The role IT takes in organizations has evolved over the decades, as its influence on innovation and competitiveness ebbs and flows.
In today’s era of digital transformation, IT once again find itself critical to business success, suggests Rene Nulsch, Head of Corporate IT for COMPAREX Group. It is, he notes, at the heart of organizations’ embrace of disruptive digital technology — or at least should be.
At the same time, disruptive technologies and business models are posing a challenge to traditional IT organizations, says Jason Mackay, General Manager of COMPAREX Canada.
“IT is being challenged right now in terms of being relevant,” he says, pointing to the dangers posed by shadow IT purchases. “Years ago, if people wanted technology they were held in check by the IT organization. They would adopt technology at the pace of the IT organization.
“Today it must be reversed for IT to create value, or the lines of business will simply outsource.”
We spoke with recently with Nulsch about the role of the IT organization in COMPAREX’s move toward global managed services and its own digital transformation.
You’ve mentioned that technology has gone through numerous eras. How is the role of IT changing today?
If you look at, for example, the ’80s, IT was in the driver’s seat, pushing business applications and productivity. In the ’90s and the beginning of the 2000s, there was more focus on cost reduction, on process levels and on standardization.
Now we see that IT in the driver’s seat again. With digital transformation, and all the technologies that have emerged in the last five or 10 years, IT is being called on to build solutions, platforms and connections between all the different players in the business.
There’s also a strong focus on moving from fixed processes to more agile approaches, to adapt to changes in the market more quickly. Today, the window of opportunity is so short. Before you might have a year change a system, but today you have hours or days before the opportunity is claimed by a competitor.
For us, we see upcoming opportunities more or less weekly that we need to act on and adapt business to. There are major vendors changing their business models every day, and so we must adapt even faster to take advantage of them.
So, you need to adapt to a rapid pace of change of both vendors and customers?
Absolutely. We must train our people and adapt our business to account for these rapid changes. The learning curve is high, and you sometimes have only weeks to have the IT team learn about new technologies. Also, our employees are always asking for the latest and greatest only two or three days after a product launch. Ten years ago, there would’ve been a lot more time to act or react.
In IT, we’ve had to invest in the knowledge of our people, so that they can bring value and offer a more consultative approach.
That brings up the topic of shadow IT. If you don’t act quickly, won’t lines of business operate outside of IT?
Business departments are acting much faster and often IT must react and implement a secure and stable solution that can work. And, yes, you often see shadow IT and it’s hard to bring them back to company standard afterward, especially from a cost perspective.
I think it’s much more important that you work together, the business department and IT, so you can discuss the requirements. Also, IT must understand what the value is that the business unit is delivering to the customer. That way IT can consult with the business teams to deliver the right solution, or suggest solutions that are even better.
Do IT teams need to change their mindsets to do this?
The most important point is for the IT department to understand that they not only react on a ticket or service request, but that they are acting proactively. That they are checking every day: what can be done better with the IT organization?
They need to be discussing with the business departments what opportunities are there to deliver real value. IT organizations should be asking every day whether this task or that task has value – not only focusing on the processes that have been in place for years.
This is not only a challenge for the IT department, but for the whole company from upper management down to the employees. The more departments communicate – not just with IT, but transparently with each other – the better IT can prioritize what activities bring the most value to the business. It’s a change from the first-in-first-out mindset of ticket taking.
And IT can assist with collaboration and communications solutions that enable that.
So, ultimately, it’s about IT helping an entire company work together to transform itself?
Absolutely. You must show the value of these cross-functional team conversations and be transparent to help break down the silos that traditionally exist. You need to show all the people involved in the business what is being done, its value, how each employee can provide input, and what changes to expect once a solution is implemented.
You need very strong communication skills. It’s not easy, especially if you have a traditional corporate structure. But, on the other hand, if you’ve had employees already working in agile teams, they will force change in the old structures.
If you look at our own digital transformation, for example, we invested a lot in technology in the last few years to offer customers a cost-value model. We’ve adopted solutions in areas such as cost transparency, rewards options and rebates, consumption-based pricing, so that the customer knows the value we provide. Other companies took a more platform-value approach. In either case, IT plays a big part in building those solutions.
You need a focus and strategy. You need to know the role of the company in the future and you must build towards it. And the build can only be done by the IT department and the lines of business working together.
This is the third in our six-part Q&A series with COMPAREX leadership looking at the impact of digital transformation on their lines of business. Join us in two weeks when to talk with Martijn van Dort, Head of Global HR, about the changing role of human resources. Follow us on LinkedIn to get the latest industry updates!