How to Prevent the IT Function from Becoming Marginalized

Large and mid-size organizations are seeing a dramatic shift in IT responsibility.  Gone are the days of the monolithic IT organization. Now, internal IT departments are being integrated with the business side. For example, a 2011 IBM survey of 1,734 CMO’s found that nearly one-fourth of respondents outsourced IT services, and 61% said they would rely on such IT providers over the next five years.

In spite of these tendencies, companies still need IT departments in-house.  Internal IT departments’  roles have changed; they must now act as the broker, orchestrator and manager of purchased IT services, as companies begin to shift the way they measure value from IT. Understanding these two points from the new world of IT will help you to do that: 

• New IT Supply Chain – As IT outsourcing continues to grow as a business strategy, companies still need to vet, secure, and nurture these strategic outsourcing partnerships in order to maximize their investment, capture global trends, and support business innovation. Unlike the IT departments of years past, today’s internal IT department must focus on driving relationships, and addressing changes in platforms, architecture, services, and performance requirements. 

• New Definition of IT Business Value – Internal IT organizations don’t operate their own costly data centers, they go to the cloud. They don’t build their own applications, they buy them. The IT role and supply chain have shifted so measuring IT purely by cost and efficiency does not work.  Instead, today’s most effective, internal IT drives business value for the company.  This means that companies must now evaluate their internal IT based on business outcomes that take into account both operational and financial metrics.

With the new IT supply chain, companies need IT that can enable:

• Exploratory investment in IT that results in new products or competitive business advantages
• The company to improve business processes to react to continuous changes to the market and execute strategy
• The company to transform its business model
• The company to capitalize on Big Data to better market the brand, products, and services

So if you find yourself asking how internal IT can remain relevant in today’s new IT supply chain, and why companies need internal IT departments that embrace the new role of IT to drive business growth and strategy, you’ve come to the right place. The ReThink IT paper is available with no registration and includes insights on these issues and more.

To learn more about what Wavestone US can do for your company, visit http://www.wavestone.us/capabilities/.