IT is undergoing a sea change, thanks to shifting budgets and the rise of ¡®shadow IT.¡¯ But with company-wide vision, strong IT-business relationships and a focus on value, ÍæÅ¼½ã½ãs can expand their horizons. Credit: Thinkstock ÍæÅ¼½ã½ã You might think that the ÍæÅ¼½ã½ã of a billion-dollar business would have nothing good to say about shadow IT. After all, rogue deployments have been keeping senior IT execs up at night for years, wondering if those a la carte antics will open the gates to a major security breach or break applications across the network. But that’s not at all how Ian Pitt, ÍæÅ¼½ã½ã of LogMeIn, sees it. “Shadow IT keeps the IT people on their toes. It introduces competition and we learn that if we’re not delivering user requirements, users will look elsewhere,” he told ÍæÅ¼½ã½ã.com. However, this isn’t a story about shadow IT. It’s a story about the changing role of the ÍæÅ¼½ã½ã in an era of lightning-fast technological change and increasing demands that IT become closer, much closer, to the business side of the enterprise. Pitt’s cautious embrace of shadow IT is a symptom of the redefinition of the ÍæÅ¼½ã½ã’s role, from service provider to what’s being called “a value broker.” [ Learn from your peers: Check out our State of the ÍæÅ¼½ã½ã 2017 report on the challenges and concerns of ÍæÅ¼½ã½ãs today. | Find out whether you have what it takes to be a next-generation ÍæÅ¼½ã½ã and how IT leaders transform their organizations for the digital era. | Get weekly insights by . ] “ÍæÅ¼½ã½ãs must be able to deliver value in measurable terms. The ÍæÅ¼½ã½ã must move from back-office technology provider to front-office digital disrupter talking to clients within the business,” said Andrew Wilson, ÍæÅ¼½ã½ã of Accenture. Wilson made his remarks during a 2015 videotaped interview with Chad Quinn, president of Ecosystems, a business consultancy, which conducted more than 100 interviews with IT and finance execs from 92 companies. The interviews became that helped popularize the concept of value broker. Two years later, says Quinn, the trend has only accelerated, and woe unto the ÍæÅ¼½ã½ã who isn’t paying attention. Building better business relationships Consider the high-level bloodletting in the IT department of Warburg Pincus last year after a Salesforce deployment went south. IT leadership had plenty of experience implementing Salesforce CRM applications but seemed stuck in the mindset of a “glorified contact manager,” says Warburg Pincus CTO Raj Kushwaha. That isn’t at all what the sales team needed, and the disconnect between IT and sales cost some IT execs their jobs, he adds. IDG Understanding what the sales team needed was more than a matter of a quick meeting or two. The company’s new IT leadership adopted what Kushwaha calls an “outside-in approach,” based on starting with the customer (in this case the sales team) and working with them to a solution, rather than seeing the technology as the starting point. “Don’t try to explain the technology to the business units; talk to the business guys in terms they understand,” he says. Ultimately, IT and sales realized that what was needed was a set of applications to give sales people a historical view of everything about a customer and her historical interactions with Warburg Pincus, including deals she was involved in — and to make it available in real time. As a way to bring IT and the business units closer together at Driscoll’s, the multinational berry distributor, ÍæÅ¼½ã½ã Tom Cullen embedded senior IT leaders in business units. “It’s a new reporting structure. They have a foot in IT and a foot in business and help the units adhere to standards,” he says. The value of company-wide vision It’s a given that technological change has always challenged IT and ÍæÅ¼½ã½ãs. But moves to SaaS, increasing reliance on the cloud, and the rise of big data and analytics have pushed ÍæÅ¼½ã½ãs into new territory. And when a business undergoes a major shift, be it a merger or restructure, the ÍæÅ¼½ã½ãs role becomes exponentially more difficult. When Informatica left Wall Street behind and became privately held in 2015, a major source of change and stress all by itself, it also opted for a sea change in its business model, recalls Graeme Thompson, the company’s senior vice president and ÍæÅ¼½ã½ã. Informatica moved to a modern subscription- and cloud-based sales model, rather than relying on license and maintenance revenue. “All our processes had to change,” he says. “We’re no longer just tracking an initial deal, shipping the software and hoping [the customer] pays the maintenance. Now we have to track how the customer uses the product, because renewal is our key metric.” If, for example, Informatica sells five Salesforce connectors to a client, it needs to understand why only three are being used, which means the customer probably won’t renew them, Graeme says. Those changes went to the heart of Informatica’s business process, and a ÍæÅ¼½ã½ã who didn’t have a view of the company as a whole couldn’t have