You know those guys in their shabby wool sweaters and sandals (some sport hoodies and sneakers), wandering around the office, helping users with their daily computer problems? Well, that’s about as much as most people know about the guys working in the traditional IT departments of large companies.
However, there are usually much more to those guys. They are the ones taking care of all the digital tools that we use to conduct our work on a daily basis. Those guys look after the networks, wireless connections, email systems, applications, computers, tablets and mobile phones… In addition these guys evaluate different technologies and service providers, purchase solutions and then fight with the top management for the investments to develop the company’s IT systems, devices and so on.
Usually, a company spends around 3 % of their turnover on IT. Some companies spend a little more, because they might have more complex and critical systems, banks for example. Anyway, this 3–4 % is seen as an “operating cost”, which the top management wants to optimize – or rather minimize.
This is actually one of the main reasons corporate IT systems are usually not very innovative or nice to use. They are managed and developed on a shoestring budget.
So, the IT guys are usually under a lot of stress from two directions: the IT systems need to work but at the same time they need to be as cheap as possible. Those are the main requirements that the top management puts on IT: Get the job done, as cheap as possible.
Not very strategic.
The funny thing is that many of these woolly sweater and sandals sporting types (some IT guys do dress differently though) are highly innovative, smart and creative people. Yet they are taking care of a mundane task of managing “basic infrastructure” with the pure goal of minimizing cost and risk.
Could it be argued that dismissing IT resources as just technological janitors is wasting precious brainpower on something essentially unproductive?
Let’s develop this thought further.
IT departments were originally born out of the need to have some geeks that know how to install and keep IT systems running, when those systems were so called “in-house systems”. After that, integrators and service providers saw the opportunity to provide systems from centralized data centers, as “hosted services”. In the past 10 years, “cloud services” have evolved, which has basically made buying these services so easy that even the business guys can buy a CRM system from the cloud with the company credit card.
In practice this means that the IT guys now run the “old school” legacy systems and some cloud services side-by-side. In the future, most systems will be bought from the cloud.
So what will this mean for the “in-house” IT guys? Many of them will surely work for large service providers and cloud companies. Some of them will work for startups. What is common to all of these is the requirement to be innovative. Just like Microsoft’s new CEO, Satya Nadella said in his first employee letter that “Our industry does not respect tradition – it only respects innovation”. I could not agree more.
Some re-thinking needed? My point is that can companies afford losing these innovative guys in hoodies, sweaters or sandals? Or should companies re-think what IT departments are and what their mission is?
I argue that IT departments should become Innovation Departments. Buy the boring infrastructure stuff as a service and turn your in-house IT brains into Innovation Executives.
Innovation Departments should have their say on how the company can develop processes, customer services, delivery processes and financial optimization. Innovation Departments should think about how to harness these new school cloud service ecosystems and modern digital tools in providing the benefits of mobility, integration and user experience to the employees and customers of companies.
The mission should be increasing business value, not minimizing cost.
This means that companies can gain competitive advantage over their rivals through digital innovation. Especially if the innovations can be protected with IPR. This could also open up completely new business opportunities for companies. Imagine that an innovation in a support process would allow a new core business to grow within your company.
This means that the 3 % operating expenditure could suddenly turn into a huge growth in turnover.
The Innovation Departments could unlock a huge hidden business value that has been chained until now. For example, the car industry is already putting heavy bets on in-car digital innovation.
What is your company doing next?
- Mikko Laaksonen works as a Senior Development Manager at Fujitsu Finland. He currently works with business development of Fujitsu’s global service offerings in the Nordics. Mikko has over 10 years of experience in Service Business Development, Product Management and Marketing & Sales. He holds a Master’s degree from Helsinki School of Economics (Aalto Univeristy) in International Business with a Bachelor in Economics and Marketing from University of West of England, Bristol.