In the early 1900s, large organizations needed another type of CEO: Chief Electricity Officer. Before there was an accessible and reliable power grid to plug into, organizations that needed electricity employed a CEO to make sure they had steady and cheap access to this vital commodity.
Given the aging data center architecture, it’s now the Chief Innovation Officer who is increasingly becoming the Chief Electricity Officer of the past, responsible for keeping the lights on of their IT infrastructure.
According to industry analysts, 80 percent of IT spend worldwide is allocated for maintenance, while only 20 percent is devoted to driving innovation. I believe that ratio needs to shift dramatically to enable enterprise IT to spend less time “keeping the lights on” and more time rolling out new services and apps, testing new business models and achieving greater efficiency. For the old guard to succeed in this hyper-competitive landscape, I believe businesses need to radically transform their IT infrastructure.
Across virtually every industry, upstarts are often outmaneuvering incumbents. The oft-cited advantage Amazon, Uber and others maintain over their legacy competitors is web-scale IT infrastructure, which delivers agility to rapidly grow the business and innovate at a breakneck pace.
Because they do not need to devote the bulk of their time and budget maintaining on-premises environments, these companies are empowered to innovate at a much more rapid rate. For instance, while Walmart was getting its unlimited three-day shipping service off the ground in 2015, Amazon brought one-hour delivery service to market in just 111 days.
Radical is the key word for these incumbents. Many companies are currently engaged in the process of completely changing their business models and how they deliver their product and services to customers. Unfortunately, their IT organizations struggle to keep up and, thus, simply add layers and piecemeal solutions to their existing infrastructure. The resulting transformation is incremental when it needs to be sweeping.