Not too long ago the verdict was being passed that IT no longer provided a competitive edge to a company, and was simply a commodity that every company spent money on – in some ways not too different from electricity. Like with every commodity the key was to simply get more of it cheaper, and that’s what most IT organizations started doing post the dot com bubble. IT budgets related to innovation in most large enterprises were cut to the bone, and the only IT projects that were generally undertaken usually involved words like consolidation, outsourcing, or off-shoring.
Fast forward to 2014, we see digital native businesses being built that impact practically every industry - from financial services to healthcare to agriculture. While IT’s old guard has been busy keeping the lights running at the lowest possible cost, whole new companies are being created around IT. Take the example of the Square Wallet. It essentially allows you to place all your credit cards, loyalty cards, and receipts into one app, and then pay using your name while checking out. It's a simple to use mobile app, that could have been developed by MasterCard, Visa, American Express, or a 125+ year old company called NCR, but it was thought off and elegantly built by Square - a company founded less than 5 years ago.
Failure of companies not to think of IT as a strategic differentiator, risks not just the IT organization loosing its relevancy, but a company itself being made irrelevant by its more nimble and digital native competition. While there are some legacy companies that are beginning to see the light, in particular Nike with its Fuel Band, Coca Cola experimenting with Freestyle, and Ford heavily integrating software and intelligence into their vehicles - a vast majority of legacy companies still view IT as a cost center. This has to change, and change fast!