Evolving relation between IT and Business
March 17, 2008 by Raj Sheelvant
In the mid-1990s, IT was mainly perceived as a cost center. Many organizations did not understand the full fledged role of IT in an organizations. According to the article “Strategic IT takes stage at financial services firm”, only 5% of employees, at most, understood what IT was or could do for the company. As technology became pervasive for many businesses, the perception of IT as “no more than a cost center” is beginning to fade, but it is not gone completely. A Wisconsin Technology Network Media (WTN) survey as quoted by the article, of 434 upper-level executives conducted between Dec. 19, 2007, and Jan. 7, 2008, found that IT as a cost center is still a reality for about 25% of the respondents. And, although nearly 70% of respondents said they participate in forming business strategy, more than half (54.2%) said they still spend more time on operations and functionality than on business transformation or strategy, compared with about 25% who cited business transformation as their chief activity, and 22% who get to focus exclusively on strategy.
IT and the business need to be joined at the hip to be successful in global economy. Many traditional CEOs do not understand IT’s ability and thus look at it only from a cost center perspective. Bifurcation of the two aspects of IT should be done by the CIO and IT Executives. The operational and tactical aspect as mentioned in the survey above, can and should be outsourced so that internal IT department can focus on how to use IT to add business value to the organization. According to the article, IT department need to invest “considerable amount of time” to plotting what the company wants to do in the coming year. Rather than waiting for the green light on individual projects, IT and the business need to dig in immediately to do market research on the potential projects and likely partners. When the go-ahead comes, IT can be ready to move rather than relegating that project to the next budget cycle. I agree that this is the only way IT department can enable the business strategy.
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