Running IT like a Business: Is it Time?
Running IT like a Business: Is it Time?
November 22, 2007: For most businesses there is the IT department and then there is the actual business, news from the Gartner symposium is calling this out of date and laying down the challenge to run IT like a business.
Gartner is focusing on organisations that are starting to run IT like a business and with good reason as if IT and business ever stop following the same path and head in different directions the business can come apart at the seams.
“Running IT like a business is almost becoming a truism, you just can’t afford to ignore it” said Steve Bittinger, Research Director at Gartner.
The divergence of IT and business can occur at even the very top levels, a Gartner industry survey in 2005 of paired CEO’s and CIO’s found the CEO is more likely to think IT is a strategic asset for the business, while the CIO is focused on the back office and day to day operations.
According to Bittinger, one of the major dangers of running IT like a business is charging in and not planning the process strategically. “You should not start wioth a new organizational structure, that’s the tail wagging the dog, you need to make sure everything in the business process is sorted out first” he said.
Bittinger explains that there are several different models currently being utilised to run IT like a business including:
- Hosted Services: Looks at the best practices of external providers and adapt them for in-house production.
- Professional Services: Usually resulting in using one of the ‘big four’ consulting firms, mainly focusing on the relationship between IT and the business.
- Consumer Advocate: Very fused model where IT underpins the business itself. Famous example is Google where if they didn’t have their entire IT infrastructure the business couldn’t even operate.
- Consumer Testing: Mainly the realm of fast paced investment banks and firms who are always rolling out something new with a major focus on the fast delivery of services.
This isn’t to say that the existing models are the one stop shop for converting your IT into a more business orientated section; rather they are the most common models Gartner has seen amongst the early adopters and the second wave of adoptions that are beginning to come into fruition.
“This is just how the market is evolving, no particular model is necessarily the best practice, there may be some other models as well but these are the main ones” Bittinger said.
One thing the existing models do give is a clearer picture on what is appropriate for your business by looking at who the early adopters are and whether or not they were successful. In this sense being slightly late to the running IT like a business party is somewhat advantageous because the early adopters act like your beta testers and you are able to pick and choose which path to go down based on their experiences.
“Businesses need to look with clear eyes at what the pitfalls are going to be and try to broaden the base of understanding” Bittinger said.
An example of these pitfalls that Bittinger pointed to is heavily outsourced organisations, which are becoming more and more common and in this type of environment it’s extremely difficult to motivate the outsourcer into driving innovation. While it’s one option to sit there and think that you can just ignore the problem and keep on as you are, there is a real danger of the divergence of IT and the business and something that needs to be addressed.
“You don’t get to be a Google unless you have the IT part sorted out. In the Google model they have a lot of things going on, they try new things and then bam they have a new application out” Bittinger said.
Another major pitfall when going down this path is the people in your organisation themselves. How do you get the IT executives who’ve been raised through the ranks of the IT department to suddenly start thinking like business executives? The answer according to Gartner lies in understanding your business process and being honest about who can and can not be promoted in-house to handle the new situation, this can often times mean making the tough choices and bringing in new talent from outside, but if it gets the fusion business and IT need then it goes a long way to getting the business on the right track.
Steps to take in running IT like a business:
- Examine the core assumptions of the business that may cause bias or prevent a proper understanding of what needs to happen
- Define your objectives and intended benefits as part of a strategic plan
- Approach organisations who specialise in advice before you’re at the very end of the process and are starting to change the structure of the organisation itself
- Manage competencies and skills deliberately so you know when it is or isn’t possible to grow them from within
Much like when you start anything new, the road ahead can look dangerous and off putting, but this shouldn’t be a deterrent and the benefits of running IT like a business can definitely outweigh the difficulties of the journey.
“Try and remove the inhibitors that prevent you from changing, otherwise IT and the business can be on different trajectories that ultimately end in disaster” Bittinger said.