Let's be realistic
Reading and re-reading our debate, I think that Dana and I are in agreement on most of the fundamentals here. We certainly agree that IT cannot deliver value or ROI (the things needed to shift from “cost center” to “profit center”) unless the business knows enough about IT to really use it; and IT cannot be responsive enough to business to let this happen unless they have open ears and open minds.
If you look at our responses regarding the kinds of key hires needed, you’ll see that we’re both talking about the need for IT to be ingrained at the top and for the top of IT to be oriented towards partnering with the business.
Unfortunately, I have seen scant evidence to suggest that many companies can do this. They lack the leadership and vision. They treat IT like expensive janitors. And there is nothing wrong with that. If all you want is to “keep the lights on” an IT department can do that for you, and you don’t even need to hire top talent to make it work. Unless you are in one of the rare companies that can truly use IT to transform their business (a “profit center” kind of IT department), then you need to be honest and realistic about it, and that means treating it like a “cost center” and trying to minimize its damage to you budget.
It's about creating new business
The lines are blurred between businesses and IT as never before. Nearly all businesses need to exploit IT to grow and compete. IT needs to transform into a profit center mentality to allow the business then to thrive.
Success nowadays is not just survival of the fiscally fittest, it's about gaining dominance by bring the most technology capable. Let's face it, a lot of companies are not going to make IT a profit center, and they will be in trouble, and then deeper trouble. It will be very hard to transform a company that is dysfunctional in IT.
On the other hand, companies that do IT well, that integrate the technically possible with the business necessary, will be able to change, adapt and compete.
I'm seeing companies now following that model, taking their IT capabilities and making them the product, combining their digital services and market insights to forge whole new services, and bringing in whole new revenues.
IT needs to be at the strategy table to explain to leadership what can be done, or the best way to procure IT services to the same ends.
So the discussion has changed. It's not how will IT support the old business, it's how is IT able to create new lines of business, to be a driver of new business development.