In an era of increasing reliance on technology in business, the traditional in-house IT model for enterprise companies is coming under pressure as other aspects of the organization look for a more nimble approach. In many instances, it’s not unusual for the IT function to be viewed as something of an obstruction to be worked around rather than an asset to the business. This leads to the rise of alternative, external cloud solutions being adopted directly by other business unit leaders and a hodgepodge of unconnected ‘solutions’ being used by various factions within the company.
As a result, while accountability for technology issues remains with the IT department, budgets, and tech buying decisions are increasingly being made elsewhere within the organization. It’s important for enterprise IT leaders and the managed service providers who serve them to recognize the threat that this evolving technical landscape poses to their futures and, equally important, the potential damage this does within the business itself, and take steps to move toward the frictionless enterprise that their company needs and demands.
The Changing Role of IT Within the Enterprise
The changing role of IT within the enterprise was highlighted by an Avanade survey of more than a thousand business and IT leaders. The results revealed some interesting trends in the shifting roles of the IT function in business. And, it’s important to note that while this study specifically addresses the enterprise, I think these same issues also impact IT leaders in the small to midsize markets. SMBs are categorized by both number of employees and annual revenue: small business is typically defined as fewer than 100 employees and revenue of less than $50 million, midsize is defined as 100 to 999 employees with less than $1 billion in annual revenue. So as you read the following, keep in mind that many of these same challenges are likely things IT professionals are dealing with in organizations of vastly different sizes, not just across the enterprise:
- Thirty-seven percent of technology budgets are controlled outside the IT department.
- Seventy-one percent of C-Level executives think they can make quicker and better technology decisions without the involvement of the IT function.
- More than a third (36 percent) of time spent by IT staff is on managing legacy systems.
- More than two-thirds (68 percent) of IT decision makers feel responsible for technology use and security, but consider that they don’t have sufficient control to manage these issues effectively.
For their part, CIOs are reporting that while they believe the IT department is well aligned with the needs of the business, the routine IT operation of the legacy systems currently in place tends to be the problem. Responding to a survey by Information Week, seven out of ten of the 362 IT professionals who responded said that a focus on day-to-day operations was holding them back from leading the way with tech innovation. The result is that just one in five now believe that IT is the primary driver of new technology initiatives.
It’s this evolving situation that’s leading many forward thinking companies to re-evaluate their IT function. The demand for a faster, more flexible approach will mean that the IT department of the future will need to have a greater understanding of the overall needs and objectives of the company – and be able to source both internal and critically external sources of technology to meet that demand. That’s where the value of managed service providers comes into play – together, they can innovate and lead the way when it comes to technology initiatives.
The Challenges to IT Teams
Today’s IT teams are dealing with many challenges, but according to the Information Week report, it’s when new business opportunities with an unknown ROI arise, that IT is most out of step with other business units. Senior executives who are looking for a faster response and more options than IT can traditionally provide are impatient and, as a result, bound to look for their own alternatives. The challenge for IT managers is to take advantage of the best of those alternatives themselves, not only to reduce their day-to-day demands, but also to provide the flexibility that other units demand.
Software-as-a-Service (SaaS) provides a prime example of where IT departments have the capacity to reduce the friction in their operations. The Information Week study found that just 20 percent of CIOs had initiatives in place to increase the use of SaaS last year, that figure actually being less than the 22 percent the previous year. Hardly a ringing endorsement for the services that some of their colleagues are already using independently. Take the marketing department for instance, where SaaS dominates the digital landscape.
It’s telling that the marketing of SaaS products is targeted at the end user, be it sales, marketing or some other part of the business – but not to IT professionals. Technology managers need to change that perception and prove to both internal and external entities that they have something to offer in sourcing, integrating, and maintaining SaaS products into the organization’s IT structure. Until they find a way to do that, little is likely to change.
In addition to providing a faster and more flexible response to their business partners, IT also needs to be addressing the issues of efficiency and storage – and that’s another area where the cloud can help them to reduce friction in the organization. The ever-increasing ability to collect a mass of data, combined with the necessity to process and analyze it means that traditional in-house methods are unlikely to be sustainable in the long-term. That’s why IT professionals are beginning to recognize the value of making better use of resources by virtualizing applications and services via a hybrid cloud.
The numbers using virtualization services to their full extent are still relatively low – Information Week reported that while 72 percent of IT pros are using server virtualization, only 21 percent make extensive use of a private cloud and just one in ten have adopted hybrid cloud techniques. Those numbers are undoubtedly going to increase significantly as more providers come on stream with managed cloud service offerings. As ever, innovation and pricing will be driven by competition and with the likes of Amazon, Microsoft, IBM, and Google all in the hybrid cloud market, expansion is likely to be rapid.
Mobile provides another area of difficulty for IT, not so much in the customer interface but in the security and operability issues posed by the proliferation of so many different devices and operating systems. The Information Week survey estimates that around two-thirds of organizations have a policy that allows employees to bring their own devices for work use. Where the issue and control of laptops and Blackberries was not so long ago under the tight control of IT, this widespread use of BYOD has brought a whole new set of challenges to tech managers and administrators. IT teams now need to be able to implement policies and develop technologies across three key areas:
- Security and encryption
- Division between personal and business use
- And development of a mobile application strategy for both employees and customers
IT professionals are, without question, facing challenges when it comes to adapting both their methods and their outlook. But by focusing on getting their arms around fragmentation, finding trusted managed service provider partners to help complement their own in-house expertise and focusing on innovative thinking to deliver solutions that demonstrate internally that the best solutions can and will come from IT—that’s the real key to success–both for the IT team, and the organization as a whole.
The most forward thinking will see this threat as an opportunity to embrace new technologies and to learn from the experiences of newer digital businesses. Those who succeed in creating a frictionless enterprise that is capable of producing the responsive infrastructure that the rest of the C-Suite demands will the ones most likely to prosper. The ones who don’t will find their business partners continuing to look elsewhere for solutions.
If you’re interested in reading the Information Week survey in its entirety, you can download The Frictionless Enterprise (Registration required).
This post was brought to you by IBM for MSPs and opinions are my own. To read more on this topic, visit IBM’s PivotPoint. Dedicated to providing valuable insight from industry thought leaders, PivotPoint offers expertise to help you develop, differentiate and scale your business.
Shelly Kramer is a Principal Analyst and Founding Partner at Futurum Research. A serial entrepreneur with a technology centric focus, she has worked alongside some of the world’s largest brands to embrace disruption and spur innovation, understand and address the realities of the connected customer, and help navigate the process of digital transformation. She brings 20 years' experience as a brand strategist to her work at Futurum, and has deep experience helping global companies with marketing challenges, GTM strategies, messaging development, and driving strategy and digital transformation for B2B brands across multiple verticals. Shelly's coverage areas include Collaboration/CX/SaaS, platforms, ESG, and Cybersecurity, as well as topics and trends related to the Future of Work, the transformation of the workplace and how people and technology are driving that transformation. A transplanted New Yorker, she has learned to love life in the Midwest, and has firsthand experience that some of the most innovative minds and most successful companies in the world also happen to live in “flyover country.”