For over 30 years, we have successfully run IT organizations. And things (generally) have worked well for IT organizations and the businesses they serve. Best practices were identified, shared and enhanced. Technology evolved and became increasingly more sophisticated. We built the backbone that business runs on today.
However, the traditional way of running IT is dead and a change is needed before we face extinction. That may seem a bit dramatic, but IT needs to make a significant change to remain relevant. There are three components that need to change: the Chief Information Officer (or IT executive), the individuals within the IT organization and the business that they serve.
Minimizing Information Technology
In 2004, Nicholas Carr created quite a dustup with his book Does IT Matter suggesting a change in the value of IT organizations. In essence, he was correct…based on the direction IT is heading today. As IT focuses more on minimizing expenses and less on value creation, the intrinsic value the IT organization brings to the business is lessened. IT becomes a fundamental support organization and little more. That balance needs to change.
Value Creation is King
At this point operations and core support are table stakes. IT needs to identify ways to create value for the organization. By value creation I mean creating revenue in ways not previously possible. In his book The Digital Edge: Exploiting Information and Technology for Business Advantage, Mark McDonald delves further into this point. Today, executive recruiters are hiring CIOs that are focused on value creation rather than just table stakes.
The CIO needs to lead the change. There is no other organization within a business that has the potential to lead this kind of change. More than just about any other group, the IT organization has both the breadth and depth across the business. IT Transformation takes place when the IT organization is aligned toward value creation while still providing operational support. IT Transformation is challenging, but not a pipe dream. Progressive CIOs from Boston Scientific, General Motors, Chevron and UPS are already heading in that direction.
Changing the way the CIO and IT organization functions are only two of the three components. The business also needs to change the way it perceives value from IT. I have heard many references to IT organizations
- “(IT is) where big projects go to die”
- “The IT police”
- “The ‘no’ organization”
- “Those nice people you call when you can’t connect to the network”
IT can be much more than this. Why isn’t that the case. Well, a history lesson of IT’s evolution over the past 30 years would be required. So, how do we make the change?
The Three-Legged Race
In order for the paradigm to change and IT Transformation to truly take hold, all three components need to work in unison. The CIO, the IT organization and the business all need to evolve for the evolution to take place. That seems like a pretty tall order. Who takes the first step to affect the change? The CIO. The others, while valuable, do not have the connections and relationships of the CIO. Challenge the status quo and evolve the paradigm. The rewards are too great to miss.