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I lately wrote about The LoB and IT Dilemma and how both have different objectives ITvsLOB.jpg
and approaches. IT runs the company, while LoB strives to innovate at their own department.

This time I want to talk about the balance act, IT faces recently and what opportunities come with it. Many might be familiar with the bestselling book “IT Doesn’t Matter”. Nicholas G. Carr has the opinion, that “as information technology’s power and ubiquity have grown, its strategic importance has diminished”. This is a provoking statement – at least if you work in the IT industry. When we organized a Cloud Forum last year I had the pleasure to meet an excellent author and speaker, Joe Weinmann (@joeweinmann), who challenged that statement pretty well in his book “Cloudonomics”.

Bottom Line spending are costs, Top Line spending are investments

IT, being a relatively young field, has already gone through many changes. First an IT organization had more of a get-things-together role. But around the time of the dotcom bubble many new IT firms emerged and it became obvious that IT is not a static field, but an ever changing one. Not many have survived from that time; however the situation remains the same. New disruptive technologies change the way we live and work. And it happens at an unprecedented pace of change. They force their way and challenge many traditional markets. Some technologies undermine existing standards, such as the internet does with traditional Medias, or others evolve into a business idea and come out of nothing – born to tear down the establishment with new and better services. Big players were not prepared and now struggle to keep their market territory.

In this sense, IT will not simply vanish, but continue to evolve.  As soon as it is disruptive, we categorize it under the umbrella of Digital Transformation.

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And Digital Transformation is not about cost reduction, it is about future investments in new markets, new opportunities or at least to defend existing market positions against the close chasers. Therefore a business case has to be identified, a clear strategy has to be aligned and a business and technology roadmap has to be in place.

The technology itself becomes a liberating force. As an example, it is cheap to store and process large volume of data (Big Data) these days, but only if companies are able to make it smart data and show tangible benefit, they will see adoption. That should be put into the center of gravity! Cloud is another technology right at the heart of digital transformation, because it means freedom, efficiency and agility.

Nevertheless, IT can also not drop all its traditional tasks to do something else. The challenge here is to find a way between traditional role and conquering new fields: More like a balancing act.

IT’s traditional role is to run the company. In its own sense “keeping the lights on” is a tactical task. Now, however, IT has the opportunity to change that and get back more relevant on a strategic level. Cloud will reduce the commoditized footprint of IT and free it up for more value adding tasks. This will change the IT’s role and makes spending not costs anymore, but investments – giving everything a more innovating touch.

Cloud is not the first disruptive technology we encounter. We had the computer, demanding all industries without exception to adapt to it and the internet has done the same. The change might take time but it will inevitably happen. But if we learned one thing from the past, it is that the early bird catches the worm. Being one of the first that understands and uses the new technology to ones advantage will differentiate you from your competitors. Every company needs to tackle the challenge to transform their business into the digital age and requires a balancing IT organization to do so.

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Now, in order to form a new strategy, one has to understand macroeconomic trends on the one side and enterprise business objectives on the other. Disruptive technologies – such as cloud, mobile and big data – should be adopted and used to further support business objectives and to change the company. This will eventually improve the company’s competitiveness – and make it a TOP line approach.

Summary

Digital transformation changes the company and directly influences competitive relevance. It is a game changer. Now, who can best control digital transformation if not IT? IT has to use the opportunity and step up towards change. Digital transformation cannot be tackled blindfolded and certainly does not happen within a single company layer. If IT is able to make use of the technology to gain new market share, they are in a good shape to further influence the company’s strategy and be back at the CEO table.

Look forward to your Thoughts.Please follow me Bert Schulze ( @BeSchulze ).

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1 Comment

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  1. Frank Heine

    Very good article – answered a lot of questions to me, specifically around the perception that “cloud” is seen as a threat to classical IT

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