Recasting IT for the Digital Age

Recasting IT for the Digital Age

          
Article image

Recasting IT for the Digital Age

  • Add To Interests
  • SAVE CONTENT
  • PRINT
  • PDF

  • Technology_Advantage_Apr2016_Page_Promo

    Digital technologies continue to rapidly reshape the business landscape. (See the appendix, “Technology Trends to Monitor.”) A striking feature of this ongoing transformation is that, despite these technologies’ underlying technical complexity, a significant share of many companies’ digital campaigns is being driven largely by the business function, with only limited conceptual involvement by the corporate IT department. In fact, sometimes the business even launches digital initiatives without the knowledge of corporate IT. This has become possible because of new enabling technologies, such as software as a service (SaaS) offerings, cloud-based enterprise resource planning (ERP) software, and augmented-reality applications, which are provided by specialists such as Metaio (recently acquired by Apple).

    The empowerment of the business function in this manner can provide clear advantages for a company: it can, for example, speed the launch of innovative new products and services to customers. But over time, it can also lead to an assortment of independently driven digital initiatives that have no unifying standards. This can translate into high complexity, additional costs, a lack of compatibility among initiatives, and security issues.

    More broadly, the business function’s growing ability to launch and operate digital initiatives on its own raises a question: what role will the corporate IT department, led by the CIO, play in companies’ accelerating digital efforts? There is a very real risk that the IT department could be largely excluded from the company’s digital initiatives and relegated to the management of back-office applications.

    Tweet thisThere is a very real risk that the IT department could be largely excluded from the company’s digital initiatives and relegated to the management of back-office applications.

    We believe that corporate IT departments can not only avoid such a risk but actually increase the importance of their role. To do so, though, they will need to challenge their self-perception and determine exactly how they can provide real value with regard to digital technologies. A number of IT organizations have already done this successfully—for example, they have set standards and guiding principles that minimize complexity across local digital initiatives without stifling the spirit of autonomous digital innovation.

    A challenge for the corporate IT department is that the parameters of this new role will vary, depending on the nature of the technologies the company uses. To succeed, corporate IT will need to take a critical look at the maturity of these technologies in light of the department’s own capabilities. Some digital technologies should indeed be managed by the IT department; others can be better deployed and maintained by the business function, whether on its own or with the help of specialized third-party providers.

    To help companies identify the sweet spots for IT, we have developed a matrix that is based on two dimensions: a technology’s maturity for business use within the company and the level of integration with corporate IT that the technology would require. (See the exhibit, “The Role of the Corporate IT Department Changes Along Two Dimensions.”) Depending on which quadrant a particular technology falls into, the corporate IT department could take on one or more of four potential roles:

    • Securing the integration of digital technologies in corporate IT.

    • Advising the business function on the smart implementation of business opportunities and the security of operations.

    • Screening trends and assessing the potential need for integration between the business function and the IT department.

    • Ensuring that implementation provides efficiency, flexibility, and agility benefits for the business function.
    exhibit

    Ultimately, though, the corporate IT department will need to fill all four potential roles simultaneously in order to secure its seat at the table during a company’s digital efforts and to maximize its overall value to the firm. To manage this, the IT department will need to be particularly strong on three key fronts: digital IT strategy design and execution support, the integration of digital initiatives with the existing customer experience, and the flexible implementation of digital technologies coupled with the skillful deployment of agile paradigms. In sum, the corporate IT department could play a vital role in a company’s digital efforts—but to do so, it will need to build specific capabilities and expertise and demonstrate the value that it adds.

  • Add To Interests
  • SAVE CONTENT
  • PRINT
  • PDF