Digital Transformation Game Plan

Chapter 16. The Future Shape of the IT Department

Redirecting an organization to center on customer value requires significant shifts at all levels. The IT department has for decades been seen as a cost center, with decisions made to optimize efficiency that often resulted in reduced costs but also reduced speed, increased time-to-market, and a reliance on third parties for technical expertise. Today’s world is full of ambiguity and rapidly emerging technology; the IT department must reshape itself to become a valued partner in fulfilling heightened customer expectations.

Better Alignment Between Business and IT

Over the past 30 years, IT organizations have always been evolving. In many cases, IT became bigger, more centralized, more outsourced, and also more complex. The Global Financial Crisis in 2008 put a lot of pressure on most business functions, IT departments included. With the rising demand for more and more software applications and technology solutions, and the pressure to reduce costs, IT often ended up with more outsourcing than it would have liked, with increased complexity. The department also runs almost like a business unit by itself—it offers products and services to internal business users and consumers; it manages a large number of suppliers; it employs a large pool of IT staff that engage in a wide range of activities. It also starts to build more and more Center of Excellence (CoE) and other equivalent units within the IT department based on skill sets specialization ...