1. The status quo of IT departments in traditional enterprises
Let’s start with an example, which is the function definition of a production company’s IT department (published in a red header file at that time) :
Responsible for IT system construction;
Responsible for IT system operation and maintenance;
Responsible for network and information security;
Responsible for computer repair and maintenance;
Other what promotes security, promotes informationization level to be more empty. Although every industry, every enterprise emphasizes “We are different!” . However, in fact, the functions of IT departments in most traditional enterprises in China are almost the same. The reason why I did not include “IT system design and planning” is that for most traditional enterprises, although there is this item in the function description, traditional IT departments have lost the right and ability of IT planning due to various institutional constraints. The situation is better, the approval power of information construction is still in the IT department, poor even the construction of IT system, business departments will bypass IT to purchase software, and even the operation and maintenance of the system are business departments themselves! (Helpless) In many traditional enterprises, the IT department does not have a big say, the company encountered economic crisis to downsize, is also the earliest affected department. Therefore, so that many IT department personnel self-mockery: we are the company’s network management and computer repair (merciless self-hacking)!
2. Why are traditional enterprises and IT departments marginalized?
First, the most fundamental reason, just two words: value! It is an iron law that you have as much say as you can add value to the business. In traditional enterprises, THE IT department is only responsible for system operation and maintenance, network wiring, computer maintenance, etc., some low-value work, of course, will not pay attention to, or even will not be respected. There is no “job type” discrimination here. IT just means that the work of traditional IT department is not on the “main value chain” of the enterprise, nor does IT create the expected value for the enterprise, so IT will gradually be marginalized and lose the right to speak.
Second, most of the traditional enterprises will set up a CIO at the top of the enterprise, or vice president in charge of information; IT department set up a minister, the minister below several departments, such as: network group, software group, operation and maintenance group, a little bigger enterprises in each department below will set up some leaders, such as: management information group, production information group… . This kind of organization mode is a typical “pyramid” organization of departmental level, with low efficiency in communication and coordination. It is often criticized by businesses for its slow response to new requirements and long cycle of problem solving.
Third, IT is the assessment mechanism. The assessment of the IT department in traditional enterprises adopts the terms of industrial manufacturing or office civil service, or pure project assessment. The evaluation mechanism of the enterprise IT department is not tied to the real values and goals of the enterprise. This seems to bring us back to the first point. Still remember, the boss gave us the training: “work is like a burning fireplace, effort is the wood, success is the fire, want to keep the fireplace flourishing, you need to constantly add wood”. The boss wants to tell us that we need to work hard to get a faster promotion and pay rise, but we are trained to whisper to ourselves: “Salary is firewood, effort is fire, if you want the fire to flourish, then you give me a raise.” It’s human nature. Back to business: How can IT not be marginalized? Change!
3. Digital transformation of enterprises requires “new IT”
Under the tide of enterprise digital transformation, IT department is facing unprecedented opportunities and challenges. Enterprise digital transformation, IT department leaders must stand up and do the transformation of the transformation of the work of the facilitator. To win the attention and support of leaders, to cultivate digital technology talents, establish digital technology system, and do a good job in the connection between technology and business. I plan to write a separate article detailing how IT can gain the attention and support of senior leadership. For the training of digital talents, please refer to the organization and Talent of Enterprise digital Transformation. Here, I would like to talk with you about how to redefine IT under the digital transformation of enterprises.
In the new era, the new mission of IT department is to promote the digital transformation of enterprises. This mission dictates that the IT department must be transformed and IT must be redefined.
First, go from the back end, to the front end, and get into the business. The transformation of IT departments must break the “magic spell” of “not knowing business, only repairing computers and connecting network cables”, and go deep into business to understand business, learn business and master business. Only with a deep understanding of business requirements, IT personnel can transform business flows in the real world into data flows in the virtual space and time of the computer, and design digital application scenarios and products that conform to and are close to the business, so as to help business personnel improve efficiency, reduce costs and create value for the enterprise.
Second, shift from operation center to enabling center. IT department is the preacher and enabler of enterprise digital transformation. On the one hand, IT should help other departments of the enterprise to understand the role and trend of digitalization and pave the way for the consciousness of transformation. On the other hand, it is necessary to empower business departments with digital tools, technologies and data, so that business personnel can learn to use digital systems and master certain digital skills.
Third, shift from cost center to profit center. Since THE IT department cannot directly create value and bring profits to the enterprise, IT also needs a certain amount of IT investment, so most companies consider the IT department as the cost center. I think in the digital age, IT should not be defined solely in terms of cost, but rather as an investment. Investment will have income, and IT investment income, more is to reflect the optimization of business process support, help business to achieve efficiency, quality, cost reduction and innovation. In addition, in terms of cost, enterprises should not only focus on the acquisition cost of IT, but also on the total cost of ownership. When IT goes deep into business and becomes a link between business and technology, when IT drives business innovation with technology, and when IT becomes a digital evangelist and enabler, IT is no longer a cost center, but a profit center that can create value for enterprises. Finally, what about traditional IT operations?
