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IT’s Changing Value Proposition

The MIT Center for Information Systems Research issued a very interesting research briefing last December titled “The IT Unit of the Future.” Nearly 90% of respondents to this study indicated that IT’s value proposition would change in the next 3-5 years. Part

of the study, developed from interviews with 50 CIOs, identified four IT value propositions:

  • Business support. Utilizing SaaS and the growing technology capabilities of business partners, IT value focuses on coordination and pushing development responsibilities to the business partners.
  • Solution/Platform delivery: IT value creation is more traditional, coming from building and deploying systems and capabilities.
  • Business process design: IT value creation focuses on enterprise process design and optimizations, outsourcing much of the build function to vendor partners.
  • Revenue generation: IT value creation focuses on developing digital products and services to enhance revenue generation.

The news from this study was the shift between these four value propositions. As the chart indicates, both business support and solutions/platform delivery were expected to be almost one-half the percentage of value creation in 3-5 years than at the present, whereas the business process design percentage was nearly tripled while the revenue generation percentage was quadrupled.

The implications of these changes in emphasis could be significant in terms of mindset and capabilities in and out of IT departments. From a focus on standardization, optimization, and cost control, the focus shifts to innovative uses of emerging technologies such as social media, cloud computing, and mobile devices; speed to market; flexibility to follow changing opportunities, and building new products and services.

The re-skilling of IT staff—from technologies to business understanding to managing complex projects—will be critical to making the transition to generating IT value in the future.

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