An IT department made sense in a bygone era, when technology was separate from the business. Now it just hurts both. No man is an island. And the IT department shouldn’t be one, either.
Despite their purpose, which usually mentions encouraging corporate-wide innovation and digital transformation, chief information officers are frequently left to run a metaphorical island as heads of these departments. Any organization's structure will almost certainly include a rectangular box designated IT, complete with its own management hierarchy and budget.
But, unfortunately, having an IT department is precisely what will prohibit businesses from becoming innovative, flexible, customer-focused, and digitally transformed.
That's because IT departments were designed for a different age and aren't equipped to handle the demands of a digital-first world. We all enjoy whining about our IT departments, accusing their employees and bosses of living in their own worlds and being insensitive to business needs. Our criticisms, however, are incorrect. The issue isn't with the people or with the leadership. It's the whole concept of IT departments in the first place that sets IT up for failure.
The good news is that a tiny number of pioneers are also abandoning their IT departments. Their actions serve as role models for others who want to follow in their footsteps.
Dedicated computer departments
It's helpful to remember why IT departments were created in order to understand how we got here. Originally called the "computer department," they served a strictly back-office function, ensuring that the company's computers remained operational.
When there was business and there was technology, that made sense. While the departments may have new titles ("global digital solutions," anyone?) the idea of combining all employees with the knowledge and expertise required to manage IT into a single organizational unit is no longer viable. It's a formula for disaster to delegate IT decisions and activities to a department that is symbolically and sometimes literally removed from the so-called main business.
After all, technology is no longer an option or a differentiator; it has become a competitive need. The fact that most organizations can't function without technology has been underlined by Covid-19. It's inextricably linked to employees' work, and it's a key enabler of business models, and driver of customer experience.
The issue begins with what I call the "partnership engagement model," which is a natural result of having a distinct IT department that is presented as a "business partner." While intuitively appealing—who wouldn't want to be seen as a partner?—this model positions the IT island as a supplier, mandated to build IT solutions and deliver services to the mainland. And, as a result, the measures by which the IT department is judged are frequently irrelevant to the company's success.
Assume you're in charge of manufacturing. Your obligations are crystal clear: If a sales team places an order, you can check your plant capacity to see if you can fulfill it or not. If you can't, you'll have to figure out how to adjust things so you can reach the deadline. Are you running behind on a promised delivery to a customer? This will be the fault of your logistics colleagues. Badly made products coming off the production line? That’s your job to fix.
This logic may be found in every aspect of a business. It's not flawless, but it gets the job done. Except in the case of technology. When you ask most IT departments how they're judged, they nearly invariably say inputs—money spent, systems that don't fail, or projects that arrive on time and on budget. However, there is essentially no mention of the role that technology plays in corporate outcomes.
In other words, implementing technology on time, on budget, and according to specifications—which is what the partnership model is all about—doesn't always equate to success. The value that technology brings to a company comes from its use rather than its possession. Building and managing IT systems isn't the key to success.
The Future of IT
The partnership model also anticipates that the various corporate units would be able to describe exactly what they will require from the IT department months in advance. The demands of the typical yearly budgeting procedure support this idea. In order to establish a case for funding, requirements must be identified, and estimates of how long and how much the required work will cost must be made. However, that method implies that requirements can be predicted in advance and that nothing will change before the task is completed.
In today's fast-paced digital world, that isn't how things function.
Consider a customer-focused marketing department that must submit a financing application in September or October in order to be placed on the IT department's calendar for the following year. The truth is that a marketing department—or any department—has no idea what it will require, particularly in terms of technology for customer engagement or the creation of digital products. That's because consumers don't know what they'll need six, twelve, or eighteen months in advance, or whether a new product feature would solve the problem.
Sure, you might state that you want the IT department to be more responsive and adaptable. However, having the department in its own compartment makes this nearly impossible.
Finally, take into account the mindset of those who work in an IT department. Most of them aren't in it for the love of manufacturing, insurance, or banking. They're doing it because they're passionate about technology. As a result, the separate IT department supports that mindset, deepening the cultural divide. Then there's business, and then there's technology. That, however, is incorrect: nowadays, the business is the technology, and the technology is the business.
Leading companies
There is, thankfully, a better method. There are a number of firms who are attempting to eliminate their IT teams in favor of integrating IT into every business unit. The leadership team at these firms is working from a design premise, rather than a management premise, to realize value from IT. While this may appear minor, it signals a significant shift. "Everyone will work in IT in three to five years," one chief information officer predicted.
Of course, if you have your own data centers, servers, and software on-site, you'll need specialists to keep track of everything. The IT department's original goal was to achieve this. However, with cloud computing and other technological advancements, having hardware or software on-site is no longer necessary.
Furthermore, the way we design software nowadays has evolved dramatically. Employees can, for example, use low code/no-code software development platforms to drag and drop application components, connect them, and create mobile or web apps without needing to know how to code. It's another no-longer-needed duty of the former IT department.
The corporation may integrate digital know-how in each of these areas by establishing a framework that organizes staff groups around missions such as business banking, payments, and marketplace. Leaders might ask themselves a basic question: How can we use technology to achieve our specific objectives? As a result, they are free to use technology in whatever way suits them best.
Employees have a strong sense of ownership and drive as a result of this autonomy/accountability combo. Teams have the resources they require, and while this may result in redundancy in some cases, the bank is willing to tolerate it. Nobody has to wait for their request to be approved by the IT department.
Guardrails are necessary
It's vital to remember that this does not imply that everyone can do anything with technology. Technology that is decentralized also necessitates some centralization. When it comes to producing digital products and solutions, this bank has set some ground rules: everyone must utilize the same security protocols and programming languages, as well as follow a predetermined architectural layout. Employees, on the other hand, have the freedom to do whatever they need to get the work done within certain boundaries.
According to the chief operating officer of a similar energy company, the goal is to establish "freedom within a framework," providing employees the canvas and paint but allowing them to choose what and how they paint.
The bank, the energy firm, and a few other businesses have discovered that separating IT makes it practically impossible to provide the agility, speed, and flexibility that customers want. It stops businesses from getting the most out of all employees by pushing them to compete on missions and mindsets. It increases the likelihood that they will develop answers to issues that no longer exist.
Instead, they argue that the most successful businesses require what amounts to a distributed network of IT skills and knowledge pools. They're working to integrate IT professionals into each area, staffing each department, and even each team within that department, with a mix of people who know both business and technology. This unifies internal teamwork relationships, allowing for faster decision-making, more visibility, and shared ownership. There are no handoffs to slow down the process.
None of this is going to be easy. Companies must figure out how to manage and deploy IT resources in a new, decentralized world where the needs of various groups can fluctuate month to month. Maintaining the status quo also has a lot of entrenched interests. Senior executives will have to admit that they are often part of the problem, and that many people don't know what they don't know when it comes to the digital world.
However, once they realize this, the path forward will be clear: businesses require IT. They almost probably do not, however, require an IT department.
Be sure to register for our upcoming webinar on remote work productivity. For more information on optimizing your IT or securing your network, contact RCS Professional Services to speak with an IT professional or visit our website www.rcsprofessional.com.
