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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.

What if you aren't sure how to be seen as a source of revenue and not just cost?

"Strong CIOs are not pulling themselves down into the weeds of managing a cost center. That's why they have VPs," says Patrick Meehan, a distinguished analyst in Gartner's CIO Research group. Instead, he recommends "buckling down" IT into a very efficient business services organization and finding a second-in-command who can oversee "keeping the lights on" functions and work with the business to make sure that the terms of service-level agreements are met and that the organization is getting the best value for its IT dollars.

Once that's done, he says, you should reallocate some of the savings from IT efficiencies to work with other areas on front-office functions and channel strategies — projects that grow the business and help create revenue. That way, he says, "you're moving from a cost center to a profit center."

What if the rest of the organization persists in thinking of IT only as a cost center? In that case, Meehan advises CIOs to find initiatives in which they will have profit-and-loss responsibility. "Get a partner, perhaps someone you've worked with before," he says. "You need a win here, a hook there. Once you've proved you can do it, other P&L leaders will see it and will want to play with you, too."

 

Data owner or data support system?

The number of large organizations with chief data officers has more than doubled in the past three years, and Gartner predicts that by 2019, 90% of global organizations will have one. Should IT departments welcome this development or fight to keep data analysis for themselves? It depends a lot on the CDO's reporting relationships and functions within an organization, and whether IT has the skills and capacity to manage data analytics.

One thing's for sure: If you want to turn enterprise technology into a source of monetary value and not just an expense, data is a great place to start. "From 1990 through 2010, companies averaged 4% productivity gains every year," says Jim Fowler, CIO at GE. Most of those gains came from technological improvements. But, he says, during the past five years, companies saw little or no productivity gains, and they began experiencing productivity losses early this year.

"That's the call for change in my role right now," he says. "Productivity gains in the next 10 years are going to come from connecting the value stream of information in a business, information about products, all the data coming off machines and turning that into signals that will help automate work."

Many companies get monetary value from the data itself. Mastercard was an early convert to the value of data and has been warehousing its transaction data for years. The company used that resource to build Mastercard Advisors, a business arm of Mastercard that provides data-driven insights to the retail, financial and real-estate industries, among others.

 

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