Rethinking IT: From cost centre to champion of innovation

IT in many organisations is still widely viewed as just a cost centre

If we head back some 20 years, most IT departments were perceived as a centre of innovation. No one knew the internet as well as they do now, and IT was seen more as a ‘black box’.

The industry facade had to come off IT eventually, through increased business dependence (demand) and subsequent generational workforce uptake (supply).

Fast forward to today, and IT in many organisations is still widely viewed as just a cost centre—one with that same cost code but holding a larger budget. IT remains consistently in the top three most expensive departments within a business but is not always being leveraged across organisations effectively.

With our advent in digital based innovation, CIOs and IT managers can use this era to leverage a more decentralised innovation capability—rather than a necessary central expense on the balance sheet.

Making the change to innovation

It’s important to acknowledge there isn’t always a map or blueprint to digital innovation. There is no definitive guide as there is still a large pioneering phase in hand and by its nature, this will continue. However, there are known common threads to successful implementations.

1.   A focus on stewardship: IT departments should be looking for ways to accelerate the workforce’s adoption of initiatives such as agile, DevOps and modern tools and processes. To do this, IT requires a clear vision with key stakeholder buy-in, which in turn will aid with providing context and clarity to the workforce. Leadership should nurture, guide and protect the teams involved, especially against key process owners who may embrace older methods.

2.   The magic happens when people think beyond borders: One problem with new digital and innovation initiatives is that they often will not encourage people to think beyond current products, services or processes. A way to address this is to engage multi-disciplinary teams in digital initiatives. Adding new skills to the squad outside of traditional IT roles—marketing, finance, procurement, communications, HR etc.—will bring different perspectives and approaches to problem solving.

3.   Adoption of a modular toolchain through code: Often IT will spend a period of time finalising a set of tools or products that are deemed fit for use over a lengthy period of time to ensure ROI. This process can create a false economy of efficiency, maintaining products on licensing until ROI is achieved. Instead, open source tooling, OpEx-only enabled licensing and ‘everything as code’ can form a powerful basis for parts of the stack that can be easily replaced when designed in a more modular fashion.

4.   Facing into asset and automation maturity: Organisations often underestimate the amount of internal artefacts that can be reused, albeit with a slight tweak. The reuse of a code base and handover material only is often deemed “a failure” for many successful implementations. Add to this, IT teams, and not vendors, should be controlling the shift to a central asset area for the organisation. Cloud and SaaS adoption provide an ability to build a services construct very quickly with little risk if true cloud services are adopted. IT should be aware of modern automation practices, and the tools to execute on them. They should also know how to vet these tools against security and compliance and do their best to make them available as a library of resources for the organisation.

The adoption of these common threads over time positions IT as a trusted advisor and an asset for growth.

Where to start

Transitioning from cost to innovation centre can be accelerated by a fast-moving technology market that offers a tonne of capability, processes and tools to choose from. Getting stakeholder buy-in early will also reduce friction. Here are some places to start:

1.   Create a proof point: Solve a problem tomorrow with the tools that are already in place, to create credibility. Investigate a business or development problem by identifying processes, tools, or removing an internal bottleneck that makes something easier to accomplish and/or increases quality.

2.   Communicate those wins: Practice communicating wins, IT’s involvement and how improvements in technology have helped the business. Be careful of separation between new teams adopting new ways of working and the older teams working as before.

3.   Be curious always: IT teams are often guilty of focusing on tasks that are explicitly assigned to them. IT should be communicating with stakeholders to find out what frustrates them, what processes are broken, and where they think technology can help. Always ask questions, challenging what is in place and don’t be afraid to state what might seem to be the obvious.

4.   Enable innovators at will: Team members and organisational culture have a lot to do with how departments are perceived. Promote advocates in key parts of the digital innovation team and process. Hire talent that is used to thinking ahead and looking for ways to perform better.

IT is no longer just about the technology, but about how an organisation embraces modern ways of working and go to market strategies. The digital era in hand, seems to be the perfect time to make that shift from the cost centre to champion of innovation.

Craig Howe is managing director, APAC, at Contino.

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