Image: Trend of IT trends 2010-2020 Source: Deloitte
The future of the IT organisation includes structural changes such as organizing resources around products and outcomes, creating a clear road map for foundational tech investments, and evolving traditional roles in procurement and vendor management.
IT is becoming nimbler, more agile and product focused and yet the finance function is often still budgeting, funding and reporting in “old ways”. This creates tension which if not dealt with can undermine the innovations brought to the tables by CTOs (and CIOs) which ultimately affect the business’s strategic goals.
Tension causes friction and friction doesn’t bode well for agile innovation or effective procurement transformation.
The report states, “Nowhere is this tension felt more acutely than in funding strategic innovation and transformation agendas, which currently account for a small percentage of IT’s overall budget. (The average IT department spends 56 percent of its technology budget on maintaining business operations and only 18 percent on building new business capabilities.)”
However, changes need to happen with the IT organisation as well, to create significantly improved alignment and collaboration with finance.
One possible example of how this alignment can materialise is in IT procurement where CPOs and IT buyers should be empowered by finance to move away from tactical short-term measures (product price fixation for example) to becoming architects of creative IT supply contracts and partnerships that drive long term strategic value for the business as a whole.
In a nutshell finance need to release some constraints from IT to let them fly and the CTO & CPO need to demonstrate they can deliver value (including savings) across the organization.
Read the full report here: Deloitte’s Tech Trends 2020