Technological disruption and innovation could enable IT's strategic relevance, says a new CA Technologies report, but IT pros and CIOs cannot wait to make their case — they need to act now.
In its February 2014 survey and white paper, The Changing Role of IT and What to Do About It, CA Technologies argues that disruptive technologies and the current hypercompetitive business climate are creating an opportunity for CIOs and IT to contribute in bigger ways to the success of a company.
However, the Executive Summary states there is a pressing need to act:
the window of opportunity is closing as lines of business get more tech-savvy, spending more of their budgets on IT projects and re-examing the role that IT plays in advising them.
From the survey, 35% of IT spend is occurring outside the department, a figure expected to grow to 44% in three years. Alarmingly, only 11% view IT as a developer of new services, and 14% see IT as a driver of new business initiatives. More encouraging, 40% of those surveyed believe IT is "strategically important," up from 35% in 2011.
To better understand the significance of the results and their implication for IT leaders, TechRepublic held a Q&A by email with Lokesh Jindal, General Manager, IT Business Management at CA Technologies.
Key takeaways from the interview:
- The future of IT is about being a trusted advisor.
- IT leaders must demonstrate how technology services can drive the business.
- There is a tremendous opportunity for IT to reposition itself, but it needs to act now.
- Changing roles: Some services no longer require IT's involvement, while there can be greater focus on higher-value services.
- Alignment: IT needs to connect its strategy and metrics with those of the business.
- Security: IT must help find the balance between enabling and protecting the business.
- IT needs to become a center of innovation and a revenue-generator in an enterprise.
- Every company is essentially becoming a software company.
TechRepublic: The future of IT is not about control, it is about (fill in the blank). What word or phrase would you choose and why?
Lokesh Jindal: The future of IT is about being a trusted advisor. IT will never be able to control all of the IT spend or dictate what people use. In this new app economy, the key role evolves to becoming a trusted advisor to the business on issues of security, risk, pooling of buying power, and how to use new technologies to deliver competitive differentiation in the market. It is all about the customer. IT leaders must be able to demonstrate how technology, apps, and services can fuel revenue, secure more customers, help to enter new markets, develop new products and services, and create exciting and rich customer experiences.
TechRepublic: The tone of the Executive Summary sounds quite urgent — what is the risk of IT becoming irrelevant, or severely marginalized?
Lokesh Jindal: The risk is real, and it is now. We are already several years into experiencing the impact of the consumerization of IT, empowering employees to forge their own path without IT's support or expertise. We're even father along into the cloud era, giving business departments easy access to find and buy IT services themselves. The study points to more than a third of IT buying now happening outside of IT, and as a result, IT can no longer just say "no" or hide their heads in the sand. They also do not need to be on the defensive. This new hyper-connected world opens up a tremendous opportunity for IT to reposition itself and the services they provide, but they need to act now.
TechRepublic: There appears to be a substantial gap in perception. 79% of CIOs compared to 56% of other respondents believe that IT is providing required services. Why the gap? What do you believe is missing, based on the other respondents' point of view?
Lokesh Jindal: There are two very different ways to look at this. A pessimistic view would say that CIOs are simply out of touch with reality and what is happening in their organization. Those who work for the CIO see first-hand when business departments or end users go around IT to get the services they need, while the CIO may be blind to this.
However, an alternative view is quite possible: The CIO is already on the same page as the rest of the business, and so the definition of a "required service" has changed. CIOs may simply be acknowledging that some services no longer require IT's involvement, but that IT is in fact still providing the most essential, higher-value services. They may already be thinking about this from a point of view of how their role has changed.
TechRepublic: What is the best way for a CIO to fully engage lines of business (LOB) in sharing IT metrics and key performance indicators (KPIs) and better position IT?
Lokesh Jindal: Traditionally in meetings between business and IT executives, the IT's KPIs were far too technical to be interesting to the business. IT often painted a pretty, technical picture when the business experience really was not pretty at all. The challenge was that while IT was focused on milestones and SLAs, their business counterparts were focused on outcomes.
