In Disrupt IT I describe how the CIO role and the IT function need to be transformed to meet the needs of the digital business. In this new role, IT becomes a partner to the rest of the business, instead of a service provider.
Technology is fundamental to the digital business; it is being used to create new business models, products and services. As the organisation’s technology partner the IT function needs to play an integral part in the design and transformation of new business models and in creating new and enhanced products and services. The CIO and IT staff therefore need to be capable of engaging in the full business lifecycle, contributing to the discussion and using their knowledge of both the business and technology to help shape business outcomes, create value and increase revenue.
Traditionally the IT function has primarily been a reactive department that responded to requests and needs from the rest of the business as they arose. It would then seek out the best-fit and most cost effective solution to meet those needs. In the digital age businesses need the ability to respond quickly to changing market conditions, customer preferences or competitor activity. They cannot wait for the elongated processes of the old-style IT function to create a solution. And with technologies such as cloud and mobile they do not have to wait either. They can deal directly with service providers who can provision solutions far more quickly than IT has been able to in the past.
To succeed in the digital age, organisations need their IT function to be focused on the areas where technology will have the greatest impact; customer facing solutions that differentiate and enhance the customer experience, data and tools that provide insight and intelligence on customer behaviour, preferences and trends, and technologies that open up new markets or that enable new offerings. In its new role as the organisation’s Technology and Service Broker the IT function is tasked with bringing new and relevant technologies into the organisation, working with other functions to assess their commercial potential and facilitating their use by the rest of the business.
As well as being a much more proactive role for the CIO and the IT function, it is also a more outward looking role, requiring knowledge of not just the technology but also of the business, its products and services, and its markets, customers and competitors. And it is a role that will place the CIO and the IT function at the centre of the digital business, playing an integral role in shaping and transforming business models, and creating new and enhanced products and services.
Since becoming CIO at Dell Adriana Karaboutis has been building such an IT function. In a recent interview with Search CIO Karaboutis explained how Dell’s IT department spends time observing how other business functions work and identifying challenges and problems they encounter. The IT function then uses this information, together with its knowledge of technology to proactively design new solutions before the business even knows they have a need for something new. And it does this for internal and external customers.
Describing her philosophy Karaboutis explains that whereas the traditional mindset of IT was to ask the rest of business what they needed and to capture the responses in detailed requirements documents, Dell IT now proactively looks for new ways of doing things, tests ideas and concepts, and shares the results with the rest of the business to see how they can be applied to create value for the organisation. And it is clearly working as Karaboutis states that the outcomes of Dell IT’s new approach have “turned into surprises and delights for our customers.”
In an interview with CXO Talk in November 2013 Karaboutis explained how the new focus for IT has repositioned the function as one that works with all areas of the organisation to actively drive the business strategy forward as opposed to just being an enabler of the strategy. This shift from a department that is viewed as a support function that enables strategy to one that drives the business lies at the heart of the new model for IT I defined in Disrupt IT.
To perform this new role needs new skills and ways of working within the IT function and, as Karaboutis explains, it also requires a cultural shift to enable IT staff to be comfortable working alongside the rest of the business to create value for the company. This may include embracing and supporting shadow IT projects, and helping to make the resulting tools available across the organisation.
In Disrupt IT I describe the new skills and ways of working that are required for the IT function’s new role and I also define seven principles that can be used to guide the transformation of the CIO role and the IT function to establish this new model. The exact shape, structure and size of the new style IT function will vary by organisation but the seven principles provide a framework for CIOs and Boards to use when building the IT capability their organisation needs to succeed in the digital age.
The Technology and Service Broker role is a fundamental change from the service provider role of the IT function. If implemented successfully it will generate significant benefits for the organisation and equip it with a new model for IT. The result will be a CIO and IT function that can play a central role in shaping and leading the digital transformation of the business – something that all organisations will need to survive and succeed in the digital age.