The new rules of business and technology entanglement (post 2020)

Tabish Asifi, Group IT Governance Lead at Majid Al Futtaim Holding | Digital Transformation Program discusses why complete assimilation of IT within other functions is  needed going ahead

Let me start by positioning myself as a peacemaker. A peacemaker between you (the Business and IT Leaders) and what you are about to read. Yes, the ideas I am about to share, might be a bit challenging or controversial or even provocative (to some) but then I feel its time has come. If not now then when? 2021 is already being poised as an year of recovery and rehabilitation marked by significant change in how business operate. I feel the grounds are moist enough to allow the seeds of new ideas to germinate, for all the right reasons. So here we go.

The rules of the games in business have changed drastically, in the last few years. Its a given. No one really argues about it anymore. What’s prone to differing interpretations, is the extent to which it has.

Technology is no longer, just an enabler for the business but rather, its what drives the core of the business and its competitive position in the market, now and more so in the near future. Its transformative power is no longer a privilege, the business can choose to ignore or belittle, but rather its quickly becoming a necessity for survival. Doing it better than your competitors, is going to be the key predictor of your business success in the coming future. As the saying goes, what has got you here will not get you much farther.

Now I would be making some bold statements here, the acceptance of which is entirely up to you. But I have great news for those, who do choose to accept it. “If you are a business decision maker, your business will likely survive the next decade. As simple as that”.

First of all its important to realize, that there is no Business AND IT anymore. Building a bridge won’t really help much (if its not already there) as it would still be symbolic of a separation that exists between Business and IT. Complete assimilation of IT within other functions is what’s needed. (see my end notes / ps)

The responsibility of an IT leader to understand business , must be matched or superseded by the responsibility of the business leader to understand IT, else the chasm or the cliff of separation can never be resolved, rather it might increase. Infact, I would even go to the extent of saying, that the business needs to understand IT better, than vice versa, so as to really take advantage of IT, through a pull strategy ie for driving digital transformation, in a meaningful way (not as a fad or in a superficial way), while fully understanding the inherent limitations and challenges of corporate IT.

The democratization of IT is a critical change, long due, that many organizations will have to go through, (as painful as it maybe, both for IT and the business) in order for it to embed technology deep within the organization’s DNA. Without this shift everything else would be just an exercise in relabeling, and thus proportionately effective (or ineffective, I should say).
The budgeting of IT needs to be completely invisible to IT ie to say it should be distributed across business functions and be fully integrated and justified by them. The validation of IT cost elements may be done by IT specialists (as an input in the budgeting exercise) but that’s where the buck stops. And yes I am talking about function /activity /process based, attribution of even the IT infrastructure/ fixed costs. So here is a quick check if you are doing it right. Ask the accounts function , if there is any IT costs in your organization, if the answer is yes (and likely a big one), then you know your budgeting process is not geared up for the coming future.

The need for AND the separation of, a CoE (center of excellence) for technology related innovation (ie for testing out newer IT capabilities in your specific business context) will be a ‘must have’ for those who want to prime themselves for the new era of digitally transformed business competing against each other. With a tiny bit of exaggeration I can say, not having your accounting department wouldn’t hurt your business future prospects as much as not having this CoE would. (Just to clear the air, I have nothing against accounting fxn.)

The CoE for tech related innovation needs to be structured very differently from how the fully assimilated IT function would look like. Infact in many ways it would be entirely complementary to operational IT in structure and functionality. Any resemblance of this CoE with the operational IT could be safely classified as a fault line that needs to be rectified. How it needs to be structured is a discussion in itself so I leave it for the future blogs.

The “agile” delusion would need some major corrections on the way to these necessary adaptations by the organization. I would not cover much in this article but here is a clear pointer. Blind faith in anything is not an optimal strategy. Nowadays business and IT are professing agile left right and center with the hope that it is going to solve their ‘time to market’ issues, or enhance ‘business adaptation’ capabilities to changing environment etc. Let me give you the bad and the sad news before its too late. It WONT.

Agile has a time and place in organization. But its not (and has never been) a substitute for building business excellence through the right strategy, structure, processes and most importantly the culture. And there is no shortcut to it.
Yes, it holds true even in a digitally transforming marketplace. In fact more so since you cannot transform your organization digitally on a weak foundation. Operational excellence is a pre-requisite before embarking on the journey of customer experience enhancement, else the strategy will straightaway backfire.

Having said that, those companies that really know when and where to take advantage of the agile mindset (way of doing) within its organizational spaces, will be at an advantage vis a vis those who don’t. But the worst off, would be those who go ‘full-on’ agile (or fragile, as I would put it) without a deeper understanding of the strength and the limitations of the agile way of working.

There is a lot more to talk about in this area, but would prefer to keep it short and simple for the general reader. If you have any comments or reservations or clarifications feel free to use the comment section.

Ps- As my pet project I am working on a governance model that does NOT allow this business and IT separation to exists by design, is geared up for the future and identifies the needed structure and strategy elements to function. I will hopefully cover the fundamentals of that in a separate article.