In the second of a series of blogs about the future of the CIO and the IT function, Chris Gabriel looks at the business issues that are driving change, and how he expects roles to change in step with the emergence of a ‘service defined enterprise’.
In the first in this series of blogs, I contended that rumours of the CIOs’ demise are wildly exaggerated, pointing out that “behind the perceived threat from the cloud and service providers, there is an opportunity – an opportunity to create a new kind of IT department acting as a critical connector between the business and its technology…”
I also pointed out that this opportunity to re-invent the IT function as a kind of pseudo internal service provider, has not passed CIOs by – our own research at Logicalis suggests CIOs are well aware of it, and actively seeking to run with it.
The obvious next question, then, is how? How will CIOs go about effecting this transformation? The answer to that question is, however, inextricably linked with another pretty fundamental question – why? What is driving this change?
So, without wanting to be a tease, I am going to answer the ‘why?’ question first, and reserve the ‘how?’ for another time – a third part in this series, coming soon.
The main drivers, in my opinion, are the consumerisation of IT and the inexorable rise of cloud and SaaS – and how that is changing the wider business view, and consumption, of technology.
First, the acceleration of technology consumerisation, which has given consumers more applications through their smart phones than most business users could ever dream of, is being mirrored in the business world.
IT departments have of course always had a range of service partners assisting in designing, building, or operating IT infrastructure, applications and services. But the growth in cloud based infrastructure and application services in the last three years means that the average business consumer is being presented with ever-greater service choice directly from the services provider.
For consumers, buying services is seen as agile, efficient, and most importantly, provides a near immediate realisation of investment benefit – that new mobile handset works immediately on leaving the store, you can send an email within seconds of signing up to a provider. Buying services provides near instant gratification.
Business executives and line of business leaders are in many ways now taking the same approach, and this is being driven by supply.
Software as a Service (SaaS) usage has exploded because providers offer something the business user can purchase and start using nearly immediately the contract is signed. When sales directors want improved customer relationship management (CRM) they go straight to SalesForce.com and buy mature CRM processes as a service.
On the face of it, that is very grave news for the internal IT function, which has traditionally been nowhere near as agile, for a variety of legacy operational reasons. But whatever the reasons, if the business approached IT to deliver an internal CRM project the clear perception is that the time frame would be much longer, the cost much higher, and the complexity much greater – and that is all that matters to the ‘business consumer’.
So, today the business executive is thinking about services, not about the technology needed to make those services available. Indeed, businesses, like consumers, are ever more defining themselves by the services they use; they are becoming Service Defined Enterprises (SDE).
The Services Defined Enterprise will be agile because it will consume the services it needs from the most efficient and appropriate source. That source will be the organisation that can meet the strategic or tactical needs of the business or line of business, delivering the most relevant service at an appropriate cost, risk and speed.
In short, the Service Defined Enterprise will see technology as a powerful tool in meeting its business objectives and will consider services from any source – and this is the trend that is really driving change for IT functions and CIOs worldwide.
As I pointed out at the beginning of this blog, in response, CIOs are seeking to create a new kind of IT department, one acting as a critical connector between the business and its technology, whether it is built and managed in-house, or acquired as a service.
The nature of this ‘new reality’ will fundamentally define the response from CIOs, or it should. It is going to demand a lot of change, both in terms of how legacy technology is streamlined and optimised and, more importantly, in the way CIOs and IT functions think about IT service provision.
In essence, they are going to have to act as internal enterprise service providers. But more on that next time…