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More Business Acumen Expected from IT Departments
Global study reveals technology strategy isn’t IT’s only responsibility

By Aliah D. Wright  3/14/2014
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Goodbye IT help desk, hello business-strategy partner.

As more and more companies begin to deploy technology, IT and HR leaders must become senior advisors who influence and guide—and not just manage—a corporation’s IT investments, finds  a new study by IT management-solutions provider CA Technologies,.

And the newly released TechInsights Report: The Changing Role of IT and What to Do About It, finds the transformation of technology from a centrally managed IT responsibility to a corporatewide business enabler is changing the enterprise and reshaping the way technology is purchased, deployed and used.

As IT takes on business strategy, other business departments are taking on responsibility for technology needs. A Society for Human Resource Management (SHRM) Foundation report, Transforming HR Through Technology, acknowledges that HR management is evolving into a more technology-based profession.

“In many organizations,” the report states, “employees now see the face of HR as a portal rather than a person. This transformation of HR service delivery is known as ‘e-HR,’ and implementing e-HR requires a fundamental change in the way HR professionals view their roles.”

Jeremy Ames, president of Hive Tech HR, an HR technology consultancy based in Massachusetts, says he has been watching as IT and HR “battle” over which group should own HR technology projects.

“Right now … there is a push for everyone to become more strategic, mainly because there is an even greater need for every department to prove out their ROI [return on investment],” said Ames, who is also a member of the Society for Human Resource Management's (SHRM) Technology and HR Management Special Expertise Panel.. “Whether or not IT and HR admit it, the race to become that strategic partner for the business is under way.”

Being more strategic is paramount, especially considering HR is now often tasked with:

  • Streamlining HR processes and reducing administrative burdens.
  • Reducing HR administration and compliance costs.
  • Competing more effectively for global talent.
  • Improving service and access to data for employees and managers.
  • Providing real-time metrics to allow decision-makers to spot trends and manage the workforce more effectively.
  • Transforming itself so that it can play a more strategic role in the business.

“Software and technology are disrupting business models, creating new businesses from the ground up and even transforming entire industries,” said CA Technologies Chief Technology Officer John Michelsen in a news release. “Customers are demanding new applications and a different experience, and employees require new tools to succeed and be productive. As a result, we are seeing a seismic shift in the way technology is seen, purchased, used and deployed across the enterprise. IT departments must evolve from single-source providers to business consultants, brokers and advisors or risk becoming marginalized in the software and technology-driven economy.”

More than 35 percent of IT spending now happens outside of the IT department, according to the study, which surveyed 1,300 IT leaders in 21 countries from the public sector and the financial services, health care, manufacturing, and telecommunications industries.

Respondents expect this trend to continue, with lines of business responsible for 44 percent of IT spending within three years, or by 2017.

In the past, 80 percent of IT budgets were typically spent on maintenance activities, the study reports. Today, total enterprise spending on IT across all functions and units has moved from “maintenance or ‘keeping the lights on’ activities to a heavier concentration on new services development and deployment,” according to CA Technologies’ news release. Respondents report a nearly even split today and expect the balance to shift in favor of innovation—to 59 percent—in three years as buying power continues to increase outside of central IT departments.

The study also revealed that activities such as driving new business initiatives (14 percent) and developing innovative products/services (11 percent) are not the highest priorities for most IT departments. Instead, traditional IT duties—maintaining infrastructure and applications (41 percent) and fixing problems as they arise (35 percent)—top the list.

What’s more, IT leaders are not doing enough to apply technology to measure IT’s impact on the business and to help the lines of business understand IT’s value, according to the release. Few frequently share key performance metrics (31 percent), evaluate the effect of shifts in investments (27 percent) or assess whether IT is meeting its key performance metrics (37 percent).

Aliah D. Wright is a manager/online editor for SHRM Online.

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