Last week, WTN Media’s Fusion 2014 conference in Madison, WI captured information technology-driven external business challenges and IT leaders’ responses. Small or large, government or private, non-profit or for-profit, the challenges are shared. Here are my take-away thoughts.

IT’s Role

IT leaders now largely accept a distributed model. “Shadow IT” is here to stay. The shift is correct from my perspective now that insight is one of remaining sources of advantage. Data is abundant and its interpretation must be real-time, predictive and prescriptive. As Greg Pfluger, VP for Information Systems at American Family Insurance, commented, “Marketing … better understands technology than IT people understand marketing. Treat them with respect.”

Despite the complicating issues, Software as a Service (SaaS) is a winning business model; the benefits far outweigh the cons for customers and suppliers. A primary IT role is to ensure integration and security needs are met.

To make this work, reaching agreement and clarity on the line between IT and other business groups is essential. Will IT be responsible for data only or have an expanded role, like employing data scientists that are a shared resource across the company? I especially like the use of IT Innovation leaders with one leg in IT and one leg in a business function or business unit. They have the skills and knowledge needed to use information technology as a driving force for step-change efficiency gains, new business models and other disruptive innovations.

Wherever the line is drawn, IT must be a partner to the business leaders, not a service-offering vendor as there are more agile vendors on the outside, according to Jonathan Martin, EMC’s SVP for Corporate Marketing. But the more IT can focus on enabling innovation – leaving the day-to-day plumbing to outside vendors –the higher value the IT contribution. IT should also oversee SaaS vendor contracts to protect the organization’s security and data reliability.

Business models

Mobility, ubiquitous sensors, and big data capabilities are creating powerful new business models and solutions. The GM OnStar presentation by Paul Pebbles, Senior Manager, Technology Planning and Sandbox Development was especially impressive. (You have to love his job title!) GM is wisely viewing OnStar as a platform – a universal container and common convention for the user interface for application-specific software – much like the Salesforce.com platform. We are in a winner-take-all world, and the race to create a leading platform for tasks-to-be-done in different environments is a marathon run at a sprint speed. (With value migrating to information, GM’s decision to restrict its OnStar innovation to GM cars will open the doors to competing platforms. Is the company’s thinking old school?)

Higher education, customer experience, healthcare, on-line retail and other industries are all open for disruption via innovative use of IT capabilities. (My bet will be on the organizations creating the enabling platforms that advance disruption, like the MIT-Harvard on-line education platform.) Companies that create contextual awareness and advance user interfaces as the physical and digital worlds collide will also win. Mark McDonald of Accenture got it right when he said you must use technology to advance human well-being – to break long term trade-offs that limit human potential or the quality of our experiences.

More worrisome was the limited number of hands that went up in the audience when asked about increased R&D investments and presence of internal innovation groups. Was the largely Wisconsin audience too involved in business as usual? Indeed, the keynote company address from Colony Brands provided an example. The company survived many disruptions in the past. But how will it win against Amazon? “More testing” and “focus on performance” was CEO Bauman’s answer. Yet Amazon conducts thousands of tests as business-as-usual and exemplifies what great customer service looks like in today’s mobile, on-line retail world. Tomorrow, new competitors could easily enter to serve those lacking credit – Colony Brands’ target market – with a more beneficial business model. Welcome to disruption.

Leadership

Gartner’s Tina Nunno discussed the need for IT leaders to take on more Machiavellian leadership principles—to be more politically aware and manipulative. There was a lot of push-back against her ideas over the cocktail hour, in large measure because IT leaders understand the importance of a collaborative versus political culture. But the author of The Wolfe in CIO’s Clothing made a good point about the need for IT to establish clear boundaries to advance an agenda that matters for the good of the entire organization, like security.

Don Adamany, Founder and CEO of 7-year old IT services company Ahead, captured what leadership is all about in this age of disruption. “Don’t solve problems with old tools,” he said. “Build a collaborative and transparent team – it kills politics.… [And] hire an alien or two to shake things up.” Finally, “recognize there are a ton of start-ups out there – with nothing to lose – working non-stop to take a slice of your market share as you focus on profits.”

It’s all too easy as leaders of traditional organizations to read articles about Facebook, new messaging tools, DropBox, Square, Alibaba (China’s answer to Amazon), Instagram and other IT enabled businesses and assume “that stuff” relates little to your business. WTN’s Fusion teaches us otherwise. Its 2014 roster once again demonstrated that IT is a disruptive force across all industries and size organizations. While you may not want to be on the bleeding edge, falling behind is akin to falling into quicksand without a rope to pull you out.

More articles by Kay Plantes

Kay Plantes is an MIT-trained economist, business strategy consultant, columnist and author. Business model innovation, strategic leadership and smart economic policies are her professional passions. She resides in San Diego, California but still considers Madison home. She is the author of Beyond Price.

The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of WTN Media, LLC. WTN accepts no legal liability or responsibility for any claims made or opinions expressed herein.