The inability of companies to keep pace with their IT departments is holding back the take-up ofdigital technology.
Two-thirds of senior business leaders claimed that if companies don’t become more digital by 2020 they will have lost competitiveness, a study has revealed.
But companies are struggling to keep pace with rapid advances in digital technology, according to the study by CEB, the membership group for business executives.
“Even if IT is performing really well and has everything in place, digital won’t work unless companies address bigger issues,” said Andrew Horne , IT practice leader at CEB.
Larger companies find it particularly difficult to keep up to speed with digital technology, including the development ofmobile apps,data analytics and new digital channels to reach their customers.
“The average company is bigger than it used to be, more regulated, more complex. It has more product lines, and a pervasive risk-adverse culture,” Horne told Computer Weekly. “Large companies are getting slower. It takes longer to hire people and longer to finish a project.”
This puts large companies at a competitive disadvantage when they are competing with smaller disruptive companies andhigh-tech startups.
The IT department of a large bank, for example, took only a week to build an innovative mobile app for its retail customers. But it took the bank nine months to get the app through the legal and compliance processes before it could be made available to the public.
The shift from products to services
One of the effects of digitisation is that businesses are making a shift away from being pure product suppliers to become data services suppliers.
One IT leader, who works for a company that makes analysers, for example, is trying to convince the business to supply analytical services, rather than devices.
“We have experts who can interpret the measurement, so we have experts who can sell an added-value service,” he told a gathering of IT leaders.
Another CIO is battling with the challenge of making digital services available to customers only at the time they need them, rather than risk bombarding them with advertising.
“Large companies are getting slower. It takes longer to hire people and longer to finish a project”
Andrew Horne, CEB
Aircraft and tractor makers are other examples of companies that are moving away from simply supplying products, to gathering live data from vehicles and using them to develop new services to customers.
But they often hit barriers because their sales teams are not trained how to sell digital services and, on a practical level, their bonuses still depend on sales of the physical products.
In one case, a company solved this problem by giving its CIO responsibility for the sales team selling digital products.
“In the short term that worked. The problem was that CIO was a full-time job, and managing the sales team was a full-time job,” said Horne.
Digital strategy a shared responsibility
CIOs can’t take responsibility for every problem in the organisation, but they can make it clear to other executives where the bottlenecks are.
“One reason these problems exists is because there is no natural owner. They have crept up between the cracks,” said Horne.
CIOs cannot take responsibility for corporate compliance, sales bonuses, or fixing corporate bottlenecks.
“IT can’t take all that on,” said Horne. “CIOs can prioritise where IT can make a difference, but as for the rest, make sure it’s communicated to the rest of the organisation.”
Changing role of IT department
As digital technology begins to permeate all areas of business, IT departments will increasingly play a supporting and training role for non-technical employees.
The IT department in one global retailer, for example, ran a business intelligence (BI) team to provide and support BI technology for sales, marketing and other departments.