There are several steps to making this transition:
- Connect the IT strategy to the business strategy — be very clear about what business strategy is supported by a specific IT investment and the expected business result. This is where it starts.
- Clearly show how investments are aligned to that strategy and how IT is executing to make progress for those investments. This is where a portfolio management perspective becomes very critical.
- Translate the IT metrics to business metrics. This is such an important disconnect to address that we now offer a workshop series, called the CA Business Service Reliability Workshop, to help IT executives transform IT mathematics into relevant business indicators. Volume, revenue, and operational metrics have been most impactful.
Essentially business wants to see strategic alignment, investment focus, and achieved outcomes. That is the key to a better CIO relationship with the business.
TechRepublic: Can you provide an example of an IT department successfully moving to "the forefront of strategic decisions" within an enterprise?
Lokesh Jindal: Two examples come to mind. The first deals with big data. The CIO of a large financial institution explained how his IT organization uses big data to drive innovation across the business. Specifically the IT group's information-based strategy enables the IT team to leverage data in ways that speed decision making and problem solving, reducing costs and risk for the business. IT's early adoption of big data helps this company offer better services to its customers, for instance, via their mobile devices. This is just one instance in which IT's advanced knowledge of a disruptive trend and application of technology, in this case big data analytics, provides the business with better tools to serve its customers.
The second is around investment alignment. Another large financial institution loaded all of its IT investments into a single project and portfolio management system and prioritized based on business strategy. Through this effort, the PMO team uncovered $100M of investments that were still moving ahead even though the business strategy had changed. With this visibility, they were able to sit with the business and discuss prioritization based on resources, and to re-focus the investment on business outcomes as opposed to executing IT projects.
TechRepublic: Can cybersecurity be an enabler for IT? Only 43% of respondents believe that in three years IT will play a role in securing critical data. Could this outlook be too low, given the global potential for cyberrisk?
Lokesh Jindal: The IT security landscape is changing in the face of cyberrisk, but IT will continue to play a large role in securing critical data. This number might be low, but perhaps the respondents are considering the growth of security as a service. For example, identity and access management (IAM) capabilities are now offered as a service from a variety of companies, including CA Technologies.
But even then, IT must be engaged in the process of working with service providers, and of course, there may be some areas that organizations deem too sensitive and so they will want their critical apps and information to remain protected by the IT organization.
The IT security leader's job has evolved over the years. They can no longer simply offer the security of "no" with no access, a closed perimeter, and focus purely on protecting assets. They now must leverage IT to help meet the growth needs of the business. So, one of the biggest security challenges for business today is finding the balance of enabling the business while protecting the business. A focus on identities can help with that balance — even enhancing productivity — with single sign-on, streamlined authentication and user self-service, while providing security through controlled access and managed user identities. This enablement helps drive new, innovative services for mobile and cloud-connected enterprise.
TechRepublic: Given the trends that the survey uncovers, what are the best and worst case scenarios for the future of IT? What is in the best interest of the enterprise, given the impact of disruptive technology?
Lokesh Jindal: The best case scenario is that the business recognizes that technology is fundamental to business success — essentially every company is becoming a software company — and that no role is more critical to this than the CIO. IT becomes the center of innovation for the company, and is measured as a revenue-generator rather than a cost center. Given the never-ending developments in disruptive technologies, this is the only scenario that makes sense.
I would like to add that the research presents challenges IT organizations face today in terms of perception, but CIOs and other IT leaders should look at this study with an eye on opportunities. The data shows there is room for growth for IT organizations and ways they can improve how they are perceived; for instance, providing better metrics to the business or taking the lead on transparency of IT investment alignment to business strategy.
Don't wait for business leaders to request or go out and get their own IT services. Instead, understand the business, know what technology can do to help it grow, and take the lead on driving those innovations. IT has the resources, tools, and talent to take the lead, CIOs just need to act now to prove how invaluable IT already is.
Research firm Vanson Bourne conducted the survey for the The Changing World of IT report on behalf of CA Technologies in May-June 2013. Respondents included 1,300 IT leaders at enterprises with over $100 million in revenue in the US, Brazil, Europe, and the APAC region.