When IT acts as a partner to the business, rather than as a technological consultant or IT service provider - the benefits are significant.
This year’s McKinsey Global Survey interviewed executives from both the IT and business functions, and found that IT departments that actively collaborate with the rest of the business tend to perform better overall. According to the results, however, few IT departments are playing the role of business partner today. For organisations to succeed in the digital age, moving in this direction is critical.
A new model
Strategy & the global consulting division at PwC, has spoken of the rise of the “IT-business partnership model”. In a 2013 report, it included the IT-business engagement maturity path (below), which illustrates the transformation IT service providers will likely undergo prior to putting a new partnership model in place; transitioning from transaction-based service providers to consultative strategic partners. According to Strategy & “The rapid digitisation of virtually every industry, there are now demands that companies close the gap between IT and the business even further”.
But regardless of their digital objectives, not all IT departments will be ready to transition to the new partnership model. Sometimes IT doesn’t have the best relationship with the business and can suffer from an image problem; seen as the department of ‘no’, and a barrier to innovation rather than an enabler.
The result is usually a fragmented landscape of siloed systems, as the line of business engage in shadow IT to get around rigid policies and procedures. In these organisations, it’s important for IT to be visible and relevant, and better communications are necessary to lift the veil on the inner workings of IT and demonstrate how IT works with the business, and vice versa.
Once IT services and the business are communicating regularly and effectively, open decision making will likely ensue, which can go a long way in curbing negative perceptions while establishing IT as a partner. In fact, according to the McKinsey survey, at organisations where IT is a partner, three times more respondents say that the IT department is effective at implementing innovation and creating a healthy culture.
However, it would seem that some IT departments are holding themselves back from making the transition to the new partnership model. For a fourth consecutive year, the results of the McKinsey survey showed a misalignment between how IT and business executives view priorities for the IT function.
While 44% of IT leaders say cutting costs is their organisations’ priority, only 16% of business leaders say the same, with most ranking cost cutting last. Instead, what business respondents want most from IT is for them to improve the effectiveness of IT business processes (72%), improve cost efficiency of business processes (47%), and provide managers with information to support planning and decision making (45%). Interestingly, all of these priorities are related to business, not technology. It would appear that the board is already recognising the potential benefits of an IT-business partnership – IT just has to meet them halfway.
Start the process
The pressure on the IT services department to perform will only increase with the growth of digital technologies such as big data, analytics, and mobile. In organisations where IT and the business work together, digital projects will thrive, characterised by open communication and a shared vision.
IT departments who are yet to start this transition can set the wheels in motion by collaborating with other functions on new initiatives – digital or not. Soon, the emerging shift to a new partnership model will be a necessity for companies that want to succeed in the fully digitised world.
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