Information Technology’s Changing Mandate in the Age of Disruption and the Need for Strategic Alignment
Information Technology’s Changing Mandate in an Age of Disruption is an academic article written by The Economist Intelligence Unit for The Economist news outlet. An explanation of why this research was performed is to understand the complex impact of the pandemic on Strategic IT Alignment. The research results are an in-depth discovery from over 1,000 respondents from 6 sectors. The article identifies a focus on IT and business regeneration after the pandemic began. Four themes of IT Strategic Alignment relating to the research are defined to engage business and IT professionals to make their transformations successful. The proposed suggestions will be based on how leadership/teams should best alter strategies based on research findings:
· Shortcomings created by the pandemic
· Capacity between IT project planning backlog and IT budget growth
· Growing organization-wide tension over control over IT team infrastructure and strategy
· Collaboration between IT leaders and business managers needs to be stronger
· Technologies considered most important are IT-related (3).
1. Digital Transformation
What is digital transformation? Salesforce.com describes digital transformation as “[…] the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements. This reimagining of business in the digital age is digital transformation”. The EIU recognizes that transformation has been disrupted in different ways because of the pandemic (3). The question now, then, is how will teams look beyond the disruption created for effective digital transformation? Even before the pandemic, there was a lack of recognition for IT teams to be able to take ownership of IT transformation.
Alturi et al. outline critical steps to digital transformation success in their article Tech-Enabled Disruption of Products and Services: The New Battleground for Industrial Companies. They are:
· Listen to Your Customers
· Place Big Bets
· Agile Development
· Build your Ecosystem
· Develop New Go-To-Market Capabilities
These key steps refer to digital transformation. In the first step, increasing digital transformation requires us to understand how we get closer to and how to do a better job for our investors. Placing big bets means doing what is required to transform and only when it is necessary. A digital transformation is as good as its cost, and use will make it in the short- and long-run. Agile development is described as software streamlining time-consuming tasks that people would otherwise do. Building your own ecosystem means connecting information technology resources as a unit. For a company, it means connecting suppliers, partners, customers, applications, and other technologies.
The EIU identify in Figure 3 a lack of three main factors slowing down responses to urgent IT alignment requests during the times of the pandemic: lack of time, resources, and close collaborative links with other departments (9). Growth is stunted, according to EIU, because 63.9% of project requests are over budget, while only 7.8% of budgets are over project requests (9). In this case, lack of financial resources prevented teams from IT project completion. Figure 5 depicts 37% of projects with a backlog of 3–6 months and 33% at 7–12 months. This would mean that teams attempted to transform and were prevented from completing IT projects on time due to the pandemic disruption.
A digital transformation can make use of the Idea Box Funnel used by Mastercard to manage their innovation change. It has been implemented in many companies since then because of its effectiveness. Furr et al detail the use in their article How Does Digital Transformation Happen The Mastercard Case.
Best of Breed refers to combining two systems such as CRM and ERP to have the same working data about customers and all functional data. Again, the question to be asked: is this essential? This kind of connectivity requires significant learning time and money input. The takeaway is that every decision requires a look at benefits and threats. This is where an ITDM and BDM can work together to make informed decisions. One way to identify software capabilities is the Gartner Magic Quadrant, which identifies software as a niche player, visionary, challenger, or leader.
An ITDM should be aware of the future opportunities for digital transformation. The pandemic has shown the current limitations of many firms’ IT systems (EIU 3). With the 3–12 months backlog on IT projects during the pandemic, an ITDM could feel that the challenges are increasing (EIU 3). The answers found should reflect the resilience of an ITDM to make long-term, lasting changes to their organization for good during and after the pandemic. Using these different methods can mean more central importance given to IT teams. It can also mean having to navigate collaboration with a BDM. An ITDM should know that part of a healthy work environment is learning to find this work between business and technology decisions. Business decisions can ground an ITDM in the company's needs or limit it financially and autonomously. An ITDM can take a digital transformation methodically, with plenty of research to make it a successful project. Because so many projects fail, it will matter how much effort is put into understanding how viable a project is before it begins.
An ITDM should become familiar with their area of expertise to manage and find the right solutions for IT transformations. They should be able to recommend appropriate needs to be implemented and managed. Their work involves servers, visualization, networking, security, storage, cloud-based services, software, outsourcing, computing devices, and applications. They should not make decisions for approval of funds, purchases or make final decisions. An issue that could likely arise during work is spending more time than is necessary to make these decisions.
These decisions are essential at all levels of decision-making, outlined by Alturi et al. as the Digital Transformation Steps for Success and Digital Transformation Sources of Value (3). Because ITDMs and BDMs share many responsibilities, they must work collaboratively, varying depending on the organization and task. Some transformation responsibilities in one organization could be transferred to another organization. It is important to detail the responsibilities of ITDMs and BDMs from the start to the end of transformation.
