written by Jerry Luftman
The 21st Century is marked by the continued penetration of Information Technology (IT) into all facets of the organization. Businesses, regardless of their size, cannot function without IT enabling/driving every activity, from traditional back-office systems to strategic services that interact with customers/clients and external partners. With the global business environment, organizations, and technology continuing to experience dramatic change at an accelerated pace, the role of IT has become increasingly more complex and challenging. Hence, as IT has become mission critical, it is imperative for IT and business leaders to work effectively and efficiently together to ensure that they are leveraging IT across their organization. The success of the business depends on the success of IT.
There are several active blogs debating the role and the future of IT in organizations; many question the need for a CIO or the use of the “IT” name. Without getting into a debate about the title of the person that heads the IT organization (whatever it might be called), it is essential that someone has that leadership and management responsibility.
IT is not going away. IT is going through a renaissance that requires the role of the CIO and IT organization, as well as how the business and IT organizations collaborate, to transform. Although we have experienced many of these concepts in the past, there are two major drivers for this change. The first is that our research is showing that even with the economic downturn, there is a steady increase in the number of organizations around the globe devoting more time to leveraging IT for revenue generating initiatives.
The second, which is likely driving the first, is due to the dramatic simultaneous changes that we are experiencing in technology (e.g., Cloud, business analytics, social media, mobile, Bring Your Own Device – Bring Your Own Infrastructure, and the integration of these technologies with existing technologies) as well as the significant non-technical changes (e.g., economy, sourcing considerations, globalization, politics, terrorism, security threats, natural disasters, wars). Each of these taken individually is significant, but taken together is monumental.
It would be remiss not to point out that over the years there have been noteworthy examples (e.g., American Airlines, American Hospital Supplies, Otis Elevator, FedEx/UPS, USAA) of IT being used to enable revenue generating opportunities. The big difference is that today we are seeing IT drive many of these revenue generating initiatives that are the result of leveraging new technology, and it is being done by more and more organizations around the globe. Additionally, the initiatives of today are motivated by customer demand as opposed to business push. The growing role of the CMO (Chief Marketing Officer) is indicative of this departure from the past.
IT has evolved from a group supporting back office processes, to enabling front office processes, to driving business innovation. IT is moving from an organization focusing on metrics/SLAs and expenses to analyze itself, to an organization that is delivering demonstrable business cost reduction, to an organization that is providing distinctive revenue increases. IT has evolved from having technical initiatives motivated by pure technology or business desires to being responsive to customers/clients desires. These are significant differences from what we have experienced in the past. IT-business organizations that do not recognize this transformation and do not focus more on these revenue generating initiatives will be left behind.
Although there are fundamental differences in the specific roles that these senior IT executives (CIOs) have in different large organizations and are even bigger differences in the role of the CIO in SMEs (small medium enterprises). For example, while Cloud will have a substantial impact on all organizations, many blogs profess that SME IT organizations will be eliminated as the result of Cloud. However, these discussions often miss an important contribution of Cloud computing; it enables these SMEs to consider IT initiatives that heretofore were only available to large organizations (initiatives that can help catapult them to the next revenue inflexion point). Organizations of every size will need to derive a Cloud strategy that encompasses the integration of Cloud with other emerging and existing technologies. The SME CIO/IT role for those companies that recognize these opportunities will need to change, perhaps more dramatically than the significant changes that are required of CIOs/IT from large organizations. Naturally not all organizations can respond in the same way; different situations/criteria will enable or inhibit these changes. In general, organizations need to recognize that competitive advantage that is facilitated by IT is clearly on the rise.
Essential to all organizations is the persistent demand to improve the alignment/integration of IT and business; however with a stronger focus on paying customers/clients. This must take place while recognizing that addressing revenues does not preclude the continuous emphasis on business process improvements and the IT infrastructure and processes; even if outsourced. Some might suggest that this is a paradox; a set of contradictions that lies at the heart of IT leadership. Be strategic, tactical, AND operational. Leverage emerging technologies, while being weighed down by the day-to-day, the past, and sourcing considerations. We are in the midst of a renaissance. We have never experienced this many environmental, business, and technical changes taking place simultaneously; all which must be addressed.
Perhaps a bigger concern, often raised by these blogs, is that the “C” level IT executives (i.e., CIO, CTO, CISO) have still not lived up to the expectations for C level executives – they lack a business acumen; the same is often true for the rest of the IT organization (this does not preclude the need for them to maintain an appropriate balance of technical skills). At the same time we are finding that an even bigger problem is our non-IT executives not understanding what their role needs to be for IT initiatives. All IT organizations (and their business partners and service providers especially as outsourcing continues to increase) will need to raise their game and master the challenge of this innovative transformation.
The worldwide growth in the use of IT to enable and drive organizational opportunities to improve efficiencies and effectiveness/revenues (even during the economic conundrum) suggests that the future of IT is strong. Multiple studies and our global travels and affiliates have found that there is an increasing demand for skilled IT professionals (internal and outsourced/service provider staff, and vendors). The key is having the appropriate balance of technical, business/management, industry, and interpersonal skills.
These are exciting times for those individuals and organizations that are prepared. GIIM is focused on preparing IT and non-IT organizations to meet the challenges of our dynamic environment.
Jerry Luftman Ph.D., Professor& Managing Director
Global Institute for IT Management LLC to see his full bio, click here