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  • Writer's pictureEdwin and George

The fall and rise of the IT department

Worrying times for the old school "IT department".

Research in March 2019 involving Australian and New Zealand companies by Technology One, Queensland, finds that Business functions (Finance, Sales, Customer Services, HR and Field Operations) are dominating the decision-making process to select, procure and buy complex IT systems.

It seems that the poor old-school IT department is losing its influence and is in need of a re-boot.

The gloves are off.

Fed up with risk averse IT strategies (let’s just keep things running and invisible) and IT departments that are removed from the Business, senior executives from other functions are taking control:

This study indicates that IT groups are no longer the primary decision makers nor budget holders for enterprise solutions: key business units have overtaken as technology budget holders.

Software as a Service (SaaS) is making this possible.

In Customer Service teams, for example, spending on SaaS solutions has flourished.

Keen to implement new customer experiences as soon as possible, Customer Service Directors want to grab the opportunity to innovate and be leader of the pack. HR departments are doing the same; buying SaaS solutions for hiring, learning and performance management.

It gets worse for IT.

The research found that Business functions who made the purchasing decision were more likely to view the new solution favourably than if introduced by IT. They were also more open to changing the way they work to fit the needs of the solution.

However, despite all this, as ever, satisfaction with enterprise solutions remains relatively low (it has for some time). This isn’t down to technical issues. It’s down to poor change management, communications and staff struggling to adapt to new processes and ways of working.

The fact is SaaS brings both benefits and costs.

On the one hand, it lets Business Units buy and run state of the art solutions that are specific to their needs, without significant input from IT.

On the other hand, the ease of deployment means that organisations are creating pockets of information and processes that aren’t well integrated with other systems.

For example, management information that is produced by one system often needs to be tied up with that produced elsewhere. IT then becomes involved to integrate multiple systems.

So, there’s a Business strategy decision to be made.

Define the systems structure first and then let Business Units loose (with or without IT) or let them press ahead and buy solutions in an uncoordinated way.

Indeed, the days of the IT department are far from over; they will either be contributing to the strategy or tidying up the mess.

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