It’s a perennial topic for sure, but it usually focuses on how well aligned IT operations are to the business, or changes in skills, delivery methods, outsourcing, and so on. In short, all evolutions of running the IT model as we know it today and not dealing with the real question: how should the role of technology be managed within the enterprise?
In today’s enterprise, technology touches everything and that means a wide mixture of technologies from humble sensors, up through an ever widening number of user devices, to conventional computers. The one thing they all have in common is that they are almost certainly all connected in one form or another to the internet, directly, or indirectly. Increasingly in this environment all these ‘technology elements’ will be interacting through ‘services’ in both senses of the word – i.e. the business value delivered as a service and the format of technology provisioning.
The value these devices creates lies in, around and across the edge on the enterprise, i.e. the decentralisation, localised optimisation, or personalisation that creates many of reasons for deployment. All of this runs against the role of the IT department – as established in the mid-nineties – generally reporting to the CFO as part of the back office transactional operations and enterprise overheads. The goal was to centralise around core processes and data to reduce cost, improve efficiency and leverage enterprise resources better. Therefore, the organisational structure of the IT department over the last fifteen years reflects its role in providing and managing these capabilities.
Right now, the cloud adoption model is stirring things up in the IT department as CIOs look at changes to the ‘what and how’ of carrying out this role and in so doing, the supposition mostly used is that it’s a variant to the current role. It seems to be popular to talk about moving to ‘multi-sourcing’ amongst CIO conversations recently. But let me illustrate the point about managing technology in the enterprise by the example of Ford and Microsoft launching Hohm. It’s a service running on Microsoft sold to and consumed by Ford customers to provide Ford with a market advantage in selling electric cars by optimising the recharging cycle management. Now add how this service also creates information for all parties that they will all wish to use, (customers may amalgamate this with their smart electricity meter energy management) and it is clearly technology used by and across the Enterprise. But it is not IT.
For an enterprise to take full advantage of the technologies now available it will need to be able to gain leverage by integration, though this may mean quite a lot of different approaches in the future. The management and benefits are much wider than IT reducing costs for the CFO, but it will be counter productive chaos if there is no overall ability for the enterprise to maximise its leverage. Now that’s a new way of thinking about the role of the IT department and the CIO!
How to get there? There has to be some recognisable glide path from today to say five years time and that’s the hard part. My long time friend and sparring partner for discussing big issues Peter Evans-Greenwood puts forward some solid and workable views in his blog under the title of ‘The IT Department we have today is not the IT Department we will need tomorrow’. I will add to this that I think tasks that are prescriptive, legislatively defined and non-differentiating, such as invoicing, will be move to business process outsourcing, as part of a process to unload low value industrialised work, and free up time/skill focuses on the new areas I have outlined. The new focus will need to be on task workers able to rapid implement a solution with fast development techniques over the abstracted virtualised ‘cloud’ environments.
For a much deeper perspective I recommend downloading and reading the Spring 2010 edition of the Boston Consulting Groups magazine IT Advantage, always an excellent read. Four out of the five articles deal with re-examining various aspects of the IT departments role in the changing business and technology conditions of enterprises.
When top end strategy consultants start focussing on the role of the IT department again its time to recognise that times really are changing for the IT department and the CIO!