There is also a problem: IT departments are learning business, enabling business, innovation business, then who will do the traditional information system operation and maintenance work? In fact, the enterprise digital transformation we talk about includes both technological upgrading and business transformation. Information system operation and maintenance is also a business that needs transformation and upgrading. Enterprises can build digital technologies and systems for unified monitoring and operation to support o&M work, such as cloud and containerization of application systems, integration of IT o&M tools, automation and intelligence, which will improve IT o&M efficiency and reduce o&M costs. In this way, the IT department can devote more resources and time to the realization and innovation of business requirements.
3.2 Integration of IT and services
Enterprise digital transformation and data governance require deep integration of technology and business, but how to operate? Deep integration of technology and business is to let IT into business and business into IT. The following three ideas are for reference:
First, let IT people work and meet with business people in business departments. That way, even if you don’t have to learn the business, you can understand the business every day.
Second, let the business people work in the IT department so that the business people understand how the IT people think. In fact, many enterprises are already doing so, such as China Merchants Bank. At China Merchants bank, many people in the business department work permanently in the information technology department rather than the business department; In the IT department, people who are proficient in banking are also required to be project leaders. The information project approval of China Merchants Bank shall be examined and determined by the information technology, business department, accounting department and other relevant departments. Only when the technology and business have been approved by all parties, can the project be approved. Therefore, the IT department of China Merchants Bank is very influential, and is called “the upper class” inside China Merchants Bank.
Third, IT technical goals should align with the business goals of the enterprise. In digital transformation, the goal of IT should not stop at the technical level of how many systems are under construction, how many modules are designed, how many functions are developed, but more should stand on the business point of view, align with the business goals of the enterprise, and focus on the optimization of business process, management improvement, and business innovation.
The author firmly believes that with the continuous development of technology, people from all walks of life are becoming more and more aware of digital education, and schools and society are becoming more and more mature in digital education. One day, the boundary between technology and business will be broken. In the near future, all talents will be digital talents, but will be different according to the professional division of labor, divided into digital professionals committed to the construction of digital infrastructure, and committed to the application of digital technology to achieve business value-added and innovative digital application talents.
3.3 Build the “base” of enterprise digital technology
Enterprise digital transformation, IT department also has an important responsibility, that is to build digital technology base for the enterprise.
Base on enterprise digital technology, there is no a standard definition, is the most relevant provider of IT products and services, but there is a problem, although GeChang agent in constructing digital technology base for the enterprise, but each manufacturer is defined on the base of the enterprise digital cognition and differences, and the difference is very big.
As a technology platform, the enterprise digital base will be considered as a technology platform, providing DevOps, microservices, containerization, low code and other IT infrastructure; ERP, will think that the enterprise digital base is based on the “new ERP” resource and ability sharing center, such as: financial sharing center, human resources sharing center, procurement center, sales center, etc.
Those engaged in data governance, data warehouse and BI will think that the digital base of the enterprise is the data platform or data center, providing data asset management, data calculation, data analysis, data mining, data application, data visualization and other data management and application capabilities.
Cloud computing, cloud services, will think that enterprise digital technology base is cloud computing, various IaaS, PaaS, SaaS, DaaS, in short, enterprises to digital transformation must first “cloud”……
Of course, for manufacturers, standing in their own favorable point of view to talk about the enterprise digital technology base, seeking advantages and avoiding disadvantages, this is also understandable. However, for enterprises, each enterprise has different internal and external environment, industry, enterprise scale, IT and business status, digital needs, and the required digital technology base is also different. The enterprise must think clearly, what exactly should be the digital technology base you need? If you don’t know, I suggest you focus on business development, agile organization, and talent development.
3.4 Do a good job in enabling services with data as the starting point
Enterprise digital transformation, “data” is the IT department’s strongest grasp, “technology” is the IT department’s biggest advantage. IT departments should make good use of these levers and advantages to empower the business and enhance the overall digital capabilities of the enterprise.
Tool enablement: Can you do business without digital tools? Of course can! However, with the right digital tools, business efficiency will be greatly improved, business costs will be reduced, so that business processing twice the result with half the effort. Therefore, IT departments should help businesses build digital tools that fit their reality and needs. We all know that, but what does it take to build such a tool? IT always seems to return to the “hundred-year dispute” between IT and business, “business says this function is not what I want, IT says your needs are not clear ah!” In the final analysis, IT is still needed to go deep into the business, and the business also needs to think about problems with technical thinking as far as possible.
Technology empowerment: Digital transformation is the process of reshaping enterprise’s business model and information environment by using digital technology. Therefore, digital transformation cannot be separated from digital technology. Current digital technologies include: big data, cloud computing, Internet of Things, block chain, AI, 5G, VR/AR, etc. Technology empowerment itself contains two meanings: first, the teacher should teach students, first of all, the teacher’s own first meeting, and also have to do a good teaching plan. Second, every technology has its own personality, and every business has its own personality. Only when the personality of the technology and the personality of the business match, is the real marriage.
Data empowerment: this is a good understanding, in the author’s article has also been mentioned many times, whether it is “data insight”, “user portrait”, “product portrait”, “intelligent touch”, “thousands of faces”…… Both are business scenarios of data empowerment. In fact, the essence of data empowerment is to “push the right data to the right users at the right time”. Data analysis can help optimize business processes and assist leaders in making scientific decisions. The above is my shallow thinking about the transformation of IT department under the digital transformation.
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