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As digital transformation redefines companies and enterprise business models, CIOs face their own pressure to reinvent, including embracing new operating modes that shift emphasis to agility, innovation, and alignment with key business goals.
Given the accelerated pace of change, business users are hungry to explore new ideas, capitalize on fresh opportunities, and modernize existing systems to stay a step ahead of the competition. With software-as-a-service (SaaS) applications and public cloud services within easy reach, departments like marketing or finance can quickly move ahead with strategic projects on their own instead of waiting around for an IT group that’s slow to deliver or hamstrung by traditional processes.
A report commissioned by Hewlett Packard Enterprise found that lines of business are more involved in IT decision-making than in the past, with some managers spending more than 30 percent of their time identifying IT needs and researching solutions. IT spending by non-IT business units is also increasing at a faster clip than tech purchases by IT departments, hitting $609 billion this year, with a 5.9 percent compound annual growth rate through 2020, according to an IDC forecast.
The Strategic CIO's Playbook: Expert advice on how to create an IT environment that drives business growth through hybrid IT and partnering with the business.
Forward-thinking CIOs are trying to shift the dynamic of the shadow IT spend by shaking up their internal organizations to support hybrid IT practices and a service-oriented culture. By remaking IT in the manner of external service providers, CIOs seek to reestablish the organization as a critical clearinghouse for technology. Their goal: to regain the confidence and support of business users who don’t necessarily want to inherit the burden of procuring and managing IT services or dealing with security and compliance issues on their own.
“All the talk about rogue IT has gone away. What’s changed is the IT department resigned to the fact that technology is sourced from both inside and outside the organization,” explains Melanie Posey, research vice president and general manager at 451 Research. The research firm estimates that 60 percent of projected workloads will be deployed to the cloud within the next two years, establishing a hybrid IT environment for the foreseeable future. “Those that are savvy enough to get in front of it are setting up IT as an internal service provider that will operate and manage internal and external resources no matter where they are,” Posey says.
For IT to transform into a service broker culture, CIOs must understand the business and, most significantly, the changing needs for digital business. While IT-business alignment has been a mandate for years, the level of collaboration rises significantly with digital transformation projects, requiring CIOs to be cultivating new kinds of working relationships between IT and lines of business while investing in new skill sets. One of the most significant challenges is reorienting the traditional IT mindset away from order taker with jurisdiction over data center technologies. Instead, IT needs to become a partner that helps analyze objectives and makes recommendations on the right technology mix that will deliver effectively for the business.
“There needs to be a proactive relationship with the business—not just at a technology level, but with an understanding of what the business value is and what it’s trying to achieve for the customers it serves,” says Ray Richardson, master hybrid IT cloud transformation strategist for HPE. That requires IT to ask a different set of questions—not about storage requirements or network capacity, he explains, but about how a technology might be used and leveraged. “Instead of talking about the technology requirements, IT needs to be asking about the vision of the group, the customer target, the issues and challenges customers face,” Richardson says. “There has to be a complete mindset change.”
IT also needs to recognize that its charter for the new service broker era is to make it easy for the business to quickly access the technology it needs. For years, traditional IT organizations have grappled with application backlogs, years-long development cycles, and endless back and forth with the business haggling over requirements and system prototypes. That protracted delivery cycle doesn’t stand a chance when a business team can plunk down a credit card and gain instant access to a SaaS application or a public cloud service to satisfy its development needs. CIOs serious about making the leap need to shift their IT culture to be more flexible, embracing an agile mindset and the methodologies of a modern cloud-based software company as opposed to operating within the norms of a traditional IT organization.
“Business users aren’t interested in consuming IT; they are interested in performing a particular function,” Richardson says. “People want to be abstracted from the technology and abstracted from the complexity of doing business with IT.”
