Expert buyers of IT know how to shape, source and
exploit IT investments. IT departments were once key players in all
three areas, but for many this is now down to one: sourcing. And as
companies' supply chain management matures, this could turn into
none.
Twenty years ago, when I transferred from customer service to
IT, we in-house IT specialists were integral to the business we
worked for. We collaborated as equals with colleagues in other
departments to shape the company's processes and technologies. We
helped get the IT delivered and create value.
The executives knew how they were exploiting IT in their
strategies and operating plans and treated us as fully fledged
members of the corporate team.
CIO as an IT supplier
Much has changed over the years. Most IT departments are now
quasi-suppliers of IT. They measure performance using supply-side
metrics, refer to their colleagues as customers, "charge" them for
services and have relationship managers to bridge the gap that has
opened up between themselves and "the business".
If they have an IT strategy, it is unlikely to be the same as
the executives' strategy for IT.
Of the three "expert IT buyer" accountabilities, shaping and
exploiting IT investment correctly rests with line managers, but
most line managers freely admit that their capabilities in these
areas are low.
The IT department remains accountable for IT sourcing, but many
IT people are frustrated by the low level of influence they have
over business decisions.
The more the IT department positions itself as a quasi-supplier,
the less it will be allowed to manage the company's core interests
as a user of IT. The inherent conflict of interest becomes
increasingly obvious.
Someone else needs to take accountability for IT sourcing, most
obviously the company's supply chain people. Some CIOs will see
this as an opportunity to become a fully-fledged supplier or to
focus on more value-adding capabilities others may see it as
threat.
The decision for CIOs
Each CIO faces a strategic choice. Would you rather be a
supplier competing with other, external suppliers, or the company's
chief expert in shaping and exploiting IT investment? You will not
be allowed to be both.
Therefore, would the transfer of IT sourcing to the supply chain
department be a good tactic, or a bad one?
Let me lead the witness. Many line managers know that they
struggle with IT exploitation and investment, yet these are the
value-creating aspects of IT management.
Also, the CIO is not the only one facing this choice. The CEO
has it too: if the CIO wants to be a supplier, then who is the
company's chief "expert buyer" of IT?
This has typically been the CEO, but in future it may be the
head of supply chain management. None of these options is ideal and
each puts a different twist on the business' strategy for IT, but
someone has to do it.
● Chris Potts is a director at IT consultancy firm Dominic
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