Is IT an order taker?

Arun Tewary, CIO, Emirates Flight Catering, discusses how to work out if your IT department is valued or just taken for granted.

Tags: Emirates Flight Catering Company
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By  Arun Tewary Published  October 13, 2011

Arun Tewary, CIO, Emirates Flight Catering, discusses how to work out if your IT department is valued or just taken for granted.

I T is core to any business and it should be seen as the department that can make a difference. The sustenance, growth and survival of any business is dependent upon the breadth and depth of IT in that organisation.

The role and extent of IT has evolved over a period of time. In the early days, it used to be a function under finance. Even today, there are many organisations where IT is a part of the finance function. In better managed organisations IT is a core function, directly under CEO or top management, with an independent standing. This independence provides it the required strength, vision and strategy to become an equal stakes partner in business strategy and growth.

There are organisations where IT has a presence in board room. However, in a large business segment, IT is seen as just another service function, and as such reduced to an order taker. During the initial stage, it was a typical scenario of customised solutions development by dedicated team of IT developers, who would work purely as per the requirements dictated by the concerned businesses. These initial custom solution developments never considered organisational integration aspects and produced numerous IT solutions in silos. These systems would be operated by the developers of these systems or low-level computer operators.

Over time, IT emerged and was perceived as order takers and this remained the case for a considerable period of time. These were the days of big mainframes and machine level programming languages with punch cards and tapes. Gradually, the technology matured into client server and other forms. The solutions developed during this era – in line with industrial growth and corporate competitiveness – started attracting a wider audience, critical reviews and stepped up feedback from business.

Then came the enterprise solutions and end users computing devices got a significantly higher coverage, thereby empowering business managers in using and contributing more towards the formation of IT solutions. This transition brought a paradigm shift in the role and relationship of IT within businesses. However, there are still many business managers from that era or thought process, who still think that IT professionals must develop and deliver solutions as per what is asked from them. The entire corporate world is at a crossroad now – is IT an order taker or not?

If IT is an order taker, then it is a sign that their relationship with the rest of the business is in trouble. With all the talk about business/IT alignment, I would hope the CIO of any company where IT is an order taker is asking themselves what strategic advantage they can provide to the business. Being an order taker is often thought of as an unnecessary overhead as well, but every business is interested in the strategic advantage IT and automation can provide. If the IT department is reduced to just an order taker, it has effectively become a commodity. IT must be seen as a trusted partner, an enabler, a key differentiator in the overall service/solution. If not, the IT leadership is doing it wrong.

If the IT strategy is based on only the needs of internal customers, then the probability of IT being an order taker increases. This strategy also drags IT into the battle of why can’t we outsource our IT functions. As Richard Hunter (Gartner) suggests in his book Real Business of IT - How CIOs create and communicate value, IT should no longer use the term internal customers, otherwise it risks creating barriers within the organisation. Rather the good relationship model is working together peer-to-peer. The moment IT declares another department a customer, it is generating a divide between the IT department and other business functions and rendering itself to become order takers.

Placing IT in any frame other than order taker role is about more than just semantics. IT will always have a role of performing internal support; let’s be honest, keeping the email server running is never going to be seen as strategic. The challenge is to put all such routine operations to run on autopilot mode, and have the CIO focus on managing a portfolio of strategic projects that have a quantifiable business return. The risk of IT being an order taker multiplies many fold if the organisation is strictly tactical. If the IT leadership is not called in to address strategic objectives until the deadline is already set, it is a clear indication that the organisation treats its IT as an order taker.

But, if the scenario is one whereby the IT professionals are allowed to ask the business what it is that they are trying to do,  then very safely it can be assumed that IT is not merely an order taker. The perceived authority of IT or its importance is largely dependent upon how the CEO is projecting them amongst the leadership management team and across the organisation. If IT is involved in developing the strategic plans of the organisation, then it is being treated and seen differently in the organisation. It is all about the maturity of the IT organisation. The right balance among the elements of an IT organisation’s value proposition depends on the style and market position of the business as a whole, combined with the expected contribution that IT makes. Complex enterprises require a multilayered value proposition from IT. The most appropriate balance of the value proposition depends on the style and market position of the enterprise.

In order to prevent or pre-empt IT from becoming an order taker, the CIO could run IT on the basis of profit and loss. This may justify the cost of IT personnel who provide the knowledge and support that the business needs to maintain a competitive edge. Conversely, by making IT a profit centre, you also risk putting a strain on the organisation to make internal profits; not support the mainstream business operation.

It tends to eliminate individual initiatives and opens the door for analysis of productivity and workflow issues. IT should evaluate, analyse, plan and implement solutions proactively that will positively affect the productivity of the people in the business or organisation. It may be prudent to analyse this subject in the backdrop of new approaches in the IT industry like, capacity on demand, cloud computing and so on. Not too far in distant future, capability on demand or expertise on demand is also expected to be introduced in the industry. It is very likely that these new approaches would have effect on the structure, approach and objectives of IT. It is expected to move towards leaner IT teams within organisations, but deepened relationship with business. On the whole, enterprise IT organisations are likely to be winners – but only if they begin preparing now.

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