The burgeoning business technology organization

May 14, 2019

A blog post by Atilla Terzioglu, principal, Suseela Kadiyala, specialist leader and Ninaad Balachandran, consultant

As business demand for specialized, customer-facing capabilities rises, many companies recognize that market competitiveness may largely hinge on their agility and speed to market. As such, leaders are increasingly identifying opportunities to embed customer-centricity into both their technology and broader business operating constructs.

In the increasingly popular Thin IT operating model, many technologists specializing in traditionally IT-centric capabilities like application development, maintenance, and operations are moving out of the IT organization and into business units. The model encourages technologists to live and breathe business-specific capabilities, developing bespoke products and solutions likely to improve customer experience, brand perception, and sales, among other benefits.

This approach not only moves workers traditionally under IT’s purview closer to the business but also provides the business with full accountability for its technology-driven results. Rather than throw specifications over the metaphorical fence to a separate IT department, technology resources and capabilities embedded in lines of business can result in more tech-savvy business stakeholders and dedicated technologists who can develop more domain-specific knowledge. Together, they can co-create digitally oriented customer apps for which speed of delivery and frequent updates in response to market feedback are essential. This collaborative model empowers the business to make decisions and can enable it to quickly see and reap the results of its technology investments.

This technology operating model may represent a considerable reorganization of IT resources and could evoke some initial concerns for both the business and IT. While it is possible to contract additional workers as needed, there may be a fixed capacity of technology specialists assigned to work with an individual business unit on particular products. Additionally, it remains critical that these business technology organizations adhere to governance, standards, and policies set by the IT organization, or they risk creating operational silos and data islands, to the detriment of the enterprise at large. Moreover, integrating IT capabilities and business resources means talent lines will begin to blur. Business units may need to rethink their own ways of working; processes and roles may change, particularly for individuals whose technology-related skills and assignments may overlap with those of the newly embedded IT workers.

This shift entails IT and business leaders fully embracing the technology transformation and changing expectations. Beginning with products and solutions most likely to synergize with the business because they are customizable, frequently updated, and confer a competitive advantage, leaders can determine how best to identify and integrate IT capabilities into business units. From there, it’s time to move technology specialists out of the IT organization and into the business; based on early results, they can identify additional capabilities to shift.

IT leaders hesitant to enact wholesale changes too quickly might consider an interim step of organizing IT resources into product teams associated with business-oriented value streams. This keeps dedicated app-dev teams in the IT organization initially but transfers their day-to-day management to business-unit leaders, in anticipation of a full shift later on. This approach can work only if CIOs truly sever management responsibilities and recognize they cannot pull back those resources for other IT work. Some technologists may also seek reassurance that aligning so closely with a particular business function will not constrain their future career opportunities—if anything, doing so may enable them to better develop the skills and knowledge needed to deliver valuable solutions in today’s ever-changing workplace.

During this transformation, CIOs must also consider the role of the IT organization moving forward. While much of the innovative, customer-focused work would move into business units, technologists tending to ERP, email, and other out-of-the-box applications that do not provide competitive advantage through differentiation would remain in the IT organization. CIOs will need to assess their IT function’s operating model, taking steps to build their own service-based Thin IT capability to orchestrate technology across lines of business. This scenario raises the question: Does the IT organization still have interesting work to do, or are the remaining technologists simply keeping the lights on? Suffice it to say Thin IT, by leveraging the benefits of technologies such as cloud, automation, and numerous other emerging and maturing technologies, will have the opportunity to do a lot more than that.

This article first appeared on the WSJ. It is the second in a series on the future technology operating model. The first article on Thin IT can be found here.