From a historical perspective, an in-house IT department understands itself as an enabler, or a service provider for business. With the help of tried and tested frameworks (like ITIL), its processed have been structured to be cost-efficient and support business with efficacy. In the past, this kind of structuring also embodied the right path for a productive partnership.
In today’s digitalized world, however, IT departments have been degraded to a pure service provider. This is due to the traditional distribution of roles, which has been subject to little questioning to date. As a consequence of classic role distribution, CIOs are often working with their back to the wall. Their colleagues from other departments think they contribute very little to a company’s business success, with criticism handed out for every instance of an IT incident relevant to production. Added to this comes that an in-house IT department often has no influence over a company’s overall IT strategy and has been obliged to develop a patchwork of non-coordinated applications due to the lack of influence. This is not a sensible situation in light of today’s demands, for value creation is moving away from business and toward IT.
If companies want to endure in their markets in the age of digitalization, then this traditional role distribution is going to be a hindrance. New technologies are opening up entirely new opportunities for data collection and analysis, which can be used as a foundation for streamlining and bringing more efficiency to both core and peripheral processes in companies. Additionally, technologies are opening up new digital business models. To fully tap into this potential, the perception of IT departments at companies will have to change. An in-house IT department represents the link between business and technology. That is why it constitutes an essential component in elaborating company strategies and business fields based on new technologies, which means it will also have more and more impact on business success. Ergo, to be in a position to elaborate successful business models tailored to market needs, it is fundamentally essential to improve communication and understanding between business and IT.
A company’s business model delivers answers to fundamental questions like: Who is my customer? How can I reach my customer? Which added value do I offer my customer? How do I provide these services? How can I use that to generate turnover and attain growth?
These questions remain the same in the digitalized world, too. Surviving the digital transformation means restructuring one’s own organization into a single networked unit. That means individual elements will, irrespective of their primary tasks, collaborate across boundaries and address old issues within the context of the new challenges by working together.
To attain that level of networking, a fundamental transformation is needed in how organizations understand themselves. Structures and responsibilities must be redistributed with processes tailored to new approaches. It will be necessary to give up old thinking patterns to tip lasting development in the right direction. One role model to this end could be start-ups with digital business models, whose approaches can be applied to the way existing companies function. Start-ups have a fundamentally different attitude on and understanding of an IT department’s spectrum of tasks. They view the IT department as a driver whose ability to perform is not measured by cost savings, but rather by the innovativeness put forward. The food for thought supplied by IT departments is highly relevant for a company’s core activities, for putting together concepts with agility, and for workable implementation. New reference models for management (like IT4IT) or for multi-provider control (like SIAM (Service Integration and Management)) that address the role of IT (such as IT Function) can provide support in the adoption of these start-up concepts.
Accordingly, IT can become a cohesive element between business strategy, other departments, and customers, thereby contributing to and significantly shaping the creation of a single networked unit. This collaboration between business and IT liberates IT departments from the role of whipping boy and contributes to companies as a whole persisting on the market.