How The Changing Business World Has Impacted IT

Today’s IT department doesn’t look like it used to. Triggered by simultaneous shifts in the business world, everything has changed: the work, the methods and the speed. Here, we look at four recent business shifts and how they have impacted IT.

1. IT in business strategy: Every company is a technology company.

Nearly every company relies on IT to create differentiation in some way. Johnson & Johnson has long been a healthcare company, but it is heavily involved in biotech. General Electric, the industrial and one-time financial services company, conducts advanced research and sells tech products. Blue Apron sells food, but its heart is that of a tech company.

The challenge for businesses today lies in recognizing the opportunities that come from new technologies and offering value propositions before digital-native startups capture the market. Who knows what might be possible better than CIOs and CTOs? Rather than waiting to hear what capabilities are needed, IT leaders should be in the boardroom presenting new sources of innovation and efficiency. Building business and IT strategy simultaneously results in tight alignment, top-line growth and a competitive edge.

2. A fast-paced world: New development life cycles change IT culture.

The cadence of business is accelerating. Successful businesses have responded by becoming more flexible and adaptable, learning to quickly pivot to serve customers in a rapidly changing competitive landscape. But where does that flexibility come from? Often, from their IT departments.

For decades, there was one dominant software development life cycle (SDLC): waterfall. When businesses started to move faster, IT couldn’t keep up. Then iterative, lean, agile, spiral and DevOps models emerged. They brought significant benefits — better alignment between business strategy and IT, for example, with more rapid delivery and better end products. But adopting these SDLCs requires significant cultural changes. IT has to start working before key decisions are made and account for the possibility of the organization changing its mind. 

3. The rise of XaaS: IT departments move from technology providers to technology diplomats.

Cloud computing today enables just about anything to be delivered “as-a-service” (XaaS), making it easy for business people to bypass IT and purchase technology from outside the organization. This democratization of IT has caused tech fluency to spread throughout organizations. Smart software salespeople target business unit leaders, not IT execs. So where does that leave IT?

Organizations still require strategies for information and systems. A siloed technology landscape is not usually the most effective one. Someone must sort through competing requests, prioritize IT spend, lead programs and projects, and manage vendors.

The result is that IT departments need to change their mindsets — and their skill sets. Without a monopoly license on providing technology, they need to be diplomats and negotiators. The new task at hand is to sell the business on what they want it to buy and to ensure that smart decisions are made, even if not entirely by them. Facilitating honest conversations around what the business wants can reveal a variety of things — from unrecognized requirements to misunderstood capabilities, future limitations to future growth opportunities. As IT leaders sharpen their skills, their abilities to help businesses navigate their technical futures open up a world of opportunities.

4. A digital revolution: The customer is king.

Today’s most successful brands create personalized experiences — and they grow their revenue two to three times faster than competitors. The Amazon effect (almost frictionless shopping and near-immediate results) has spilled over into every industry, with customers’ expectations for superior experiences rising.

The result is a digital revolution — not just web, mobile and social, but CRM, analytics, artificial intelligence and more. The need to keep up with customers drives an enormous percentage of most IT budgets today and defines much of the relationship between IT and business.

When database marketing began in the early 1980s, companies used direct mail and phone to market to customers one on one. As the use of the internet became widespread, email became a popular tool for direct marketing. Customer relationship management was invented when companies began consolidating detailed data about customers into centralized databases and then mining the information, turning it into valuable insights.

The focus on web, mobile and social has only continued to grow. Today, this information — plus external data sets and more — is combined to create a 360-degree view of the customer. The result has been a major shift in the skills, priorities and working relationship between business and IT.

What’s next?

As the world continues to speed up, one thing we know for sure is that things will change faster than ever before. IT departments of the future will have two crucial needs — adaptability and business alignment.

Adaptability allows IT to reinvent itself even as it continues to deliver. Services can’t be interrupted while IT implements a major transformation program. Instead, IT needs to be constantly adjusting and improving, taking changes in stride while simultaneously providing superior services. IT leaders must deal with the problems of today while growing toward the vision of tomorrow.

Business alignment means having a shared goal with the rest of the organization and driving all activities toward the pursuit of that goal. Business alignment is easily visualized in heavily tech-dependent companies (like Uber or Airbnb) but is just as important in companies with less visible dependencies (like health care and manufacturing). The consequences of failing to deliver this business alignment can be seen in companies like Toys R Us, which is going out of business largely due to failures to thrive against digital native Amazon.

It’s easy to look backward and see how business has impacted and changed IT. It’s harder to predict what comes next, but with adaptability and alignment, IT departments can handle whatever is thrown at them. As Steve Jobs said: “You can’t connect the dots looking forward; you can only connect them looking backward. So you have to trust that the dots will somehow connect in your future.”