CIOs: Upend your IT operating model and ‘be the business’- Valutrics

CIOs in the New Era of IT, must distribute the IT function — that’s leadership, budget, development — across the enterprise to better serve their customers.

CIOs have to break down the wall that separates IT from the enterprise

That’s a mindset shift, it’s an organizational design shift, it’s governance, and it’s getting a whole group of vertically-oriented executives — my PL, my function, my region — to look up and out at the future as a whole. That’s something the CIO needs to drive, but he or she cannot drive it if they’re trying to run IT from way over in the IT organization.

There are a range of things that CIOs are doing to create this new, much more integrated operating model. That’s an industrial-era model where we built big barriers around our organization. Today, one way that CIOs could get started is by building a development platform that invites everybody in the company to be a developer. But use our tools, adhere to our security protocols, make sure what you’re spending on any of this goes into a larger budget. It’s reconceptualizing shadow IT as end-user innovation.
CIOs transition their IT operating model?

The way IT has traditionally supported ERP is there’s somebody from database, there’s somebody from development, there’s a business analyst, there’s somebody from infrastructure. But they are all on different teams and in different departments.

The way CIOs are starting to reconceptualize the operating model is let’s have a team that considers itself a product management team and ERP is the product. Are we selling ERP like a product out to the market? No. But we’re certainly delivering internally. That product, ERP, is going to have a product manager. That product manager is going to have a cross-functional team. On that team is going to be someone from database, somebody from app dev, and somebody from finance, HR and supply chain — all of the areas ERP is serving.

Let’s remove the us-and-them divide. There’s going to be a cross-functional team responsible for ERP. And, by the way, this is a major shift: Maybe that team doesn’t even report into IT. If ERP is serving the HR organization, why not? It makes more sense to have the technology managed by a cross-functional team, many of whom are in the business and using ERP.

Eash Sundaram, the CIO at JetBlue, says “IT must become the toolkit that does not belong to IT alone; it belongs to everybody.” It is up to the CIO to give everybody access to the IT toolkit.

If an ERP system is an IT toolkit, and it is, why is it the folks who use it the most, who get the most value from it — HR, finance — why don’t they have any accountability for it? That’s another example of really reconceptualizing IT from being a function to being a capability that everyone in the company has access to.

Now, those are pretty [big] words, and getting that down in terms of organizational design, role, definition, compensation plan, governance structures — there’s a lot of work to be done.

But there’s no choice. IT cannot belong to IT alone. IT must be the business and, equally important, IT must let the business be IT. Think permeability.