In the driver’s seat: Why today’s IT departments are moving from back office to front-line services

 
Annabel Denham
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IT’S HARDLY surprising that today’s IT departments are feeling the strain. Technology has become more than just a back office tool – it is a disruptive force, offering those businesses with the ability and vision to effectively harness it huge competitive advantage. In just one example, a 2013 report by the RSA and sponsored by Vodafone, The Flex Factor, identified total potential savings for UK firms of £8.1bn through the adoption of flexible working. But taking advantage of such trends can mean organisational and infrastructure challenges. IT teams must be able to strategically support a wider range of devices, to break down internal business barriers, and to keep an even closer eye on security.

Today, for example, UK households have an average of three different types of internet-enabled device each, according to Vodafone report The New IT Crowd. And IT departments are shifting from back office support to delivering essential frontline services, as companies try to please a more tech-savvy customer base. Consequently, firms of all sizes are finding they need to redefine the IT function. The roles of chief information officer (CIO) and chief technology officer (CTO) have irrevocably changed from “internal gatekeeper” to fundamental business enabler. New job titles, like multichannel director, are emerging – and those with technology and business strategy skills are rising up the ranks. According to a recent survey by CIO Magazine, CIOs view revenue growth and customer acquisition as critical priorities – and are focusing on aligning IT initiatives with business goals.

“Working with CIOs on a regular basis, I cannot recall meeting one who hasn’t wanted the opportunity to invest, innovate, and be at the forefront of the business’s thinking, irrespective of the demands that go with that,” says Richard Baderman, director in Deloitte’s technology consulting practice. As a recent Sage Group study concluded, the single most important factor in CIO recruitment is the new, innovative and efficient solutions a candidate can bring to the company.

However, one hurdle SMEs will face in harnessing this enthusiasm to build new technology into their models is a skills gap in the CIO/CTO function. In a recent Deloitte survey of IT executives, for example, over half said that the ability to think like a business is still their number one skills deficit. As Andrew Brown of Strategy Analytics points out: “IT directors often see their plans scuppered by management challenges [such as budget constraints]. Many need to learn ‘business language,’ to ensure their proposals stand up in a ‘business’ argument.”

And this transformation has led to mounting pressures on IT directors. Vodafone’s New IT Crowd report found that senior IT directors feel they are expected to be more involved in the direction of the business – at the same time as managing an increasingly complicated technology and communications estate. For SMEs, the pressure is even greater. Subbu Murthy, founder of UGovernIT, estimates that around two-thirds of CIOs in SMEs are having to focus almost exclusively on keeping the lights on. “They are often constrained by tight budgets, limited resources and the old school, back office mentality,” he told LinkedIn.

This doesn’t necessarily spell disaster, however, as SMEs can choose to outsource certain premises-based initiatives. There might be a slight premium, but it could help deal with complexity, provide better services to colleagues, ensure a relatively fixed cost, and give access to expertise not held in-house.

But while CIOs increasingly need to oversee the transformation of every business process – selling, marketing, communications, innovation and collaboration – they must also respond to the needs of their colleagues. Employees are now demanding the same level of usability and mobility in their professional devices as they have with their personal ones – creating a whole new set of challenges for the IT director.

“There’s been a revolution in the way we work. Employees want flexibility, as well as to communicate and collaborate better via tools like Jabber or WhatsApp. And with that, they want a native user experience, with seamless mobility management around that,” says Brown. But mobility provides significant opportunities to SMEs: responding to and collaborating with colleagues boosts productivity, while enabling business continuity.

IT directors face a tricky balancing act – and while there’s no overnight fix, Baderman offers some useful advice. “IT functions need to consistently get the basics right, and generate headroom to begin innovating tech solutions.” And, he adds, business partnerships – working side-by-side with customers to refine, iterate, and ultimately jointly bring to market technology solutions – are vital. For SMEs, efficient operations of these processes can be early differentiators, and drive competitive advantage.
Annabel Palmer is business features writer at City A.M.