Everything You Knew about IT is Now Wrong

In fact, even the word Information in IT is starting to disappear in organization titles. Rather than Chief Information Officer organization, titles that include the words “Enterprise Technology” are starting to pop up in the Global 2000. The main reason is that “IT” is synonymous with productivity improvement through information technology, i.e., email, databases, legacy applications, etc., but much of that improvement has already been gained. Corporate productivity and value is now gained through automation and servicing digital customers.  

At ONUG, we debate and search out the software building blocks in which to construct the digital enterprise. But what is driving all this new build out and spend is that being digital is the only way to increase corporate value through technology. We know that digital customers are more affluent than their analog peers and demand digital experiences. If they don’t get them, they stop buying. This simple concept cuts across the entire economy.

If you are reading this blog, then you are more than likely on the upper end of the digital customer spectrum and are definitely someone who is building or supplying digital products and services. When I say that digital customers demand a digital experience in nearly everything they buy, I mean everything! Case in point, I tried to buy a half cord of firewood from a company, but the only way they interact with customers is via the phone. You have to call them, talk to someone who takes down your address, instructions of where to place the wood, etc. You then have to write a check and tape it to your front door… Another firewood company accepts Venmo, and I can text the order or send a message from their website. You guessed it, I went with the digital firewood company.

As time goes on, digital customers will be more and more reluctant to consume products and services from non-digital enterprises. This spans every major industry segment in the economy, be it real estate, finance and insurance, health and social care, durable manufacturers, etc. It’s digital consumers who are driving your cloud strategy, automation plans, mobile app development, cybersecurity strategy, approach to DevOps, etc. They are driving the need for you to re-think corporate organization structure, the skills you need and the type of culture that thrives in a digital enterprise.  

In fact, digital consumers are not only driving your digital strategy but the digital transformation of the world economy. They are responsible for the rise of the zero marginal cost economy and how software is propelling the cost of services towards nearly free as described in Jeremy Rifkin’s book The Zero Marginal Cost Society. As a result, digital consumer choice is largely determined by features and the velocity of change, not by the price of the product or service; software attributes. If you disagree then just look at the large number of corporate bankruptcies that have occurred over the past few years, thanks to executive management’s inability to pivot toward a digital enterprise. Case in point, Sears, ToysRUs, Radio Shack, Nine West, Brookstone, Barneys New York, Sports Authority, and on and on.  

IT organizations and the technology tools they have had are not equipped to survive in this digital world. A few comments to hammer in this point.   First, much of IT service management has been structured by a set of rules called ITIL or Information Technology Infrastructure Library. ITIL is a set of detailed practices for IT service management that focuses on aligning IT services with business needs. ITIL describes processes, procedures, tasks and checklists that are applied by an organization towards strategy, delivering value and maintaining a minimum level of competency. Sounds good but it was developed for the world of the late 1980s/early 1990s–in fact, before the Internet was commercial. These practices or volumes of books are gospel to many older IT executives, who have institutionalized them. As a result, many corporate IT departments are stuck in the past with these inflexible ITIL-based operating models. If you are interviewing for a job and you hear ITIL, then don’t take the job!

Another old model that many cling to is OSI or Open Systems Interconnect, a seven-layer model that details functions and features at each layer. The problem is that modern stacks are flat and getting flatter as we are hurled toward an API interconnect world. OSI was useful in the 90s, but not anymore. 

The biggest change of all besides these old models is that IT used to be inward facing; that is, their main customers were business unit managers or other parts of the business. Today, enterprise technology groups are outward facing, defining the digital products and services their company needs to deliver and building them.  

This is a seismic shift in how both IT and corporations deliver value. The best way to sum it up is that business and digital strategy are one and the same. We are quickly entering the twilight of IT as we knew it and entering the digital enterprise and its group of enterprise technologists. 

At ONUG Fall in NYC on October 16-17, hosted by Cigna, the ONUG Community will dive into these digital topics. Eric Reed, Cigna CTO, will keynote the morning of the Oct. 16th on “Digital HeathCare” and how being digital is the only way the healthcare system delivers better care at a lower cost. The CTO Fireside chat keynote panel will be amazing as they dive into how corporations are transforming their organizations toward enterprise technologists. You’ll also get to see over 50 Proof of Concept demonstrations and many other topics and sessions. Most of all, you’ll meet with your peers to hear about their digital journeys.    

This session takes place on Oct. 16th in the morning with a powerhouse panel:

Moderator: Paul Michelman, MIT Sloan Management Review, Editor in Chief

Tsvi Gal, Managing Director, Morgan Stanley 

Don Duet, Senior Advisor, McKinsey & Co; ex-Goldman Sachs CTO

Stephen Davy, Managing Director & CTO, Societe Generale

Eric Reed, CTO, Cigna

I invite you to join us at ONUG Fall and accelerate your corporation’s journey toward being a digital enterprise.  

 

Author's Bio

Nick Lippis

Nick Lippis

Co-founder and Co-Chairman, ONUG