Rebooting the IT department

The IT department (in-house IT organisations) has been getting a bit of 'kicking' from Consumer and Cloud IT for a number of years now. Companies like Google, Facebook, Amazon and Apple have transformed our digital experience and set the bar very high. Consumers are fickle and impatient, so the applications they use have to be intuitive and responsive or they simply get abandoned in favour of rival alternatives. Consumer-focused tech companies understand this and have made it part of their operating DNA.  

The Enterprise IT Monopoly

IT departments have been around for a very long time and their value has traditionally been in knowing the technology landscape and how to piece together relevant technologies to create reliable platforms. IT departments were more akin to the Science department than they were a service driven customer-centric organisation. As such, their 'customers' weren't really treated like customers. In the past, employees didn't get a lot of choice about where they got their IT services and devices. If you wanted to get paid, you were at the mercy of the payroll system that the IT department had designed, deployed and managed. If you wanted to send an email or look up customer records, again these systems would have typically been built and delivered by the IT department. Employees didn’t have the option of being fickle so the IT department didn't have to care too much about how pretty or usable their technology platforms were, they just had to stand up to the one obvious measurement that the business helps them accountable to - availability. 

Ugly and Clumsy, but Bullet Proof Systems

Enterprise IT systems are (mostly) run on highly engineered and available platforms and rarely go down or lose data– if ever at all. The business can measure up time and therefore hold IT accountable for it. User Experience is a lot harder to quantify and measure, which is why most applications delivered by in-house IT departments look and feel like a technical cave painting that was coded on a 48k ZX Spectrum.

I don’t blame IT departments for prioritising the reliability of their services. Employees get very annoyed if they don’t get paid on payday and Managers get even grumpier if the business can’t process orders or replenish stock from their inventory. Empathy aside, times have changed. Technology is largely commoditised (in particular, hardware) and as a result of this the value of IT (to the business) is more in the provision of service rather than the technology itself. 

As a result of this commoditisation, the competitive landscape for the IT department has changed dramatically.

The Monopoly has gone

Many cloud-based applications from companies such as Salesforce, Amazon, Concur, Google and Microsoft have embraced the consumerisation of IT.  These cloud-based applications have the intuitive and responsive front ends that deliver the satisfying user experience that we are now used to with our consumer applications but now these, consumer friendly, applications also come with Enterprise reliability. Furthermore, this ‘Enterprise’ reliability is delivered using infrastructure platforms built using commodity compute components (the white-box approach) as opposed to the monolithic and highly specialised infrastructure components that are vended from the likes of the IBM, HP, EMC and Cisco. The monopoly that Enterprise IT once had over their employees (and the business) is very much under attack. Very few applications are too sacred for the cloud and very few employees (good ones) will tolerate barriers to productivity in an age were collaboration and intellectual value add are all-important to the mission of any business.

How have Enterprise IT been responding?

Amazon, Google, Microsoft and Salesforce (etc) are formidable competition- perhaps even intimidating. However you choose to view or describe this competition, the way in which Enterprise IT respond will decide whether or not they remain relevant -or even exist- in the next 10-20 years. I believe Enterprise IT has a place in the future and I believe they have the potential to add more value than mass-market consumer cloud companies. However, it is up to Enterprise IT to realise this value and to start taking the competition to their livelihoods seriously.

So, what are the typical responses we have seen from Enterprise IT thus far?

1) Compete on price. Reducing the cost base of IT platforms a worthwhile pursuit as a reduction in the cost of operations should deliver immediate value back to the business. This said, cutting spending on IT is not always necessarily the best thing to do for the business. Business cases can be very complex and it may well be the case that by spending more on IT, the business can drive a greater return elsewhere. 

Moreover, very few people -including businesses- buy solely based on the lowest cost. Cost is a very important factor in the buying process but it is not the most overriding consideration when consumers make decisions about what they consume. Consumption decisions are also heavily influenced by factors such as convenience, speed of delivery, brand power, extensiveness, etc. 

