Outside-in IT

The advent of outside-in IT and how it changes the relationship with business

Traditionally, enterprise IT controlled the choice and supply of information technology within the firm, and CIOs deployed business relationship managers (BRMs) to the business and functional units essentially as a sales force to understand requirements and define new IT solutions. 

The astute BRM aspired to be a full member of the business management team, participating in discussions about strategy and business change, not just about IT. While enterprise IT tended to be positioned as a provider of various systems and services, the effective BRM also aspired to be a promoter of new technologies and a partner of business colleagues, envisioning, defining and implementing business change. 

Kirtland Mead LEF.png

Today, cloud computing and consumerisation are leading to enterprise IT losing control of IT within the firm. Many support functions – such as HR, email and travel – that were once serviced by enterprise IT can now be supported more effectively from the cloud. 

More importantly, core functions such as sales, marketing, engineering and product development are developing and owning their own technology, which they often see as more critical than enterprise IT’s back-office support.

At the same time, modern employees expect to be able to use the technologies they are familiar with, hence the burgeoning BYOT (bring your own technology) movement. 

Finally, advanced firms are working more with outside partners, not only for technical and support functions, but also to acquire high value intellectual property (IP) which they choose not to develop in-house. 

Outside-in

These developments, which we collectively refer to as “outside-in” are affecting virtually every aspect of the modern firm. And enterprise IT, whose traditional focus on complex, back-office systems and infrastructure usually makes it the most “inside-out” part of the firm, runs the risk of being pushed to the sidelines.

If enterprise IT is to retain a central, front-of-the-firm role going forward, its BRMs will have to raise their game and learn to operate effectively in an outside-in world.  

They will have to get out of the office and work much more closely with their firm’s entire business ecosystem – suppliers, partners, customers, regulators and others. In short, they must shift from being relationship managers to digital leaders.

If they embrace outside-in, BRMs can help the enterprise IT organisation to shift from simply building and commissioning systems to leveraging external resources such cloud computing, software as a service, BYOT, apps and open communities. This will require a host of new hard and soft skills, as well more expertise in security, governance and risk management.   

Examples of outside-in are emerging

What exactly is outside-in IT and how can enterprise IT add value? Examples from our recent research include:

  • Working with new product and service development – Working with engineering, BRMs in a market-leading train manufacturer established shared development platforms across the enterprise to ensure that on-board systems can work together with cost management systems and allow the firm to price their trains as a service, by seat/kilometre. And BRMs in a European electric utility are working with marketing and service management to develop new web-enabled services to assist customers in managing their electricity consumption. 
  • Leveraging advanced capabilities from the cloud – BRMs in a leading consumer goods manufacturer have developed a world-class business intelligence (BI) capability, working with outside partners and communities. They are selling this service both to their own business units and to major customers in return for a larger shelf-space allocation in the customer’s stores.
  • Working with outside partners to manage important business processes – Central IT in a major oil and gas exploration and production company is managing oil field operations for the firm with the help of several specialised service partners. IT operates the “digital oil field” with the help of specialised software capabilities augmented by additional IP developed by the firm’s own geologists and engineers.

Outside-in chart

The need for personal power and strong relationship skills

In the outside-in world, if enterprise IT refuses a business request, management will be able to find another supplier who will agree to deliver. To retain their role, a BRM must not only be proactive, but able to engage their partners so that they do not feel the need to go around IT.

Our research suggests that successful BRMs show up as personally powerful and astute about the business. Through strong relationship skills, they succeed in participating in the early meetings for a new business initiative and are thus able to shape demand towards appropriate solutions. 

Personal power does not come from being smart or from knowledge of methodology. It comes from broad experience in business and from having worked in difficult and risky situations. 

For the effective outside-in BRM, being smart and knowing the technology are just table stakes. The real game is business change and value.

Kirt Mead (pictured) is a senior consultant at CSC’s Leading Edge Forum

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This was first published in July 2014

 

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