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The Digital Disruption of Corporate IT

Is corporate IT in jeopardy of digital disruption? What does that even mean? If you read the latest doomsday warnings in articles by management consultants and technology vendors, there are constant references to the impact of emerging digital technologies on mainstream business models. They coined the term "digital disruption" and use the case histories of Amazon®, Uber®, Airbnb®, Travelocity® and others to warn executives of traditional brick and mortar firms to watch their digital backs for unconventional competitors.

Some CIOs get it and are working hard to evolve their departments and the advantages they can provide to their business customers - both internally and externally. But many others struggle with fewer resources and increasing demands on their team which has an impact on traditional roles. Let's take a look at those roles and see how they are changing:

1)    Data center - The IT department traditionally is in charge of the company data center although they may share some facilities duties with building management. But as those data centers age, costs for maintaining hardware, energy to cool the super-heated processors in high performance computing clusters continue to rise at a substantial rate.

Disruption - the Cloud. Now instead of a full division responsible for all the complexity and costs, a business manager can deploy servers in a few hours.\

Downside - If you put all your "eggs" in one basket - you better watch that basket! Due diligence in selecting your Cloud provider is essential. It must have the highest levels of security, redundancy and support.

2)     Application development and support - Probably the biggest division and the  highest cost element of corporate IT is application development and support. Even the license management and maintenance fees on commercial software are high cost, high effort activities.

Disruption - Software-as-a-Service (SaaS). SaaS (Software-as-a-Service) offerings from companies like SalesForce®, WorkDay® and more every day, make it very easy to bypass the IT department to get access to the IT resources you need.

Downside -  Corporate IT drives standardization. If business users prefer personalization and fit-for-purpose user interfaces, corporate information can be fragmented into many silos often without an overarching strategy/plan that includes a governance program, it can swiftly lead to data quality issues and inefficiencies.

3)      Report writing - With the ERP platform safely in the hands of corporate IT, getting access to valuable data in the ERP systems requires a lengthy request process for report writers with their specialized training on how to free data from the ERP constraints. Frequently you have more requests than resources leaving the business waiting for their data.

Disruption - Self-service Business Intelligence (BI). Technologies (Spotfire®, Qlik® and Tableau®) make it easy -or at least easier- for anyone to gain access and to analyze operational and commercial data. Enabling the one that requested the work is a clever way to cut support costs.

Downside - There are only minimal downsides to this approach. This is true disruption at its best.

4)    Desktop PC support - Desktop support is one of the most frustrating services provided by corporate IT. First they have to enforce a strict standardization process where they, not the business, dictate the hardware and the productivity software. Then they have to policy personal use, unauthorized access of "black listed" websites and applications. What a thankless chore. You also are required to set up a support center that answers the unending questions about forgotten passwords and unknown printer drivers.

Disruption - Bring-your-own-device (BYOD). Who wants a PC or even laptop anymore? Digital literate employees bring their smart phones and tablets to work and want to have one device for work and personal lives.

Downside - BYOD solves the problem, unless you are in the cyber security division where you are losing sleep at every mention of this trend.

5)    Outlook and SharePoint® - If you overlook all the servers dedicated to the ERP platform, your data center is filled with compute and storage devices dedicated to email and document management. In addition to the hardware support, you need administrators to manage user profiles, updates and patches and resource forecasting. Fortunately, the trend of email growth has not been adopted by the next generation workers.

Disruption - Text, instant messaging and social media. Collaborative sites enable hyper connectivity among digital natives without another Outlook or SharePoint server in the data center.

Downside -  It is challenging to track, trace and search information exchanges in message strings which could lead to loss of information.

6)    Structured data management - Corporate IT is responsible for data management, at least enterprise data sources for structured data, transactions from ERP systems, enterprise data warehouses and records and documents that find their way to the EDMS repositories. But many business users are not very happy with data access, data quality or the time it takes to reformat data into their analysis applications. Shadow IT (spreadsheets and personal network drives) contain a lot of critical data.

Disruption -  Big Data. New digital technologies are creating data lakes, data marts and third parties are offering analytics-as-a -service offerings.

Downside - Lack of an effective data foundation not only hurts the reputation of corporate IT, it slows down the decision making processes and accuracy in a company. Without a strong governance program in place, data lakes can quickly become swamps and quagmires which will be abandoned for individual spreadsheets once again.

The CIO is in a tough spot these days. Emerging technologies and alternatives are challenging traditional roles so it is essential that CIOs be aware of these trends. Don't get mired in the day-to-day. Take a look at how leading the adoption of business solutions can add value to the organization, but also increase your department's value to the business.  

Comments

Excellent summary.
With all these disruptive influences, the assurance of real business benefits through good programme governance surely has a value. What is the downside? Not sure there is one.. (but it is not very popular)

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