Pathways are another tool for digital transformation from Pick your Pathway. They allow digital transformation to occur depending on the amount of customer experience and operational efficiency focus needed. An ITDM and BDM should work to understand where the company needs to change most in these aspects. Each pathway has issues that can arise because of the huge changes, so it is important to choose the pathway that has been researched to reach successful completion in the most relevant circumstances for a company.
According to EIU, ITDMs face solid decision-making outside IT teams that impact digital transformations. 60% of ITDMs say that non-IT professionals make decisions about what IT teams will use and what applications, and 50% of BDMs say the same (11). Together, ITDMs and BDMs can review the different planning tools described above.
A BDM understands the importance of technology in the organization. This means making sure that technology projects are funded and managed correctly. Opportunities for the future include cloud computing, AI, data science, and automation. These are the most critical technologies to success in the next 12 months, according to EIU (4). The best way to do this is to work collaboratively with IT professionals. A BDM should follow the lead of an ITDM when it comes to finding the right solution. This means working in collaboration with ITDMs on decision-making that will require more input from other decision-makers like the board for large projects or team members for smaller projects. A BDM can focus on taking the lead in final decision-making that involves financial numbers. A BDM should do something other than what an ITDM should do. A BDM must take on more of the solution-finding and management role to avoid making uninformed decisions.
A BDM should also be aware of the threat of not knowing how to manage an IT solution. Another issue that could likely arise during work is spending more time than necessary to make these decisions. Time as an investment should not be undervalued in the process of transformation. Another issue is the cost of IT projects. The price is a significant consideration. The long-term benefit and success should be measured by the firm’s financial ability and its impact on investors.
2. Human Capital
Human Capital involves Strategic IT Alignment during the pandemic because alignment involves valuing people’s shifting abilities and priorities at work. Valuing people means understanding the need for healthy and happy employees who can get as much job done for alignment. Human capital management is required when human capital meets strategic IT alignment. Successful implementation of human capital management means more business opportunities. Many times thriving human capital at work means addressing a firm’s human resources management practices (Murphy 8:4).
What does considering human capital for strategic IT alignment mean during the pandemic? In Strategies for Retaining Key IT Professionals, Pfugler et al., many professionals leave jobs because they identify as one of the employee types defined by the authors. This includes lacking career development or not feeling involved in decision-making, among other reasons (Murphy 8:5). Why a person decides to leave work is complex but can be explained if a company cannot nurture employees that have potential. This can create persistent problems for the firm during times of change like strategic IT alignment. Considering human capital means creating inviting workspaces that function at home and in the office and can blend both experiences seamlessly. Supporting remote workers was cited by 72% of IT leaders as a virtual space for improvement (EIU 7).
Decision-makers can use Eden et al.’s Flexing, Deepening, and Revitalizing and Challenges, Actions, and Outcomes from the article Digital Transformation Require Workforce Transformation. Flexing, deepening, and revitalizing refers to decision-makers taking a responsible look at organizational culture to improve it. This is useful to consider during the pandemic when decision-makers already consider how short- and long-term change will impact the firm. Similarly, the challenges, actions, and outcome model responds to the action-oriented model of flexing, deepening, and revitalizing in a timeline form ending with achievement (Murphy 8:9).
Part of the disruption was also necessary to change in such a short period. According to a McKinsey study, companies could make transformations in 2020 that were accelerated 3-to 4 years. This does not include a long-term change that would require further scaling and re-evaluation (EIU 6). Putting pressure on employees could likely result from such an intensive transition period. This would result in employee dissatisfaction if they are overworked or met with too much new information related to the IT project.
The pandemic has uncovered many changes that align with the emerging and relevant technologies people use more in their daily work. EIU writes, “[e]mployee working habits and customer buying behaviors have shifted significantly during the pandemic — in many cases, irreversibly — so a permanent uptick in the use of digital channels will need to inform future business and IT strategy” ( 5). This is a significant opportunity for an ITDM and BDM to recognize and respond to changes in how people expect to work moving forward.
An ITDM will understand that an IT project's implementation depends on support. This requires the ITDM to communicate with the team. EIU writes, “[A] new set of metrics might be required that more closely reflect overall strategic objectives” for IT alignment (14). The alignment will require working with the BDM to identify if hiring, promoting, and firing are necessary. New jobs and opportunities for new people are created in many transformations, and previous jobs are done away with for good. This is part of the typical churn. An ITDM should become aware when average churn becomes a retention issue (Murphy 8:4). An ITDM will be mindful of how legacy systems can make business operations less efficient (EIU 9). They will be able to know how to run a team without an excess of people resigning. They will be able to use the tools above to understand how to make human capital management effective for their firm.
