by Paul Daugherty – Chief Technology Officer

Shifting focus from cost to growth: four key steps

Dec 19, 20124 mins
IT LeadershipIT Strategy

Having spent the years following the financial crisis aggressively focused on cost reduction, many IT organisations are now also focussed on helping their businesses deliver growth.

And where they once operated as discrete, project-oriented technology providers, they are now adapting to support the increasingly complex shared services operations many global businesses have set up in order to centralise governance and control.

Moreover, CIOs have been working to satisfy these demands while simultaneously adapting to disruptive technology trends such as cloud computing and mobile IT.

And in amongst all this, they must be sufficiently innovative and agile to deliver growth-oriented services to more complicated businesses whose appetite to invest may change rapidly during this ongoing period of economic volatility.

Changing IT

All this calls for a change:creating a global IT operating model capable of meeting these challenges. Getting there requires CIOs to take four key steps:

  • Evolve the IT architecture.Research  by Accenture shows that high-performance businesses are three times more likely to prioritise regular updates of their application architecture than other organisations.

Such architecture increasingly requires a diverse mix of software and service components, including open-source applications and cloud services, all of which must be integrated with legacy systems.

Traditional approaches – consolidating around a single ERP system, for example – may not suffice. Instead, CIOs are developing solutions that offer scalability, flexibility and cost control.

  • Build flexibility into IT sourcing models. CIOs spent several years building sourcing partnerships with the primary aim of delivering operational efficiencies and cost savings. But these partnerships may not be able to drive innovation and growth.

Instead, CIOs are becoming procurement experts capable of buying services from multiple vendors in order to access a range of skill sets and solutions. They are able to offer their businesses a catalogue of IT services from such vendors, as well as from in-house IT professionals, that can be delivered quickly when and where they are needed.

This requires IT organisations to develop new skills of their own – particularly around the management and co-ordination of third-party service providers.

  • Adapt the IT workforce. Accenture’s research shows high-performance businesses are seven times more likely than other IT organisations to have invested in the development of new technology skills.

    IT organisations have traditionally employed staff with specialised knowledge about the architecture in use within the business, but the emergence of new sourcing models that make greater use of third-party providers may have lead to skills shortages.

    CIOs are now making proactive choices about which competencies to build in-house. The IT workforce – and those who work with it – is acquiring skills that reflect the new operating models with which they are increasingly required to work.

  • Run IT as a business.CIOs are changing too. Where once they ran IT organisations that supplied services to the rest of the business, they now work in close partnership with senior leadership.

They are learning to think like business leaders rather than service providers, becoming adept at making the case for the value IT can deliver, and teaching others how to capitalise on that growth potential. This often requires a new governance model, in order to ensure that IT organisations maximise returns on their investments – both internally and with third-party service providers.

Seize the moment

This repositioning is likely to be challenging for many IT organizations, but now is the time to seize the opportunity. As businesses pivot from the gruelling cost focus of recent years towards a renewed quest for growth, CIOs are well placed to become important strategic partners who can take the lead in driving the business agenda.

To be successful, IT organisations will need to rethink their operating models, implementing a way of working that is global, diverse in its offering of services and skills, and, above all, adaptable.

About the author:

Paul Daugherty is Accenture’s Chief Technology Officer and also serves as managing director of Accenture’s Technology Strategy and Innovation group.  Daugherty is responsible for the technology innovation and growth agenda.