5 lessons small IT shops can teach the big guys

The new mantra of IT seems to be "do more with less," but how does that work in practice? Is it possible for CIOs to slim down their IT staffs and still meet the high expectations of business users?

To get the answers, we talked with a half-dozen CIOs who run IT shops that are small by design, with a dozen or so employees. Even more than their bigger counterparts, these shops are using cloud computing, SaaS and outsourcing to offload infrastructure tasks and focus on the essentials of the business.

"This is a golden era for small IT departments," says Reed Sheard, CIO at Santa Barbara, Calif.'s Westmont College, who manages a staff of 15. "With the cloud, I can do things now that only shops with lots of people and money could do before. Now I can play at an enterprise level. It's a huge opportunity."

These leaders of small departments offer five pieces of advice that even big shops can learn from, relating to agility, prioritization, staffing and vendor management.

1. Small makes agility easier – sometimes

For the head of a small IT department, "the opportunity to be nimble exists to a much larger degree than in a multinational corporation," says Sheard. "I can get everybody in the same room at once."

It's not just proximity to staff; it's also the proximity to the business. "It's our responsibility to empower the college's larger mission. That proximity to the heartbeat of the organization is advantageous because I can walk across the hall or across campus in just a few minutes to have a meeting."

That nearness helped Sheard in a recent situation. Facing exponential growth in storage needs, he initially thought about simply expanding the organization's existing storage-area network, even though his team found the software to manage it increasingly complex.

Based on his own experience and insights from other college officials, he knew that offsite access into the legacy storage system was difficult. He started running the numbers and quickly discovered that for the same cost of the SAN and its needed expansion, he could just as easily move to a cloud-based storage system. "We were able not just to fix the problem, but to look two or three steps down the road" to where mobile access was going to be in increasing demand, he says.

There can be a downside to agility, however. "Because we're small, we feel we're more agile," says David Cooke, director of technology at Altum Inc., a Reston, Va.-based developer of grant-management software. Cooke has an onsite team of 12 and an offshore team of six. "If an opportunity appears, we tend to go aggressively at it," he says. "That can drag individuals in different directions."

Cooke's situation highlights a scenario that can be a challenge in a small IT department. "Getting a small department to adopt process is tricky, because the tendency is to want to turn on a dime. You have to draw a fine line on how rigid the processes are. We have more processes in place than most companies our size, but they're probably not as robust as I would like."

Takeaway for big IT shops: Maintain relationships with peers for better business insight, and remember that processes are there for a reason.

2. Small makes prioritization a must

With a small staff, there's no margin for error when choosing which projects you pursue. "You don't have the resources of a large company, so you have to prioritize," says Chris McMasters, CIO at Honeyville Inc., which has an IT department of six.

Customers of the Rancho Cucamonga, Calif.-based food processing and distribution company include Frito-Lay and Mars M&M. "When Kellogg's needs us to integrate data, we determine that as a business priority, and focus our resources on it."

That also means CIOs of small IT departments need to be better managers. "I have to allow my staff to focus on that project and minimize disruptions," he says. That means giving employees the latitude to say no, they can't drop what they're doing because another project already has priority.

"If you protect them, they can finish one project sooner and get to the next one faster. You have to minimize the noise around them," says McMasters. The alternative is the IT department ends up with a long list of to-do items, and very few are done well.

In the city of Goodyear, Ariz., a suburb of Phoenix, CIO Dan Cotterman (who runs a department of 18) says each department creates its strategic and operational plans based on the city council's strategic action plan, which specifies what projects they need to accomplish. Then IT builds its roadmap, which helps it establish priorities.

The city used to have a request process that was highly formal and involved triplicates of everything. Cotterman says he has tried to make the process more informal, with weekly meetings with city leadership. "When a request comes in, we see how well it aligns. Usually only a few fit neatly with strategic priorities," he says.

Takeaway for big IT shops: Identify and maintain priorities so your staff doesn't feel torn in multiple directions.

3. Small makes staffing harder

The same rules apply for both small and large IT departments: You need staff with both technical breadth and depth. But for a small IT department, breadth may be more important than depth since consultants can be hired to provide technical expertise. Even more important for employees of small IT shops are business savvy and collaboration skills.

"You can't have silos when you're small because people are involved in everything," says Dale Denham, CIO at Geiger, a Lewiston, Maine-based promotional products distributor with 750 employees and 30 people in the IT department. "I prefer not to hire people who only do storage, because they'd become so focused on storage-related goals such as I/O [to the exclusion of all else], they forget to focus on how a business unit accomplishes its goal."

