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Doing More than just “Keeping the Lights On”

Innovation Executive Forum | Posted on November 3, 2017 by Erika Van Noort

In this era, the role of the IT department is much more than keeping the lights on. From machine learning and artificial intelligence (AI) to cybersecurity and customer engagement, technology is reshaping the way we do business.

In this environment, IT is no longer just a means to keep functional areas afloat: It’s a primary driver of organizational strategy. At our most recent IEF dinner in Seattle, we spoke with IT executives about having a seat at the table when it comes to the strategic direction in their organizations. Below we share some key insights from those who joined us, with a focus on:

–    Leading through change in the face of disruptive forces

–    Tapping into data and analytics to create value

–    Capturing and communicating the business value of IT

Leading the Charge

Technology is a disruptive force in business and the pace of change is only accelerating. Factors that once put a company ahead no longer has the same staying power.

“We were first-to-market, we were patented with that model. But that’s only going to carry us so far,” offered one attendee from a pet insurance provider. “For a long time, it was our product that put us over our competitors. A lot of competitors have now copied our product.” The member explained that despite being a market leader in the field, his organization could shed market share to a competitor offering a better app-driven experience.

An IEF member in the digital ad space described a major disruptive force in the creative industry: The big consulting firm with the highly repeatable standard process, as opposed to the traditional agency that searches for the “secret sauce” in every account.

These firms offer an efficient, inexpensive and scalable alternative to traditional agency work. For the moment, he explained, this approach will fail to win over major accounts. However, the danger lies in thinking this approach only threatens the business’s low-hanging fruit. What was once a fringe competitor in the industry could move to the core as they refine their business model. “The problem is that you stop paying attention. They start creeping up your chain and pretty soon they’ve eaten your business.”

Today, business leaders in every vertical must ask themselves the question, “Could we be disrupted by an app?” The answer is: Yes.  Every company is becoming a technology company in some form. Those who aren’t will fall behind.

Whether internal or external, this means IT leaders play a bigger role in leading their organizations through transformation.  As one attendee lamented, “we’re doing a lot of organizational change management we did not imagine we would have to be doing a few years ago.”

Nonetheless, change management is now a vital facet of IT leadership. As more business outcomes become dependent on technology, it falls to IT departments to plan, implement and drive adoption of new tools. From refreshing office technology through what one attendee dubbed “ax the fax” programs to transitioning out of the data center business, the organization counts on IT to transform the way work gets done, break down silos and drive a better digital experience.

A representative of the financial services sector saw the value in bringing a streamlined digital experience to customers. She also weighed in on the associated challenges:

“When users go to Uber, they get an experience that’s really good. Every week, their expectations are rising, and we need to be able to meet those, to make their lives a little easier.”

Further Reading: 1 Reason Why Most Change Management Efforts Fail (Forbes)

Data: Fuel for Disruption

In October, Dell EMC announced a massive $1B R&D investment in the Internet of Things (IoT). The move signals the company’s push behind edge computing. It also recognizes the enormous potential for data to power disruption.

As organizations harvest more data through technology products, services, and devices, IT leaders play a greater role in harvesting this rich intelligence.  The question is, as one attendee explained, “How do we take information that’s available to us and turn it into meaningful insights?”

Many modern technology products capture data on almost all aspects of their usage. Many also have artificial intelligence (AI) components that analyze the resulting data to spot trend indicators and drive value. These analytics create outstanding opportunities to improve engagement with customers and open new revenue streams for the company.

Often, that data is critical to driving product decisions, or steering marketing and advertising strategies. In fact, sometimes this data holds more value than the initial transaction itself.

One member in digital advertising gave the example of a movie rental kiosk company. They discovered, “The DVD was not the market. It was the person renting the DVD.”

He explained that capturing the transaction data and tying it back to the retail location where the rental took place empowered the kiosk operator with much richer information about the customer. This, in turn, fueled better-targeted marketing and promotional efforts across several touch points.

“We’re trying to determine who’s using our product and what features they’re using: How does that help us sell more product, not just build it.”

As one attendee representing a network of specialty surgeons indicated, his organization gathers and analyzes patient outcome data to articulate their value to patients as well as their referral network of primary physicians.

“Analytics is key for us. In a very competitive world, that’s our leverage. That’s our advantage.”

Further Reading: The Edge Will Eat the Cloud (Gartner)

Building the IT Value Prop

Technology is no longer seen as the purview of one specialized function area. It now permeates every aspect of the business. In a scenario where technology is integrated with every line of business, IT leaders often feel the need to re-evaluate the ways their department adds value and re-invent the ways they communicate that value.

As one IEF member stated, “While we’ve always worked very hard to keep the lights on and keep our data centers enabled, there’s always been a solution focus to our team.”

“It always comes back to the mantra of ‘Business value of IT.’”

One member described implementing best-in-breed solutions and driving adoption of machine learning and AI tools to strengthen his team’s value to the business.  The result was a dramatic improvement in the real-time delivery of critical reports.

Another member in the workflow automation sector gave the example of adapting his own company’s products to provide an in-house solution for their customer portal. This success enabled his IT department to play a principal role in shaping and defining the customer experience. It also provided an excellent case study to take to clients.

“We’ve been able to improve the way [our company] does business with [our company’s] products. It was an amazing opportunity to sweep in and develop a custom solution.”

This question of IT’s business value is perhaps felt strongest around the subject of cybersecurity investments. “There hasn’t been a meeting I’ve been in where someone didn’t say this was a top concern for him or her,” said Alayna Broderson, the District Sales Director from Softchoice.

In any industry, data security is paramount. In some verticals, the cost of a breach is beyond extensive. “You cannot afford to spend at a level where you’re 100% secure,” complained one attendee. “There’s no such thing as 100% secure,” argued another.

While the best time to go to the business for more investment may appear to be after an incident, one member offers an alternative approach: When no incident occurs, remind the business that security investment pays off. “Remember all that money I asked you for two years ago? That’s why we didn’t have an impact. That kept us in business.”

At the end of the day, accountability for security rises to the top: “Our role within technology is to make sure executives understand that this is a business decision, not an IT decision.”

Further Reading: IT’s Future Value Proposition (McKinsey)

Last Thoughts

This concludes our IEF Seattle event, where we learned more about the evolving role of IT leadership in maintaining the agility and security of the organization. Here are the key takeaways:

–    No organization or industry is safe from disruptive technology, but IT is poised to lead change

–    Data drives pivotal product intelligence and IT holds the keys

–    A disruptive environment strengthens the IT department’s value proposition

–    Security is not a single department accountability

Have any thoughts to add? Join the conversation. #CIOTableTalk

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