Rethinking and realigning IT for the AI era

As far as Jason Johnson is concerned, AI is as transformative as the invention of the tractor.

“Just as farmers expanded their operations from two acres to 200 acres upon the tractor’s introduction, our role is to equip our staff to explore their ‘200 acres,’” says Johnson, senior vice president and CIO of Sweetwater, a $1.5 billion online retailer of musical instruments and audio equipment.

This involves restructuring IT through training, demonstrations, and advocacy, Johnson says. It is “reminiscent of the period when computers first started gaining traction in enterprises during the 1960s and 1970s.”

Just as IT found itself having to pivot through other significant changes, including cloud migration, SaaS adoption, DevOps, and digital transformation, organizations are scrambling to adjust to a world increasingly moving toward automation. AI has blown in like a freight train — barreling into organizations at a frenetic pace, adding more stress and urgency as they consider what applications to deploy.

This requires IT leaders to rethink how IT is staffed and organized, and how IT works with the business to capture the value and promise of AI in its many flavors — generative AI, agentic AI, and machine learning.

“Despite how fast any of those other shifts have been … the pace with AI is something we simply have not seen before,” notes Mike DiBenedetto, CIO of Northland Investment, a multi-family investor, owner, and manager.

More than two-thirds (68%) of this year’s State of the CIO IT leader respondents say that AI has already — or is starting to — reshape operations, and 80% say they are researching and evaluating adding AI to the tech stack.

As a result, there is little doubt IT leaders have to realign their departments for the AI era. To harken back to the tractor analogy, many are plowing through with a clear sense of purpose.

Enhancing efficiencies

It has long been a mandate that IT develop new services and evolve teams and processes to meet the need for transformation. But like DiBenedetto, Johnson says that “with the introduction of AI, this pace of change has increased significantly. AI provides tools and assistance that help IT teams keep up with changes, even when facing constraints and pressures to achieve more with fewer resources.”

To meet these changes head on, Johnson has created cross-functional teams to enable and empower both IT employees and customers through AI. “We collaborate closely with our legal and compliance teams to ensure that we use our data, as well as the data we manage on behalf of our customers, in safe and compliant manners,” he notes. “Internally, we have established working groups focused on enhancing efficiencies within IT, such as improving software development processes and reducing service desk resolution times.”

Sweetwater also has established an AI center of excellence and has embedded data science professionals into the group. They are helping to design the experiments and pilots to ensure the results are statistically significant and then applying AI in areas that can accelerate the business.

Similarly, John Kreul, senior vice president and chief information and digital officer of Jewelers Mutual, is forming dedicated cross-disciplinary teams “focused on our customers to create seamless and personalized journeys.” Those teams are concentrating on microservices, data, and AI platforms that will be leveraged across the organization, Kreul says.

Shifting IT to more meaningful work 

AI has significantly boosted self-service capabilities and case deflection within Workday’s IT team, “so much so that it’s allowed us to reallocate our talented case managers to more impactful, meaningful work,” says CIO Rani Johnson.

The team is now building more sophisticated AI chatbots that can resolve a broader spectrum of issues and provide proactive assistance to employees facing IT challenges, she says. “This shift ensures our IT professionals are engaged in higher-value activities that truly leverage their expertise.”

A prime example is the AI Insights Widget, which was jointly developed by Workday’s IT and revenue operations teams. The custom generative AI tool tackles a significant pain point for the sales force, Johnson says.

“Previously, gathering comprehensive account information was a manual, time-consuming process, often taking one to two hours per account due,” she says. “The AI Insights Widget automates this, freeing up valuable sales time and accelerating their efforts.”

A focus on continual improvement, change, and collaboration

Others says AI adoption hasn’t significantly changed IT’s focus. While Sweetwater’s Johnson refers to AI as “a pretty big revolution,” deployment of the technology is not really shifting IT’s roles and responsibilities, he says. But as IT builds tools embedded with AI to make the business faster and more efficient, “this is heavily impacting our own internal folks,” whether through automating code reviews, or accelerating software development or business analytics, he says.

“It’s forcing us to work closer with the business,” Johnson says. “It’s changing the shape of work from one and done to one of continual improvement and continual change in a way that is … different than what we’ve seen before.”

Similarly, DiBenedetto says the advent of AI hasn’t required major structural changes in his IT group, nor when it comes to hiring new staff.

“We’re always looking for fit for culture [and] a willingness to learn,” he says. “The concept of being a lifelong learner is certainly a requirement, and we’re always trying to make sure that we can find somebody that fits; somebody who sits in the IT department that can understand, ‘How does my contribution contribute to the overall success of the organization?’”

If IT implements an AI engine into an employee work process, the team members need to familiarize themselves with the workflow to ensure it is effective for that employee and has a downstream effect, DiBenedetto says.

