Stop Looking at Your IT Department as a Cost Center
IT departments say they're seen as a "sieve in the budget," as a home for "tech nerds." In fact, IT departments are becoming increasingly strategic. Have you recognized that?
In modern business, departments not directly related to operations have had to fight to demonstrate their value. Marketing departments have been the go-to scapegoat, but information technology (IT) departments haven’t been far behind. In a recent survey conducted by CIO magazine, half of IT leaders surveyed said their departments were seen primarily as “cost centers” -- meaning they do not add to profits.
But a reality check is needed here because a company's IT department should be one of its major profit drivers. A 2016 Deloitte Growth Enterprise Services poll of 500 mid-market executives found that IT department leaders were responsible for 49 percent of technology adoption, compared to 36 percent a year earlier. In fact, IT departments are becoming more and more strategic, and technology is becoming a more reliable investment.
Clearly, then, there’s a disconnect there: IT teams are playing a key role in moving businesses forward, but their department heads still claim they’re seen as a sieve in the budget.
Yet, CIOs and IT departments play a much bigger role in business than they’re often given credit for, and that needs to change.
More about that IT reality check
If an attitude shift is in order, it's executives and entrepreneurs who are in the most ideal position to bridge that gap and shift their (and their companies') perspective, from viewing the IT function as a necessary evil to viewing these departments as innovation hubs.
The purpose for doing that isn't to give them a warm fuzzy feeling, because there’s actually a lot more at stake. In a world reliant on and connected by technology, IT is vital to operations. Lacking IT resources is the same as lacking the machinery or manpower necessary to produce a product or service. A company simply can’t function without it.
And the “tech nerds in front of their computers all day” stereotype is exhausted and clichéd.
CIOs and IT departments are really agents for change and innovation. They create new, more efficient processes and provide solutions to stagnant operations. Hiring or partnering with an IT team means you have people whose primary focus is on innovation -- and that’s essential in the hyper-competitive market accompanying today’s influx of entrepreneurs.
Removing cost from the thought process
Rethinking your IT department gives these professionals room to demonstrate the kind of innovation they’re really capable of. Here’s how to start:
1. Try to learn the basics of IT. Nothing will generate appreciation of your IT department faster than learning firsthand about these people's jobs and the (seemingly endless) complexities they deal with daily. They may be more experienced and are being paid to be the experts, but even a rudimentary understanding of what IT encompasses will lead to a greater appreciation for the department.
Fifth Third Bank CEO and President Greg Carmichael began his journey as the bank's CIO, and he credits his time in that role for teaching him crucial problem-solving and multitasking abilities. “CEOs today have to solve multiple problems at once,” he says, “and they need to understand disruptive technologies and how they apply to their current businesses. I am a stronger CEO as a result of my time as a CIO.”
If you’re looking to dip your toes into the tech world, Lynda.com is a great resource for learning about IT. Many universities also offer relatively cheap courses on IT-related subjects, but another option is to simply ask your IT department questions about what they do and how they think they can improve things.
They’re often eager to talk about their work and will appreciate the interest.
2. Integrate IT into your company -- not only strategically, but physically. Too often, the IT department is relegated to some back room, hidden out of sight. Physically integrating it with the rest of the company by moving IT's offices and workspaces to a more central location will allow you and your other employees to see IT’s contributions to your operations up close.
Walmart is making just such a change to its technology division, merging corporate IT with its technology groups responsible for ecommerce development. Part of the motivation stems from an initiative to quickly identify ways of combining physical and online shopping, to put IT in a position to contribute more directly to business growth.
The phrase “out of sight, out of mind” is incredibly pertinent in this instance. The people whom employees interact with daily are those whose contributions they recognize in the company, largely because they see the actual product of the hours those people put in. When your IT department is in some dimly lit back room, it’s likely that the only interaction you have is when something is going wrong or you’re signing paychecks.
3. Challenge your IT department with the strategies and objectives of the company. Most importantly, instead of tasking IT staffers only with menial assignments (such as setting up email accounts), challenge them to align your overall strategy with your business objectives.
One such example of a successfully aligned IT department is at Southern Company, where CEO Tom Fanning -- former CIO -- transitioned the company’s IT practice from a cost center to a positive financial differentiator. Similarly, IT Labs, NASA’s Technology and Innovation Division, has created a process for integrating new information technologies that has made the division the incubator for several effective innovations that have required minimal investment.
If you start seeing your IT staff as your “innovation team,” you’ll empower them to transform your company for the better. Proper utilization of your IT team will allow them to locate and eliminate internal inefficiencies, identify opportunities through the analysis of data, determine technology threats and opportunities in the industry and better manage your customers through CRM tools.
Thinking of your IT department as a driver of business growth can only improve your company. Instead of focusing on its cost, look at the areas where it pays for itself, and then some. Increasing internal efficiency lowers costs and helps keep you competitive, and IT is a means for connecting you to potential clients in an increasingly technological world.
The most successful companies are those that react more quickly and intelligently than the competition. Once you start rethinking the value your IT team offers, you'll be one step closer to seating yourself at that table.
Kevin Yamazaki is the founder and CEO of Sidebench, a leading digital product and venture studio that creates custom software and apps. He works as a passionate solutions architect and product designer. Because of Yamazaki's innovations, Sidebench has a growing reputation for solving its clients' largest unique challenges through custom integrations, internal tools and consumer-facing applications.