Corporate IT is being disrupted. Technologies such as social, mobile and cloud have changed how consumers and businesses are using technology. They are also placing new demands on the IT function; technology is now more accessible to non-IT staff, awareness and knowledge of its application within the enterprise has never been higher and, as a result, neither have expectations about what can be achieved in terms of functionality and speed of delivery.
The digital business has to be agile; it needs to be able to respond quickly to changing market conditions, customer preferences or competitor activity. But the traditional IT function is not set up to be agile; it is weighed down by the baggage it has collected over the past 20-30 years when technologies such as social, mobile and cloud did not even exist and when the rest of the business had different needs and expectations of its IT team.
As a result, there is now a significant gap between the capability of the IT function and the expectations of the rest of the business. This gap, which has existed for a number of years, is getting wider and is being filled by shadow IT and by vendors dealing directly with other business functions and hence bypassing the CIO and the IT function.
There is no shortage of evidence that the gap exists; an increasing number of non-IT executives are expressing a desire to work directly with technology vendors as they are frustrated with the inflexible and slow response of their IT function. There are frequent reports about the growth of technology spending outside of the IT function with some analysts predicting that other functions will eventually outspend the IT function. And C-suite surveys have revealed decreasing confidence in IT’s ability to support the creation of new products and enable the business to enter new markets.
But perhaps the most compelling evidence of the gap between IT’s capability and the needs of the digital business comes from a recent study performed by research firm Vanson Bourne on behalf of VMware. The survey of 1,800 IT decision makers across Europe, Middle East and Africa found that 65% of respondents believe there is a significant gap between what the business wants and when IT can deliver the required solutions. The average lag time between business need and IT delivery was found to be five months although in some cases it was much longer with gaps of up to 18 months.
Digital markets move quickly, they are more dynamic than traditional markets and they can be disrupted more easily. To survive and succeed in the digital world, businesses need to be able to respond quickly and easily to changing market conditions, customer preferences or competitor activity. They cannot wait months for the IT function to catch-up; where IT projects used to take months, they now need to take weeks.
No wonder then that the VMware survey also found that the majority of respondents feel under pressure from the CEO or board to modernise IT in the next 12 months. The rest of the business can see that there’s a gap and it also knows that time is running out to close it. But this modernisation has to be more than just another iteration of the IT operating model. As corporate history has shown us, the only way to survive disruption is to reinvent yourself. Companies that do nothing when their markets are being disrupted, and those that make only minor changes to their business model, rarely survive for long.
To survive the disruption it is facing, IT needs to reinvent itself. IT needs a new model, one that is radical and disruptive. And this new model has to cover all aspects of the organisation’s IT capability. To be a sustainable digital business, organisations need the right type of CIO, the right type of IT function and the right platform. And they also need the right approach and knowledge at both board level and across the wider organisation.
In Disrupt IT I describe this new model and I also identify seven principles that can be used to guide the transformation. The first three principles cover the CIO role whilst principles four, five and six apply to the IT function. Recognising that change is also needed outside of the IT department, the seventh principle is aimed at the Board and the wider organisation to ensure they maximise the benefits from the new model for IT.
As well as transforming their own role and the IT function, the CIO also needs to think about the technology and this includes making sure that the organisation’s existing platform can support a digital business. Social, mobile, analytics and cloud are driving the digital revolution and are certain to play a key part in the digital transformation of most businesses but so will the organisation’s existing systems and infrastructure. The new technologies can rarely be used on a standalone basis; they have to connect to, and exchange data with, existing systems. And these connections need to be seamless to create a smooth customer journey, and secure to ensure customer confidence.
Every organisation’s platform is unique and the exact combination of new social, mobile, analytics and cloud will vary by company and will no doubt change over time. But there are certain principles that all CIOs can follow to ensure that they have the right type of platform for digital:
- New systems, services and data feeds can be easily integrated – successful digital players create new products and services by combining functionality and data from different sources. CIOs should ensure that their platform can integrate new systems, services or data feeds using standard protocols with minimal set-up time and effort, and without the need for ongoing manual intervention, monitoring or administration.
- Data/services can be delivered to any location and device – digital has no boundaries, customers and, increasingly, employees expect to be able to access the services and data they need, whenever and wherever they want and using any device they choose. The platform needs to be device and location agnostic, it must be capable of delivering functionality and information from any system in a secure and reliable way to internal or external users.
- Changes can be made to the platform quickly – digital markets move quickly and businesses need to respond at the same speed. And regardless of whether this response involves in-house or outsourced development, the implementation of a new module of an existing system or a completely new system, the platform cannot be the reason why it cannot be done quickly. This may mean delivering minimum functionality in the first release of a new service or system, and then adding new features post go-live. It could also mean frequent updates with minor improvements and changes being added in each version.
The journey to becoming a digital business presents CIOs and IT functions with many challenges. CIOs need to be bold and lead a radical transformation of their own role and of the IT function; they need to disrupt IT. And, at the same time, they need to ensure their organisation’s platform can cope with the demands that digital will place on the existing systems and infrastructure. Some CIOs will not last the course but those that do and who are successful in creating an IT capability for the digital age will find themselves playing a central role in shaping and leading the digital transformation of the business.