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January 18, 2010

Run IT as a business -- why that's a train wreck waiting to happen

Everything you've been told is wrong: What IT should do instead

By Bob Lewis | InfoWorld
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147 Recommendations

"If you board the wrong train, it's no use running along the corridor in the other direction," said famed World War II German resistance fighter Dietrich Bonhoeffer. We in IT boarded the wrong train a long time ago. It's the "standard model" of information technology organizations -- the familiar litany that says CIOs should run IT as a business, meeting the requirements of its internal customers. This refrain has been endorsed by our holy trinity, too: analyst firms, most consultancies, and ITIL.

They call the standard model "best practice." When they're in a different mood, they also call desktop lockdown a best practice, leaving you to figure out how it is that you tell your customers what they can and can't do.

[ Get Bob Lewis' continuing IT management wisdom in his Advice Line blog and newsletter. | Stay up on key IT trends in Eric Knorr's Modernizing IT blog. ]

So we've had to run along the corridor, trying to make sense of it all. But you can't make sense of nonsense.

I admit this conclusion is not a growing consensus. It isn't even an emerging trend. It's more a guerilla movement, promoted covertly by some renegade CIOs and supported by a few consultants and commentators who have rejected the conventional wisdom and industry punditry in favor of what their experience tells them works in real organizations.

Bassam Fawaz, CIO of a large global logistics company, is one of the renegades. According to Fawaz, "The IT conventional wisdom that is generously dispensed by many IT think-tanks and opinion makers is largely theoretical and offers little or no practical value."

Businesses are starting to shake off the recession and think about the future instead of simply making it to next week. It's the perfect time to board the right train -- the one headed to the promised land, where IT is a strategic partner to the rest of the business, not a subservient order taker content to process work requests while accepting the blame for everything that goes wrong.

Want to board the right train?
Your ticket to the promised land begins with this: No one inside your company is your customer.

Thinking that they are is the core fallacy of the standard model, and it has caused no end of trouble.

Take the common complaint voiced by (among others) Dirk Huggett, an IT business analyst for the North Dakota Information Technology Department: "You are always too expensive. One classic example is PCs," he says. "Executives get flyers from different vendors for $299 laptops and get upset when the ones they buy cost them $800. It is tough to explain why the cheaper PC won't run their mission-critical application.

"Or try to explain your file and print server hosting rates. It doesn't matter that part of that rate is full backup and off-site storage. Or as part of a clustered environment you have built-in redundancy and that ensuring the server is updated and secured appropriately is part of that cost. Their friend Joe hosts these things on the side, and it is much cheaper."

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mtsinc 18-Jan-10 7:47am
1 reply
Actually, I have less trouble thinking of IT as a "business" than I do as a "business unit". A Business can achieve economies of scale by consolidating processes, assets, and resources - for example, the way a single physical host can contain multiple Virtual Machines. When you have to chargeback individual resources, the ability to do this kind of consolidation is constrained. The stakeholders want to know what's "theirs" and not be paying for what "isn't theirs". A Business has autonomy. It sets its own policy on how to deliver a product. No well-run business is going to allow itself to be dragged willy-nilly by its customers. It operates as a unit, and is responsible as a unit. An IT division that can do this has the ability to serve its customer (the parent company) as a whole instead of merely pandering to its parts. Finally, a Business sets prices. Here's where IT fails miserably. To users, a "toy" IT and a "professional" IT are indistinguishable. Not just in things like the cost of the equipment, but the cost of EVERYTHING, and most especially talent. Offshoring made a lot of CEOs think that Christmas was here, when in fact all they had was a cost-of-living differential. Sure, I could live high on the hog on $15K in Bangalore, but a cheap unskilled programmer, whether he/she costs $56K/year or Rs. 1 lakh, is still a cheap, unskilled programmer. The causes of this reality disconnect are manifold. All good CEOs have to have some degree of unreality if they want to be able to take "impossible" goals and make them real. IT models - unlike cardboard architectural models - are virtually indistinguishable from the actuality that they represent at a superficial level. Users have never been properly educated that the difference between an Enterprise Architect and little Jimmy coding "pong" is as great as that of a cardiac surgeon and a boy scout with a first-aid merit badge. And, last, and most fatal, is the "All You Have To Do Is" Syndrome, which, alas, affects both users and IT staff alike. Long before computers, there was an old saying that "Everything takes Longer and Costs More". In IT, you can square and cube that. Nothing is as simple as it seems, and until computers develop some common sense, it never will be. Everyday Low Prices and Git 'R Dun! are the operative words for IT these days. And all we really get is a mess and minimal credibility. Maybe we really SHOULD start to run ourselves as a business. An independent one, with realistic goals, schedules, and prices.
Regaug 18-Jan-10 2:18pm
You make some very good points. Most IT depts are currently trained to view the parent company as a customer, but most don't have the autonomy you speak of, and most "parent companies" would never, ever give it. That is why IT is moving to 3rd party companies (as a superset of off-shoring); that's the only way they will get that autonomy.
EVVJSK 18-Jan-10 8:02am
"Instead, they should say, "My job is to help you and the company succeed," followed by "Show me how you do things now," and "Let's figure out a better way of getting this done." This one little line, in my opinion is what too many IT departments fail to do (in some cases because they are understaffed, but in other cases because they are missing their mission). To me this says, let's understand what currently works and doesn't work, and let's work together to make processes better. Nearly the whole article can be boiled down to that one simple line.
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