Menu

CEB Blogs

Topics

Corporate IT

Adaptive IT, and Why Every Firm Needs It

Over 80% of business processes can now be digitized; IT teams need to embrace the adaptive IT trend in response

http://www.dreamstime.com/stock-photo-square-peg-image74240Digitization has changed, and is changing, the way business is done. Digital information enables managers to improve products and productivity like never before.

Unsurprisingly, this means that the role of CIOs and their teams must change too. And adaptive IT offers tech teams a way to increase IT’s contribution to digitization and to thrive under the challenges and complexity that digitization creates.

IT has always faced change, but as digitization has become faster and broader-based across the enterprise, it presents IT leaders and their teams with ever-changing combinations of stakeholders, requirements, and the opportunity to help the business.

One CIO in the CEB CIO network noted, “I’m in an environment that is very information intensive, very knowledge intensive, and this is reshaping IT. It’s reshaping the ownership of IT within the community so it is changing the whole ecosystem.”

Digitization Is Here to Stay

At the average company, 87% of business processes can be digitized. Therefore, IT must work with more stakeholders, across more technologies and objectives than ever before. As each part of the value chain, including suppliers, channel partners, customers, and frontline employees can identify and pursue digitization opportunities, IT must adapt to changes in how technology-related decisions are made and funded.

There has been a lot of coverage about reorganizing IT to prepare for digitization, but these kinds of structural solutions won’t work by themselves because they are hard to scale-up and they create complexity that undermines flexibility. As one attendee at the 2014 CEB summits for IT leaders in London and Chicago said, “We thought about setting up our IT organization for two-speed IT, but [adaptive IT] has changed our perspective and highlighted issues we hadn’t realized.”

How IT Should Respond

IT must be able to look across the firm to find the best digitization opportunities and support “digitization decision making.”

To support the rest of the business in these digitization efforts, IT cannot rely on the traditional principles of “standardization and efficiency.” A new set of management principles are required to make digitization successful and to help the enterprise maximize returns from technology investments. These are that:

  1. IT focuses disproportionate effort in areas where it provides distinctive advantage, and will “dare to be adequate” elsewhere.

  2. IT varies its responsibilities based on where the ideas and money come from, and other contextual factors.

  3. IT recognizes that process discipline must serve business outcomes and uses judgment to determine the appropriate level of rigor.

  4. IT continues to drive for efficiency while making principled tradeoffs for the sake of speed.

Adaptive IT provides a way to make these principles real. In practice, good adaptive IT consists of 3 components:

  1. Adaptive strategy: Managers should shift IT’s role between delivering, consulting, brokering and coaching to help the company extract full value from technology regardless of where the ideas or money comes from.

  2. Adaptive governance and delivery: Increase enterprise speed to market by accelerating governance and dynamically reallocating investments to free up resources.

  3. Adaptive workforce: Continue to develop-business friendly competencies and behaviors, while simultaneously replenishing IT’s technical edge.

 

More On…

 

One Response

Leave a Reply

*

 

Recommended For You

IT: 5 Ways to Measure How Adaptive You Are

The past 15 years have seen everyone become far more comfortable with digital technology. In...

Close