The New(ish) Role for IT and the IT Group

Matt Bishop, Global Managing Principal, CIO Advisory
Stan Lepeak, Global Research Director, KPMG LLP

Technology change—and complexity—continues to increase. This is nothing new but in the context of cloud, “big data,” BYOD, and social media, the pace of change is accelerating. Expectations of what Information Technology (IT) can bring and what the IT group should do to enable these expectations continues to change. As a result, the IT franchise—and IT as the keeper and enabler of technologies in the organization—is more at risk than ever. So how can CIOs guide their organizations to better support the business with technology-enabled services while running the IT organization itself much more effectively?

First, it is important to recognize that the pace of IT change is different this time. It’s not driven by one thing—the mainframe, client server, ERP, the Internet—but a lot of different things coming together—cloud, social media, big data, mobility, the consumerization of IT, etc.  It is the combinatorial effect of these new technology trends.

So how do most IT organizations address these combinatorial components? They run some pilots; put them it in a Petrie dish; test this and that thing out; and make sure they’re comfortable and confident with that technology. This is a no brainer and can be fun but everyone is doing it, including a broad range of nimble vendors and service providers directly targeting the business. The much more important next step is using that technology to drive real efficiencies and effectiveness in the current and soon to be future modes of doing business (not IT).

Let’s look at big data. IT groups embrace the potential of big data, for example in the form of predictive analytics, and the notion of information as an asset and using information to drive business value. But there is a big gap right now in that IT groups either do not have the capacity or the focus to really turn that lens on themselves. As a result, many IT organizations have difficulty answering questions that predictive analytics could help answer.

One good example is to improve IT systems reliability. IT organizations are doing significant work associated with outages or trying to prevent outages. But few organizations are taking all the historical data they have around incident, around capacity, around configuration, around vendor reliability, and developing tested statistical equations to identify when is the next likely time an outage will occur.

Another example is the cost dimension of analytics and IT. IT organizations make purchasing decisions all the time. These purchasing decisions are based on metrics such as cost, available budget, standard performance metrics, and existing vendor preferred relationships.  But what needs to be better addressed is the total cost of those assets over their lifespan, from acquisitions to disposal, inclusive of operating costs and those types. This is where big data can have a potentially big impact of the business in terms of cost and performance.

These examples are part of the bigger issue of how can CIOs better drive innovation in the IT organization from the use of technology as well as from the standpoint of their people, and making their people more creative in terms of being able to help the business or be more creative in terms of solving problems.  The focus needs to move beyond cost to include innovation and speed.

There are many enablers of innovation. One is a willingness to try new things that potentially may fail, and an associated second is the executive permit that to fail is sometimes acceptable. This means moving beyond an overemphasis on self-preservation and underemphasis on accelerated change.  It also means better defining and measuring true innovation and what change enables it in new and creative ways. This is an outward focused effort, and too many IT groups are inward and historically focused in their metrics.  This must change, or innovation and underpinnings of it through the exploitation of the myriad of current technologies trends in the market today will remain aspirational for too many IT organization.

Hear Matt explain the critical role IT plays in a technology climate of change and opportunity in the KPMG Advisory Institute podcast: The New Role of Technology.

Explore KPMG Advisory Institute’s CIO Agenda and visit the KPMG Advisory Institute for the latest thought leadership from Management Consulting.

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