As transformative technologies such as cloud, mobility, big data, and social business continue to gain traction across the region, the influence of line-of-business (LoB) executives within the technology procurement process is growing considerably.
That’s because we are beginning to see a new wave of business process transformation take hold in the Middle East, particularly as new use cases around innovation-accelerating solutions like cognitive systems, the Internet of Things (IoT), robotics, augmented and virtual reality, and 3D printing continue to emerge.
In most organisations in the Middle East, digital initiatives are being increasingly funded by line-of-business departments or jointly funded by IT and the LoBs. This is a fundamental change from the days when the IT department was solely responsible for procuring, provisioning, and supporting technology in the organisation.
And in this context, the relationship between the IT function and LoBs is expected to change rapidly over the next few years. There are various reasons for this shift, including — but not limited to — a rise in innovation at the business end, the ongoing disruption of back-office functions, the emergence of chief digital officers, and the implementation of new visions for organisation’s in-house IT teams.
Many organisations, particularly in the financial services, retail, telecommunications, and public services sectors, are focusing much of their digital efforts on transforming customer omni-channel engagement. Here, the LoB teams that are at the forefront of customer engagement, such as sales, marketing, and customer service departments, are emerging as natural internal champions for digital initiatives.
Although project teams for such initiatives comprise both LoB and IT personnel, the project managers are increasingly being appointed from the LoBs. The LoBs are also increasing their funding in these areas and, very soon, will overtake spending by the IT department. The IT’s primary responsibility is to then enable an agile infrastructure — increasingly, in a cloud model — to support the digital solutions at the front end.
As for the ongoing disruption of back-office functions, the emergence of cognitive systems and robots will accelerate the intelligent automation of many finance, procurement, and administrative processes. And while this will lead to a much greater increase in productivity, it will also have serious implications for jobs, skilling, and corporate culture.
The influence of CFOs and COOs on intelligent process automation decisions will be significant, as they have far-reaching consequences. IT will, of course, play the role of facilitator and enabler, but it will be challenging for the average IT function to adequately advise on and enable such non-traditional technologies. As a result, their role as a leading partner in such projects may come into question.
This role is also coming under mounting pressure from the emergence of CDO positions in a number of industries. As organisations progress up the digital maturity curve and look to scale their digital business by developing digital platforms and services that cut across traditional department silos, the need to have an office focused on driving the digital leadership team becomes apparent.
In some instances, CIOs have assumed this role or added it to their responsibilities; in others, the two positions are kept separate and distinct. An independent CDO will certainly take away most of the digital transformation leadership responsibilities from the CIO and other CxOs. And this will also create the need for a potentially complicated three-way alignment between the LoB, the CDO, and the IT department.
This all feeds into the new vision that many organisations now have for their own in-house IT teams. As traditional business transforms into digital business, and innovation accelerates at the business end, the IT department will still have an opportunity to contribute to this innovation.
But it’s most critical role will be to provide an infrastructure that is agile and secure enough to support this innovation, as well as to integrate the results of this innovation into the current IT environment. As such, we expect the traditional lines of engagement between IT functions and LoB departments to be redrawn.
In this context, it is important for the IT function to articulate a new vision for itself — one that re-imagines it as an IT services business that generates revenue and profit from internal customers and eventually from external ecosystem partners as well.
Some organisations may establish an internal open market where the IT function competes with external IT providers to acquire business from LoBs. This will create a new identity for the IT function, reshape the relationships with the LoBs, and furthermore, strengthen its relevance and contribution to the business.
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