Posted by: Beth Cohen
application development, big data, business applications, business continuity, business innovation, business IT, business responsibility, Business Value, cloud application development, Cloud business models, Cloud Business strategy, cloud computing models, emerging technology, enterprise, enterprise architectures, enterprise cloud, enterprise cloud services, Enterprise computing, Enterprise data models, enterprise IT, IaaS, infrastruture, innovation, IT architectures, IT business alignment, IT consultant, IT Innovation, IT Leadership, IT management, IT management tools, IT operations, IT organization strategy, IT portfolio management, IT risk management, IT service delivery models, IT services, IT technology, leveraging IT investment, managing Cloud Portfolios, New IT product innovation, operations, SaaS, Supply chain, System integration, Systems innovation, technology innovation, utility computing, virtual desktop
When an inpatient business unit marketing manager with a credit card can stand up an instance of Salesforce in a matter of a few days, and many companies have long outsourced their daily IT operations, many business executives are questioning if a traditional centralized IT organization is the right model for today’s agile business. An increasing number of IT projects and purchasing decisions are coming from directly from business units, rather than central IT. IT managers need to rethink how they deliver services and interact with the rest of the organization to maintain their value and relevancy.
The death of IT has been a perennial topic since the beginning of the information age. The good news is that IT applications, services and process controls are needed more than ever. Even the smallest pizza shop business today is dependent on a complex web of applications and interrelated supply chain systems. The bigger question becomes, who should be responsible for making the critical business decisions about the IT spending and who should be maintaining the systems?
Over the years, the pendulum has been cycling between a centralized and decentralized model for the delivery of IT services. Until the mid-1990’s the centralized model was dominant, more because computers were expensive and temperamental, not because it was seen as optimal. Computers were not designed with the idea that mere mortals would be able manage them and MIS was a black art. All that changed with the wide availability of the cheap PC and a useful set of office productivity desktop applications. Thank Microsoft for giving users a reason to take control of their computers for the first time. Central IT still held on to the large back office systems, but there was growing tension between corporate IT department and business units for ownership and control of users’ systems and applications.
The pendulum swung back as we entered the 21st century with the widespread deployment of ERP, VDI (Virtual Desktop Infrastructure), SAN storage and virtualization – large expensive systems that require specialized knowledge to maintain. Pressure to cut costs and improve IT efficiency drove rampant offshoring and outsourcing as companies were sold on the idea that specialized IT services companies would be able to manage the systems better and cheaper. While, as we all now know, outsourcing cost savings have mostly proven to be mirages, the fruits of the drive for efficiency are utility computing and the development of SaaS systems that have turned the old capital and labor intensive IT service delivery cost models on their heads.
Where does this leave centralized IT? For smart managers, the IT organization has never been a better position to deliver strategic value to ensure the success of an organization’s business objectives. Unlike the business units that are mostly concerned with the success of their small corner, central IT has a unique overview of the entire organization. Use this knowledge to develop integrated systems that improve information flow throughout the organization. So next time you are thinking that centralized IT is dead, it is time to get to work on tying all those 46 one-off Salesforce deployments together so that the entire company can share vital information across the functions.
About the Author
Beth Cohen, President, Luth Computer Specialists, an independent consultancy specializing in cloud focused solutions to help enterprises leverage the efficiencies of cloud architectures and technologies. Previously, Ms. Cohen was a Senior Cloud Architect with Cloud Technology Partners and the Director of Engineering IT for BBN Corporation, where she was involved with the initial development of the Internet, working on some of the hottest networking and web technology protocols in their infancy