Chiranjoy Das, CIO of Simple Tire, estimates he spends between 70 percent to 80 percent of his time embedded in the business ranks, talking to users in accounting or marketing about their core challenges. Rather than a discussion of web protocols, database technologies, or analytics tools, Das makes it a point to communicate with the business about the business, not about the technical aspects of IT. “I don’t talk technology directly at all—I don’t throw around buzzwords because that scares people,” he explains. Instead, he focuses conversations on how IT can empower the business by coming up with insights to better analyze marketing spend, for example, or leveraging 15 years of finance data to gain competitive intelligence on spending trends that could translate into opportunities or cost savings. “We have a layman’s discussion, not a conversation about a cool analytics tool that can do data mining,” he explains.
To have those discussions, CIOs need to actively break down long-standing barriers and walls between the IT organization and the rest of the business. IT staffers should be embedded in the business ranks, having offices in the same proximity and attending many of the same meetings. They should also report into a set of leaders who are collaborating closely and have the full backing of the C-suite. Mutual goals, common budgets, and investments in technology that can drive easy and continuous communications are critical to building relationships and fostering IT-business alignment. “Feedback is important,” says Richardson, adding that collaboration tools like chatbots and internal social media platforms like Slack can keep the lines of communications open. “This helps establish an iterative process with the business and enables all to see a stream of consciousness that went into a particular release.”
CIOs also need to build up a talent pool to support the hybrid IT era. Expertise in infrastructure, cloud, agile technologies, and automation is critical to the new environment, but CIOs also need to nurture people who can take a holistic and multidisciplinary view of IT as opposed to fielding a bench of siloed specialists, experts say. Creating a skills matrix to identify critical gaps can help direct hiring priorities, and CIOs should also be instituting training initiatives to reskill existing IT personnel who can help promote the new culture and changes among their peers.
HudsonAlpha Institute for Biotechnology, a nonprofit focused on genomic research, has a subscription for Linux Academy, among other online training resources, to teach IT staffers important skills. Hiring choices are also different in the evolving world of hybrid IT. “In the past, we thought it was important to have individuals with specific expertise with a particular vendor or system, and that’s not a necessity today,” says CIO Peyton McNully. “Now, we tend to look for well-rounded individuals who are adept at management of complexity vs. management of a specific nuance of a system.”
Other big changes McNully is cultivating include getting employees comfortable with automation and arranging technology to support a specific business need. “We are focused on orchestrating the technology and sandbox environments around a business case as opposed to being a brokerage that gets an email and responds with some technology,” he explains. “It goes beyond simply announcing a service is available and requires humanizing the approach to service/platforms so it allows our researchers to do more research.”
Like any significant transformation effort, a CIO’s prowess in change management will be key. “The challenge is people are always resistant to change, but if you give them training, they will go back to their meetings or coffee breaks and give other people religion—it’s contagious,” says David Linthicum, a cloud computing specialist.
Linthicum says it’s also important to put a detailed plan in place that outlines the direction for both the technology architecture for hybrid IT and the cultural and operational practices to support the new model. As part of this detailed roadmap, CIOs should lay out the technologies that will come into play, such as composable infrastructure, automation, DevOps, and hybrid cloud, among others. And they also need to provide a detailed justification and business case for the changes along with a roadmap for securing the necessary sponsors and stakeholder alignment.
As part of this effort, HPE’s Richardson advocates for a CIO-driven governance effort and what he calls “ruthless standardization.” He also suggests spinning off a smaller IT entity to embrace the new standards and practices for targeted projects—a database or middleware service, for example—and building out the environment and culture from there. “Find a couple of examples and construct them as a true service provider to the business,” he explains. “Do it once right and you can build from there.”
Detailed planning and rolling out the changes as a phased approach, both to IT architecture and culture, is the best way to ensure success. In addition, each stage of the transition should be tied to metrics and goals that must be met and continuously monitored prior to moving forward.
“You have to take the long game and have realistic objectives of what can be accomplished over the next five to 10 years,” says Linthicum. “If CIOs are overly aggressive, they can make a lot of mistakes, lose employee trust, and give the cloud a bad name.”
This article/content was written by the individual writer identified and does not necessarily reflect the view of Hewlett Packard Enterprise Company.
Beth Stackpole is a veteran writer and editor who's been covering the intersection of business and technology for 25-plus years for a variety of leading publications and websites.