Technology & Innovation

IT leaders consolidate their powers

March 19, 2018


March 19, 2018


New opportunities for IT executives are arising out of digital disruption, but it is also stretching the skillset they require.

Digital disruption is good news for IT executives. As digital improvements become a priority across organisations, IT leaders, and aspiring leaders, are in even higher demand.

Although bringing a company into the digital mainstream is a great task, over two-thirds (68%) of IT executives surveyed by The Economist Intelligence Unit believe their companies have adapted well to the challenge so far. As their professional reputation is staked on their ability to manage technology-driven change, it is perhaps not surprising they more often say their companies have done so extremely well (28%), far more than executives from other functions surveyed.

Globally, continuous digital transformation leaves IT executives in a strong position with growing responsibilities. But it has required a shift in focus in how they work, how they collaborate with colleagues, and the skills they need in order to thrive.

Redesigning the IT leader network

For IT executives to truly grow and succeed within their company, the IT department must also change in new and significant ways. According to the survey, the need for a coherent technology strategy in order to respond to digital disruption is, unsurprisingly, felt more keenly by IT leaders (68%) than other departments (eg, 54% in customer services). Furthermore, the need for new core processes (57%), roles and skills (67%) is felt more heavily in their department than anywhere else.

Derrick Hastie, global head of data technology at Aegon Asset Management, has been a first-hand witness to digital migration in financial services. He helped introduce some of the first online loan capabilities at the Royal Bank of Scotland back in 1998.

“We have been involved in digital for quite some time. We’re quite comfortable with it,” he says, adding that for his team “digital is associated with lean thinking and customer-oriented thinking. It is the ‘outside in’ perspective.”

Mr Hastie says small teams working across Aegon are crucial for meeting corporate goals. This makes sense—IT cannot implement change within a vacuum. To succeed, executives require a deeper understanding of how other parts of a business operate. For example, 76% of IT leaders believe they need to understand and collaborate more with customer service, two-thirds believe the same of marketing. They also must share ownership of projects and interact with other leaders on a more frequent basis.

Other departmental leaders seem to agree with IT’s rising and merging role in the company. Across all other survey respondents (sales, marketing and customer service), 39% say their responsibilities have expanded to overlap or merge with IT to a significant degree—more than with any other function (see chart 1).

Benefitting from disruption

Mr Hastie explained that, until recently, much of his company’s IT work was sent offshore for cost reasons—for example, programming or data input. But as digital disruption engulfs the financial sector, much of that work is being brought back onshore. “It is changing the skills we need on the ground. You need proper engineers now, as opposed to just analysts or developers. Digital is changing the footprint of the people we need,” he says.

Mr Hastie and his peers have to work hard at securing those resources. Senior management often believe that offshore is still best on a cost basis, he says. That is no longer true when agility and speed become more important factors. The message is sinking in. Smaller, local composite teams are appearing across the financial sector. Cloud computing means testing new ideas can be done cheaply at home.

The survey confirms that the roles and requirements of IT managers and their staff are changing—perhaps for the betterment of workers. A full 70% of IT executives believe that digital disruption will be actively beneficial to their personal professional ambitions (see chart 2). And relative to their peers in other functions (sales, marketing and customer service), many say they are clear on where they need to focus their skills and training to make the most of new career opportunities.

For example, executives believe that, to advance in their careers, ”hard” skills such as data analysis matter more than ”softer”, people-oriented skills like empathy, delegation and internal networking. Thankfully, the majority (55%) say that their current employers offer the opportunities to build up their skill bases— only their marketing colleagues rank their companies more highly (61%) for training for the digital age. IT executives are also most likely to say that their role extends to helping members of their own departments develop new skills (with 21% strongly agreeing).

In terms of delivering on the cost and speed benefits of digital evolution, “we’re only scratching the surface right now”, concludes Mr Hastie. Indeed, nearly three in five (59%) IT leaders across industry believe that digitalisation impacts will be “significant” or “extreme” in the next three years.

If Mr Hastie is right, then IT executives will have to extend the hand of friendship and even possibly share ownership of digital projects with their colleagues in sales, marketing, legal and compliance on a more regular basis.

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