22 November 2010 | Article by Birthe Elkjær, Vice President, Business Consulting, NNIT

Article by Birthe Elkjær, Vice President, Business Consulting, NNIT

Virtualisation, cloud, outsourcing and global sourcing. These are the new facts of life for Danish companies. Good news for business but somewhat challenging for IT departments. Because when applications, operation and maintenance have been outsourced, what does that leave? Birthe Elkjær, Vice President, NNIT Business Consulting suggests a new role for IT departments.
 
Outsourcing and global sourcing have become popular in many companies. The focus is on core business, with non-critical processes that do not directly create value in the company being passed to subcontractors and business partners. And unless you are an IT company, IT is not a core competence and is therefore a natural choice for outsourcing. This puts IT departments in a situation where they must reassess their function in the company – because when applications, operation and maintenance have been outsourced or delivered via global sourcing, what is left?
 
 The changing face of IT
 A business model featuring outsourcing frees up internal resources, and that is absolutely central for IT departments to exploit. Because, naturally, IT departments still have a useful role to play. But with a twist. Today, operating tasks are most time-intensive but we can expect a shift, with business development taking over the lion’s share and time spent on operations being minimised. When the operating tasks are carried out by others, the question arises about how IT departments should strategically develop to address the remaining tasks? IT departments must define how they will address new tasks. If they can achieve this, they will consolidate their new role in the company:

• IT departments must engage in strategic development of the business and contribute to top-line growth
• Appreciate the opportunities of intelligent use of technology as drivers – cloud computing, for example
• Be strong in the use of global sourcing and managing projects and suppliers

Less caretaker – more playmaker
If we look at what a technology platform such as cloud computing implies for IT departments, the picture is the same: Cloud eliminates certain functions but also creates new needs. It is intrinsic to cloud as a business model that new functionalities and applications are continuously developed. IT will be delivered as a ready-to-start standard service, without the need for in-house IT experts standing by with a screwdriver at the ready. However, IT departments will have the task of translating the standard applications into strategic IT initiatives and value-creating business processes. In other words: Less caretaker – more playmaker who can add IT to the strategic agenda.