A BDM should be aware of a project’s human impact on employees. A good BDM will know when a project promotes a positive work culture and project outlook or the opposite. If a project is exhausting a team and there is much pushback, a BDM must understand how it happened. From the start of a project, a BDM has to ensure the project’s viability to ensure that employees are on-board with the decision for change.
A BDM is more likely than an ITDM to identify a lack of talent and collaboration with IT, according to EIU (9). This would require a BDM to understand the role of ITDM more closely with more meetings and status reports from IT teams. A BDM might feel apprehensive when it comes to implementing IT due to the firm’s financial commitment required to complete and maintain it. It might become an afterthought for some decision-makers. It is essential that a BDM collaboratively work with an ITDM because the more that a BDM thinks in terms of IT, the more they are preparing for the future. EIU explains, “[…] improvements to IT will be crucial if executive teams are to deliver on their goal of building the resilience necessary to drive business recovery” (5).
3. Security Governance
A significant concern for Strategic IT Alignment during the pandemic and after is keeping data secure. Security governance ensures effective IT implementation. Security concerns rank highest for decision-making respondents as greatest barriers to organizational digital objectives (EIU 8). EIU calls cybersecurity a top area of focus over the next 12 months, for 47% of respondents implementing automation (18). Security governance ensures that employees, businesses, stakeholders, and customers and their information remain private. This could be for employees using Microsoft Teams or Zoom for project meetings or secure WhatsApp messaging for health insurance customers (EIU 7). The elderly are especially at risk of identity theft and depend on security governance in uncertain times where they spend even more time than usual alone or in a Zoom room (EIU 7).
Because of the importance of security concerns to firms’ digital objectives, an ITDM can work with a CIO to identify critical factors and prevent challenges by using McLaughlin and Grogan’s Advice to CIO from the article Challenges and Best Practices in Information Security Management:
• Attention
• Tools
• Employees as a source of risk
• Governance
• Collaborate
• Research best practices
• Question
o How strong?
o How well prepared?
o Do we know what to do?
o What have we learned?
o Are we improving? (Murphy 5:12)
An ITDM understands the need for security governance as part of effective strategic IT alignment during the pandemic.
The Security Cycle outlined by McLaughlin and Grogan illustrates the steps needed for successful security implementation (5:6). During the time of pandemic disruption, it is essential that security is placed as a priority for the firm. The cycle begins with an assessment of two variables of impact and probability. The higher the two variables are for the firm regarding security the greater the action to respond from ignore at low levels, monitor and operational team at moderate levels and formal risk plans and executive committee at highest levels. The level of threat relates to level of engagement a security team should engage in combatting the challenge.
An ITDM can recognize that a CIO works directly with them under the umbrella of technology. An ITDM should recognize a CIO who is capable of understand the challenges inherent in handing data. The opportunities included with implementing new security protocol and management are more secure transactions and everyday work for employees and customers. During uncertain times like the pandemic, security becomes increasingly important with new modes of interaction involving data and information sharing remotely.
A challenge of an increasingly data-driven workplace for an ITDM is the growing knowledge of those entities or people who are looking to take personal or secure data for their own profit or illegal purposes. An ITDM must recognize the essential place security has as technology and data become more integral in a post-pandemic workplace and world.
It is important to consider the potential mistakes in the future because of the importance of security concerns to firms’ digital objectives. Decision-makers during the pandemic are more likely to face security mistakes because of the changes to work environments and increases and challenges to effective strategic IT alignment. An ITDM and BDM should be aware of Security Policy Mistakes that impact the entire firm including:
Too long and detailed
Do-ability before risk
Too many changes, too fast
Mixed documents — Charter, Policy, Standards, Procedures
Clarity of Requirements — mandates not philosophy
Wrong Audience — Tech vs Users
Mix of audiences
What’s mandated — not “should” — “must”
Compliance?
Out of date (5:13)
These are issues that arise with the intention to create security without understanding the inherent challenges. While these common set of mistakes are security related, they involve the decision making of an ITDM and BDM.
A BDM can realize the potential for strategic IT alignment to become if it is not already an integral part of the company during the pandemic with the safety of security governance. The pandemic offers a time for a BDM to find answers to the challenging questions because of the enlightenment offered by the time away from pre-pandemic normalized conditions. A BDM should recognize the importance of hiring and maintaining a responsible CIO and team in collaboration with the ITDM.
A BDM should recognize the potential for data to become a legal burden if security governance is not at its strongest. A security breach could mean costly litigation between a company and its customers.
4. Internet of Things (IoT)
IoT in the workplace could be imagined as connecting systems to things to make everything work more resiliently with technology at its core. Some examples of the Internet of things (IoT) are teen driver technology, ingestible sensors, and connected home devices (Murphy 13). The Internet of things connects devices, machines, animals, and people. The pandemic challenged workers’ sense of interactivity, connectivity, and creativity. IoT offers the ability to reconnect individuals in new ways through technological advancements.
