For those of us working in IT, I’m afraid I’ve got some bad news, our business masters are not happy with us. According to a recent survey from McKinsey, just over half of all executives say their CIOs have a significant impact on their organizations’ business issues. Ouch!
They also said they want to spend on average 8% less on infrastructure, but 6% more in innovation. This is all well and good for our Veep’s to say, but how do we IT practitioners actually achieve this?
Before we go beating ourselves up, it’s worthwhile understanding how we got here.
What the (almost) great depression taught us
The Global Financial Crisis of late 2000’s not only sent many people to the wall and Governments scrambling for economic stability, it forced many businesses to take a good hard look at their costs and figure out new ways to become efficient. As consumer demand slumped to an all time low, competitive forces became fiercer than ever as survival instincts kicked in. With IT being seen as a high cost center, it was inevitable that the bean counters went knocking on their door first to look for savings.
And probably with good reason too! I mean how do you explain to an accountant why all the storage you purchased a year ago is only 30% utilized when costs continually go down? Or how do you justify why software to help you streamline operations remains uninstalled because you were too busy keeping the lights on?
They will ask you why can’t we just pay for what we need, when we need it? And if we don’t need it anymore, just hand it back? The fact is IT needs to align to market economics, not technology economics if its is to remain sustainable.
Expectations have changed forever
In an internet driven, globalized economy the production of goods and delivery of services is won and lost on realizing economies of scale. The differentiator for customers is no longer the product itself, but speed and convenience they can get it. Customers have more choice than ever before, so their expectations of service have not only gone up, but changed all together.
Think about the last time you wanted to buy something, how did you do your research? Did you jump in your car, drive down to the shopping mall and walk the aisles? Did you get out the yellow pages and start ringing stores in your area? The answer for most of us is no, we took our smart phones or notebooks, punched in what we were looking for into our favorite search engine and commenced our journey of discovery. Chances are you didn’t even purchase it from your own neighbourhood or country, rather somewhere overseas where you could get it conveniently delivered to your door.
And the most likely reason your chose that supplier is they made it really easy for you to purchase from them. Maybe they allowed you to browse details of the product and pay from a mobile device, or helped you make your decision by hearing what other customers thought of the product and what else they purchased.
Delivering the mobility enabled business, anywhere, anytime and on any device is necessarily trivial, but is now the means by which companies now need to compete our hearts and wallets.
IT is no longer black art and changing the game… again
I remember when walking into a board room to deliver a IT strategy presentation to line of business managers felt like a meeting between two alien races. Either their eyes would glaze over before I got to the second slide or they thought WINDOWS stood for Wished I‘d Never Deployed On Work Station.
Speaking different languages is one thing, but having misaligned priorities made synergies between functions really tough. According to this study last year, only 10% of top marketing and IT executives believe collaboration between their corporate functions is sufficient.
Thankfully the discussion in the boardroom these days is changing, and the C-Suite are becoming much more comfortable with IT. Decades of exposure to implementing systems like ERP (Enterprise Resource Management) together with the consumerization of IT through the internet and mobile devices has not only made them more knowledgeable, but empowered to envision its possibilities. Sharing information between departments, redefining business processes and reaching new customers and is now easier than ever before.
Of course all of this does not mean the role of the CIO is redundant, far from it! Greg Baster, CIO of property group GPT, summarized it perfectly when he said “it’s not a change in role, it’s a change in emphasis”. With the line of business leaders now stakeholders shaping the technology strategy, IT is a business partner, as opposed to just a naysaying support function.
We are already seeing the outcome of such collaborations, in fact they are causing industry wide disruptions. Take for example Yu'E Bao, new kind of financial institution backed by e-commerce giant, Alibaba. They offers the convenience of internet enabled on-demand deposits offering higher wealth management returns using technology-enabled insight through advanced analytics of its Alipay accounts. By predicting when users will move money in and out of their accounts, they are able to better manage liquidity risks and offer its customers almost twice the interest rate of traditional banks. In less than two years, they have managed to attract over 81 million customers to this new model and really shaking up traditional markets in China.
A new imperative for IT
These economic evolutions, along with nexus forces of the cloud, mobility and insights through analytics have changed the landscape for IT practitioners forever. The imperative to let business drive IT and not the other way around is now apparent if businesses are to not only survive, but thrive in the brave new world. To lead this, we need to envision a new way to build IT, we need Business Defined IT approach.
I know it sounds like another “markitecture” buzzword, but a Business-Defined IT strategy calls for superior capabilities for delivering services faster and continuously. Sure the infrastructure that support these applications needs to continue to be reliable and scalable, but moreover it needs to be responsive to changes and future-proof to adapt to the unknown. In other words, it needs to be software-defined to make new functionality available quicker, highly automated to bring value instantly, non-disruptive to service customers 24/7, extensible to deal with hyper growth and virtualized to meet changing demands.
This week, Hitachi Data Systems is announcing the first important step to this new imperative; we call it Continuous Cloud Infrastructure. You will hear a lot about how we are bridging yesterday’s legacy data center to tomorrows mobilized IT-as-a-service.
In the next few series of blogs, my colleagues and I will take you on walk, drive and flight across the world to show you how Business Defined IT is already happening now, and how you can harness its power in your business.
But we also want to hear your perspectives and the initiatives going on in your business, so please share them with us here.