A ZDNet Multiplexer Blog What's this?

IT teams bypassed in era of digital disruption

Digital disruption is either here or well on its way for most businesses.

The digital revolution is having a serious impact on Australian enterprises. According to a recent report by GlobalData (commissioned by Telstra), 80 percent of Australian organisations (ICT, HR and facilities management) acknowledged technology was transforming their business.

There's a never-ending stream of technologies that promise businesses a real competitive edge. It doesn't what type of organisation (it can be as wide-ranging from manufacturing to the arts) and it doesn't matter the technology (from 3D printing to IoT). However, success depends on the individual organisation getting on top of their own disruption.

And yet, IT teams within organisations who are best positioned to enable this competitive advantage have great cause to be concerned. In short, the research revealed that IT is often being bypassed. 33 percent of Facilities Management respondents stated they have already implemented workplace transformation strategies. A further 29 percent of HR teams have done so; however, only 3 percent of IT teams reported involvement in workplace transformation strategies.

The implication from these results is that IT teams aren't being consulted; they're being bypassed in favour of ad-hoc strategies within individual departments and business units. This reinforces Gartner's now-infamous claim from a few years ago that by 2017 the CMO will spend more on IT than the CIO, and suggests that that trend applies far beyond the marketing team within organisations.

Worse, it looks like many IT teams aren't even aware that this is happening to their department. According to the survey, 63 percent of IT organisations believe that they are the sole or major IT budget holders within the business, but Facilities Management and Human Resources see this to be true in only 43 percent of cases. This indicates that IT is often unaware of the actual spending on IT that is occurring within the organisation. The research also indicated that alternate funding is often sourced directly from either the CEO or CFO, or a combination of both.

At the moment, the impact of various departments working on IT-heavy projects without the involvement of IT isn't being felt. However, over the long-term this trend could turn into a significant problem for Australia's businesses.

The purpose of the IT team within an organisation is to have a holistic understanding of the business' IT environment, and then manage it in such a way that there's an efficient, cohesive vision and strategy for the overall business. If IT is being bypassed, then the ability for the organisation to be strategic with its IT investment is negatively impacted. It is possible that the technology selected may not meet business requirements or may compromise end-user experiences, and the patchwork nature of this technology also opens the business up to greater security and compliance risk and contributes to the rise of shadow IT.

Without IT being involved in transformation projects, there's also risk around projects not being met on time, on budget, or achieving cost-savings objectives that the project might have been aiming for.

In short, IT needs to find its way back to the table. The best way to do this is ensure that members of the senior leadership within the organisation are united in their vision and strategic objectives for the company. One of the reasons some departments bypass IT is that the IT function within the organisation may be seen as a "roadblock".

In some industries, there may be complex requirements around compliance and regulatory issues that need to be met. In these instances, it is critical that IT is involved in technology selection and implementation.

CIOs and other senior IT managers need to be able to clearly articulate the broader technology vision for a company in alignment with the business objectives being sought by department and business units.

The CEO and CFO of organisations are still seen to be the primary decision-makers in nearly 60 percent of organisations. Given the research finding that these two roles are often the source of alternate IT funds, it is important that these key stakeholders within the business work hard to encourage the entire business to be consultative with the IT team, and for the IT organisation itself to be far more deeply embedded within the other areas of the business. At the moment, many CEOs are under pressure to find that point of competitive differentiation and be part of the IT disruption process within their industry, rather than the victim of it. Bringing the entire business together and aligned with the same technology vision is an important step in achieving that goal.