The speed with which technology has altered businesses — from retail and holiday bookings to food delivery — has been accompanied by a shift in the how IT teams need to be led at C-suite level.
Once the main role of the IT department was to provide support services, with an eye on keeping costs down and critical systems running, says Adam Woodhouse, a director at consultancy KPMG. But he says: “When a leadership team is looking for bright ideas . . . that open up new revenue streams, that’s not good enough.”
Tech leaders must understand their organisation’s main goals, says Ian Cohen, an independent consultant and former chief information officer for insurance broker Jardine Lloyd Thompson. “It’s about being very commercial, very business savvy.”
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Executives at large companies in particular need to focus on their venture’s main aims. Mike McNamara, former chief information officer at UK supermarket group Tesco, gives an example: when he joined US discount retailer Target in June 2015, he found the company had about 800 different IT projects under way. This was a staggering number even for its size: Target has 1,800 stores in the US alone and sold $74bn of goods in 2015, an increase of 1.6 per cent over the previous year attributed to increasing use of digital channels.
Mr McNamara and the leadership team identified which projects were important. Better digital channels, a more efficient supply chain and more effective technology for the company’s in-store employees were among the priorities. In two days they whittled down the list to fewer than 100 projects aligned with key objectives.
Mr McNamara also cut the reliance on contractors, who made up 70 per cent of the IT team when he joined. This is now 30 per cent, while Target has recruited 700 more staff at centres in Minneapolis and Bangalore.
To win in retail today, and in the future, you’ve got to own and build your own technology
The reason for this shift was to have better control over the company’s corporate systems and to be able to respond swiftly to business demands: “To win in retail today, and in the future, you’ve got to own and build your own technology.”
He also streamlined internal processes so reliable applications can be introduced quickly, using a philosophy known as “DevOps” (which more closely unites developments and operations teams). It has been popularised by internet companies such as Amazon and Facebook.
This encourages software developers to work more closely with IT operations staff who manage the systems on which the software runs. Historically these groups worked separately, with development teams working on broad sets of software updates before passing them to colleagues in operations to implement, often via a series of handovers that could last for months.
Instead, team members work in small groups, testing software and ironing out glitches as a project progresses. This allows changes to be made more quickly than under the old silo method. Analysts at IT research company Gartner say DevOps is becoming mainstream and may now be employed by as many as one in four of Forbes’ Global 2000 organisations.
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IT teams across the world would benefit from similar shake-ups, KPMG’s Mr Woodhouse says, as it makes them think more about users. “The fundamental thing they need to have in place are customer-focused technologists, rather than systems-focused technologists,” he says.
Mr Woodhouse adds that, aside from speeding up the introduction of applications, it puts an end to the “blame game” that can ensue if something goes wrong with software, when operations team members blame the code and developers blame the systems.
Mr McNamara is also a fan of DevOps. When he joined Target, the approach was used in a few areas, he says. “Now, it’s across the board. It’s just the way we work.”