“We expect that people working on our technology team understand what occurs in a department, whether that’s day to day, whether that’s driving a quarterly result, whether that’s driving toward a year-long goal or an initiative that somebody has on their roadmap,” he says. “So we’ve always hired for that, and we continue to hire for that, and we think that is critical as we shift toward focusing on AI.”

As use of AI increases, IT has “an interesting opportunity to be trusted partners; to be the reliable source and to put context around this new and exciting area,” DiBenedetto adds. Beyond understanding the technology, this requires IT to “stay close to the progression of AI” as it moves from chatbots connected to LLMs, to the creation of agents, to more custom applications and the custom responses coming from AI leveraging retrieval augmented generation (RAG) or small language models tailored to an individual need, DiBenedetto says.

Jewelers Mutual’s Kreul says AI has prompted changes in staffing, as well as investing in data and AI resources, and that IT is experimenting with multiple tools and models.

“Our investments are not just technological; they are company-wide initiatives,” Kreul says. “I believe that to leverage AI to its fullest potential, it must be a company-wide commitment. Everyone must be curious, willing to learn, and eager to experiment with AI.”

Yet, AI itself is not driving the reorganization of IT. “Rather, it is the need to work differently to create products and services that our customers value,” Kreul says. “The future of work involves integrating business, data, technology, and functions to create differentiated customer experiences.”

More training on automation

What is changing at Northland is that the technology team “is coming up to speed and being trained in all these areas at a detailed level,” says DiBenedetto. For example, teams that were traditionally focused on infrastructure and cloud are becoming “much, much more versed on automation,” and the necessary security components, given the changing expectations of the job.

“The part we’re not changing is … they have to go back to the business and communicate the value of technology and connect the dots of where it can provide tangible, measurable value to the work that they do daily and over the long term,” he says.

IT will continue to be tech evangelists, DiBenedetto says. While the real estate industry does not typically include early adopters of technology, “we want to make sure that our organization is viewed as [one] where people can … have the best possible tools available to them to perform their job on a day-to-day basis.”

He adds, “We want to make sure that AI is a source of excitement, that there’s not this barrier between our technology team and our business teams around how they’re using technology.”

Johnson of Sweetwater believes that “our department’s most crucial task is fostering an organizational mindset that incorporates AI enablement into every process.”

The integration of AI begins with training because there is a definite adoption curve. “You have to teach people how to think about and use AI while also surrounding them with a lot of love,” Johnson says, adding that “the goal at Sweetwater is not to replace them,” but get them to be more productive.

“Farmers didn’t just plow their two acres of land and then go take a nap the rest of the day and do nothing else,” he notes. “They went and found 200 acres.”

AI as a new operating principle

Justice Erolin, chief technology officer at BairesDev, a nearshore software development company, has made significant structural shifts in his 4,000-plus distributed IT workforce, thanks to AI.

AI isn’t just a tool but also a new operating principle that is being embedded into delivery pipelines, infrastructure management, and client work, he says.

Erolin is restructuring BairesDev’s internal engineering orgs to be AI-native, integrating cross-functional “AI Guilds” that serve as internal accelerators for adoption across cloud, DevOps, data science, and delivery teams.

To address the shortage of generative AI-skilled engineers, Erolin is launching in-house upskilling programs and advocating for hybrid talent models that blend automation with human expertise.

As for Northland, the company is in the beginning stages of creating an AI leadership group focused on governance. “That group is tasked with understanding how to provide some structure [and] some strategic thinking as to where we believe the areas of opportunity are, and then asking individual contributors to adopt pilot tests,” DiBenedetto says. As they broaden those pilots, the group will provide feedback, “and then we can factor that into some additional components of the program.”

Recognizing AI is a constantly changing puzzle

Sweetwater’s Johnson says AI is “causing us to question everything, like getting a new puzzle piece, and it’s changing more rapidly than any recent technology has to any company.”

This requires IT to work with business leaders to constantly evaluate what is working or not working and readjust, retrain, and move resources around to support business outcomes, he says. Like any other technological change, “you can resist it, and we’ve had some of those conversations with developers … but that’s probably not a great idea.”

Jewelers Mutual’s Kreul is philosophical about how AI is changing both IT and the rest of the organization, saying that “in today’s rapidly changing world, everyone must embrace discomfort. The pace of change is outstripping any single organization.”

The biggest challenge Kreul sees for his team “is maintaining current operations while transitioning to the future—this is no easy task.”

DiBenedetto says he hasn’t found a concerning level of pushback from his IT team about AI deployments at the company. “But there is a mix of emotions, and that comes from questions around what the future holds,” he says. Of course, no one knows the answer to that, but DiBenedetto says he’s struck by how much the technology is becoming part of the conversation.

In the past month, he’s says he repeatedly heard the statement, “AI may not replace your job, but the person who uses AI may replace the person who doesn’t.”