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How Digitization is Changing the Structure of Corporate IT

Digitization is shaking up all areas of big business but has disrupted IT most of all, and for a longer period of time than most of the rest of the firm

For some time now, IT functions have been rethinking their entire operating model as they help – and often lead – their companies through digitization. This has understandably forced them to consider what they should do with all their IT strategy, governance, and management functions. Some will shrink, others expand, and some will move outside IT altogether, operating as part of a larger enterprise-wide function or as a standalone group. The key for all CIOs is to make their teams more agile.

Three forces are behind these changes to IT functions’ operating models.

  1. The need for greater speed when exploiting digital opportunities: Digitization has shortened the time in which a company must respond to technology opportunities. Falling behind competitors or agile startups can lead to significant revenue loss.

  2. Greater integration between IT and business strategy: Technology is now essential to the majority of business initiatives. IT strategy therefore a critical part of enterprise objectives, not a plan derived from company goals.

  3. The rise of business-led IT: Business partners are more tech-savvy, as well as willing and able to procure their own technologies to get their work done.

As IT teams reorganize to meet these challenges, other activities traditionally carried out by functions such as the Project Management Office, Enterprise Architecture, the “Office of the CIO,” and Information Risk are changing. Some will be carried out more frequently, increase in strategic importance, alter focus, or even change reporting line.

IT project management, for example, will largely be done either by project managers embedded in IT product lines, or by business partners themselves for their own technology initiatives. Meanwhile, enterprise architecture teams will spend less time setting or promoting architectural standards, to free up time for greater involvement in IT and business strategy.

As the activities change, the functions currently responsible for them will also shift, as shown in chart 1.

Chart 1: The changing IT function  Source: CEB analysis


More On…

  • Digital Enterprise 2020

    These resources will help you understand the future role of digitization at your firm, and the implications for the corporate IT team.

  • Corporate Agility

    Learn more about CEB's work on how IT teams can become sufficiently agile to help their companies compete amidst so much change.

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