IT Doesn't Support the Business - IT IS the Business

IT is no longer just a back-office function. It is driving innovation, creating new products, and generating revenue. AI is reshaping everything. This shift is changing IT's role from "keeping the lights on" to becoming a core engine of business growth.

Not every organization is ready for this shift.

From Cost Center to Profit Engine

I have spent more than 20 years as a technology leader (practitioner, seller, advisor, researcher) and throughout that time, IT has been seen as a cost center, a necessary but expensive part of doing business. Every year, we have been expected to cut budgets by 10%, regardless of the value we deliver.

But AI is finally flipping that script for companies bold enough to embrace it. Goldman Sachs, for example, turned their internal risk systems into Marquee, a platform that generates revenue by serving clients externally. Similarly, Adobe has evolved from a traditional software vendor into an AI-powered creative powerhouse, reshaping its business and setting new industry standards.

These organizations did not just tweak their IT strategies; they completely redefined them. Instead of waiting for the market to disrupt them, they disrupted themselves. They are proof that IT can become a core driver of business value.

That said, these examples are the exception. Most organizations are clinging to old-school models, failing to recognize that IT's role has fundamentally changed.

The companies succeeding in this new model are doing three things:

1. Commercializing internal AI solutions.
2. Building AI-driven products and services.
3. Developing platform businesses that scale through AI.

Bottom line: IT is no longer just supporting the business. IT IS the business.

Why Old-School Companies Struggle

When I speak with executive leaders, I often come away deeply concerned, not just for their businesses, but for their own roles in the future. Many traditional organizations have significant structural issues that prevent them from adapting to the new reality of IT. Silos are deeply entrenched, with business leaders and IT teams operating in isolation, speaking different languages, and moving at completely different speeds.

Even more troubling, years of focusing on cost-cutting and maintenance have created IT leaders who are entirely defensive in their thinking. They have spent decades refining how to do more with less, so they lack the vision to play offense: to innovate, drive growth, and create new value. This outdated mindset is putting their businesses, and their careers, at serious risk as AI transforms the world around them.

AI demands cross-functional collaboration and hybrid roles. Teams that blend business and technical expertise. Companies need people like:

• AI Product Managers who blend technical expertise with business acumen.
• Business-Technology Strategists who connect AI's capabilities with real business outcomes.
• Data Science Leaders who directly influence product strategy.

Take John Deere, for example. They do not just treat AI as an add-on to their traditional agricultural equipment. Instead, they have embedded AI and machine learning into their core operations, from autonomous tractors to precision planting solutions. This integration allows them to provide farmers with data-driven insights that improve yields and reduce waste, fundamentally transforming their business.

The New Rules of Investment

Old-school companies tend to pour their budgets into maintaining basic operations rather than funding innovation. Embedding AI across your organization requires you to shift priorities to:

• AI R&D and leading-edge projects to stay ahead of competitors.
• Talent acquisition and development, upskilling their teams to partner with AI.
• Developing AI solutions that directly drive business results.

Take McDonald's, for example. They have integrated AI into their operations to streamline efficiency and improve customer experience. With their acquisition of Dynamic Yield, they brought AI-driven personalization to their drive-thrus, offering recommendations based on time of day, weather, and customer preferences. They have also used AI to fine-tune inventory management, cutting waste while ensuring popular items are always available.

Organizations stuck in the past, dedicating most of their budgets to simply "keeping the lights on," will fall behind in an AI-driven future.

The New Competitive Edge

AI has not just shifted the playing field. It has rewritten the rules of competition entirely. Today, success depends on mastering three critical dimensions:

Value: Are your AI initiatives solving real, meaningful business problems that drive measurable outcomes, or are you falling into the trap of pursuing "shiny projects" with no strategic impact? Too often, I see efforts that amount to little more than "hand waving," giving the illusion of progress. While this may provide short-term cover, it ultimately jeopardizes the long-term success of your business.

