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IT's identity crisis: How to remain essential as the business evolves

Minda Zetlin | July 24, 2017
The perception of IT's value and its status within an organization are in constant flux. Here's how to stay relevant.

Smart CIOs, industry experts and publications like this one all agree that CIOs need a seat at the table; that IT must align itself with business objectives; and that IT can no longer act as a gatekeeper, exerting veto power over new technologies and forcing an organization to move slowly in these fast-paced times.

But once the industry has agreed on these principles, then what? How can IT continue to prove its worth in this changing business environment? How can IT leaders thrive in a constantly evolving world where less and less of their companies' technology is under their direct control? And should they be fighting to regain that control or learning to adapt instead?

These are questions without easy answers. And CIOs and other technology leaders need to make some important choices on the way to answering them.

 

Cost center or revenue driver?

Whatever IT's identity within an organization may be, if it's primarily viewed as a cost center, that's not a good thing. "IT is a foundational element," says Ed McLaughlin, CIO at Mastercard. "You really have to cease thinking of technology as a cost center. Technology is one of the primary assets of a business."

That doesn't necessarily mean that you should spend more money, he explains, but it does mean that both business and IT leaders need to think of IT as more than just a necessary expense, to be reduced as much as possible. "You think about your assets differently," he says. "So you move away from thinking in terms of implementation projects, and more about how to run ongoing programs and get a feedback loop where you're constantly optimizing those assets."

Some of that effort goes straight to the top line. "How do you optimize new value creation?" McLaughlin asks. "How do you optimize processes that make it easier to onboard customers and provide customer support?"

"The base function of IT is as a cost center, no different from HR or accounting," says Deanna Wise, executive vice president and CIO at Dignity Health, which operates in 39 hospitals and 250 healthcare sites in Arizona, California and Nevada. "There are some core functions that cost you, but you need them to be in business."

That said, it's smart to look beyond that base function, she says. "Partnerships with the business, being innovative and seeing how you can drive a better customer experience does translate into revenue. There are a lot of forward-thinking CIOs, and that is what they're thinking about. What new programs and new initiatives can you use to drive revenue throughout the business?"

CIOs who fail to ask these questions do so at their peril. "If IT is just perceived as a cost in your organization and you do nothing to change that, I think you're going to find yourself out of a job," says Wise. "You've made IT a commodity, and commodities can always be replaced."

 

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