IT dept resize

More than just the infrastructure that supports all your company's activities, information technology (IT) is playing an increasing role in creating business value. Technology isn't just the way we communicate, or access and store information; it's becoming a key differentiator in businesses—enabling companies of all sizes to create better and more innovative products, provide faster and more individualized service to global customers, market and sell 24 hours a day, and act on instant customer feedback.

According to a recent study by U.S. research and consulting firm Gartner Inc., technology's increasing role is causing companies to review the role of IT in their organizations, and to look for ways to harness its power faster and more effectively. "We are witnessing the emergence of a new generation of CIOs, one that aims not so much to ‘run' IT as to ensure that the business achieves strategic value from the use of technology," said Gartner analyst John Mahoney. "Although this isn't an entirely new development, the extent of the change is growing, and a tipping point will be reached in the next five years."

Although Gartner's research probably applies mainly to larger firms, it should interest SMEs because it shows how the competition is getting smarter—and suggests routes many smaller businesses should be exploring.

Gartner has identified four dominant futures for IT in businesses today:

1. IT as a Global Service Provider

Gartner sees many companies' IT organization becoming expanded shared-service units that run like a business, delivering IT services and enterprise business processes. Focusing on building business value, it adopts a marketing perspective, capitalizes on its internal position and delivers competitive services.

2. IT as the Engine Room

In this scenario, IT capabilities are delivered rapidly at market-competitive prices. The IT organization succeeds by monitoring technology and market developments, and building expertise in IT asset optimization, sourcing and vendor management, and IT financial management. It delivers ongoing cost improvements, looks for ways to deliver IT capabilities for less, and responds fast to changing business needs.

3. IT "is" the Business

In this scenario, information is the business's explicit product—or, at least, inseparable from its product. The business is structured around information flow (not process or function), and the IT organization innovates within the value chain, rather than just enabling the supporting services found in every business.

4. Everyone's IT

In this transformational scenario, business leaders and individual contributors use information and technology aggressively to break through traditional business perimeters and drive collaboration. The focus is on information, rather than technology. Highly mature businesses embrace this divergent model for its collaborative and innovative potential. Gartner says that some traditional organizations may see anarchy in this approach, others will view it as liberated creativity. Gartner's analysis suggests this model will flourish most in non-traditional situations such as dynamic businesses, startups and R&D/entrepreneurial/community ventures.

The challenge for entrepreneurs is clear. Don't see IT as just a service or a cost centre—look at it as an increasingly important partner in your business. IT won't stop with smartphones and Facebook and web analytics—it will keep on growing and changing, and create new ways to differentiate your business from the competition. Even better, nimble and tech-savvy entrepreneurs may have an edge in integrating IT's full potential throughout their companies.

Don't leave technology management to consultants or webmasters. Find yourself knowledgeable technology executives who understand your business goals and can make technology an integral part of your future success, from the engine room to the front lines of customer satisfaction.

Rick Spence is the Toronto-based author of the Canadian Entrepreneur blog and a consultant on marketing, strategy and business growth. You can reach him at rick@rickspence.ca.

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