The future of your IT department: innovation driver instead of support unit?
When companies today talk about digitalization, they often mean: more speed, more flexibility, more innovation. The IT department stands at the center in the process – or better said: It should do so. But what does reality look like in your company? Is your IT still busy with maintaining old systems? Or does it long since use cloud technologies, agile operating models and data-driven decisions in order to advance the business?
The fact is: The role of IT is changing. Radically. What used to be a pure internal service provider is today the key to new business models. According to a current study by Gartner, by 2025 over 50 percent of company IT budgets will flow into the cloud¹. Whoever doesn't initiate the change now will later have to make it up expensively.
But what does that mean concretely for your IT department? How does the transition from classic support to a strategic innovation unit succeed? And which course do you have to set today in order not to lose touch tomorrow?
New operating models: Why classic IT reaches its limits
For a long time the IT department was the backbone of the company infrastructure – stable, but often cumbersome. Fixed teams, defined processes, months-long release cycles. These structures, however, function ever more rarely in a business world that constantly changes.
Companies like Siemens AG show how it's done differently: Away from functional silos, toward product-oriented teams. DevOps principles and Continuous Integration/Continuous Deployment (CI/CD) replace rigid development cycles. The result? Faster time-to-market and more flexibility. According to a McKinsey study from 2023, organizations with agile operating models react up to 30 percent faster to market changes².
A look at Spotify makes clear what that means in practice. Small, autonomous squads with end-to-end responsibility drive innovations forward there³. But careful: These new structures require more than new tools. In demand are a culture of experimenting, flat hierarchies and the willingness to grasp mistakes as a learning opportunity.
Cloud applications: Hybrid, multi-cloud and serverless as the new normality
The cloud is long since standard – but the way companies use it develops rapidly further. The Flexera State of the Cloud Report 2023 shows: 89 percent of companies pursue a multi-cloud strategy⁴. Why? Because they no longer want to make themselves dependent. Flexibility, scalability and failure safety are in focus.
BMW Group consistently relies on this strategy. The company uses AWS, Azure and Google Cloud in parallel – among other things, in order to support data-intensive applications like autonomous driving. At the same time, new technologies like serverless computing (e.g. AWS Lambda) open up entirely different possibilities: Applications without server management, perfect for event-based processes.
And edge computing too gains significance. Siemens, for instance, combines cloud and edge architectures in order to enable real-time data analyses in its factories. That reduces latency times and increases efficiency. The whole thing is complemented by AI-supported cloud services, for instance with Azure AI, which automate routine tasks – from IT security to system monitoring.
The question is: How far along are you on this path? Do you already have a clear multi-cloud strategy? Or do you still manage isolated solutions that create more complexity than benefit?
The change of the IT roles: From technician to strategic partner
The requirements of the IT teams of tomorrow are different. It's no longer enough to keep systems running. Sought are strategists with technical know-how – and vice versa. According to the LinkedIn Workplace Learning Report 2023, cloud architecture, data science and cybersecurity belong to the most important skills of the future⁵.
And it goes even further: The IT department develops from a „cost center“ to a „value creation“ unit. A good example is provided by Deutsche Bank. With the migration of legacy systems into the cloud, it lowered its IT costs by 25 percent. At the same time, innovative solutions like AI-supported risk management tools arose.
What does that mean for your team? Do you have the suitable skills on board? Or do your employees need targeted further education in order to co-shape the change?
Challenges: What slows IT departments down today
With all the opportunities there are also stumbling blocks. Three challenges keep meeting us:
- Security concerns: 63 percent of companies name cloud security as the biggest risk⁶. Zero-trust architectures and AI-based threat detection therefore become the new standard.
- Complexity of integration: Hybrid cloud environments require a unified management. Tools like Terraform or Kubernetes create the necessary control here – provided the corresponding competencies exist in the team.
- Cultural change: DevOps and agile models often fail at the silo mentality. Without targeted trainings and pilot projects, it stays at theory. BMW has shown that small, quickly scalable pilot projects help to overcome resistance.
Are you ready to take these hurdles? Or is your organization still at the beginning of the cultural change?
Conclusion: The IT department as the engine of the digital transformation
The future of your IT department isn't decided at the technology – but at the strategy. Companies that successfully shape the change rely on three central levers:
- Customer centricity: IT solutions have to be measured by the business outcome – not by the technology deployed.
- Continuous learning culture: Investments in upskilling and partnerships with tech providers (e.g. AWS or Microsoft) ensure that the know-how always stays up to date.
- Courage to experiment: Pilot projects, fail-fast approaches and the use of low-code platforms accelerate innovations.
The IT department of the future is no longer a support service provider, but an innovation hub. It enables new business models, secures competitiveness and becomes the strategic partner of the business departments. The question is: Do you take the lead – or do you follow the others?
Sources:
[1] Gartner forecast on the cloud share in the IT budget
[2] McKinsey: Agile operating models as a success factor
[3] Spotify and the squad model
[4] Flexera 2023: Multi-cloud strategies in focus
[5] LinkedIn Learning Report: Sought-after IT skills
[6] Flexera 2023: Security concerns and cloud
