I attended a NCC Think Tank last week on the future of the IT department. The session brought together individuals with a broad range of backgrounds which made for an interesting discussion. There were, however, many similarities between the issues facing the different services and it was clear that most are facing a period of radical change.
One participant, a consultant, suggested that some of the companies he was working with were looking to reduce the in house IT department to 10% of its current headcount with all services provided externally. The role of the remaining staff would be to focus on managing the relationships with the external suppliers and ensuring that they deliver in line with the corporate strategy and business. Although this was regarded as an extreme example, the evidence from the job market suggests that the back office functions at least are moving away from internal provision with greater emphasis on planning and strategic alignment. So change is on the way and is largely being driven by external factors.
In such circumstances it is easy to take a protectionist stance but that will do little to enhance the IT department’s standing within the organisation and may even accelerate its demise. The meeting concluded that, in order to be successful, the IT department needs to be regarded as part of the business and needs to contribute to the bottom line by finding innovative ways of reducing costs or otherwise improving the business. There was a concern that some decisions to outsource components of the IT service are likely to be taken without a full understanding of the impact. This is in part because IT is seen in many businesses as a cost overhead rather than an integral part of the business. It is important then, that the IT staff know the right questions to ask of the business in order to determine the right sourcing arrangements for aspects of the business (changing the focus on an IT component to a business service). This demands that the staff within the IT department have both business and technical knowledge to allow them both to ensure that the services provided are strategically and tactically aligned with the business and to champion the contribution IT can make. Having business aware staff within the IT department will also enable them to contribute by identifying opportunities for improvement and will promote networking and communications between IT and the other business functions at all levels of the organisation. The IT department should be open and whilst it should promote its successes, it should also admit its failures and the lessons learned. Overall though, the message is that the IT department of the future needs strong leadership which has to come from all levels of the department. And one of the key challenges will be to change the culture within the IT department itself before it is recognised as a key business unit.