Where does Information Technology stand today ! What does the future look like? Are we up to the level?
For the last 50 years the IT department has seen itself rattled all over the place in organisations from small to big ones, from it being substandard departments or just plain desk support to Accounts/financial depts., to being a standalone ones. We still are at the nexus of the whole concept and understanding what can be the real benefits or anything for that matter. However, I still see organizations will fail if they continue operating with IT units that are designed and led on principles and practices from a previous era. Instead, the IT department must evolve to reflect new digital goals and bring that edge to making the whole organisation evolve into the sci-fi era. No it is not a movie, it is a reality that we must all face in a world where changes and disruptions are being created by so many innovations that we had only dreamt of in the 80s. Think of the movie “back to the future”, flying cars, artificial intelligence, video communications and so much more. Is it a dream still or are we really now getting into the real areas where these changes are just at our doorstep!!!
So let us just go back and rethink and get a glimpse of what we had and how that whole story started. I for one can say that the IT departments have moved through three distinct models. In the early days, it was a functional unit, with the objective of keeping computer systems functioning. In this time period, all required knowledge to do this was located in the IT unit, and there was a clear delineation of responsibilities, with the CIO acting as the functional manager.
Then came the partnership phase, where the objective became understanding business requirements and issues. In this phase, IT had to build relationships with business units to facilitate knowledge access. The CIO acted as a manager of the boundary between business and IT, and a developer of the business knowledge of IT staff.
Today, we are and live in a pervasive phase, in which the IT unit’s job is to optimize business opportunities from digital opportunities. Digital phase is a shared responsibility across IT and business, and the CIO is one of the major orchestrator.
“The challenge is not the IT organization, but organizing for IT.”
The major shift has occurred in the past few years in IT whereby we started to see that the CIO had been separated from the chief digital officer (CDO), and companies started to realize that these distinct units do not scale well.
In large organizations in particular, the CIO, CTO, and CDO are coming closer together for a more integrated digital and IT operating model. When undergoing a digital transformation project, you need someone on the tech side to own and drive it, whether that’s the CIO or CDO or someone else. If you do hire a CDO, you should situate them as close to the CIO as possible.
However, “the CDO should not be responsible for digital transformation—that’s why a lot of it fails”. “It’s not an internal technology thing. You really need accountability on the business part as well.”
Aligning IT with business
Aligning IT with the business has been a top CIO issue in recent years, as a customer focus takes over.
But in organizations that have been around for many years, IT has not gotten the time to understand the business. You have business-aligned IT functions popping up because business needs tech to understand the business. “Moving the future will be a combination of the two. You are no longer going to be a traditional IT ops shop—you need that, but that comes with understanding the business and partnering with them.” I always and keep saying and preaching that IT without understanding business can and will never be able to bring that change in the business outlook and be at the tip and spearheading the right changes that will and can eventually make the business more profitable and innovative.
IT is evolving along with the rest of the business. “Most organizations with scale and history have quite an inward-looking business function rather than an outward-looking one”. Pushing IT further into the business has been one of the largest challenges. The reason has been simple as many still viewed the whole concept as a support to only part of the daily operations without looking outwardly of what it can do for the business. However, one has to accept that the sector that has seen the opportunity has been the Banking sector and the impressive innovation that has been brought around is amazingly interesting. Does your organisation see things the way it should be?
However, companies should not forget about employee needs as well.
We talk about external customers, but for us to make our internal customers successful, we need them to be able to perform their jobs. “Collectively, we miss that digitization is not just outward-facing, but inward-facing as well. Companies are starting to wake up to that.” As we say slowly but surely. But I would like to take a pause here and remind organisations that the more you take the ostrich approach or let us see first and copy, outmaneuvers the very existence of the survival of the fittest.
So what happens to the role of the CIO
With these changes, CIOs now have an opportunity to rewrite their job description in terms of the role they want to play in the business. I always recommend meeting with the business side and offering them different options, to help them see that IT is more than just support.
The IT model will continue to shift as new opportunities and constraints arise. CIOs need to see themselves and given the “carte blanche” to act as equal partners in the C-suite, rather than junior partners being support or explaining what tech is all about.
Increased demand for tech-savvy senior leaders on company boards has also elevated the CIO role. It also demands that the CIO talk the same business language as well. One can be tech savvy in his/her own surroundings but needs to raise the bar and talk business language as well. The whole issue again here is with education and the contents provided by educational institutions. But, however does an MBA with technical expertise or qualifications makes you a better business person. I think no, it is in the person itself. “The chicken and egg” problem starts over again. But it does not stop the more business prone and technically savvy ones to make the difference.
