Money, technology, and change: three critical issues technology leaders cope with every day. In order to be successful, modern technology executives must continually focus on shifting their organisations so they are better positioned to implement emerging technologies and new technology management processes.
However, they must also not lose focus on the need to de-install certain existing technologies and technology management processes.
As many readers will be able to testify, this seemingly contradictory juggling act is nothing new. IT’s perennial challenge has always been to take full advantage of incremental technology evolution and disruptive technology innovations while simultaneously managing the retirement and de-installation of software and hardware platforms nearing the end of their economic or technical usefulness.
From our regular discussions with the region’s CIO community, we found that most leaders are able to effectively manage the life cycle of incremental technology innovation but continue to struggle when it comes to managing their more mature strategic platforms.
This is something that has to change, as it is an inescapable fact that successful organisations move purposefully to de-install older platforms, while less successful ones tend to add platforms with the long-term goal of migrating to just one of them — but then fail to de-install the original system.
Disruptions and opportunities created by digital transformation are raising the stakes for enterprises worldwide, making the change-management imperative more relevant and pressing than ever before. Digital transformation poses a particular challenge for today’s technology professionals: not only are their core underlying technologies (ERP, on-premise computing, security, mobility, etc) changing, but the way they actually apply these technologies is also shifting as they look to support new business models, methods, and practices.
Adding to this complexity is the fact that all of this is happening at a time when line-of-business users are exerting more and more influence over technology budgets and decisions. This all leaves the CIO in a rather precarious position; so, how can this unprecedented level of disruptive change be effectively managed to ensure the best possible results for the organisation as a whole?
Every successful technology executive is accomplished at pulling the financial levers. But almost all the IT professionals we have spoken to over the last eighteen months have identified the intensifying demands to master new technologies whilst simultaneously controlling and cutting spending on existing platforms as one of the major challenges they face today.
This challenge essentially boils down to the mounting pressure that modern CIOs are coming under to rationalise their organisations’ technology spending. Increasingly, this is being done through the establishment of formal, multi-year goals for changing technology architecture, infrastructure, and applications with the aim of reducing aggregate or transactional IT spending/investment.
However, in order to truly support the management of disruptive technology change, organisations must now look to disruptively change their management of technology spending processes. What has historically been done to manage IT spending — the nipping, the tucking, and the relentless thoroughness of good cost control — needs to be supplanted by a strategic approach to controlling costs.
To this end, we have identified a number of core principles for disruptively managing technology spending within the modern organisation. Among these is the idea that technology spending rationalisation initiatives should be elevated to the point that they feature among the organisation’s top five strategic initiatives, with ambitious targets set for reducing technology expenses by 8—15 per cent per annum.
To avoid the potential for a conflict of interest, it is important that this person isn’t the CIO; indeed, the CIO has probably personally supported some of the platforms that need to be restructured. Appointing a more neutrally positioned leader will therefore help to reinforce the idea that everything is on the table.
That means considering absolutely everything for rationalisation: data, applications, assets, skills, and facilities. Every system and technology must be fair game, including the human resources invested in maintaining these systems. Ultimately, this should all feed into one overarching goal — the organisation’s future tech platform must be stronger and better than the one currently in place.
To achieve the digital transformation ambitions that most organisations now crave, there must be a focus on restructuring virtually every element of IT — its platform, its people, and its processes. One of those critical processes is technology spending, but incrementalism and inertia have unfortunately become the norm in this space.
Money, funding, budgets, capital, spending — these are our some of business’s most important resources and critical constraints. Technologists often find it easiest to focus where their true passions lie: managing technology, not budgets. However, in the face of digital transformation, they are now being challenged to enable widespread change across the entire organisation.
The essential role of technology leaders is to support the business while simultaneously achieving change — to shepherd their organisations to new and better places, enable new technologies, and empower new functionality, processes, and business models. This requires effective management across the entire IT portfolio — technologies, skills, and, increasingly, the money.
— The columnist is group vice-president and regional managing director for the Middle East, Africa and Turkey at global ICT market intelligence and advisory firm International Data Corporation (IDC) He can be contacted via Twitter @JyotiIDC
