Monday, February 11, 2013

The Next Evolution of IT

The times they are a trite! It's amazing how bad humans are at change considering nothing in our life is constant, including ourselves. However it's also true that some things never change. Frankly it is this dichotomy that generates the employment of millions in the field of consulting. One group of consultants tells companies how to change losing sight of the constants, another group advises on how to reduce the variables to regain consistency. Then there's this small group, of which I'd like to think I'm a member, who advise state change where a new set of constants and variables apply. So you can imagine in cloud computing with everyone running around helter-skelter just perhaps what's happening is a state change.

Operating models must evolve in reaction to evolving market forces. As a result processes, procedures, and tools change too and as there are a variety of approaches there are a variety of options. As the primary tool provider, IT must deliver new tools supporting the new business operating model. However to achieve its goals IT must evolve its own operating model.
In comparison to double entry accounting, invented in the early 15th century, IT is new, only decades old. Once the mainframe was invented the pace of business innovation has accelerated on a yearly basis. Every year we move further with digitizing business processes to drive productivity gains and establish new products and services. As a result the pace of business innovation is inextricably tied to that of technology; a company cannot win in one without winning in the other.

Focusing on just the past twenty years, advancements in technology have given rise to the Internet, email, chat, smartphones, blogs, micro-blogs, eCommerce, and tablets. IT has valiantly tried to stay ahead while falling further and further behind the curve. Against this backdrop IT budgets have been squeezed, talent hard to attract and keep, and risk tolerance all but eliminated. As a result IT has been forced into an ever escalating challenge to fund the future with reinvestments from the successes of previous investments. Finally, to this we now add the unknowns driven by the Consumerization of IT. Wow! It's a wonder IT hasn't imploded. By comparison in the world of business using an IT timeline, it's like moving from the single proprietor merchant of the 1700's to WalMart in 50yrs. But of course IT gets no credit for the size of the challenge. As viewed by the business results have been largely a disappointment with isolated wins punctuated by innovations which are driving real revenue. I measure disappointment by how rarely I hear anyone in business extol the virtues of their IT organization. Instead the perpetual complaint continues to be "too slow, too expensive" and the wins too few and far between.

After 50yrs of trying the same approach it's time to evolve. IT does not operate in a vacuum; the world is too big and too complex. Like everyone else, IT needs a list of friends to call when its time to move the couch or build the fence. It's time to recognize this need and formally adopt it as the central element of our IT strategy; the indoctrination of operating as an Ecosystem. In doing so we recognize we don't operate alone, we need to grow relationships and complimentary capabilities. Our focus shifts from building solutions to finding and adopting solutions. Its subtle, but this is what the business has been clamoring for over the past decade (or two). We move IT up the value chain from service or technology provider to solution provider, focusing on the solution to a business problem rather than its constituent technologies. Changing our approach will require a culture shift including a massive shift in skills. Today we manage information technologies with a design, build, run mindset. To meet the business goals today and in the future we need to focus on business solutions with an architect, oversee, audit approach. With this change, who provides the design, build, run skills go? The ecosystem. Who makes sure the right things are built the right way at the right time for the right value? IT in partnership with the business.

IT will never deliver on the ideal model: free, instantaneous, and clairvoyant. However that doesn't mean the business will ever release IT from these expectations. The Ecosystem approach shifts the operating model from developing technologies to providing a solution. Time to market opportunities in a highly competitive market necessitate a dynamic mix of capabilities. Its time for us to admit IT doesn't know everything, and it can't. Instead of trying to hire and train every conceivable technology expertise, and always falling short, IT needs to raise the bar and its game focusing on leading, not constructing.

Ecosystem based IT uses time to market and cost as primary drivers, along with requirements, to make quick decisions of rent, lease, buy, or build. Combine this with a strategic decision to jettison assets (see my earlier post on Assets are Evil) and you get the kind of agile, efficient and elastic IT leaders in the C suite are clamoring for and strategically minded CIO's are striving to deliver.

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