The possibility of IoT is that it reimagines the workplace to make it more efficient after the pandemic disruption. The EIU explains that “the pandemic has shone a harsh light on the shortcomings of existing IT systems,” and almost 85% of respondents claim that their IT infrastructure needs to be able to handle unexpected future challenges like the pandemic (3). The
Xiaomi in China has been able to use IoT to connect an ecosystem of products for its smart home. The ecosystem was impressive on its own, but it also made a massive statement about a company's capability to make partnerships a part of its planned success (Murphy 13:10). The ecosystem allows the Xiaomi phone to control everything in the house, like lights and sound systems. The partnerships enable many complex devices popular in China to work with the IoT controller.
One of the opportunities to implement IoT is to expand the reality of more ITDMs involved in jobs previously reserved for non-IT specialists. This could include farming, intelligent houses, and sensor technology. One example of IoT in the future could be water tracking technology that works with intelligent watering systems. Different trackers measure different water use needs and levels in different soils. This could provide a new opportunity to move some jobs to IT and ITDM specialist jobs.
ITDMs could gain a more central role in the firm through IoT. The concern that EIU brings about centralizing a company's IT needs could change immediately after the pandemic and after. They can advise the board and stakeholders of the importance of IoT in the workplace. IoT glasses that function as interactive, portable work/social computers can be distributed for every employee to understand their essential need for it in the workplace. Trackable sensors worn on a work phone or watch can observe employee activity or connect employees to ecosystems at home and work. (Murphy 13:13). IoT could even be used at work to keep high-risk employees with comorbidities safe. An ITDM can manage health logs with every employee’s health level. Alerts are sent to the appropriate responders when an employee becomes unwell at work. Sensors are being made to measure many different vital human functions in different ways for memory, mediate awareness, muscle (to assist human processes), and measure (monitor) (Mills 5).
ITDMs can become leaders for the post-pandemic workplace that caters to the needs of a hybrid workplace this way. IoT offers the ability to create connected spaces through ecosystems during meetings even when people are far away, something not possible or as conceivable before the pandemic. An ITDM can inspire a workplace to become more productive, engaged, inspired, and creative with IoT. It would take an IT specialist to understand, implement, and manage these systems.
An ITDM can start with simple IoT projects that will ensure its success. Because many IT projects can fail due to the complex nature of IT alignment, it is essential to take steps toward IoT integration that is fast enough for the company’s pace while slow enough to make it realizable (EIU 4). An ITDM can argue for the opportunities of IoT, like the ability to stay connected during the pandemic and after. There is the possibility that a tech-centered company can become a leader in IoT if a project succeeds as one of the first. An ITDM can also recognize the benefits of waiting to start an IoT project to prioritize another IT project like data science. An ITDM must be able to illustrate to the company stakeholders, board, and decision-makers that a project will carry salience.
One of the issues that IoT creates for companies is the possibility of liability of privacy loss for technology users. It is essential to understand the issues created by IoT. An IoT ITDM and BDM can remind employees that the future is safer with technology. In general, IT alignment, including BDMs and ITDMs, is “incumbent on IT leaders to measure and monitor exactly how their team contributes to an outcome that the business strives to achieve” (14). In addition, these professionals should understand legal frameworks and work closely with IT, business, security, and privacy specialty lawyers. The issue is that legislation will make some technologies highly regulated or illegal. The legality of having IoT can depend on a region by region since regulatory systems can either encourage or discourage IoT use as the world moves into a time when technology will be available. There are the threats created by wearable devices that Mills et al. outline ranging from physical to information: damage (gateway to a hacker), disablement, deception (biometric feedback), distortion (relay false symptom data) (4).
A BDM can ensure future IoT success in the following ways. A BDM can hire more IT specialists to increase their influence and ensure success for an integrated future. They can remind the company of the emergent importance of IoT during the pandemic and after through reminders, town halls, and meetings. Hiring more IT specialists will ensure that the backlog created during the pandemic does not cripple the company but actualizes more need for IT and IoT. A BDM can ensure that budgets are organized to sustain an IoT project in a company with a tighter budget.
A BDM should consider the issues in the future by implementing IoT. The opportunities should outweigh the problems. A problem could be the cost of implementing an IoT project. The project might not be essential to the functions of a financially challenged organization. IoT has not been described as one of the top technologies that will be implemented in the next 12 months, according to EIU (4). This is because company BDMs have to choose wisely when it comes to what technology project a company will set its focus on. IoT’s complex and new nature adds to the fact that technology like AI and data science is more essential to the needs of a company immediately after and during the pandemic.
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