Throughout the history of IT, the best-known industry leaders have come from the leading suppliers of the time – think Microsoft’s Bill Gates, Oracle’s Larry Ellison, Amazon’s Jeff Bezos, Facebook’s Mark Zuckerberg – and founding and building new companies will probably always attract the most aggressive and entrepreneurial...
technologists. But as we look ahead to the digital landscape of the 2020s, the vast gap between the way customers and suppliers view digital leadership, innovation and risk-taking needs to narrow.
Today’s stark differences in mindset between the supplier and customer sides of the industry have deep roots. For example, when young programmers and computer scientists complete their training and are ready to enter the marketplace, which side of the business are they drawn to, and why?
When coupled with the back-office work that has dominated the history of enterprise IT, this initial split between the more entrepreneurial and the more cautious also helps explain why enterprise IT is often seen as the “Land of No”, at various times telling its organisation: no personal computers, no local area networks, no iPhones, no Facebook, no Dropbox – the very opposite of what an entrepreneur would be inclined to say.
Of course, enterprise IT’s caution has often been entirely understandable – if mostly on the wrong side of history. Given its mission, internal IT does need to be wary and risk-averse. However, as digital technologies become much more strategic to the very core of a company, more entrepreneurial and supply-side cultures are becoming a business requirement. Unfortunately, in many IT organisations, the bulk of staff still find it hard to make the transition from cautious technology service providers to risk-embracing digital business leaders. Addressing this challenge involves nurturing a more outside-in approach.
Improve perceptions of enterprise IT
The process begins with the CIO. Is the CIO the chief digital officer (CDO) of the firm, or is the role more about providing effective internal IT services? Is the CIO a full member of the executive team, or does he or she have a lesser status, perhaps reporting to the chief financial officer (CFO)? The answers vary from business to business.
Not surprisingly, the role of the CIO and enterprise IT overall is heavily shaped by its ability to deliver. Have there been visible successes or failures? Does the IT organisation meet its deadlines? Is it responsive to the changing needs of the firm? Has it earned a full seat at the strategy table? How important is IT to the business overall?
But perceptions are also critical. It’s not always easy to know what “good” looks like, how much IT projects should cost, or whether competitors do things better or worse. Yet these uncertainties don’t stop people from having strong opinions.
The following traits can help CIOs improve these perceptions:
- The IT department must embrace new ways of working as they arise and gain market momentum, rather than instinctively resisting them.
- Enterprise IT needs to be seen as being able to move quickly, perhaps through team-based agile methods, as opposed to traditional waterfall methodologies.
- Ideally, people across the organisation should enjoy working with and learning from the IT department, as opposed to feeling out of sync or at odds.
- It helps if people can see that existing back-office systems are evolving and becoming more like the intuitive web and app experiences they use in their personal lives.
- Perhaps the bottom-line test is whether the rest of the firm looks to enterprise IT first for new digital ideas and solutions, or only when really necessary.
Take an outside-in approach
IT has always been a corporate-wide function, touching on every major aspect of a firm, and thus, like CEOs, chief operating officers (COOs), CFOs and HR, CIOs need to develop 360-degree perspective.
Historically, however, this perspective has been mostly inside-out. The IT department has tended to see its internal constituencies as its “customers”, or “users”, and has often not had the bandwidth to fully engage with the external world as well.
In this sense, the IT function resembles the finance and HR operations, which also spend most of their time and energy on internal challenges. In IT’s case, these internal tendencies are further compounded by the intense, heads-down individual focus that many IT activities – such as systems analysis and software development – require.
But this inside-out approach is becoming increasingly problematic. IT leaders need to see and respond to the ever-more capable “digital world” around them, and this requires more of an outside-in mindset which recognises that the most important IT developments and opportunities often occur well outside the walls of the firm. This tends to create two conflicting enterprise IT agendas:
- IT needs to make sure its internal systems are efficient, standardised, secure, compliant and within budget. These objectives are closely aligned with those of the COO and CFO.
- But the IT industry itself is mostly about the digital future and the new possibilities that technology can enable. Here, the agenda is about business impact, market change, new ways of working and becoming a digital organisation. These goals are more associated with the CEO and CMO.
Every firm seeks to strike a balance between these two missions. If IT organisations are spending two-thirds of their energy on the former and one-third on the latter, they tend to be in good shape. Unfortunately, there are quite a few organisations where the balance is closer to nine-tenths/one-tenth, and such back-office IT organisations can never keep up with the expectations of their firms and the markets they operate in.
In these cases, enterprise IT isn’t represented in the boardroom. Instead, digital leadership tends to come from other parts of the organisation, and IT is often subject to relentless cost-cutting and/or large-scale outsourcing. Getting out of this dilemma requires reinvigorated technology leadership.
Strong leadership required
For most of the 21st century, the IT organisations the Leading Edge Forum has worked with have been largely focused on becoming better business partners, with the role of technology, and even that of the CIO, somewhat diminished. The emphasis has been more on business results and behavioural change than aggressive technology adoption.
But becoming a powerful digital leader will increasingly mean taking advantage of the coming wave of innovation – machine intelligence, the internet of things, speech recognition, biometrics, 3D printing, chatbots, 5G, DevOps, blockchain, smart contracts, wearables, and so on.
These emerging areas will often require deep technical and architectural understanding, as well as the ability to attract and manage the corresponding talent. To thrive in this future, large organisations need people with native cloud skills, who are used to working in the open source world, who keep up with the latest software tools and languages, and who are comfortable being part of agile, multifunction teams in uncertain and fast-changing circumstances, all while maintaining architectural clarity and integrity. Not surprisingly, many IT organisations – already under a budget and resource squeeze – are struggling with these challenges.
To meet these demands, companies can’t rely entirely on their suppliers. They need strong technology leadership and a vigorous CIO function, willing and able to promote a digital vision for the firm, while making it clear what skills and capabilities the organisation needs to succeed.
While internal IT will probably never generate the fame and riches of today’s digital giants, the need for a more entrepreneurial, risk-taking enterprise IT mindset is now clear. It’s the gateway to the 2020s and beyond.
This article is an excerpt from “Seeing digital – a visual guide to the industries, organisations and careers of the 2020s”, by David Moschella, research director for the Leading Edge Forum.