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Increasing the Pace of Innovation

Innovation Executive Forum | Posted on September 10, 2018 by Karen Bader

The IT department of the past was like a hardware store. The business devised a new initiative. That initiative required tools and IT would provide them.

Today, things have changed. Technology does much more than support the business in generating revenue – it’s a key part of the equation.

In this world, the speed of innovation is a key differentiator.

To enable the business to scale and fend off competitors often means changing the way the organization thinks, plans and invests. Often, it falls to IT leaders to help lead the way through technology decisions and enablement.

At our recent IEF event, we spoke to IT executives and thought leaders in Montreal about the obstacles they face in bringing the business up to speed. We cover the highlights of the discussion in this article.

The Pasta Progression

In the modern organization, the CEO thinks about business value in terms of “more, faster, better.” Technology has a critical role to play in delivering that value across the organization. It’s up to IT to provide the speed and scalability to follow through.

But rising demand for a robust, scalable IT environment comes with a shift in IT’s reason for being. As one IEF member in Montreal put it, “the organization is going from what I call ‘depth in one area’ to ‘breadth in multiple areas.”

For many IT leaders, keeping up is sometimes a challenge. As another attendee explained, “our big challenge, or where we’re challenging IT a lot, is that we’re not able to be as agile as we’d like.” Achieving the speed necessary to react to the demands of the business isn’t easy.

“To adopt new product lines and adapt to the needs of our customers – it’s a painful process,” the member explained. “We often have to go through trial-and-error before we get it right.”

Often, our guests agreed, the problem is a lack of people. “When we want to scale up production, we have to scale up the number of people,” said one member. Although demands on IT have increased, resources haven’t always kept pace.

Another guest explained the problem. “It’s what was there when the company was smaller. Now, it’s grown rapidly over the last two years. But of course, IT did not grow.”

In other cases, aging infrastructure gets in the way. “We’re looking for a flawless experience, making sure there’s no downtime for our team,” explained one member from a web services organization. “A lot of our issues are around legacy tools.”

Sometimes, the cost and complexity of leaving legacy infrastructure behind are too great. The challenge ahead is “taking all of that and adapting it to the modern age and the size the company wants it to be.” Another member described the slow, steady process of bringing IT from ad hoc to simple, agile and efficient.

As one member described the progression of IT to support the business: “we’re progressing from spaghetti-like complexity back in the 2000s to ‘lasagna’ and then to ‘ravioli.’ Spaghetti was pretty straightforward, then we moved to lasagna with layers; now integration is key which takes us to the more complex art of ravioli.

From Cost Center to Competitor

For much of its history, the IT department operated in “do-more-with-less” mode. In its relationship with the business – and with finance – cost containment was the name of the game.

But today the conversation has changed.

Organizations now see IT as a primary driver of business value. As technology becomes more cost-effective from a “rent-versus-own” perspective, opportunities emerge to use technology to attract customers and drive market share.

The relationship between the business and IT has gone from “we need you to shave off between 8% and 14%” to a very different exchange. As one attendee in Montreal remarked, “We’re talking about revenue right now, we’re not talking about cost.”

Discussing ROI “is a lot easier when your revenue is going up.”

While this new equilibrium brings more resources, it also brings new dangers. In a competitive digital marketplace, the business can’t afford to wait. The ability to react to opportunities and fend off competitive threats is make-or-break.

Sometimes, IT struggles to meet demand. Staffing problems, legacy infrastructure and security concerns impede delivery of critical projects. As one member explained, “lines-of-business (LOBs) are saying, ‘you guys are not able to deliver in the timeframe we’re actually looking for.’”

In many organizations, the IT department’s purview over technology has evolved from “control-and-govern” to more of a partnership with LOBs. Some of the members found this arrangement left them out of the loop – sometimes putting the business at risk.

“We’re trying to implement security and a lot of people are doing things on their own,” explained one member. “They think, ‘Oh I can’t wait on IT,” and now we’re not stakeholders. We’re trying to pick up the pieces after.”

Another member asserted that reaction time from IT has been a driving force of cloud adoption – and even shadow IT. “They’re actually finding real tools that actually work and then they’re coming to us and saying, ‘this is what we want.’”

He also acknowledged that IT has a responsibility to make the best of the shadow IT situation. “I’m quite okay with that,” he said.

“Go out and get it – but then give it to me, so I can manage costs, so I know what’s going on.”

Holding on to the Best and Brightest

Technology is changing fast – and people are changing with it. Today’s users have more tech-savvy than ever before. Where once they depended on IT for technical knowledge, now they consider themselves experts.

“The consumerization of IT has set a whole new benchmark for how we approach an employee,” said one of our guests. Users now have the know-how to choose the tools, services and devices they prefer. When IT doesn’t provide them, they may resort to shadow IT – or worse, leave for an organization that will.

One of our guests pegged this as the greatest challenge facing IT leaders today. “If you want to grow as a company, you need to keep your smartest people,” he suggested.

The problem?

“They always leave for another place. The smart people want to work with smart people.”

Many IT departments face intense competition to recruit and retain the best technical talent. Competing offers from the “big leagues” is a key factor. In fact, one guest joked he would consider leaving his organization for one of the leading cloud providers.

“Even with all the perks, I still have to deal with that ‘spaghetti’ – that legacy stuff. I get the impression I wouldn’t have to there.”

Rather than compensation, modern technical workers have a keen interest in the technology they’ll be working with. This is sometimes reflected as early as the interview process.

“Candidates ask very different questions than they did 5 to 7 years ago,” explained one guest in a recruiting role. “They want to know what percentage of their time will be spent on the boring pieces and how much of it on the highly innovative work.”

But as another attendee argued, smaller organizations can compete by providing a work environment that allows tech talent to thrive. “We do stand-ups, agile methodology, user backlogs,” said one member, describing his organization’s approach to a digital workplace.

“This iterative process is really conducive to how millennials – and most people – want to work.”

New communication and collaboration mechanisms are also helping IT talent deliver their best work. As one IEF member argued, “if collaborating with colleagues becomes an obstacle, that’s when they leave. They want to go faster.”

In the end, our guests agreed, the best employees want to know they have an impact on the organization and its purpose. “They can do that work anywhere,” said one member.

“You need to sell them on that vision.”

Final Thoughts

To conclude our IEF session in Montreal, here’s a summary of some key insights from our participants:

  • If IT isn’t accelerating innovation, it’s getting in the way.
  • To achieve full agility, the IT environment needs to evolve from spaghetti-like complexity to “ravioli”, with fewer moving parts and increased efficiency.
  • IT is no longer a cost center, but it must partner with the business to control shadow IT.
  • Talent retention is the biggest challenge for IT. Rethinking collaboration can help.

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