At the same time, personality conflicts in a small department can be disastrous to productivity. "They don't have to love each other," says Altum's Cooke. "But we've had to get rid of people who were strong technically because they caused friction and there were personality conflicts." His recommendation: Include more co-workers in the interview process to help gauge the compatibility of the applicant. Not a bad idea for companies of any size.

Randy Gross, CIO at the Downers Grove, Ill.-based IT industry organization CompTIA, has a staff of five. With a group that small, he says, if one person leaves and hasn't documented his or her processes, "you're in a world of hurt. Everyone has nuances in the way they configure systems, but human nature is not to let anyone touch your toys," he says. His recommendation: a lot of cross-training, which is a key part of collaboration.

"They have to understand that it's not one guy coming after your job – it's making sure the company is in sound shape [regarding business continuity] should something happen to one person. If you treat it like that, they're more prepared," says Gross.

When Gross brings on new staffers, they're trained over three months in the most important disciplines, including networking, security and virtualization. "We'll open up those areas one at a time to help them understand how they've been built, maintained, upgraded and expanded. Then we move to the next discipline."

Takeaway for big IT shops: With DevOps and software-defined systems becoming more common, cross-training benefits everyone.

4. Take advantage of outsourcing options to focus on the business

The vast array of outsourcing options these days makes it infinitely easier to run a small IT shop, according to several CIOs. With outsourcing, you can craft an internal team that focuses on the business and craft an external team that focuses on technology.

"Cloud computing doesn't necessarily reduce your resources, but it changes the skill set you need," says Cotterman, who's added three full-time positions to the city's IT department in the past year, two of which are devoted to business analysis. "You're going from an administration-heavy team to more business analysts, people who can explain technology and steer the business units down the path to the right solution. It helps us be much more customized to their needs."

Scott Glenn, associate principal for IT Strategy & Operations at the consulting firm Hackett Group, says he believes strongly in this strategy. Maintaining a small IT department that's good at keeping the data center running is focusing on the wrong thing – because anyone can keep a data center running.

"You need an IT department with an expertise in fixing the business issue," he says. "You can change who supports the data center. You want people who understand the business in the IT department."

Glenn stresses another aspect of having a small IT department focus on the business. "Technology changes so rapidly, it's hard to keep skill sets refreshed," he says. Internal IT teams can't stay up on everything, and if they do, CIOs face having a really expensive staff. "Some resources are in high demand. If you hire them, they'll hold you hostage for 30% more," he says. "Let that be someone else's problem."

If you're deploying ERP, hire people who are smart about that; ditto for social media or mobility. "You know what [the business] needs, but you need someone to help you understand the technology. Regardless of size, when you have that focus on primarily business-facing and new development, and not on hands-on keyboard support, you can get more done."

Takeaway for big IT shops: What's good advice for tiny IT shops goes doubly for big ones – hire IT staffers who know strategy, and source outside the company for particular technological knowhow.

5. Small makes vendor management crucial

CIOs who are outsourcing a lot of work must devote a greater proportion of their time to vendor and supplier management, whether that means individual IT contract workers or larger IT consulting firms.

Honeyville's McMasters works with 20 contract workers to augment his staff. "I spend a lot of time on those relationships, because when we need them, they have to understand our business right away. Done right, it's very powerful. They become part of the business," he says.

When it comes to large consulting firms, "we don't always go with the lowest bidder," says CompTIA's Gross. "You have to make sure they have the right kind of people and the right mix of people." He's witnessed the person with the most knowledge about a system leave the consultancy, which in turn left his company in the lurch. His recommendation: Don't be afraid to use multiple consulting firms. "Some firms might say they know the whole Microsoft stack, but in reality, they don't," he says.

Takeaway for big IT shops: Whether working with individual contractors or large consultancies, maintain close relationships so you'll have access to the talent you need when you need it.

How big? How small?

One question remains, of course, and that's how big should an IT department be in relation to the rest of the company? No matter the size of the company, business has always searched for a balance in IT spending. In the past 10 years, reports from research firm Gartner have pegged the ideal ratio of IT employees to all employees at around 5%, although the percentage is significantly higher in some industries, such as financial services.

For small and large IT departments alike, there's no set percentage. For small companies, what's most important is that the staff isn't so small that the departure of a key employee cripples the team or so large that staffers start closing themselves off into silos. While large IT departments have more flexibility in staffing, the same logic prevails: Focusing on cross-training and eliminating silos gives you more flexibility during inevitable staff changes.

Perhaps the best answer comes down to what helps the business most. Grow your internal team based on business needs, and grow your external team based on technology needs.

This story, "5 lessons small IT shops can teach the big guys" was originally published by Computerworld.