Several analyses tell us that the more integrated the IT department is in the business, and the better the IT strategy is integrated into the overall strategy, the better the company performs.
Yet we often see companies where the IT department is perceived as an appendix to the company. Almost as an external supplier which supports the daily operation and keeps the wheels turning in the engine room.
To put it bluntly the IT department is unfortunately still perceived as the nerds who are hidden in the basement. Almost as a necessary expense. The IT manager is the “chief nerd”, who takes care of his own business and is not part of senior management. Nor expected to contribute to company’s strategy.
Admitted. This picture of the IT manager is very exaggerated. However, it is rarely expected that the IT manager contributes to business development or strategy. The IT department has their own isolated strategy, which is about supporting the business – not to actively contribute to running the business. It is a shame, because the most innovative and future-proof businesses are extremely focused in their approach to IT. Those who see IT as a major factor, not only in the operation, but also in the growth of the business. This is where the IT strategy and the business strategy are synchronized.
The CEO needs to understand to link IT to the business strategy in order to improve competitiveness, bottom line, productivity and growth. Technology and IT should be used as tools to modify and create new business models. This is why the top management should recognize that a close cooperation between top management and the IT department is the way to strengthen the entire business performance.
The IT manager needs to move from being a support function to being a business driver. The IT manager must be able to think both business and IT strategic and establish a clear relationship between the IT department's goals and strategy, and the company’s business goals. Thus, if top management does not understand how the IT department creates return on investment, it is the IT manager's responsibility to document and communicate this clearly to the top management.
With increased digitization, the company will be able to grow into a winning business which thinks commercially in relation to the IT strategy’s influence on the opportunities and risks. In this scenario, the IT manager and the top management have a common understanding of the company's strategy and understand what kind of investments are required to implement the strategy. It is not necessarily about simply increasing the IT budget; it is about utilizing the technology and being open towards the opportunities it creates. Those companies that understand to drag the nerd out of IT and into the business management, those are the companies that will do best in the competition. And that will show on the bottom line.
The consumer culture has long outpaced the business world when it comes to evolving technology. We have hopped into an Uber, waited in line for the iPhoneX and indulged in affordable VR headsets as an easy wow-worthy Christmas present.
It was in 1997 that a colleague showed me a bulletin board on the World Wide Web, while I was implementing standalone ERP solutions for medium-sized businesses. I hadn’t heard of Amazon at that moment in time. The key driver of digital change for the retail systems I was implementing was the move to telesales, away from the keying in of orders from paper order forms. This was just the beginning.
Today, the walls of the corner office have fallen. Along with Millennials entering the labour market, technology has overtaken the exchange of knowledge and admiration has disappeared. This imposes new requirements to the manager including a significant change in leadership style.