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April 4, 2016updated 28 Mar 2017 4:16pm

How IT can transform itself to deliver successful digital transformation to the business

By James Nunns

Digital transformation has become perhaps one of the most commonly used buzzwords in technology over the past year. Its rise has been influenced by new disruptive market players such as Uber and Airbnb which have forced the traditional IT of established companies to change the way they are operating.

The questions posed by these disruptors are how IT departments can address their own transformation in order to both stay relevant but ultimately to drive the business forward and past digital disruptors.

Traditional IT has typically been treated as an environment for hosting data, services or applications that are owned, controlled, operated and managed by the same organisation such as a data centre, server farm, mainframe or supercomputer, essentially non-cloud based computing IT environments.

This model has changed as new technologies such as cloud computing have disrupted the way business works. The rise of cloud native companies such as Uber and Airbnb have shown a different business model is possible that offers faster time to deployment, saves costs and creates much greater agility.

The demand to save costs while at the same time increasing capabilities has created a major shift to a new style of IT. No longer is it acceptable for IT to develop and deploy a new application in over a year, IT now needs to act quickly and turn around development and deployment in the matter or weeks to months.

A cultural change is happening as a result of this disruption, the business can’t sit separately from IT, both must work together in order for the business goals to be met, driven by IT and not hindered by it.

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As cloud has moved more progressively into the IT organisations, many of the traditional roles that have been outsourced to cloud providers, it isn’t absolutely necessary to run the infrastructure or software as this can be done through Infrastructure as a Service and by Software as a Service.

The same goes for platforms and even disaster recovery. The invasion of companies taking over traditional IT tasks doesn’t stop there, as automation in traditional software even takes out many of the more mundane jobs.

None of this is particularly bad at face value. In theory automation can take over the running of many mundane jobs that simply take up time and don’t require a great deal of skill. This then frees IT to be doing more value added jobs that will benefit the business and drive it forward.

The purpose of it in addition to freeing up valuable IT time is to save costs.

The question then is where will the IT department jobs of today exist tomorrow? The answer is that reskilling to roles that are purely focused on driving forward the business rather than keeping the lights on and business ticking over.

The retraining of IT professionals into different areas is one that the CIO will have a direct influence on. Understanding business strategy and where it is heading will help to advise on role changes and where the business will need more skills. Perhaps for example the business is looking at Hadoop technologies, so more trained professionals in that area could aide continuity.

CIO Transformation

In a survey by Forrester Research it was found that the CIO is seen as the senior manager leading in driving or supporting business transformation. While it is seen as the most important, it is also the role that is perhaps changing the most dramatically.

CIO’s which have been focused on enterprise resource planning, data centres, networks and driving down costs will continue to see disruption to their role, traditional IT is no longer the focus of the role.

The shift from capex to opex has reduced the amount of effort and complexity of traditional IT, in effect time and money is feed up, and this is now being fed into customer-facing innovation.

Collaboration is a big change for IT, the department is now joining with finance and marketing and becoming a much more important factor in driving revenue and managing costs.

The CIO has become a leader and diplomat that must coordinate and manage outside companies ahead of understanding the inner workings of technology which has become less of an important factor.

Shifting between working with outside suppliers and internal team management means changes to the makeup of the CIO. A rigid control of the organisation won’t necessary work, so tasks can be delegated to others with greater expertise in those areas.

Essentially, the CIOs role has more and more become one of people management and getting the right skills into the right places.

IT transformation

The changes in traditional IT are inevitable, businesses are seeking to harness technological innovation to stay relevant and lead the business through digital disruption. Key challenges will be faced but one of the most important will be how quickly change is embraced.

The likes of Uber and Airbnb have already arrived and disrupted their markets and to some extent the markets they were operating in didn’t and haven’t reacted.

Uber first appeared in 2012 and experimented with carpooling and other features in 2014, in 2015 it was valued at over $62 billion. The point being that it didn’t pop up over night, yet traditional taxi firms did not react to it and have been left behind because of it.

Disruptors to the markets may not always be identified, cloud has provided the capability to spring up over night and challenge incumbents. Watching for competitors, being proactive and acting quickly are the ways for businesses to continue existing.

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