Going beyond just 'keeping the lights on'

THE constant tug-of- war between the information technology department and the business unit in organisations over IT requirements has resulted in the former facing the threat of becoming marginalised in the decision-making process, according to a senior executive at a consultancy firm.

Kevin Wo, senior VP and Asean MD at Avanade, says the role of IT has always been to help "keep the lights on", referring to its supporting role to the business function. Technology has become the source of innovation in recent years and more non-technical executives have familiarised themselves with tech applications. With this has come the expectation that the IT department would get elevated, as the source of tools for innovation.

On the contrary, however, many IT departments are being seen as obstacles to innovation. Business executives want faster creation of applications, and those which work as well as the consumer products on the cloud that they have grown familiar with, such as Google's Gmail which delivers email through a browser.

"More enterprise workers are expecting that their companies will provide an experience that feels the way they are used to with consumer (services). There's a lot more expectation," Mr Wo said.

But IT departments are plagued by various barriers: escalating costs in maintaining everything running smoothly, as well as security issues and additional complexity introduced by all the new gadgets and cloud-based applications coming into the enterprise, explained Mr Wo. "The four main trends of mobility, big data, cloud and convergence have been presenting new issues for IT departments. And they're putting all their effort into keeping the lights on," he said.

This tension between IT and the business is happening globally. Mr Wo pointed to a recent worldwide survey by Avanade which found that a whopping 40 per cent of IT staff spend their time managing and maintaining ageing legacy systems. This chore continues to bog them down, preventing them from delivering new IT services at the rate the business wants.

As a result, the vast majority of business leaders (86 per cent) believe that they can make better and faster decisions without involving the IT department. For 2014, Avanade found that 45 per cent of technology budgets were controlled by business departments outside of IT.

But IT departments are not the enemy. The survey also found that 86 per cent of businesses were comfortable with IT staff taking a more business-oriented role and interacting with clients and partners as consultants.

The majority of businesses intend to put their money where their mouth is: 69 per cent of businesses said they were planning to expand the IT department's role to become that of a business adviser in the next year.

In Singapore, the push to elevate IT's role has come more slowly than the global average, but it's happening, said Mr Wo. About three out of 10 companies in Singapore already have IT set up in a "business consultant" role, where the IT department advises business leaders on how they can accelerate innovation through technology. "And we're seeing more of this happening."

"IT can no longer function in the traditional way. The research shows that new models have emerged," Mr Wo added.

IT departments can help by laying out potential minefields for businesses, such as data privacy and compliance issues that could crop up, he said.

Chief information officers should helm the new charge by building partnerships with external service providers, and helping to position their IT departments as the source of new business tools for the rest of the employees, said the consultant.

In Singapore, customer-facing entities in the retail and telecommunications sector have naturally been quicker to understand the need for IT innovation, said Mr Wo. They also tend to look to their IT departments to accelerate this change, and are positioning them as brokers between technology vendors and the business function.

Banks here, on the other hand, have stayed fairly traditional compared with their European counterparts, he noted. But banks are in large part customer-facing entities too, and need to pick up a couple of secrets from retailers, he said.

"Banks here are quite happy with their traditional set-up. While it meets their purposes for now, they're beginning to realise that they need to change the way they interact with customers," he said.

Mr Wo pointed to a few examples out of Singapore of businesses that bit the bullet and made bigger investments in IT transformation earlier, such as a real estate company which embarked on a project to have its applications managed by an external vendor. This move allowed the company to focus on business-directed innovation, while getting out of the rut of "keeping the lights on".

Another was the Singapore arm of a Japanese consumer product company, which decided to move its sizeable installed base of applications off its own infrastructure onto the cloud. The move was extensive, and handing over some of its critical business applications to the cloud was of top concern - but the company's IT department is now free of having to maintain its data centre assets, said Mr Wo.

Agility

He cautioned companies from going to the cloud simply to save cost: "Companies should view it as a way to be agile."

The cloud offloads the chore of on-premises infrastructure management, and firms should take that as a jumping-off point to be able to respond to market trends more quickly, he said.

Avanade has roots as a joint venture between software firm Microsoft and IT consultancy Accenture. Accenture eventually took majority ownership and made Avanade a subsidiary. The majority of Avanade's revenue comes from subcontracting work for Accenture and Microsoft.