MBA in IT: Gaining a Competitive Advantage

“Decisions about how and where you invest in IT are not technical decisions any more, but part of your entire business strategy,” reflects Kiron Ravindran, a professor of information systems at IE Business School. “The use of IT has changed – it’s no longer something which supports your business, but the way you do business.”

Ravindran’s words carry weight. In the digital economy of the 21^st century, IT is central to any function in any business. The role of HR managers is to manage HR systems, IT is central to keeping pace with regulatory requirements in the finance sector and CMOs are gradually taking control of IT budgets, while marketing budgets dedicate more and more towards IT.

This is reflected in the MBA curricula of business schools. At IE Business School, Ravindran explains, IT has been made part of the core curriculum. Other schools offer MBA in IT tracks and specializations, and there is no shortage of detailed elective modules at any decent school.

“Every company is now a technology company – it’s part of their competitive advantage,” says Doug Stayman, associate dean for MBA programs at the Cornell Johnson School of Management. “If you’re an investment bank you’re spending a tremendous amount of funds on tech. People come to you not just because of the skills of your people, but also your ability to harness tech to let them do what they need to do. It is, therefore, a boardroom issue.”

In perhaps one of the most exciting developments in the MBA in IT sphere – the school opened a new tech campus in New York City (Cornell NYC Tech) – at which a one-year tech-focused MBA program will be offered, with students studying side-by-side with master’s students in technical disciplines in order that both groups gain experience of how to communicate with each other.

Employer demand in the digital economy

Employer demand is behind the creation of this new campus, explains Stayman. “There’s an interrelation between business problems and technical solutions. We’ve moved from a world of fixed assets to a digital economy, which is much faster paced. To be able to take a decision without understanding in a fundamental way how technology works and how to work with technology people is increasingly difficult.”

Sandra Slaughter, area coordinator of information technology management at the Scheller College of Business at the Georgia Institute of Technology, confirms this. “Jobs requiring knowledge of technology are on the increase and there is a shortage; we place 100% of our students.  As IT becomes more and more ubiquitous in more industries, I would suggest that all jobs of the future will require knowledge of technology.” 

QS research shows 11% growth in the number of MBA job opportunities in the technology sector in 2012/13, which serves to confirm this – and this is before we factor in the necessity of technical knowledge across MBA sectors.

Big data and beyond

So, what skills do MBAs need to gain a personal competitive advantage and to prepare them for the digital economy? Professor Steve Brown of the University of Leicester’s School of Management, gives a brief overview of his school’s MBA in IT: “We have a range of modules. At one end, there is a module looking at IT in project management. This deals with some of the technical issues around supporting things like PRINCE2 based projects. At the other, we look at the contexts in which managing information is performed, and how information processes enable organizations to relate to their environment. In between, there is a module on knowledge management, which takes in some of the technical as well as conceptual aspects of how knowledge is created, stored and disseminated to facilitate learning with an organization.”

“One thing we’re very focused on is product management skills,” replies Stayman. “What you need to know about business models, user feedback, technical design, and the use of metrics to measure results for example. We’re focused on the use of data,” he adds, “People who understand what big data means and what it means to be data driven in world where data is exploding.” With big data one of the major buzzwords in the modern world of business, clearly, the importance of having a grasp of how to understand data and how one can gain a competitive advantage by using it cannot be overstated.”

At the Scheller College of Business, explains Slaughter, as well as the people skills needed to manage technical talent, the MBA in IT is all about being able to keep pace with technology. “Change management skills are important. IT driven innovation often requires significant change to organizational structure, processes and technologies. We call this skill ‘being comfortable being uncomfortable’. Students need to be able to work in uncertain environments, where what you need to do is not laid out. They need to understand how to identify opportunities and problems and develop solutions.”

Ravindran uses Sheryl Sandberg as an example of how to do this right. “She graduated in 1995. One year before the World Wide Web became public. What did she learn that would allow us to run this country called Facebook in just 15 years?”

He adds that the key thing is to be able to bridge the gap between technology and business; to understand how technology can deliver value.

Innovation in business

Being equipped to deal with rapid change is, of course, extremely important in the digital economy of the 21^st century, in which innovation is key for a company looking to gain any sort of competitive advantage – as far as it is even possible to gain one in a world which is moving so fast.

“Innovation is the DNA of IT. Think about how many innovations and new business models a technology like the internet has spawned – e-commerce, social media, big data and analytics, service-oriented architectures,” says Slaughter. “Big data holds the promise to reveal new patterns of consumption and transactions that could revolutionize industries. For example, sectors such as real estate, healthcare, transportation, etc. may have a wealth of information that is not currently used to the optimal extent, but with analytics these sectors can become information-intensive.”

Brown adds that the pace of these changes can be intense. “As technological innovation grows, so does the expansion of IT into all areas of organizational life. You would have to point to things like cloud computing and social media as some of the major drives here. Ten years, maybe even five years, ago many students were unfamiliar with the value of these things for business. Now they would be pretty much at the top of the list for most students.”

Of course, innovation comes in many forms. ‘Jugaad innovation’ plays a significant role on IE’s MBA curriculum, Ravindran explains. This is the idea of appropriate technology –solutions to localized problems. He gives the example of African villagers coming up with a solution to the challenges of charging their phones for instance. Such innovations, borne of necessity, can sometimes provide the key to new innovations in more developed economies – the idea of reverse innovation.

The future of the MBA in IT

Innovations in IT have changed the world irrevocably, giving rise to the MBA in IT.  Ravindran discusses the almost terrifying reach of the big social networks. Facebook, for example, controls the communication of 800 million people, with an additional 450 million after buying Whatsapp. “Twitter has changed the history of countries in the Middle East, you can’t tell people that Twitter isn’t going to change their job!  As much as many people treat them as fads, the change is already in place.”

This is something we need to acknowledge quickly, he believes. “I would be really happy if my job was made obsolete. I really think it’s already backward if we speak about people talking about technology as if it’s an additional piece. I hope no one needs to tell students if they considered that technology can change their business – my kid doesn’t know a world without internet.”

So, what will happen in the near future? “There’s an increasing understanding that technological improvements aren’t going fast enough to sell alone,” says Stayman – who firmly believes in the value of digital technology to let people live healthier lives at lower costs. “We have to understand need, which is part of product manager role.” Marketing will play come to play a key role in product design as a consequence, he believes. “Marketing is going under huge transformation – the ability to use data to format what you want to deliver to who, and then measure the outcome, is transforming marketing as a data driven function.”

There is no escaping data, states Brown, the growing understanding of which will lead to nothing less than a profound paradigm shift: “The number one issue, I think, will be so-called ‘big data’. Organizations are becoming increasingly aware that massive amounts of information can be routinely mined on consumers, markets and behaviours. But few organizations currently have the technical skills to exploit it properly. Knowing how to work with big data effectively is going to be a seismic change in doing business, not just in terms of marketing, but also in terms of strategy, finance and human resource.

"Big data is our future,” he concludes, “whether we want it or not!”

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