Technology has to become the means to an end. In the old days of information technology, rivals competed to use new technology faster than their competitors, and barriers to entry — in terms of money and time — defined the contours of the competition. But now, technology has become commoditized, and access to it is equalized. Barriers to entry are almost nonexistent. Does anyone still think, for instance, that a company will leapfrog its competitors because it was the first to install the latest version of Microsoft Office? Will your company beat the competition because you have the latest laptop model from HP or Dell? Did Mark Zuckerberg launch Facebook because he had a more powerful computer than the people at Friendster? Certainly not.
In the next phase of the digital revolution, which I call the New Normal, companies will need to start viewing innovation as the true enabler, and technology as the means to drive that innovation. In the last 20 years, becoming digital was a competitive advantage; in the next 20 years, we will have to focus on how to be clever with digital; being digital itself will no longer define the winners and the losers. There will be no more “technology projects;” all projects will be “business projects with a technological angle.”
All of this has an enormous impact on the way IT departments will work in the future. Instead of following the business strategy, the role of the next generation of technology departments will be to lead the business into a world of technology-enabled innovation.
The old IT department was primarily a butler to the business, trying its best to take orders and understand the demands of business partners. Its main function was the implementation of technological solutions. The new IT department has to be the leader in digital innovation. In a world that has gone digital, we can outsource the implementers, but we need to retain and develop clever innovators who are well-rooted in technology, but are fundamentally business thinkers, business leaders and innovators.
The challenge is that the criterion above rules out roughly 80 percent of all IT departments today. Unfortunately, most are not equipped, staffed or positioned to be relevant in the New Normal. And the pace of change is speeding up.
CIOs will have to retool themselves if they still want to stay relevant. They will have to stop thinking technology and start thinking innovation. They must readjust the budget away from merely keeping the lights on for existing applications toward truly game-changing applications. The question a CIO needs to ask going forward is not “What can I get for my dollars?” but “How can I allocate investments in our IT portfolio to maximize benefits for our company?”
The CIO of the future will not only have to get closer to the source of business ideas, but he or she must become the source of business ideas. Not only should CIOs be invited to the brainstorming sessions for new business opportunities, but they must show how technology can spark innovation. While not all IT people are ready to take on these tasks, it is definitely the path they will have to take if they want to survive in the New Normal.