A popular author and speaker about the future of IT, Charles Araujo talks about what it means to be a digital leader, the IT organization of tomorrow, and how to enable transformation in an organization.
CIO Insight: People frequently ask you at technology conferences and other events about the future of IT and where is it headed.
I believe that the IT organization of the future is going to be defined more by what they don't do, rather than what they do. As technology continues to proliferate exponentially, we're entering an era that I call the "Internet of Everything." Everything is going to be driven by technology and everything is going to be connected. Technology will truly be everywhere—even in ways that we can't imagine today. And we, the IT function, will simply be unable to handle it all. It will just be too much. Today, if it touches technology, generally speaking it is the IT function that is expected to run it. But we're already seeing that change and break away. I believe that process is simply going to accelerate. I believe that within the next five to 10 years, 80 percent of what today's IT organization does will exist and be delivered from outside the walls of the enterprise. Only 20 percent of today's technology stack will remain within the domain control of IT. Everything else will be provided by some form of a third-party supplier—and, in many cases, it will be delivered directly to our customers without our involvement.
But that remaining 20 percent, the parts that the IT organization remains directly responsible for will be only those things that provide strategic, differentiating value to the organization. There is a lot of technology that is vitally important to the operation of the business, but which provides no differentiation in the market place. I love to use email as an example. Email is critical to almost all of us. I know that I live on email. But that doesn't make it strategic to my business. Having a great email system doesn't make a client choose our organization over anyone else's. That's true for virtually everybody. It's an important technology. I need it to be there and I need it to work reliably, but it provides no market differentiation to my organization. So why should I invest any of my capital dollars or, most importantly, the attention of my highly paid IT staff, worrying about it? I shouldn't. I should let some service provider give me that function as a service and focus my internal IT resources on something that can give me an edge in the market.
The reality is that technology is one of the few remaining drivers of competitive differentiation in the marketplace. Yet most IT organizations are spending all of their time and energy on the 80 percent of the technology stack that provide no market differentiation. That will change. It has to. It's why we're seeing the rise of the roles like the chief digital officer—that is just a sign that organizations know this to be true and have become frustrated that IT can't deliver it. So they're creating new functions to get that job done. But that's the only job that will matter in the future. So IT is going to need to rapidly start shedding those "lines of business" that provide no differentiating value and focus all of their significant resources and talent to those technologies that will provide an advantage to the organization.
CIO Insight: In The Quantum Age of IT, you discuss how technology leadership in today's digital era will extend beyond IT. What do you think it means to be a digital leader today?
As technology has infiltrated every aspect of business, we cannot expect that IT will "own" the technology conversation. In fact, it's a recipe for failure. While we've always talked about being a trusted partner, that's really been mostly internal marketing hype. We have done little to engender that trust, nor have we done much to hold our business counterparts accountable for their part of the relationship. I believe that in this new era, whether you find yourself on the business side of things or on the IT side of things, you will need to see yourself as a digital leader. Really, it just means that we're each living on separate sides of the same coin. There will be no separation. Just different roles and focuses.
Fundamentally, being a digital leader will come down to two things. First, it will be the ability to see technology through the lens of its value contribution. Today, many business people tend to see technology strictly as an automation engine. Tech people, on the other hand, tend to see technology as an end to itself; we just love the technology for its own sake. But a digital leader will see something bigger and grander. They will see technology predominately as an enabler of value transformation. They will have the ability to see any given technology, which by definition will be developed by a technology provider outside of the enterprise, and understand how it can be combined with a unique business process to unleash some kind of competitive value to the organization. Being a digital leader will be to master the art of creating unique, differentiating value from piles of commoditized technologies.
It will also mean learning to operate in a different kind of world. It is not only the IT function that is in the midst of a fundamental sea change. The basic rules of business are breaking down as we transition from the industrial era to the digital era (or whatever you want to call what's coming next). Our core structures are beginning to shift because the hierarchical management models that we have organized around are proving to be too slow and lumbering to allow us to compete in a rapidly changing marketplace. Slowly, all companies are starting to think and act more like technology startups. And that has deep ramifications for what it will mean to be a leader in this era. It will require skills that are much more focused on influencing people, creating far-reaching visions, being comfortable with rapid change, and so on. So, a digital leader will also be the professional who can most effectively operate in this dynamic, shifting, networked, non-structured world and still find ways to create these kinds of game-changing innovations using the same technologies that their competitors are using.