“Digitization” of business and the adoption of cloud-based software and services are reshaping enterprise IT. Across companies and industries, operating units and functions in corporations—manufacturing, human resources, design, marketing, finance, etc.—are using digital technologies more and more. They are automating more processes to improve productivity. Many of these success stories will be presented by TCS along with our leading clients at OOW including Hyatt, Global Glory solutions, Knowles Corporation, McDermott International and Vail resorts.
More importantly, they are also building new business models with digital technologies. This can be anything from embedding Internet of Things sensors in industrial equipment to enable pay-for-service pricing to installing beacons in stores that track consumer location, allowing retailers to offer instant promotions based on where shoppers are standing in the store and their purchasing history.
It is exciting time for anyone in the technology business. This also implies a time for sweeping change in the enterprise IT departments. Centralized IT, with a single budget and a pool of experts that develop and support applications across the organization is not well suited to deploying agile digital technology projects. Business unit heads who need a digitally-enabled product or service to gain a strategic advantage have high expectations and limited time. They will not want to take a number in the IT department’s queue. Nor will they want to hand off design, testing, and ongoing maintenance to systems engineers who do not have intimate knowledge of their business or function.
The long-term trend seems clear. Divisions, departments, and business units will want to control the technologies that they consider strategic. Increasingly, they will have their own budgets and will use them to purchase third-party services on the cloud to speed up development, reduce cost, and give them the flexibility to keep up with advancing technology and moves being made by their competition Eventually, the budget of the central IT department will shrink and more decisions around IT investments will be made by the heads of line functions, departments, and the business owners.
The end state—what we are likely to see in 10 years—is a bifurcated approach to technology. The business unit leaders will dictate which best-of-breed cloud solutions to be used for their operations. You could call this business IT, which will be controlled by departments, functions, and business units. But enterprise IT will still exist and will continue to play a critical role in the organization. IT will be in charge of functions that need to be provided in a standard way across the enterprise. These include networking, security, integration, messaging, and mobility.
Do I see this happening right now with our large clients? No.
Do I expect to see this happening over the next 10 years? Absolutely!
Do I see greater collaboration between IT and business units happening now? Definitely!
The message for CIOs and IT executives is to prepare for the change. For now, this means continuing to develop the business expertise in the IT department to collaborate with internal customers. There will be significant internal transformation. Our clients will need to make this transformation in the medium to long term, too. Service providers like us will also undergo similar transformation and some of the SI(s) like us have already embarked on this transformation journey.
Join me and my team at Oracle OpenWorld and learn more about TCS’ digital engagements. In one of our conference sessions, TCS will share insights on our work with Hyatt in shaping the future of CX using IoT devices and transforming back-office operations to manage huge data processing needs with cloud, mobility, and big data analytics tools. Plan on pre-scheduling time with us and share your comments and questions here.
I look forward to meeting with you in San Francisco!