The IT departments of some companies will shrink in the coming years, replaced by managed services, and chipped away at by small-scale, online subnets rapidly deployed through the firewall by individual users and teams.
But
it doesn’t have to be this way. Some IT departments will transform
themselves into businesses, and grow larger and stronger, playing
heroic roles in helping to lead their companies to success. This will
happen because the nature of the enterprise itself is changing, not
just IT.
Strategist Jurgens Pieterse recently presented
some thoughts about the future structure of the enterprise, and its IT
component, at an Institute for International Research conference.
Attendees universally agreed that, however the organization decides to
structure itself, that structure must center around the customer:
customer-centricity has arrived, and is non-negotiable in today’s
business.
Structure itself, however, is very negotiable.
An approximate consensus from the conference is that “The current cycle
of organizational redesign is on average 2 years. (Meaning that every
two years a company restructures fundamentally).”
Structure
imprisons rather than liberates (as opposed to discipline, which frees
action). Some key constraints noted at the conference:
- Structures restrict innovation and can make the game plan of a company predictable to their competitors.
- Job descriptions limit innovation
- Processes often sub-optimize human skills (often the most expensive resource in a company)
- Even small events can lead to a change in structure
Citing Deloitte’s model, Pieterse says:
“The beauty behind the design of ‘The flexible
organization’ is that the central core is designed to expand and
contract as the decentralized business units increase or decrease.
Simultaneously the decentralized business units are designed to
continually adapt to changes in market conditions.
“Such a company is possible but only if it is enabled by technology.” – See A futuristic perspective: IT as a key enabler of the fluid organisation structure
The competitive forces of today’s markets
are largely ruled by technological innovations, which offer decisive
leverage for winning or losing. In the face of this, the task of IT is
to provide agility to the enterprise.
But agility is more
than technical rewiring, it involves a culture change in all of
leadership. The role IT plays in enabling enterprise agility is
increasing important: IT needs to grow in strength and presence, not
diminish.
IT has several tasks in front of it, the closest
to home of which is to slim down its own development processes and then
to rearchitect its computing environment for greater agility in purely
technical terms. The second is to eliminate the chasm between business
and technology that exists within corporate life. The only way to do
this is for IT to become a business, because the business people aren’t going to become cyborgs.
Then
the third, and greatest, task that stares IT in the face now is to take
the lead in deploying the tools of change throughout the enterprise, so
that the organization can reinvent itself around its customers. These
are the tools of Enterprise 2.0,
and of Pieterse’s Fluid Organization. This is technology that achieves
functional communication between all the systems and structures of the
enterprise, that manages workforce and transaction knowledge, and that
allows instant collaboration and realignment across all departments and
management layers.
At every step of all this, and from each of these actions, the CIO should be able to show the profitability accruing to the company bottom line.
