A lot has been written recently about the CMO’s spending on IT outstripping that of the CIO and the potential implications this may have on the role of the CIO and the IT function. Such articles are missing the point. It’s not about where the budget is held or who approves the purchase order. As the saying goes, there’s only one bottom line.
Whether it’s the CMO, CIO or any other CxO who holds the budget for technology, the challenge for the organisation is ensuring that it maximises the return on its investment. And, if positioned correctly, the CIO and the IT department can have a major role in ensuring this is achieved.
However, as I explained in a previous article for this site, Is IT Facing the Perfect Storm?, the CIO and the IT function seem to be approaching a defining moment and one that could potentially determine whether their future is in a strategic and leading role or whether they will revert back to being a tactical support role with business units dealing directly with external providers.
This perfect storm is being created by a combination of factors, including cloud computing, consumerisation, tech-savvy colleagues, higher expectations, high profile failures, vendors going directly to other executives and business units potentially bypassing the corporate IT function. These factors are driving the need for a new model for IT; another significant step in the evolution of the CIO role and the IT function.
So how does the CIO position themselves and their functions to ensure that they can play their role is maximising the return on investment in technology? What does the new model for IT look like?
Technology is moving closer to becoming a utility service, which can be consumed and paid for as required, with reduced upfront investment and less need for large-scale bespoke development projects. Many infrastructure, platform and software services are becoming commodity items that can be bought in as a managed service and the outsourcing of development is well-established. The core skills for the IT function are no longer based around the traditional competencies of desktop, servers, networking or development.
The new model for IT is based on a different set of core competencies, one that is focused on defining the architecture and roadmap that will deliver the required business capabilities, setting architectural and technology standards, establishing and managing a governance framework, designing and delivering solutions, managing the integration of multiple partners and solutions and ensuring the day-to-day performance of the live environment and vendors in line with business needs.
Hence skills such as enterprise and solution architecture, portfolio, programme and project management, business analysis and vendor and service management are more likely to form the core competencies of the IT function for most companies in the future. That’s not to say that every IT department should outsource all of the traditional competency areas as they may still be core for some organisations. Indeed there have been a number of recent examples of companies insourcing services such as development as they felt this gave them a competitive advantage.
The technology landscape is shifting significantly and the role of the IT function has to evolve to ensure it remains relevant and continues to add value. The challenge for CIOs is to identify and establish the core competencies on which they should build their departments; those areas where IT can truly add value to their organisations, where the IT function can support or even create differentiation from the competition. Ensuring the rest of the business both understands these new competencies and how they should be applied will also be key to defining the new model for IT.