How IT Can Change For the Digital Era and What Leaders Can Do About It

I’ve recently come to believe that we’re at a watershed moment in technology as it’s applied to business. The aging, creaky model of centralized IT departments has been increasingly challenged by waves of internal and external competition that it’s never had to face. It started with the outsourcing wave but picked up irresistible momentum with the arrival of SaaS, the cloud, app stores, shadow IT, and BYOD/BYOA/BYOT.

The reality is that IT is struggling mightily in most organizations to keep even basic technology up-to-date, dealing with critical cybersecurity issues, closing fundamental gaps between IT services and the business, and generally not guiding their business as a whole into the digital future. It’s time to call it like it is: The legacy model of IT is largely insufficient when it comes to modern digital enablement and transformation.

As I’ve said, the CIO has a new mandate today, and that is broad digital empowerment in scale.

But I’ve come to praise IT, not to bury it, as the saying goes. I explored yesterday on ZDNet the yawning funding gap between traditional companies and digital firms, the latter who spend just over two times what the rest of us do on IT. I’ve also explored how M&A has become a compelling model for companies to acquire digital innovation, instead of doing the hard work and taking the risks in updating their core businesses with the latest technology advances and new digital business models.

Can IT get where it needs to be today? Yes, but not in its present form.

How Digital Enablement and Transformation Is Changing IT and What the CIO, CMO, CDO, and CEO can do about it

Moving Well Beyond Legacy Technology Enablement

This has all been said before, however. We need to take a hard look at where we are today, and where we can go. They say that the first thing you do when you need to fix a major problem is to admit that you have one. This then is the problem statement for traditional IT:

  • The rate and scale of external technology change now far outpaces IT investment in most companies
  • IT departments tend to be overly centralized, insular, and disconnected from the business
  • The traditional model of IT is to internally assume all the effort for digital enablement and transformation, instead of tapping into anyone who is able to help
  • Previous management solutions to “fix” slow change or innovation, such as strategic initiatives, tech incubators, “bolt-on” transformation, and Centers of Excellence, tend to recreate the problem they’re trying to solve
  • Those closest to the business often have the least role in applying technology to it
  • There is a one-size-fits-all mentality to most IT, making all parts of the business accept limited solutions
  • Once a technology solution is found, it’s rarely revisited until the imperative for change is unavoidable (and therefore late)

Whatever comes after existing IT, is going to offer a clean and consistent way to address all of these challenges, likely inherently though it’s very nature. The good news, is that I think we’re beginning to see the outlines of what that is begin to emerging from collective industry attempts at solving these challenges, going well beyond existing models of digital enablement.

Over the last few years, I’ve been involved in a number of attempts to solve these problems at an organizational level. What’s struck me, and this has been an absolutely fascinating pattern that I’ve now seen or encountered a number of times, is that the efforts that actually succeeded did something quite different: They enabled change at the edge of the organization, proactively seeking it out, and giving change agents and their champions toolkits, playbooks, and real support to drive local transformation. My explorations of the case studies at Enterprise 2.0 SUMMIT in Paris this year with social business realization programs at some of the largest in the world has only underscored this for me.

It’s time we realized that like so much with emerging technology, everyone is in the IT department. That’s not to say that everyone should have full responsibilities of traditional IT, but that digital needs are so pervasive and so extensive that we need to reverse the direction of solution develop. We must move, as John Hagel famously said, from push models of technology enablement, to pull. That’s the only scalable and sustainable way of accelerating change, deal better with uncertainly, maintain high levels of flexibility, provide a much more authentic and compelling connection between what we do as businesses and our technology, and almost completely eliminating the misalignment between business and technology.

Moving to Pull Models and Networks of Decentralized Change

As I collect case studies and permission from clients to talk about these things, you can expect me to paint a clearer picture of how digital realization in the enterprise is changing, but for now, the new model of IT that organically seems to be emerging is one of a distributed network of enablement, something that for complete lack of a better term I’ve previously called a “Network of Excellence.” I find the evidence for this model is increasingly compelling and I ask that you join me in exploring this approach, because as of right now, it’s virtually the only new model — other than bi-modal/tri-modal, which I think is important but insufficient — that seems clearly evident to me in the dozens of major IT projects or initiatives that I take a look at every year.

In other words, how leaders will create and use networks of digital enablement is the agenda for the rest of this decade. I’ve explored what leaders can do to start enabling this model this year, but we need a longer term plan based on evidence across multiple industries.

The good news: I still very much believe IT can lead this transition to a new service delivery model. But our organizations are no longer waiting. They have alternatives and choice, and they will use them.

An Urgent Industry Discussion On the Future of IT: Please Join In

I would very invite your commentary, local stories, and discussion on this topic as we look at how the role and purpose of IT is changing fundamentally as we fully enter the digital era.

Additional Reading:

Imagining the Future of the Enterprise

Businesses Have Digitized But Not Transformed

The Role of the CIO in Digital and Social Business Transformation

8 Responses to How IT Can Change For the Digital Era and What Leaders Can Do About It

  1. Nice article, but it is contingent upon an underlying assumption that is flawed. Not all businesses need to change their technology as rapidly as you seem to suggest they do. Banks have not needed to radically change their technology at that pace; it’s perfectly possible to move at a reasonable pace, driven from within a centralized department, and meet customer needs. USAA is a good example. They were and remain ahead of the curve with their use of technology and how they interact with their customers.

    • Ben,

      I believe the financial services industry has largely been quite slow to rethink their products and services in digital terms. The whole Bitcoin, cryptocurrency, and blockchain movement is just one example of lack of digital leadership. It’s been up to tech leaders like Apple, Google, and Square, who are the ones actually figuring out mobile payments for example, to move the industry forward. There are many other examples. The digital ship is sailing, and given their enormous incumbent size, traditional financial firms just can’t see it yet. It’s the same in virtually every industry, and I’m busy making a map of the disruptions happening to publish soon. Now, USAA is actually a fairly good example of a leading organization that is not too badly with tech today. But could they do better, even much better. And they’ll need to as financial services gets increasingly led by digital-native firms. Good comment though, and I appreciate you taking the time.



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  4. Coccobill says:

    Very nice article (as usual !).
    It remembers me a visionary book I read few years ago : “Igniting The Phoenix : A New Vision for IT”

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