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2013-12-10 06:36:56
Information technology is everywhere. For companies IT departments, that is a
mixed blessing
THE days of derision are long gone: now geeks are gods. Amazon, Apple,
Facebook, Google and Twitter are reinventing the ways in which mere mortals
converse, read, play, shop and live. To thousands of bright young people,
nothing is cooler than coding the night away, striving to turn their own
startup into the next big thing.
A little of this glamour should by rights be lighting up companies
information-technology departments, too. Corporate IT has been around for
decades, growing in importance and expense. Its bosses, styled for 20-odd years
as chief information officers, may perch only a rung or two from the top of the
corporate ladder.
However, IT departments have, in many non-tech firms, remained hidden away,
automating unexciting but essential functions supply chains, payroll and so
forth. And by now, this digitising of business processes has played itself out
in a lot of enterprises, says Lee Congdon, the chief information officer of
Red Hat, a provider of open-source software.
There is still plenty going on in the back office: the advent of cloud
computing means that software can be continually updated and paid for by
subscription, and that fewer companies will need their own data centres. But
the truly dramatic change is happening elsewhere. Demands for digitisation are
coming from every corner of the company. The marketing department would like to
run digital campaigns. Sales teams want seamless connections to customers as
well as to each other. Everyone wants the latest mobile device and to try out
the cleverest new app. And they all want it now.
Rich prizes beckon companies that grasp digital opportunities; ignominy awaits
those that fail. Some are seizing their chance. Burberry, a posh British
fashion chain, has dressed itself in IT from top to toe. Clever in-store
screens show off its clothes. Employees confer on Burberry Chat, an internal
social network. This may explain why Apple has poached Angela Ahrendts,
Burberry s chief executive, to run its own shops.
In theory, this is a fine opportunity for the IT department to place itself
right at the centre of corporate strategy. In practice, the rest of the company
is not always sure that the IT guys are up to the job and they are often
prepared to buy their own IT from outsiders if need be. Worse, it seems that a
lot of IT guys doubt their own ability to keep up with the pace of the digital
age. According to Dave Aron of Gartner, a research firm, in a recent survey of
chief information officers around the world just over half agreed that both
their businesses and their IT organisations were in real danger from a
digital tsunami . Some feel excited, some feel threatened, says Mr Aron, but
nobody feels like it s boring and business as usual.
One reason for worry is that IT bosses are conservative by habit and with good
reason. Above all they must keep essential systems running and safe. Those
systems are under continual attack. If they are breached, the head of IT
carries the can. More broadly, IT departments like to know who is up to what.
Many of them gave up one battle long ago, by letting staff choose their own
smartphones (a trend known as bring your own device ). When the chief
executive insists on an iPhone rather than a fogeyish BlackBerry, it is hard to
refuse.
That has been no bad thing, given the enormous number of applications being
churned out for Apple s devices and those using Google s Android operating
system, many of which can do wonders for productivity. The trouble lies in
keeping tabs on all the apps people like to use for work. With cloud-based
file-sharing services or social media, it is easy to share information and to
switch from a PC in the office to a mobile device. But if people are careless,
they may put confidential data at risk. They may run up bills as well. Many
applications cost nothing for the first few users but charges kick in once they
catch on.
Impatient marketers
The digital world, however, runs faster than the typical IT department s
default speed. Other bits of the business are not always willing to wait.
Marketing, desperate to use digital wiles to woo customers and to learn what
they are thinking, is especially impatient. Forrester, another research firm,
estimates that marketing departments spending on IT is rising two to three
times as fast as that of companies as a whole. Almost one in three marketers
thinks the IT department hinders success.
The IT crowd worry that haste has hidden costs. The marketers, points out Vijay
Gurbaxani of the Centre for Digital Transformation at the University of
California, Irvine, will not build in redundancy and disaster recovery, so that
not all is lost if projects go awry. To the cautious folk in IT departments,
this is second nature.
A lack of resources does not help. Corporate budgets everywhere are under
strain, and IT is often still seen as a cost rather than as a source of new
business models and revenues. A lot of IT heads, indeed, report to the chief
financial officer although opinions differ about how much formal lines of
command matter. But even if money is not in short supply, bodies are. When the
whole company is looking for new ways to put technology to work, the IT
department cannot do it all.
In different ways, a lot of companies have decided that it shouldn t. Many
technology-intensive organisations have long had chief technology officers, who
keep products at the cutting edge, while leaving chief information officers in
charge of the internal plumbing. Lately a new post has appeared: the chief
digital officer, whose task is to seek ways of embedding digital technology
into products and business models. Gartner estimates that 5-6% of companies now
have one. About half practise some form of two-speed IT .
If the chief information and digital officers work nicely together, it s
fantastic, says Didier Bonnet of Capgemini, a firm of consultants. He points
to Starbucks, where such a pair have operated in tandem since last year. The
chief digital officer, Adam Brotman, oversees all the coffee chain s digital
projects, from social media to mobile payments, which used to be spread around
different groups. But there are also examples, Mr Bonnet adds, of conflict,
which can slow you down rather than speed you up . Whatever the digital team
comes up with still needs to fit in with the business s existing IT systems.
So IT chiefs somehow have to let a thousand digital ideas bloom, while keeping
a weather eye on the whole field. At Dell, a PC-maker shifting towards services
and software, Adriana Karaboutis, the chief information officer, says that she
works closely with the marketing department: people there have developed
applications which, once screened by the IT team, have ended up in Dell s
internal and external app stores. With such co-operation, says Ms Karaboutis,
people stop seeing IT as something to go around, but as something to partner
with.
Corporate IT bosses are right to fear being overwhelmed. But cleaving to their
old tasks and letting others take on the new unsupervised is not an option.
Forrester calls this a titanic mistake . The IT department is not about to
die, even if many functions ascend to the cloud. However, those of its chiefs
who cannot adapt may fade away.