IT organisations need to move from "repository of technology" to "service factories that produce flexible services people want to consume", says Chuck Hollis, vice president, global marketing CTO at EMC.
"The mission for IT has changed. So many IT organisations were created as a monopoly."
Today, however, he says business users have alternatives and will take their credit cards to use it, in reference to cloud services.
His advice? 'Be a competitive IT service provider."
"It is not about technology but refactoring the way we produce our services," Hollis says in his keynote at the EMC Forum 2012 in Sydney .
IT organisations have the opportunity to go from "cost centre to value generator to the business", he says. "Data shows going forward IT will own the relationship with the business and build or broker services that make sense."
But he says IT organisations have to compete as a service provider, while being competitively priced and deliver new projects quickly "without the typical six months, 60 people and six million dollars".
Hollis points out there are dozens of competitive service providers and IT organisations need to benchmark themselves against them.
"Maybe you cooperate with them, maybe you compete with them," he says. "There should be a healthy tension between production and consumption like in other economic models."
Agents of change
He says ICT leaders likewise have to undertake their own transformation, to see themselves as "agents of change."
"IT as a broker of services, this is a very different style of IT leader," he says.
At the same time, CIOs also have to consider the new skills demand in the IT organisation as they move towards virtualisation and cloud services. These range from cloud architects and cloud administrators, and security experts. "Datacentre management is completely different in a cloud environment," he says.
"There has never been a better time to be an IT professional. Our industry is changing into an information economy and you have all the opportunities to get out of the backroom to the board."
"Talk about the power of information business to help our companies make decisions to thrive in this new digital world," he suggests.
For futurist Tim Longhurst, a critical step for ICT leaders is to "look at how the world is changing and what the opportunities are".
Major challenges that were not solved by previous generations can be solved by technology, says Longhurst, who also spoke at the EMC forum.
For a CIO, he says, it is not about cost cutting anymore, but "being visionaries", seeing the world as it could be through technology.
"What is going on out there, what are the possibilities? We understand the technology, we need to be visionaries in our organisations. Transformation won't happen without our output."
He says this type of transformation is exemplified by the experience of Salman Khan, a hedge fund analyst in Boston who posted the videos of his tutorials to his niece on YouTube. Khan had the option to share it privately with his niece or share his lessons with the world, he chose the latter. Longhurst says over millions of people have already viewed his video lessons on YouTube. He has since quit his job and established the Khan Academy.
For Andrew Dutton, senior vice president, Asia Pacific and Japan at VMware, the transformation for the IT organisation is the idea of IT as a service function, competitive and able to relate to the competitive nature of business.
"It should be able to drop things that don't work anymore, and take commercial based risks," says Dutton.
Agility is important. Agility, Dutton points out, is the ability to stop doing things that are clearly not serving the business. "That is so hard for IT," he says. "Just say 'no', it is not going to work."
Dutton says he has shift a shift over decision criteria within the IT community in the last 18 months. "More and more CIOs are trusting other CIOs," he says. Their conversations are around "how did you do it? Show me."
At the same time CIOs are also changing their focus. "I am getting out of IT, I am becoming a business person with deep skill in IT. I am a business person first," says Dutton on the new IT leader transformation.
Les Williamson, vice president, for Cisco Asia Pacific, advises utilising the CIO's business technology insights for the board. Not everyone has the ambition of being a board director, but he suggests ICT leaders to polish their resume and get a director's course. "Eighty five percent of public boards need IT skills at that level," he says.
But he says ICT executives also have to speak the language of business. "We have to change the way we communicate," says Williamson who relates his own experience on this issue.
Five years ago, he was talking to the CEO of a major bank in Australia and mentioned the word 'bandwidth'. He says for the CEO, the word 'bandwidth' was "not in his comfort level" and told him it is best for him to talk to the CIO.
"We need to make sure who we are talking to, that is a skill we need to invest," says Williamson.
For Shane O'Neill, infrastructure and systems architect at Tourism Australia, the transformation of the IT organisation is reflected in the questions it gets from business users.
"We seem to be going through continuous evolution," says O'Neill. "It is a case of finding the best fit for the business need and be across all levels of technology."
A couple of years ago, questions to the IT team would be what type of laptop would they recommend. Now it would be someone asking about options for hosting, for instance, a Facebook campaign. "We fought long and hard to establish trust with the business," he says. "In the last two years the business has accepted the advice we give, the solutions we give."
Before that, he says, there may be a project that will be given to a design agency. "All of a sudden they are also hosting the website, absolutely no technology input [on] whether we could have done it ourselves."
In this case, IT can explain to the business unit there is technically nothing wrong with what they are doing. "However, it would be better if you did it this way, and we get heard."
He says Tourism Australia had appointed a new CIO and under his leadership they have taken a lot of technology contracts that were previously out in the business unit and back into the technology team.
"We are now managing those contracts in consultation with the business," he says. "What that has allowed us to do is find similarities so we might have two separate business units using two separate email marketing platforms. When we bring those contracts in, we have an email marketing platform which should be consolidated. It allows us to consolidate the amount of services we consume economies of scale. Effectively, we are getting more value for our data."
He says Tourism Australia has created an annual operating plan. The technology team is involved at the initiation phase, or at the start of the project to see if there is a technology component. "If we already have something that they are looking to do, we can help procure or provide that service in order to drive value for money for the entire organisation, not just for technology."
"We know we are running X amount of projects through that process. It does give us a presence in the business," says O'Neill. "We are seen as a trusted adviser to the business so their call is first to us."
The same thing happened when staff brought their personal devices to work and asked IT if they can access their email from these devices. "We are the guardians of corporate data. There is a need for people to get data on the go but there is enormous onus on tech to make sure that data is secure."
"Now we support any phone, we support anything which connects to Microsoft Active Exchange Sync because that will enable us to remove that data from end user device," says O'Neill. If the staff will lose their device, they can ring IT and they can remote wipe potentially sensitive information on the device.
"It is about finding the best fit as opposed to being rigid about what we do we are trying to be more flexible," says O'Neill.
At the Brisbane Airport Corporation, technology manager assets group Stephen Tukavkin says a datacentre virtualisation project has allowed his group to be more agile and deliver new services to the enterprise.
He says the project has given his staff the ability to work more with the business in actively providing new services and applications. This agility is important as the airport services more than 21 million passengers, 420 businesses and 20,000 workers, 27 airlines, the community and government.
Tukavkin explains that he has a team of 20 staff, a combination of contractor and full time staff. "There are 30 projects on the go with another 60 in the pipeline. This technology component helped facilitate our agility with the business."
If the project had not succeeded, IT would not have been in a good position to facilitate the projects being run by the project management office and "possibly chasing our tails not providing the best computing platform the current architecture provides."
Divina Paredes (@divinap and @cio_nz on Twitter) is editor of CIO New Zealand.
This story, "CIOs need to end 'monopoly' thinking" was originally published by CIO New Zealand.