CXO

Ride the commodity IT wave by attempting bold tech strategies

IT can become the core of your company's revenue generation engine -- if you take advantage of trends that are impacting the transition to a new IT "factory."

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There's an interesting and long-running trend happening in corporate IT. Traditionally, IT was largely a back office, support function. IT tools and technologies would accelerate traditional business processes and often generate large cost and time-savings, but IT was applied primarily to existing processes. Need a faster typewriter? IT offers a word processor. Need faster accounting and financial close? In comes ERP.

In the past several years, IT began to leave the back office and, in some cases, has become what amounts to a new "factory" that directly contributes to the corporate bottom line. Here are some of the trends impacting this transition and how to take advantage of them.

The rise of commodity IT

Until the last decade or so, building a modern enterprise IT infrastructure required significant staff, skills, hardware, and money. Much of this changed with ubiquitous internet connectivity and service providers peddling hosted and cloud applications.

Ten years ago a small business that desired basic corporate email was buying a server and some heavy-duty software, and likely hiring someone to deploy it over the course of several weeks and maintain it in the long term. Now, that same business can acquire large enterprise-grade email with 15 minutes and a credit card. The same holds true for everything from CRM to ERP software.

Rather than owning a complex and expensive infrastructure to support back office IT functions, they can now be purchased at commodity prices, often an order of magnitude less expensive than traditional, in-house enterprise software. In the past few years, it has become possible to build a large company IT infrastructure without purchasing hardware, software, or the internal resources to maintain that infrastructure.

This has often been regarded as a cost-saving maneuver, or in some cases as a threat to existing IT staff, since their jobs can now be sent "to the cloud." What's far more interesting about the rise of commodity IT is that it frees up internal IT resources to focus on the front office, and shift from maintaining expensive tools that will rapidly be replaced, to becoming indispensable designers of the IT factory.

IT gets productive

As back office IT became commoditized and moved to cloud providers, new technologies like social media reshaped marketing, and traditional industries from automotive to broadcasting transformed due to technology. Automakers are becoming consumer electronics players with their own extensive cloud-based service delivery platforms, while broadcasters abandon satellites and recorded video for digital files that are faster and easier to transport. Both shifts require massive investments in technology and the intelligent resources to deploy them -- far more interesting roles than applying patches to database servers or caring for an email system.

Riding the wave

For most IT leaders, this is not new news; however, many are waiting to be summoned by their counterparts or fellow executives instead of actively discussing and planning a shift from back office to front office.

Rather than carefully evaluating cloud offerings to replace some mundane in-house technology, put your time toward a broadly-focused, bold IT strategy that considers how IT can become the core of your company's revenue generation engine. Depending on your company or industry, this might occur by building a modern digital marketing infrastructure that accelerates sales, or through traditional products that are increasingly loaded with connected technologies and supported by an in-house cloud platform that delivers ancillary services and revenue.

Products from ovens to sneakers are now being augmented by technology, and who better to spearhead that process than an IT leader already familiar with the company's products, people, and existing infrastructure?

About

Patrick Gray works for a global Fortune 500 consulting and IT services company and is the author of Breakthrough IT: Supercharging Organizational Value through Technology as well as the companion e-book The Breakthrough CIO's Companion. He has spent ...

1 comments
BTRDAYZ
BTRDAYZ

As an IT Director that has spent the bulk of my career supporting small to medium sized businesses, I've seen this coming for a number of years. What needed to occur is observing the new methodologies, and seeing if they work well enough to be trusted. We are at that point.


It was strange, but a time came where I just got a feeling:


- I think I just built my last in-house Exchange server

- Next time the phone systems are due for an upgrade, I don't think I'll go with an internal VOIP PBX.


These feelings affected my training choices when choosing to keep my skills updated as a manager. Business Process Management or Project Management Professional training became more important than certifying in the latest vendor specific technology. If my SMB employer needs a redundant e-mail system with lots of storage per mailbox, I just can't compete cost-wise over a 5 year period when building in-house compared to using a service like Office 365 Exchange Mail. Now I've got datacenter redundancy, 25 GB mailboxes, offsite backup that eliminates Iron Mountain pickups and bandwidth utilization, spam and virus filtering.


Yes, these technologies reduce my need to run around putting out fires here and there, and focus on things that are more strategic to the firm.

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