The IT department will die as technology grows in importance to business

It can’t be often that an IT leader decides to take a job because his or her new employer says it “doesn’t want to have an IT department”.

But it’s fair to say that Starling Bank – where that IT leader, John Mountain, is now CIO – isn’t your run-of-the-mill company with legacy systems and a room full of servers. Starling is a “challenger bank”, one of a new breed of digital-only entrants to the UK banking scene that’s appeared since the Bank of England loosened regulations.

As a startup, with no technical debt, it’s easy to take a different approach, but Starling is just the latest new organisation to offer a glimpse of what the corporate IT department of the future is likely to look like – or not look like, because there probably won’t be one.

As our recent interview with Mountain explains, digital staff at Starling are embedded in the business, part of multi-disciplinary teams focused on specific functions, products or services. But it’s not the first time we’ve seen this – nor is it an approach that needs to be examined over time to prove it works.

In retail, online-only firms such as Asos and Net-a-Porter have similarly been working with technology staff within business teams, alongside marketing, finance, product design and development people and others. Those companies would attest that such a setup has been instrumental in their ability to compete with high street giants and to be faster moving and more responsive to customer needs.

It’s been so successful that Atos is expected to overhaul Marks & Spencer in stock market value very soon. M&S itself was forced to overhaul its digital operation a few years ago in response.

The high street banks are going to face a similar challenge before long, but burdened with billions of pounds of legacy hardware and software that severely restricts their ability to transform the way IT works.

Starling, for example, starts from the basis that infrastructure is a commodity and runs everything in the cloud – an option not open to the online shopping firms when they were startups. Cloud is likely to accelerate the digital development of fintech startups at a greater pace than even retail.

The lessons are there for every IT leader in every organisation. If IT is meant to be part of the business these days, then why aren’t IT professionals part of the business too? The standalone IT department is dying.

At the start of the 20th century, most major US corporations employed a vice president of electricity. We’re at the start of a digital era that promises to similarly transform the way IT expertise is deployed.