Business-IT alignment in the era of disruptive technology

Digital transformation has been a tech buzzword for years, but true disruptive innovation can, and does, happen without any IT involvement whatsoever.

That was the word from Carolynn Chalmers, a director at Candor Governance — a corporate and IT governance advisory firm — speaking at the IT Leaders Africa Summit in Cape Town last week. Chalmers echoed a hot topic at the event: How do CIOs balance pressure from the business side to deliver industry-disrupting applications, while making sure to maintain the “must have” technology that keeps day-to-day operations running smoothly.

Pressure on IT leaders has been ratcheted up by enterprises chasing that “gee-whiz” moment, the experience you have as a customer when you are truly delighted by a product or service, Chalmers noted. Chances are that such experiences are so affecting because you are surprised, and impressed, by how seamlessly and cleverly your needs are met.

While such “gee-whiz” moments are often considered to be the realm and responsibility of IT, the reality is that this is not always the case, Chalmers said.

For example, AirBnB, a business that entered the market and gave customers their gee-whiz moment by changing up the hospitality industry status quo, was enabled by technology but was based on a disruptive business idea, Chalmers noted. Chalmers believes that all market disruptors have the following in common:

• They created something that allows previously unserved segments of the market to access a specific product or service;
• They’ve removed friction from an existing process;
• Their product or service adds tangible value for customers.

None of these disruption requirements are IT or tech issues, Chalmers pointed out. “They’re business issues,” she said.

And this presents a challenge for CIOs.

Innovation requires input from business

Inspired by the likes of AirBnb and Uber, IT teams are being asked to innovate in the same way. But coming up with solutions that cater to new customers, remove friction and add value actually requires more input from business than it does from IT, Chalmers said. Sure, IT must support and enable these innovative ideas but value is really achieved when business and IT work as strategic partners and have a shared vision of what they’d like to achieve. “Business needs to work with IT to understand the potential opportunities that they can achieve using technology in the current disruptive market environment,” explained Chalmers.

Gartner backs this sentiment. According to the research firm, if CIOs want to keep pace with digital transformation and tech innovation, they need to become business executives who play an active role in boosting the business’ bottom line. This demands a change in business culture. In fact, by 2021, Gartner forecasts that CIOs will be as responsible for culture change as those working in your HR department.

When CIOs aren’t being tasked with creating revolutionary, gee-whiz gadgetry, they’re focusing their attention on less flashy things. Chalmers calls these the “must haves”; the tools and technologies that have become essential to the day-to-day running of the organisation. “For today’s businesses – in Africa and across the globe – if you don’t have reliable email or stable Internet access, it’s a bit like not having a bed in a hotel room,” noted Chalmers. These IT fundamentals may be less sexy but they’re incredibly important.

Deliver ‘must-haves’ before ‘gee-whiz’

You have to bank your “must haves”, Chalmers said. “If you can’t deliver your ‘must haves’ you don’t stand a hope of delivering those memorable, gee-whiz experiences that delight and excite your customers.”

Today, delivering these IT fundamentals demands that your teams have the skills needed to do jobs that didn’t exist a decade ago, added Omeshnee Naidoo, director of information systems and technology at the City of Cape Town. Think app developers, cloud computing specialists and social media managers. And these roles continue to change. Gartner predicts that by 2021, 40% of an organisation’s IT staff will hold multiple roles and many of these will be business-related and not just technology-related.

According to a 2018/2019 study by the International Finance Corporation, finding people with the required breadth and depth of talent is especially difficult in developing markets. While government initiatives and vendor-sponsored training programmes are having an impact in countries like South Africa, the skills shortage proves a challenge for modern CIOs. 

When Martin Butler, head of the MBA programme and a senior lecturer at Stellenbosch University, asked attendees at the IT Leaders Africa Summit what CIOs do, someone quipped that the CIOs are responsible should absolutely anything go wrong. “I often tell my students that the real difference between IT and the law is that in the legal fraternity you’re innocent until proven guilty. But in IT you’re guilty until proven otherwise,” joked Butler.

In some organisations, the sad truth is that there is still uncertainty around how much value IT adds to the organization, Butler noted. Sometimes, the productivity and efficiency benefits that IT delivers are clear. In other instances, business may shrug their shoulders when asked about how IT benefits their daily operations.

Emerging tech gets the attention of business

So, what can CIOs do to up their credibility and ensure that IT is having a positive impact? Based on interviews with CIOs and customers, Butler’s research shows that IT credibility is closely linked to their success in delivering what business perceives as the more “sexy” projects. And often, these are prioritised when budgets are being allocated.  These initiatives typically see IT experimenting with some of the latest iemerging technology like artificial intelligence (AI), virtual reality (VR) or machine learning. Which is not to say that innovations like AI and VR can’t add value, but a focus on these can overshadow the “must haves.” 

“Unfortunately, these are the projects that business executives care about. These are the projects that build IT credibility,” Butler said.

African tech leaders are in the fortunate position of being able to learn from the mistakes made by businesses in developed economies. But this doesn’t mean that African CIOs and business leaders should only look be inspired by the biggest and brightest success stories. “It’s important to see how the countries, and companies, in similar situations have reacted. We shouldn’t be going to the US or Singapore or Sweden. If we don’t go and learn from Rwanda or Kenya or Estonia, we’re going to have a serious problem creating real IT value,” Butler added.