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What is IT's role in the enterprise?

Nick Owen

CIO Update

14 June 2011

The critical role of IT in any business has long been understood, and over the last few decades IT systems have evolved from back-office tools (finance, accounting) to the face of the customer.

At one time this evolution in IT role was led solely by Web-based businesses, but in today's organisations almost every facet of customer service is driven by IT systems; in contact centres, logistics and delivery, transport scheduling, banking and increasingly in healthcare. However, for many organisations, IT is still perceived simply as an enterprise function and frequently innovations and the use of new technologies are driven by the business.

Is this the right answer or is there a more enabling role for IT?

Some would argue that it is right: many aspects of the business have direct day to day customer contact through sales, marketing and other functions therefore, it is the business' role to lead revenue generation, ensure customer satisfaction and find new markets. Within this process IT is an enabler, facilitating new channels to market and providing efficiencies in delivering operations.

Even if the business and IT are one, as many would argue, someone has to be talking to the customer, designing the product, assessing product pricing and it is not the IT function.

Many IT professionals would have a different view: if the business doesn't understand the technologies that will enable its operations, how can IT have a genuinely strategic role in the enterprise?

When applications were largely enterprise based, there was an essential role for IT. And, while this role may have been trailing (i.e., the business says we need CRM), IT would typically be engaged for requirements gathering, selection and deployment and be integral in project success.

Can the same be said for today's world?

There are many examples today of organisations where customer facing applications, and experiments in social media, for example, are being led by the business. In others, pressured IT organisations supporting thousands of users and millions of customers are being tasked with running operations more efficiently while also making sense of a rapidly evolving landscape of customer interaction technologies. In such circumstances, priorities lie with operations and new technologies come second ... usually disappointing business customers in the process.

Innovation

Much has been made of the concept of a "Skunk Works" for IT; essentially rogue teams that lie outside of the bureaucracy tasked with bringing innovation or new products to market. Do these represent the answer for large monolithic IT organisations, struggling to meet current workloads let alone deliver business innovations?

To the positive, any approach that drives to new products, innovation and moves the business forward is great and should be applauded. However, as IT professionals, if we are not fully meeting business expectations across the board, it is more important to find solutions that will deliver wide reaching change, not point-solutions. We should be seeking to breed a greater appreciation of IT, not success for a small band of heroes.

There is also an emerging view that IT should actually be made of two distinct yet integrated organisations: "Innovation IT" and "Operational IT." They are conflicting in nature and underscore the dilemma that IT organisations with a predisposition to be at the centre of business activity face in balancing the need to provide resilient, cost effective and reliable infrastructure to the business.

Some say "Operational IT" is the least strategic and can eventually become a commodity, being a good candidate for outsourcing. "Innovation IT" would then be kept in-house and lead the business on innovation and customer acquisition. However you don’t need to go far to understand that well-run IT infrastructure can provide an enormous competitive advantage and be leveraged as a strategic asset. Just look at Google and Amazon.

Like many complex problems there is no one right answer, however there are key principles that can be applied across the board:

There is a necessity in IT to be up on IT of all types; from cloud to social media, not simply enterprise solutions. If IT is knowledgeable, then it is able to help drive the solution and define outcomes. Somehow we need to find time for our collective IT organisation to stay knowledgeable and contemporary (many are, but through personal interest rather than well designed IT functions), and knowledge of the new should be much broader than simply the EA function.

Inertia and too much to do is not an acceptable out for not fully supporting the business with the effective use of technology. IT needs to recognise that piloting the new and untested is a way of preparing for tomorrow's IT world.

Desire for stable operations alone does not qualify as a reason to preclude some risk taking and innovation. We are not advocating moving away from stable and secure IT systems, but merely encouraging the addition of innovation and creativity and that functions related to compliance, security and operational stability do not overwhelm the IT culture.

Business led is acceptable. Many leading organisations encourage the business to experiment with IT, and as success and maturity happen, migrate the solutions to IT. For many in IT, this is a difficult concept that sets up dynamics of ownership and conflicts with architecture and standards. However, typically challenges are more related to turf wars, functions and relationships than conflicts with technology.

Ensure that the innovation side of the business keeps the operational side in the loop and as a partner, incorporating lessons learned and performing reality checks from an operational perspective. Budgets should include a thorough analysis of total cost of ownership; usually an area of conflict with IT operations as innovation programs frequently do a poor job of incorporating long term growth and trends in the underlying IT infrastructure.

In summary, the new, fast and agile is here to stay, but legacy isn't going away anytime soon. As IT professionals, we need to live in both worlds, and the greater our ability to drive cultures that can achieve the right balance, the more opportunity we will have to be an integral part of a single business entity.

Nick Owen is an IT expert at PA Consulting Group 


To read the article online, please click here.


For more information on PA’s expertise in IT consulting, please click here. For more information on the PA Consulting Group /Harvey Nash CIO survey, visit here.

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