IT can’t live in a silo, but the business has siloes as well and we need to recognize that. The customer journey is what cuts across all departments now, and organizations need an integrator. This is where the CIO can step up and play that role. “If digital and IT is the future, you’re perfectly suited for that ”. “It puts you in the middle of the business.”
In five years’ time, “I see the CIO playing an integrator role across the organization, with a deep understanding of the business and customer journeys, and stringing them together.” You might say it is a dream but, we need to understand the practicality and the role they can play in making a business successful or doom it as well.
It’s no secret that established companies must transform to remain competitive in a digital era, and the first step of that digital transformation journey is to articulate a clear vision of how the company will better engage with customers and solve their problems.
However, this is a major challenge for most companies and will stand same until the step up happens. But without a clear digital vision, companies can’t design a coherent, executable business strategy.
Company leaders are bombarded by new technologies, including social, mobile, the cloud, the Internet of Things (IoT), artificial intelligence (AI), blockchain, and biometrics.
I say we should stop and “Calm down about the hype.” “To get value from this technology, you need to first be a well-run company.”
Take data and analytics for example, you can collect data, analyze it, and get insights from it, but if you’re not well run, you can’t take advantage of it. “So skip it.”
The fact remains that the convergence of these technologies is fundamentally changing how business gets done, and the opportunity to add customer value. If companies can’t understand that, they will continue to compete as if it’s the 20th century, while other companies continue to move into the 21st.
“We used to talk about avoiding the Kodak moment.” Now, we worry about our Uber moment—the day we realize we didn’t take advantage of these technologies and somebody else came along and did.
Taxi companies understood that they could give rides. While Uber understood that in a digital economy, it could give rides, tell you who the driver was, when they will arrive, how much it costs, and remove the hassles of payment. “They understood the possibilities of digital technologies.” “When we understand what tech can do for us, we start to define a digital vision.”
CIO’s role: To Inspire business strategy
In doing this, IT shifts from enabling to inspiring a business strategy. While the CIO was tasked with enabling business strategy in recent years, it’s no longer enough. Going forward, CIOs will have to inspire new value propositions and sources of revenue that can be tapped through technology and so much can be done. There is also a need for a leap of faith as much as Boards who needs to understand that we live with millennia’s and that things have changed and are changing undeniably.
In particular, CIOs can take advantage of the massive amounts of data, unlimited connectivity, and large processing power now available to uncover new digital opportunities. “These are the capabilities we have.” “We need to be inspired by them, to go beyond who we were.”
Companies have been digitizing since the 1990s, adding tools like CRMs to become more efficient and standardized. But while this is a transformation, it is not truly a digital transformation, because it is not creating new value. Digitizing aims for operational excellence and installing discipline around core transactions and back-office processes, while true digital transformation means allowing rapid business innovation, and empowering people to experiment, release, and constantly enhance new digital offerings.
Several companies have undergone successful digital transformations. While Amazon is a digital native, when it launched in 1994, its value proposition was as a book retailer. Today, its digital value is in personal convenience.
Schneider Electric is another example: The company is more than 100 years old, they started with electrical equipment manufacturing. Today, it creates intelligent energy solutions.
A digital offering is the confluence of a customer solution and a great experience. “If all you’re doing is what you’ve always done but you added a customer app, you are not digital.”
Therefore, the vision has to come from customer relationships. You need to understand your customer’s lives, their businesses, how they get stuff done. “And as you get closer and closer to your customers, you imagine little things you could do for them, things that would make their lives easier and then you start experimenting.”
The challenge for larger companies is that they typically evolve into a digital vision by learning and experimenting, rather than through big strategic initiatives.
Once you have your digital vision, you must remember that it is only a guiding star and you have yet achieved it, but gives you a starting and ending point. However, remember we live in a world where the ending point does not exist. In fact, we need to re-invent ourselves to be viable and value added: You may end up pivoting in a different direction as you find out which offerings take root and which do not. But innovation and experimentation are also key basis. Once you start realizing the impact and the changes, only then can one move forward. So R&D is a must but experimenting is what makes the difference as well. IT needs it’s own revolution and organisations should see to it that they are really getting to the vision of achieving survival and looking at their bottomline.
Food for thought !!!