In the past, enterprise IT operated as a dictatorship. The CIO, as the resident IT expert, acted as the gatekeeper of technology procurement. IT was a ‘dark art’ that few understood, and users got what they were given. But the consumerisation of IT has resulted in technology infiltrating other areas of the organisation and department heads are rebelling against the CIO’s regime. IT spending in non-IT areas such as marketing, finance and operations is on the rise, with some even in possession of their own IT budgets. In fact, 66% of Australian CIOs believe line of business IT spending will exceed central IT spending within five years. This was confirmed in our recent Global CIO Study where we found that one in four CIOs had lost control of IT spending and that the balance in power in IT spending has shifted decisively toward line of business executives. How can the CIO stay relevant?
CIOs must change their leadership style to suit this new democracy, or they risk being taken out of the equation altogether. A more service-driven culture is necessary. This means creating a new kind of IT department – one that acts as an internal service provider and a connector between the business and its technology, focused on maintaining, integrating and provisioning a transformative user experience throughout the organisation. Only then can they move towards becoming a Service Defined Enterprise (SDE).
However, the IT department must adapt if it is to assume the role of pseudo service provider. It needs to become the arbitrator of what service standards and capabilities are most needed and which provider is best positioned to deliver them. So, what are the prerequisites to becoming a SDE? We outline three of the eight criteria below:
Focus on delivering a 360-degree user experience
Recognising that the organisation is being bombarded with external sourcing options for all of their IT needs. Each one promises to bring the organisation something unique, compelling or transformative. The SDE will recognise that all of its services will need to be compared with those available externally. It must proactively evaluate all relevant options that are able to deliver the user experience that the organisation is able to fund.
Move from managing technology for the business to offering a well-defined service portfolio
The growth in consumer IT gives users a distorted sense of how ‘easy’ it is to access IT-based services. Consumers buying a SaaS solution are never exposed to the underlying technology platforms, complexity or operational challenges that the SaaS operator deals with every day. All they see is a product offered at a monthly pay-per-user rate and available virtually immediately. The SDE will embrace IT services portfolio management as the most effective way to engage with, and serve, the organisation. The portfolio will comprise internally built and operated services, and a variety of external service partners. The SDE will ensure that the organisation will not be able to differentiate between services delivered internally and those delivered via external partnerships.
Sell itself to the organisation based on service, value and business case
The ability to respond to and fix a failed piece of equipment, or being able to implement a new server platform is no longer of ‘value’ to the organisation. While every external service provider is selling the value of their offering to the CEO, CFO or a line of business head, IT will continue to have to consume budget simply to run and maintain the technologies and services that are already in place, i.e. today’s budget funding yesterday’s decisions and investments. This puts the IT department at a serious disadvantage in delivering what is perceived to be business value and innovation. Therefore the SDE will take on the characteristics of the service provider. It will communicate the full value of its portfolio and its ability to deliver innovative services, and it will do so passionately and persuasively. In the past, IT might talk about the dangers and risks associated with BYOD, whereas the SDE will communicate how effective mobility policies and services will improve the productivity and experience of executives, the workforce and customers.
The need for IT to be the expert hasn’t changed; it just needs to be the expert in something else – service delivery. This journey of transformation leads to a more responsive and cost-efficient IT department, greater agility, a more competitive business model, and a richer user experience. CIOs have the opportunity lead the reinvention of the IT function, it's up to them if they want to seize it.
For the other five criteria and more information on how you can transform your organisation into a SDE, download our free whitepaper: ‘Why every CEO wants to lead a Service Defined Enterprise – and why the CIO needs to make it happen’.