NexGen or Disperse Your IT Team: Time to Choose! The Six Foundations for a NexGen IT Department
You no longer need an IT department. Yes, you read that right. Your organization no longer needs the formerly known as, the Information Technology team. At least, not a siloed, reactive, order taking IT team. But before handing out pink slips, let me explain what I mean because we badly need technologists to help the organization.
Traditional IT was organized for maintaining and supporting internal systems, like servers, mainframes, and computing devices. However, in the last three decades, innovations such as personal computers, the internet, mobile devices, cloud computing, low code platforms, and now artificial intelligence (AI) platforms have moved technology away from the basements of organizations to, quite literally, the cloud. Technology infrastructure, for the most part, is now outsourced to XaaS providers and device manufacturers.
With all of the amazing digital transformation that has happened over the past thirty years what has not happened is a commensurate evolution of how we deliver digital services inside of organization. We completely evolved how the digital backbone works but have not upgraded the role our technologist could be playing. More than that, the non-IT people in every organization have gotten much more technology dependent and literate.
This decentralization of IT has been happening whether we have consciously recognized it or not. The power of technology has been moving out of the hands of IT and into the hands of the business for decades. The problem is most organizations have been decentralizing IT without doing it on purpose. This has led to a growing unease in the marriage between the business side and technology team.
Business users are becoming more populated by technology-savvy younger workers. Meanwhile, the capabilities built into many technology tools is exploding. Low code platforms allow non-technical users to easily create applications to help them with day-to-day tasks. Let’s be honest, who in your organization grabbed generative AI engines like ChatGPT and MidJourney most effectively? Could it be your marketing department? Arguably the most powerful AI engine ever created is now accessible to those who have never heard of Python or Java.
So, if we don’t need a traditional IT department anymore, but do need technologists more than ever, what can be done to re-architect into the next generation of IT? A side note before going on, if you are still calling the IT department by that name, consider changing the name to Digital Services or something more appropriate for this day and age of what your technologists do for you.
Is it a viable option to disperse your technology people into the organization and just do away with a separate department? This concept has been written about over the past 18 months. As much as I love IT decentralization, I don’t think this is the answer and here is why: The technology team has five very important roles to play, and it will be easier for them to do this as a cohesive team. One, they need to own the responsibility for executing on cybersecurity tactics. Two, they must be the architects of the overall digital enterprise architecture and have the authority to stop the business side from making poor technology and vendor design decisions. Three, they own writing code, customizing, and configuring systems on behalf of the business. Four, they should own the responsibility for data flow and data storage. And finally, they should own the responsibility for technology infrastructure design and maintenance.
The marriage between IT and the business can work in a frictionless way if the technologists own these areas and the business side understands their responsibilities and the boundaries of digital governance. However, the five areas listed above are just the foundations of what digital services must own going forward.
Service-based, order-taking IT organizations must evolve into visionary and strategic teams, where technology executives (CTO/CIO/CDO) become the primary successors to the CEO. Stop, go back and read that again.
Future CEOs should come from a strong digital technology background, or at least have a strong proclivity to digital technology with the ability to successfully install digital technology as a principal business operating unit
Successful board-level digital technology executives must know how all of the areas of the business operate and understand how to implement technology solutions that meet business objectives–arguably better than anyone else in the C-Suite. The challenge is that most IT organizations have an order-taking mindset and the population of “digital technology” executives and transformational teams is small in comparison.
NexGen IT must operate in a decentralized model. But it can only do so effectively if there is legitimate technology leadership with strong business acumen. Companies that have placed technology management in the hands of non-IT leaders, typically fail technically, operationally, and fiscally. Digital services run by technologists without business acumen commonly lag in providing viable digital technology solutions, are a roadblock to innovation, and are plagued with technology debt.
In order to be helpful, we will provide a framework to follow if you are ready to evolve your IT department for a decentralized IT world that we can no longer avoid.
Foundation One: Vision & Strategy
The NexGen IT leader and team must shift toward the strategic as opposed to the traditional tactical approach to IT. However, the organization, as well, must create an environment where technology can become a competitive weapon to amplify the organization’s ability to thrive.
NexGen IT must own the responsibility to study the organization and its competitors’ technology usage and maximize it for the organization. NexGen IT must be given influence to make business decisions and contribute to business strategy. It must focus less on providing infrastructure, implementation, and support, and more on the financial returns of digital transformation. NexGen IT should be the tip of the spear when it comes to making operational improvements with high return on investment.
Foundation Two: Supporting Digital Transactions and CX
A focus for NexGen IT should be on the way your organization delivers its services, products, or goods in a digital environment. This could be the revenue generated digitally through a website, mobile app, or other digital means. There needs to be a shift from IT being reactive to business needs to be proactively consultative. NextGen IT must understand the business strategy and the opportunities digital tools can aid in achieving that strategy.
Foundation Three: Digital Technology Innovation
NexGen IT should facilitate digital technology innovation with a focus on market-leading opportunities to increase market share, revenue, and profitability. It must lead the organization in adapting new technology and innovation in product development, service delivery, as well as customer and employee acquisition/retention. It should host the organization’s digital innovation program. It must understand how to be futuristic and visionary while also being fiscally sound.
Foundation Four: Data Activation
Data activation is arguably the most critical pillar of NexGen IT. IT leadership must be measured on how well they can empower all employees independently with data insights through intelligent automation and data visualization tools. Data being the lifeblood of the company, NexGen IT should be tasked with empowering all lines of business and operational units to leverage data for results.
NexGen IT will have oversight on data flow and storage and how data storage units are architected. Additionally, it should be tasked with ensuring the organization is using the correct automation tools, predictive data models, and artificial intelligence platforms to achieve its aims and gain competitive advantage.
Foundation Five: IT Service Operations
NextGen IT must identify the correct vendor partnerships and managed service arrangements with vendors that match business objectives and technology specifications. This would include security and privacy, infrastructure and operations, software, enterprise architecture, automation, digital governance, technology learning and development, and blueprinting. It must work closely with business analysts to improve their capabilities and develop virtual sandboxes (like business intelligence and robotic process automation tools) in which users can test ideas to contribute to the business strategy.
Foundation Six: IT Financial Management
NextGen IT must move away from cost-cutting and cost-optimization and toward generating revenue and profitability. It should be capable in developing strong business cases in partnership with business groups, finance, and legal. It should oversee technology vendor and asset management. It should be capable of making appropriate technology investments and connect with external parties (venture capital firms, startups, and digital technology providers) that can help the organization gain a competitive advantage.
NextGen IT will require individuals willing to become strategic partners to the business and who can inspire the organization to utilize technology and digital tools to gain advantage. It must not only facilitate how the organization collects data but what they do with that data. It must build internal coalitions and external partnerships that maximize the organization’s use of digital technology. It must stay on the cutting edge of innovation and how that innovation can lead the organization to its aspirations.
Traditional IT has been the organization’s digital plumbers. NextGen IT must help the organization thrive through digital empowerment. If it cannot evolve to play this role, then maybe “shadow IT” should become the norm and we let the business control its own digital destiny completely.
Scott Klososky is a founding partner of Future Point of View as well as its Elite Performance Practice Lead. He is a renowned technologist, futurist, and speaker as well as the author of four books. He is widely sought after for his ability to peer into the future and understand the challenges and opportunities leaders have using digital tools. Learn more about Scott Klososky.
