A new charter for IT in 7 Steps

The times they are-a-changin’

“There’s a battle outside and it is ragin’ / It’ll soon shake your windows and rattle your walls” (Bob Dylan / Warner Bros, Inc.)

This is the new normal: changes, disruptive or structural, are happening continuously, forcing us to adjust quickly or get side-tracked.

IT Departments have pretty much kept the same charter, including structure and inherent flaws, for the past two decades. Issues raised by business leaders and employees today are strikingly similar to the ones we were hearing then: alignment with business demands, responsiveness to market changes, projects success, security constraints and difficulty to collaborate. Sounds familiar?

At its core, the IT Function has not been changing after the introduction of the Service Management concept with ITIL V2 ISO / IEC 20000 around 2005.

Fast Forward to 2018: many IT department are struggling with emerging challenges, while those eager to adapt find themselves limited by now-obsolete charters.

 Getting out of this box starts with rethinking the IT Charter from an enterprise and business-centric point of view. As much as the whole business and organization needs technology to operate and succeed, their existence and success is the only reason why there is an IT function in the first place.

Adding Digital, Cloud and Cyber-security to the standard charter did not bridge the gap or foster a new understanding between the business organization and its technology function.

A new Charter for Technology

The IT Charter is the first topic to revisit; most of the old mission-statements are built off the concepts of managing assets, ensuring user’s ticketing performances and maintaining security of data. It is all based on a misunderstanding that the management of technology assets is critical to the success of the company. Well, it is not, and there are less and less assets for IT to manage.

It is always good practice to manage assets effectively, but benefits do not compare to the potential value of technology as a business enabler or a competitive differentiator.

 Back in the era of large mainframe computers and data centers, Boards often positioned IT under the CFO or focused on the fiduciary responsibility associated with massive amounts of capital expenditures.

Although data centers remain a viable option for many large corporations, SMB businesses and even large companies have been shifting already towards co-location, cloud global solutions and the virtualization of core assets. Meanwhile, individual computing devices have become smaller, generic and commoditized (think IoT).

Meanwhile, business functions rely more on providers leveraging platforms and software-as-a-service turnkey solutions, taking the entire infrastructure equation out of the traditional IT realm.

IT Departments, often stuck into a command-and-control mode, have seen the foundation of their assets-based charter dissolve, while outsourced solutions did not foster new / valuable interactions with their business colleagues.

The global sourcing trend started by the “Indian Tigers”, rapidly joined by the “big 5”, mostly solidified the model, as the reference charter remains mostly the one from the late 90’s and early 2000’s. The focus on costs savings and benchmarked spend created the collateral issue that IT is now often struggling with taking on new challenges.

We have a pressing need to rethink the IT charter from the start.

Front office functions are focused on generating income and growing market share, while back-office functions manage operations and optimize margin. With technology permeating all functions and aspects of a business, it is not dictate either a top-line or a bottom-line exclusive charter: it is both and it depends on the context.

Two examples:

• Rethinking the Technology Charter as enabler for growth and income generation, but also as a value-generating structure optimizing processes, performances and competitivity are complementary. Providing a CRM solution to the sales and marketing functions is key to improve top line performance. Whether the solution is externally hosted, in-house, or a hybrid is irrelevant. What matters is that the sales and marketing teams can use a tool to boost their own capabilities and performances. IT teams are ideally positioned to coach on the choice, once they are no longer thinking in terms of infrastructure ownership, instead looking at the ultimate net business value to the entire organization. IT should be Sales & Marketing Enabler, beyond software deployment.
• Building a Business Intelligence solution can be another example, where creating pretty dashboards often distracts business leaders and executives from the real issue: making the right decisions and observing their impact so they can course-correct dynamically. Of course, where the data reside, how the architecture is designed and the transactional performance all matter. But isn’t this why IT is part of the effort already? Providing an easy to use, intuitive (to the business) solution, with modeling capabilities that do not require a team of expert coders each time a request is generated, is a lot more complex and collaborative than providing and repeatable dashboard. Providing a clear and agreed upon definition of terms used in the reports can even be more critical than the accuracy of the numbers (when was the last IT drove the discussion on the definition of "total Sales", between net sales, discounted sales and tax-included sales?).

Rebuilding an IT charter based on business value and performance can reposition IT where it belongs: technology as a tool to help organizations succeed in their business ventures. The true performance of IT is measured through its net contribution to business success and economic growth, more than its budget ratio to income.

The era of data centers, server rooms and Technology as a cost center is over. Now is the time where technology architecture, services, resilience and operational capabilities are the primary focus.

Most RPA applications are Industry Specific, as the recent Everest Group report shows (Q2 2018 Market Vista? Briefing: Global Services Market Trends) . This would be a good conversation starter with the COO: should we take a look at how can RPA help the operational performance?

7 key steps to get started:

To conclude, a quick hint for Technology leaders: how does 1% process performance improvement in fulfillment or operations translates in EBITDA gain today, in your own organization? How does it compare with 5 and 10 years ago?