Business Transformation

The Evolution of the IT Department

In 10 years, what will it mean to be working in IT?

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Evolving perceptions

The traditional caricature of the IT department was of a group of tech geeks ensconced in the basement of a company, never seen by the other employees, doing jobs that nobody else understood. Things have changed dramatically with the consumerisation of technology: Today every consumer operates an advanced smart phone, while children learn to code at school. With a wider understanding of IT, the department has become a more integrated and valued part of a business.

However, while the profile of the function has steadily risen, research[1] finds that in 2019 there were suddenly fewer CIOs on the board than just two years ago, dropping from 71% to 58%. Does this spell the descent for IT?

We discuss the evolution and future of the department with Caroline Serfass, CIO of Canon Europe.

From basement to boardroom

“Perceptions of the IT department have certainly changed. When IT started it was largely about automating finance processes. It was very much something that no one else understood. I’ve witnessed myself that in some of my roles the department was still in the basement. I also used to get comments like, ‘You don’t look like you work in IT!’”

“I first began to see the transition somewhere in the 2000s, when I started to clearly see conversations about partnership and how important it was to be joined up. IT is not just a back-office function anymore. The whole world is digital, so it is much more forefront.”

Despite predictions[2] that 2020 would see the end of the IT department, today the function is still strong. Perhaps the most significant reason for this is digital transformation. The last 20 years have seen organisations all over the world, totally overhaul their business from back end to front end. This process has propelled IT into a fundamental part of a modern business. It has also changed how organisations view the function, with a greater understanding that IT leaders need to be involved in planning. The evidence of this is in the figures. According to research[3], more than half of IT leaders report every year that the role of the CIO in their organisation has become more strategic.

A digital transformation partner

However, according to 2019 figures, the number of CIOs at boardroom level has suddenly dropped by 13% from 2017[4]. Why? One suggestion is that businesses see the role of the CIO as leading digital transformation projects and now many organisations see their transformations as ‘complete.’ This attitude is a major concern for IT workers and also a common misconception for businesses.

“If we remove the word digital, we are left with transformation and transformation is never complete because the world is changing all the time. Of course there was an initial big boom of digital transformation 20 years ago when IT departments were focusing on digitising the back office. But depending on the company, sometimes even this stage is not yet complete.

As time goes on, digitisation is simply moving more to the front office and the customer-facing processes. Digitising how we communicate with customers tends to be faster-paced, as customer needs change so much more often than our finance regulations and processes, for example.”

With customer demands changing so regularly, transformation cannot be viewed as a box which can be ticked. Even if major back-end digitisation has already taken place, front end optimisation and evolution is an ongoing process.

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Why do I need an IT department?

Businesses usually understand why transformation needs to happen, but why do they still need an IT department to roll it out? With the arrival of software as a service (SaaS) in the early 2010s, the industry started to question the necessity for having an in-house IT function. SaaS solutions offered to take over responsibility for hardware maintenance and support, reducing the need for one. While this approach might work for small businesses, having no central function causes issues at enterprise-level.

“Many of these products you can buy overlap in functionality. If you work in a fragmented way, it will end up being more expensive than if you worked together. Meanwhile, what’s most important is that information can flow and when applications have not been architected or orchestrated, then this just doesn’t work.”

“The issue is that a lot of what IT does is invisible, so people tend to think it just happens. They think we just look after your laptop or your smartphone. But IT is a bit like an iceberg, you might see those elements, but underneath there are a whole set of things which require planning and strategy.”

How can IT overcome misconceptions?

For the function to retain its influence and reputation as a strategic partner, it’s crucial that it tackles misconceptions about digital transformation and the role of the IT function. What are the best strategies for IT leaders to make this happen?

  • Put formal processes in place“The way we have approached it at Canon is that we’ve put in place some processes, driven by the CEO, to make sure that IT is involved as early as possible – for example, putting checks in place, particularly in terms of financial approval. We’re also making sure that once projects are completed, that we have a formal review – have we achieved the business case, are the systems actually being used, what can we learn from how we have worked together?”
  • Take joint responsibility for projects“Our job is not finished when we have delivered the IT, that’s the easy part. It’s more difficult to ask questions - why do you want to do this? What’s the business case? I ask my team not to be afraid to step into conversations which are not just about IT but about achieving business goals. I say to people, don’t ask for permission, you are as important as anyone else.”
  • Increase visibility“Make sure that the costs of IT are more transparent so that they are better understood. This is helpful, because it’s more likely to make them think about what is valuable. When people don’t know what it costs, there is less responsibility.”

The future of IT

We are in the midst of global transformation and this has defined the role of the IT department in recent years. But in 10 years’ time what will it mean to be working in IT?

“Technologies have evolved a considerable amount. Now a lot of processes can be automated, and the world is moving towards the cloud. As a result I think the role of the IT department will become smaller, less technical and more focused on architecting information, business processes and applications for the enterprise.

IT departments will need to make sure that information flows through a business and that data links together. This is where you can’t do without IT. Their role will be defining data, defining business processes and ensuring applications are used for what they are meant to do and not customised. They will then need to make sure that all of this works, supported by technology and a performing network. They will also play a key role in optimising IT costs, ensuring there is return on investment, driving IT compliance (SoX and GDPR) and enforcing information security.”

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