IT is Growing Up: What the IT organization needs to do to be sustainable and valuable

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Inspired by strategically minded CIOs and best practice competition winners, respected industry thought leader Jill Dyché is writing a new book about how IT is changing and, when in synch with organizational culture and strategy, its potential to transform how companies function. Trends like digital, analytics and big data are pushing the envelope for technology expectations within lines of business, and with business users often acting independently the traditional IT group simply can’t stand on its own. “The New IT” is about collaboration, working together to make IT effective and enculturating that to provide lasting business value.

After delivering the opening keynote at the 2014 TDWI World Conference in Las Vegas, Dyché, the VP of SAS best practices, sat down with Information Management to discuss the book and the trends inspiring it.

Information Management: What is the new IT, and what’s driving the changes?

Dyché: The new IT is the act of rebranding the IT function in a company based on a set of new emerging trends, like digital, like big data, and even organizational trends, like shadow IT, which I would argue are a fait accompli. Shadow IT, like I said in the keynote, is out of the closet; it’s a reality at a lot of companies. CIOs can either chase that down and try to thwart it or they can add value to that trend. It is a choice that they have to make. But the combination of a lot of these trends is fundamentally changing the image of IT within companies as well as outside companies, and IT leaders have a lot of really hard decisions to make about who they want to be moving forward. And that’s what the book is about: What should IT look like in this new age of analytics as strategy, in this new age of big data, in this new age of digital. Where does that leave IT?

And when you say “digital,” what specifically do you mean by that?

When I say digital I’m just talking about the trend toward digital marketing, digital customer outreach, digital customer support, digital business processes where we’re automating everything. My colleague at SAS, Adele Sweetwood, is writing a book on digital marketing where essentially we’re getting rid of paper and it’s begetting new business processes both inside and outside of marketing. When we have to start talking to people less via the U.S. Postal Service and more via social media, that fundamentally not only changes business processes but core technologies. And so CIOs are either going to play with that or let marketing own that. It’s another one of the decisions they’ve got to make.

Let’s talk about the implications of the new IT. Obviously this causes ripples not only within the IT organization but throughout the whole enterprise. How do things need to shift?

There’s a push and a pull and, as I said in the keynote, a lot of it is cultural. A lot of companies have a greater appetite to do their own thing with technology. A CIO who I was interviewing for the book was telling me that every time there’s a technology expenditure at his company that’s over $10,000, he automatically gets an email from procurement. And so the question then becomes what do you about that. Do you prevent the investment? Do you take ownership of the investment? Do you open up a whole new conversation around the investment or do you create new standards? So that’s one example of a situation where you can either try to control it or you can support it. The fundamental question is the elasticity of ownership: what does IT continue to own, what does it surrender, what does it shed to the cloud, and what does it permit the business to own. And sometimes the business is insisting on ownership – we see a lot of this in line of business BI. People say, “We’re going to bring in a tool ourselves, we’re going to buy it, we’ve got the budget for it, we’re going to deploy it ourselves, and we may hire our own consultant.” And sometimes IT never even finds out about it until the tool is actually on the desktop of users or on their iPads. That train’s left the station and so the question is what do users, what do lines of business, want to own and what do they want to keep within the confines of IT. There are different [models and] versions of that ownership, all the way from the business owns nothing to the business owns everything.

You mentioned IT has responsibility for deciding who they want to be within the organization. What role does analytics play in terms of helping them decide, helping them carry it out and helping them establish that culture for the organization?

That’s a great question because a lot of CIOs are complaining that they don’t have a seat at the table when it comes to the formulation of company direction and strategy. And what we’ve found is that the more mature the analytics environment is at companies, the more likely it is that IT leaders do have a seat at the leadership table in a formal way. They participate in strategic planning; they participate in new initiative building. So analytics is definitely seen as strategic at companies where CIOs are leaders. As opposed to analytics being very operational, very marginalized, very technology-centric, where it may not be looked at as strategic. So I would say based on some of the conversations I’ve been having with c-level leaders both within and outside of IT, the reputation of IT’s value is directly proportional to maturity of analytics in a lot of ways, which is really uncanny, really interesting. And I think part of the idea for this book came from watching some really mature companies with very good analytics excel from an IT perspective, and their IT departments having very good reputations in their industries.

Comerica Bank is an example of that, a very well-respected IT organization. Paul Obermeyer, who’s the CIO there, owns not only IT, but owns sort of the global administrative services throughout the bank and established great alignment and partnership with the lines of business, and there are a lot of great rules of engagement between IT and the rest of the company. So it’s a very mature environment, and no coincidence that they were very much an early adopter of BI and analytics.

I think the common denominator there is proactive planning. If I’m a CIO with a good reputation and I’m reputable in my group as credible, I’m more likely to have a lens into the company’s direction and to be able to plan against that, and analytics is normally part of that plan.

So CIOs obviously face major challenges with this. What can they do to prepare for these shifts, prevent complacency and provide more value?

I think one of the things [CIOs] can do is start paying more attention to company strategy. Tracy Austin is another person in the book who used to be the CIO at Mandalay Resort Group. She was their first CIO. It’s interesting because her challenge was that when she became CIO people just assumed that she came from a very heavily technical background, and at first they marginalized her as just this technologist. She came in and invited herself to strategy meetings and line of business planning meetings and outlined what IT’s roadmap would be in the context of the business plans. I think that’s great advice for CIOs: Don’t wait for people to invite you to the table. Get yourself in meetings so you see not only the company’s strategic direction but the various business plans of the departments that are IT-enabled and you can shift your roadmap to support them. But more than ever, what we’re finding is that IT organizations that support company strategies are those organizations that actually keep a seat at the table. So it’s not one of those, the CIO comes into a board meeting once a year to give a status update, but the CIO is in the board meeting and being consulted on technology as a strategic enabler.

Are there other themes surfacing in your research for the book?

One of the other themes that seems to be very prevalent with particularly the IT leaders I’m talking to for the book is that the most successful change agents who are IT leaders, make IT transformation manifest. A good example of that is Eugene Roman, the CTO of Canadian Tire, one of Canada’s biggest retailers. When he came in and took over the CTO role, he gave everybody watches, and it became almost corporate folklore if you had one of Eugene’s watches. The symbolism was there’s a sense of urgency here, time is of the essence. But it was bigger than just that message. There was a symbol to it that people recognized, and it helped shift the culture. And there are a lot of examples of those. It’s fascinating how change is symbolic and those symbols matter.

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