IT Competing in a Segmented Marketplace
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IT Competing in a Segmented Marketplace

Sven Gerjets, SVP-IT, DIRECTV
Sven Gerjets, SVP-IT, DIRECTV

Sven Gerjets, SVP-IT, DIRECTV

I remember a day, not too far in the past when IT was the technology sounding board at our companies. If someone wanted to personally invest in technology they asked their local IT person for their perspective. Times have changed; IT no longer has a monopoly on technology. Today if someone is looking for technical advice they are more likely to go to their local 14-year old versus their local IT department. This shift in technology democratization is a serious issue for IT organizations that are unwilling to rethink their approach to delivering value to their businesses.

For example, when I use Evernote I can create notes on my PC and immediately have them on my phone. Similarly, I can snap a picture of a business card and it populates my outlook contacts, as well as pulling up their LinkedIn image. Granted, these are much simpler technical integrations than we deal with in large enterprises, but this consumer experience has cemented business expectations that technology can be cheap, seamlessly integrated, and easy to use. It is this type of consumer experience that is disrupting IT organizations and the legacy architectures that many of us are working with. This type of user experience creates a new consumer mindset with high expectations for realtime, inclusive technology solutions. Slow, stodgy IT organizations and old, complex user experiences will no longer suffice. IT is on the verge of being disrupted and as Clay Christensen demonstrated in “The Innovator’s Dilemma,” we are so mired in the model that has been successful for the last ten years that we are missing the signals that disruption is nibbling away at us.

High-quality, fast time-to-value, low-cost and frictionless user experiences are becoming table stakes for IT but unfortunately legacy technology makes these virtually impossible. If IT organizations don’t start thinking differently, architecting for the future and utilizing new technologies to deliver at the speed and cost of consumer expectations, our business partners will go elsewhere. Worse yet, they will then come back to IT with their purchased solutions for integration and these separately sourced silo solutions will make us the bottleneck once again.

The IT industry is not dissimilar to the early auto industry. Henry Ford essentially created the industry in the USA with the Model T. The marketplace at that time was very fragmented and he was able continue to build and sell essentially the same black Model T for nearly twenty years. When General Motors disrupted the marketplace by manufacturing cars with options such as different colors and features, and models that changed every year consumers realized they had the power of choice and the monopoly on technology faded. Sadly, it took a long time for Ford to realize the way of the past was over and to reinvent its manufacturing processes to compete with consumer choice.

I would argue that IT is now competing in a segmented marketplace where technology is far-reaching, easily accessible, and created at high volumes, which allow for economy of scale. To keep with the auto industry analogy, this has to be our Kaizen era. Competing in this consumerized landscape cannot just be about technology. Technology is too accessible; IT has to be about value creation and about learning.

"The organizational culture we are creating today is either going to set us up for success in the future or will end up relegating the IT organization to the back office"

If used correctly, our competitive advantage will be our organizations’ ability to learn, and adapt. We need to create organizations that are always learning and always evolving to meet higher performance bars. Our organizations have to become business savvy. They have to understand how value creation happens in their business, and they have to be empathetic to their business partner’s value drivers. We also have to balance our investments not just between short and long-term business value, but we also have to proactively invest in transforming our architectures for speed and efficiency down the road. If we do not do this, we will be in the unenviable position of Ford in 1927 when consumers wanted to buy red cars and his factories only had black paint causing Ford to lose market share for six years while they reinvented their method of working.

IT’s time for reinvention is now. We have to create an environment where our organizations are empowered to consciously learn, evolve, and raise the bar every day. This is a learning organization that can intelligently collect information about its environment, is open to learning from others, learns from its failures and successes, experiments with new approaches, encourages problem solving, and most importantly retains and shares this information across the functions in IT. Organizational practices must be developed to systemically utilize these information stores in the IT planning processes to manage risk and to ensure that failure is not repeated while successful practices are repeated over and over again.

The rate at which we can get our organizations to learn may become our only competitive advantage as technology becomes ubiquitous. This begins at the top. As leaders we need to realize that we have a lot to learn ourselves. We need to always pursue learning and encourage our organizations to do the same by example and through our incentive and performance management models. The organizational culture we are creating today is either going to set us up for success in the future or will end up relegating the IT organization to the back office while our business partners go directly to the cloud for their technology solutions.

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