Despite all of these considerations, a lot of IT departments seem too focused on re-architecting their backend infrastructures to take advantage of commodity hardware (white box servers) and defining their infrastructure layers (storage, server, network, etc) with software (and in some instances, open source).  I am not saying this isn’t the way to go, it is, but it is only the first step on the journey toward competing with consumer & cloud IT. Remember, the cloudy consumer companies have been doing this for years and are better at it than the Enterprise. IT departments need more than just second-hand tributes to 'White Box IT'.

2) Hope, FUD and Politics. Some Enterprise IT teams believe their specific operations to be so crucial to the success of the business that outsourcing will never even be considered, let alone occur. Furthermore, some teams go a step further by trying to reinforce this perception by spreading fear, uncertainty and doubt (FUD) at a political level with senior business leaders. Thankfully, this isn't still a common approach from IT departments, largely because of the momentum of cloud but also because FUD is never likely to be a successful long term approach. If a service is so crucial to the business, all options that may lead to deriving a business advantage will be considered – including cloud. The value in service is rarely in ‘who’ delivers it or from ‘where’ the service is delivered, the business value is derived from ‘what services’ are delivered and ‘how’ (I will elaborate on this further later on). 

3) Apps for the sake of Apps. I commend the Enterprise IT shops that have embraced the tablet, smartphone and ‘bring your own device’ revolution by creating company ‘app’ stores, mobilising and digitising their services. Some have done a better job than others and some have done an incredible job (sarcasm) of taking very well written and optimised mobile applications and sticking them behind an additional wall of clunky and impractical ‘Enterprise’ security services and authentication policies. 

Regardless of how well (or not) an Enterprise IT shop has delivered on their ‘mobile and app’ strategy (like commodity based infrastructures, this is a commendable step forward), it should also be understood that the top 10-20% of the world’s software developers are realistically all-ready employed at the major Consumer & Cloud IT companies. If we are to be brutally honest for a moment, Enterprise IT organisations will not be able to compete on wages for the top developers simply because technology at the Consumer & Cloud IT companies 'IS' the business, whereas the IT department is an enabler for the core business it supports. Competing app for app, like cost for cost, is not going to fruitful for IT departments. 

4) Serve to Add Value. As mentioned previously, reducing the cost base that Enterprise IT operates on is important but it is not enough on its own to keep pace with Consumer and Cloud IT. It is also pretty important to make sure that Enterprise IT is employing good software engineers, but we are also realistic about the fact that the top 10-20% are likely to be already in employment at Consumer and Cloud IT companies where software and IT is the product and the business. 

The one competitive edge that the IT department has over Consumer and Cloud IT providers is the very fact that they are part of the businesses they intend to serve. This should competitive advantage should not be overlooked and if this privileged position is harnessed with the respect it deserves, the IT department can bring value to their business in ways an external IT service provider could only dream of -regardless of how whizzy or social their apps or portals are. 

Innovative service delivery is the competitive edge available to in-house IT and by developing the design and support services that are respectfully and mindfully integrated into the business to create innovative and intuitive technology experiences that realise business objectives and value, the IT department can overcome the years of brand damage they have endured from the onslaught of Cloud & Consumer IT.

The likes of Google will get access to your CEO, CTO, CIO and CFO and even product or service owners, but they do not get the day to day operational access afforded to in-house IT. Access and communication are key to service delivery, building trust and achieving business transparency. By harnessing the intimate knowledge of the businesses, its stakeholders, their objectives and the unique operating nuncios that bind everything together, the IT department can create services that not only accelerate business services and their time to value but strongly influence their direction and success in the future. 

Hopefully, this has been an interesting thought-provoking read. My intention was to be blunt with my thoughts but hopefully, I have given those of you that work at in-house IT departments some positive ideas (for this was my intention). The future has room for Consumer, Cloud and in-house IT it's just a matter of who gets what... 

Thanks for Reading, please leave your comments.


Chancey


FYI..
If this is a topic that takes your interest and why not register for BMC Exchange on the 11th November in London. This is an event run by my employer (BMC) that will give a lot of focus to the topic of modernising IT service management. The link to register for the event is here: http://www.bmcexchange.com/bmc_exchange_london.html