succeeded. “Simply being efficient [in running an IT operation] is no longer enough. Boards looking to optimize operations need someone who can see across all of the company functions — and that’s the CEO and now the ÍæÅ¼½ã½ã,” says Graeme. Graeme didn’t begin his management career in IT; he spent 15 years or so managing supply chains, experience that gave him a broad view of business. Graeme sees an analogy to baseball, where catchers aren’t usually the superstars, but they’re the ones who tend to become managers, “because they have a view of the whole field.” Sean Wechter, ÍæÅ¼½ã½ã of Qlik, which develops visualization tools, has this career advice: “It is no longer possible to grow your IT career by being a technical guru. Now, IT athletes need to be technologists and teamwork evangelists.” The power of the purchase order “A new mindset accompanies the shift in the ÍæÅ¼½ã½ã role, as the value of the ÍæÅ¼½ã½ã is no longer determined by the number of people in the IT organization or the amount of assets over which the ÍæÅ¼½ã½ã has control.” Ecosystem’s Quinn wrote in his 2015 white paper. To better understand what that means, consider this prediction by Gartner analyst David Willis: At the beginning of this decade, technology spending outside of IT was 20 percent of total technology spending. By the end of the decade that figure could soar to 90 percent, he said. That prediction might well be overstated — though it’s likely directionally correct — and it isn’t clear how much of the spending by business units goes to authorized projects and how much to shadow projects. In any case, though, IT execs need to come to grips with the shift in power. When it comes to shadow IT, says Driscoll’s Cullen, “We don’t want to send in the police. The more you say no, the more it pops up.” Security, he adds, is an exception, and IT will crack down if it’s compromised. Cloud services, notes LogMeIn’s Pitt, make it all the easier to run rogue applications without being noticed by IT. Indeed, Cisco last year purchased a company called Cloudlock whose product of the same name provides security within the cloud and can also be used to control rogue applications and services, says Kip Compton, vice president of Cisco’s cloud platform. ÍæÅ¼½ã½ãs don’t want to simply lock down all of those services; some are beneficial. But they need a measure of control, he says. When it comes to authorized projects, ÍæÅ¼½ã½ãs need to develop a more collegial relationship with the business units, says Dean Demos, ÍæÅ¼½ã½ã of the Combined Insurance Company of America, which is part of Chubb. Demos and his team host “innovation days” in which they show new technology to senior business managers and sometimes invite vendors to demonstrate their products at those meetings. “We rely on the business units to understand the customer. You can’t set yourself up as an expert on everything,” he says. And sometimes users have ideas that IT adopts. At LogMeIn, IT has adopted Slack, “an idea sourced from users,” Pitt says. And IT execs who work closely with a business unit can help them set realistic goals for technology they plan to deploy. IDG Back to the future “Keeping the lights on” is a metaphor IT people often use when talking about their day-to-day responsibilities. But “any ÍæÅ¼½ã½ã who is just thinking about keeping the lights on won’t be ÍæÅ¼½ã½ã for very long,” Pitt says. With the business units in control of the IT budget, says Quinn, the ÍæÅ¼½ã½ã should expect to hear an increasingly common question from the business to IT: “’For the check I wrote you, what value did we achieve?’” Accenture’s Wilson has to way to make answering that question easier: “They [ÍæÅ¼½ã½ãs] should deliver things in meaningful chunks, not in monolithic big programs that take a year or two.” The move to SaaS and the cloud has paradoxically created a sort of back to the future situation for today’s ÍæÅ¼½ã½ãs “The bar for technical acumen has gone up for ÍæÅ¼½ã½ãs and CTOs. There used to be point solutions to master, then best-in-class solutions and now with the cloud and SaaS we are back to point solutions. The ÍæÅ¼½ã½ã has to understand thousands of them,” says Warburg Pincus’s Kushwaha. And that, of course, implies that the ÍæÅ¼½ã½ã has to juggle more relationships with providers of those point solutions. As if keeping abreast of all that new technology and legions of vendors wasn’t tough enough, and time-consuming enough, Kushwaha says earning an MBA is “absolutely critical. It gives them the vernacular to have the conversation with business.” And whether she learns them in a graduate school or elsewhere, the value broker needs to learn the skills of diplomacy and communications, because working across an enterprise is very different than simply running an IT department. Ultimately though, the real test of the value broker is value, or as Cullen puts it: “At the end of the day, if IT is not producing value we are not focused on the right thing.” Related articles SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe