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How Segmentation Can Support Business-Led IT

Business-led IT is here to stay; the world's best IT teams are rethinking their corporate role as a result

Customer Segmentation IlustrationFor every dollar that comes from the corporate IT budget, senior line managers and other business leaders now spend another forty-seven cents on technology from their own budgets.

This is an increase of 18% from two years ago (when it was 40 cents to the dollar), and shows that line managers are increasingly comfortable with sourcing and using technology to do their jobs and run their teams more effectively. As a result, many CIOs have found that they need to rethink the way they structure the IT function and the way they ask their staff to work with colleagues in the rest of the company.

In the past, IT teams have attempted to curb these attempts by the business to muscle in on their patch, as they see it, and they continue to underestimate how much business leaders spend directly on technology by up to 50%.

As well as getting a better understanding of technology spending and use outside the function, senior IT managers should help their teams stop being negative about business-led IT (or “shadow IT” as it is often dismissively called) and focus on activities that will support business leaders in making the right technology decisions quickly, and passing on the complex or risky ones to the IT professionals.

The Benefits of Segmentation

To do this, CIOs must first encourage their own staff to understand the risks and benefits of business-led IT from the business partners’ perspective.

And one way to do that is to segment the types of business capabilities that the IT function supports (managing financial data, providing electronic products to customers, sending mass marketing emails, and so on) to highlight areas where business-led IT is a low risk and high reward endeavor, while also teaching business leaders about the higher-risk areas where it’s much more beneficial to the company if IT retains ownership.

To further help business partners, leading IT teams define “trigger points” at which business partners should turn ownership over to IT. Then, depending on the business capability affected, they tailor their policies and procedures to guarantee that they will provide proper oversight of whatever they’ve taken on.

Being able to focus on a smaller number of higher risk projects, helps business partners get more value from their investments more quickly, and helps IT do more to contribute to its company’s success.

In this way, leading CIOs are changing IT’s “engagement model” toward providing business partners with advice and support, rather than owning their technology decision-making for them.

More On…

  • The Future of IT: Adaptive IT

    More on how IT functions should take an “adaptive IT” approach in response to all the change they are facing.

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