Speed: How quickly can you move from pilot to production and see tangible results? Speed matters because AI is a game of momentum. Agile experimentation and iterative learning are critical here. However, speed without guardrails is a recipe for disaster. That is why I emphasize the importance of "speed with rigor," balancing urgency with discipline to ensure success at scale.

Scale: Can you take individual AI successes and expand them across your enterprise? True impact comes from embedding AI into the DNA of your organization, aligning it with strategic goals, and operationalizing it for sustainable growth. Scaling requires more than replication. It demands leadership, cultural alignment, and a clear roadmap.

Walmart is a great example. They have embraced AI to tackle meaningful business challenges, deploying it at scale across their operations. AI powers their supply chain, helping predict demand and reduce waste by optimizing inventory and delivery routes. It has also reshaped customer experiences with AI-driven tools like intelligent shopping assistants and personalized recommendations.

What Is Next: 10 Predictions for the Next Five Years

1. IT Fully Embedded into Business Strategy: IT will evolve into a driver of core business strategies, co-creating revenue-generating initiatives alongside business leaders.

2. The Rise of Chief AI Officers and AI-Specific Roles: AI will require dedicated leadership at the executive level, with roles like Chief AI Officers and AI Strategists ensuring organizations maximize AI's value while managing risks.

3. SMBs and Startups Disrupting Industry Giants: Armed with affordable AI tools, small and midsize businesses will outmaneuver slower competitors. Expect to see billion-dollar companies with fewer than 20 employees become commonplace.

4. Enterprise-Startup Symbiosis: Large companies and startups will form mutually beneficial partnerships, with startups delivering leading AI innovation and enterprises providing the scale, capital, and infrastructure.

5. AI as the Driver of New Business Models: Companies will move beyond using AI to optimize internal operations and start using it to create entirely new revenue streams.

6. The Innovation Gap Will Widen Quickly: The pace of AI-driven innovation will divide industries into leaders and laggards. This gap will manifest in customer experience, operational efficiency, and overall market relevance.

7. AI Reshaping Workforce Dynamics: Hybrid roles blending technical and business expertise will become essential. Many companies will initially over-automate, leading to customer dissatisfaction and compliance issues, before realizing that the real power lies in upskilling employees to partner with AI.

8. Cultural Transformations Driven by AI Adoption: Organizations fostering cultures of experimentation, iterative learning, and cross-functional collaboration will thrive.

9. AI Governance as a Competitive Differentiator: Companies with robust AI governance frameworks and a commitment to transparency will gain a significant edge.

10. Innovation Growth (or Death) from AI Access Democratization: Democratization of access to generative AI has been fueled by organizations using broadly scraped intellectual property to train models, without compensation. If regulations curtail this practice, control will revert to a handful of tech giants, whose profit-driven priorities will stifle innovation and limit access.

How to Move Ahead

If you are ready to move beyond outdated models and fully embrace an AI-driven future, here is how to position your organization for success:

1. Audit Your IT and Business Landscape for AI Opportunities: Start with a clear-eyed review of your operations. Where can AI deliver measurable results? Avoid getting bogged down in writing endless policies or chasing "shiny" projects.

2. Invest in Hybrid Talent: Focus on building roles that blend technical and business expertise. Prioritize upskilling your existing workforce to collaborate effectively with AI. Rethink outdated hiring criteria and seek out candidates with entrepreneurial backgrounds.

3. Shift IT from Support to Strategic Partner: IT should no longer be viewed as a cost center. Elevate IT leaders to co-own business outcomes and drive revenue-generating initiatives.

4. Fund AI Projects with Clear ROI: Dedicate resources to initiatives that are directly aligned with business goals. Begin with small, measurable pilots to demonstrate value, then refine and scale for greater impact.

5. Move Fast, but with Accountability: Speed is critical in AI, but moving too quickly without clear guardrails can lead to missteps. Implement strong accountability frameworks, ensure transparency, and establish measurable performance benchmarks.