The changing paradigm of Technology supporting business or Business supporting Technology
Lately there has been some articles talking about the role of a CIO becoming less important to companies. This looks unusual mainly when businesses are embarking heavily on technology projects and adopting technology like never before. However, there is a great amount of truth in this statement. To understand this better, let us see how companies used to work and how the new era companies are working now.
The old age companies like manufacturing, Healthcare, Retail, Banks and logistics used to have large businesses that came out of years of work and brand building. Working in retail for over a decade, I have seen the way retail giants created huge empires of brick and mortar stores and large network of support structure that was initially very manual. Eventually, technology was introduced and the CIO was the key person who worked with business to make these changes happen, slowly and steadily. The CIO organisation that has been typically called the IT or Technology department ever since remained a support department like finance and HR. Their core purpose had been to support the brick and mortar business to grow and provide services as business needed.
As the businesses grew, the stature of the CIO also grew. From a typically dozens of tech geeks to thousands of IT employees and vendors became the empire of the CIO in most of the large companies. The never changing mantra these companies continue to follow has been ‘More the business grows, bigger will be the IT department to support them’. This all was perfectly fine till the time eCommerce started picking up. The old age CIOs, who were typically from the data center and infrastructure domain found it difficult to cope up with this change. Moreover, the systems growth that happened over decades of CIO model were not ready to move quickly to the next level. More than anything else, almost in every case the limitations of the CIO organisation started becoming the bottleneck for the companies growth. Nevertheless, the new faces in the CIO team and some more dollars continues to give more time to their organisations. In some cases, CIO has a rival in eCommerce CTO and has given rise to faster organisational political issues while real benefit on ground happened at a slow pace.
If I see in terms of retail, inspite of all changes over decades, all CIO organisation based companies have been feeling the heat from the newcomers like Amazon. New entrants like Uber, eBay and many more have adopted new model of business. These new business are fundamentally doing the same what their elder brothers did, but yet, they are very different.
These new entrants changed the way business is being done. Instead of technology supporting the brick and mortar business, these businesses are essentially technology supported by brick and mortar. This fundamental difference is something that has suddenly put a question mark on the future of the CIO and the organisation they have been leading all long. Amazon is a marketplace and a cloud that uses traders and their own stores to sell cheaper and better. Similarly, Uber is a technology platform that helps people in solving their commuting problems better than a traditional taxi service. While Amazon has eliminated the brick and mortar need, Uber has eliminated the need of a middle layer of a taxi paging company and the taxi driver can talk to you directly and be far more personalised.
These new companies do not have a CIO who owns technology in the company but these business have technology at their core even though they solve the business problems that traditional companies have been solving over decades in their own traditional ways. Their business teams have their own technology and CTO manages the common part that business cannot handle it alone. There is no one large IT team that does work for these businesses. If we take example of these new line of companies, they have eliminated the middle layer completely and have proven that they can change the way business is run. Similarly, it is soon that the middle layer of a big common IT team should be reviewed by all traditional businesses and start looking at the business differently. It is no more business supported by IT, rather IT is the business now. If businesses have their own technology, they will be faster and certainly better in terms of getting results. Amazon is a live example on how this change can be successful while the traditional retail businesses continue to push harder the old way and wonder why their efforts are not bringing desired results.
