Standing at the Crossroads

By Allen Bernard

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Over the past few months, I’ve had many conversations with IT leaders and regular CIOs about the state of IT; where it’s going, why, and what’s stopping it from reaching its full (and anticipated) potential.


In short, while many business folks bemoan IT’s failures to deliver on better, faster, cheaper, the truth is IT is just getting started. Think about 10 years ago: green screens were still common; the Web was just taking off as a commercial medium; client/server ruled the roost; Moore’s Law was just taking hold; hardware costs were just beginning their precipitous decline; software was something you bought in shrink wrap (or, more likely, developed yourself); the home PC market was just taking off; a cell phone in every pocket was just a dream; “connectivity” was some obscure way of being in two places at once; WiFi and Bluetooth were magic; etc., etc., etc.


Today, just a quick decade later, everything really is different. Everything I listed above has changed. Unlike the semi-controllable yet highly diversified computing infrastructure of yesteryear, today’s CIO is in charge of a mash-up, a Wild West if you will, of consumer technologies crashing headlong into the once tightly controlled space called corporate IT.


IT today is driven by user demand, not by IT. IT today has to think in brand new terms like “service”, “value” and “innovation”. IT today is no longer about IT, but about “business enablement” and “alignment” and “agility”.


Yet, none of these things has anything to do with IT’s traditional role as a business process-streamlining organization. The problem is, IT is still structured to be an optimizing organization, not an enablement organization. All of the technology that was put in place either for technology’s sake (think late ‘90’s, early ‘00’s) or to keep up with the competition (ERP, CRM, Supply Chain, etc.) is still in place. That’s mainframes, PCs, distributed data centers (i.e., mini’s in the closet of a remote office somewhere), rack mounted servers, Blade servers, WiFi a/p's, thin client, tablets PCs, readers, etc., etc. In most large organizations, all of that is still working somewhere, doing something, for someone.


Add to this the hundreds or, in some cases, thousands of different, proprietary software titles (both in-house and off the shelf) that IT supports and you have an organization that spends 70% to 80% of its time and budget just keeping things running, let alone “innovating”. And that number is increasing, not decreasing. Not yet anyway.


Even with this often overwhelming burden, business folks are now asking IT to help do things it was never intended to do—open new markets, for example, or reach customers in new ways. The truth is most IT departments are just now getting a handle the morass of technology and software that supports the enterprise and many large SMBs. Hence the rise of ITIL, project management, SOA, governance, CoBIT, and a plethora of other methodologies designed to turn IT from an ad-hoc, do-it-on-the-fly, firefighting organization into one that runs more like the rest of the business,  with repeatable processes that lead to predictable outcomes.

But we are only on the cusp of this transformation. Even though automated management solutions seem to abound, many organizations today don’t even know how many applications they have running, let alone who is using them and for what purpose. As new IT management and simplification technologies like virtualization, auto discovery tools for asset management, auto provisioning, etc. have come online, IT has finally been able to begin focusing on reining in the hardware side of things.


Application rationalization efforts are also under way, but the technology to distribute, say, one hosted instance that replaces 10 or 100 instances of SAP to the entire organization via SaaS has only recently become feasible. Also, like the chicken and the egg, it’s hard to know which to do first—hardware or software consolidation—so it seems many organizations are trying to do both at the same time. This is fine, but it takes more time and you have to avoid the deadly peril of unintended consequences—a bad day for IT is no longer an inconvenience. It can cost millions in lost revenue. High stakes, indeed.


New Roles, New Responsibilities


By all accounts, IT today is being asked to assist with roles once the solitary domain of say Marketing, Sales, Operations, or Finance. Because so much of today’s world depends on IT to function, everyone thinks IT has all the answers. It’s just not the case. To date, for the most part, IT has only provided the solutions the business has asked for. Little in the way of impact or RIO or TCO or benchmarking studies has ever entered into their calculations of what the business wants. Hence, IT’s enduring reputation as a cost center.


And it is a cost center. No doubt about it. IT is expensive. On average, two percent to four percent of a company’s gross earnings. But, without IT, there are no gross earnings, so the business pays. What’s changed is now the business wants more bang for its buck. Had Y2K not passed almost unnoticed after all the Chicken Little talk of the late ‘90’s and had the dot-com bubble not imploded, IT may still be doing things just for the sake of doing them. But these events did happen and IT now finds itself having to justify—at least to the CFO—why things cost what they do and why IT needs the budgets it needs. Of course, all business units have to do this. The point is, until recently, IT has never really had to—at least not in business terms.


The very people who run and staff it are also being asked to change. Traditionally, IT has been the home of computer science grads and other, like-minded “techies” or “geeks”—heads-down people very good at technology but with very little interest in or understanding of the business they were supporting. And that was fine for a long time. Today, however, IT folks are being asked to think like business people. But, it’s still the same people in most IT departments. Most CIOs today come from IT, not the business. This means they still lack a deep understanding of how business, any business, works. And this means that asking them to become Marketing folks or Compliance officers or, indeed the leaders their C-title implies, is a tall order.

This is not to say they are deadweights on the organization. Far from it. Someone still needs to lead the technology transformation that is under way. And they are the people to do it. They are just going to need more help in understanding the imperatives that drive what the business wants so they can implement the right technologies to make it happen. And, caveat emptor, those technologies will have to support what the business wants in the future, as well—a future rife, as we’ve seen all to clearly this past decade, with unanticipated change.


But there is hope for beleaguered CIOs as it now appears the business gets this also. In this most recent economic downturn, IT budgets have not been slashed as they were in 2002/’03/’04. What’s been reduced this year is just the budget increases. What this says is the business now knows the importance of IT and has elevated it beyond a maintenance organization. But only just.


What the business needs to learn next is the poor step-child structure that IT operated under until now, i.e., being a glorified order-taker, has led to the current situation. And until IT can do the housekeeping required to shed itself of all of the old hardware and software that doesn’t make any economic sense to keep around anymore and restructure its infrastructure to allow faster, more cost-effective and agile delivery of new services, providing the business with what it really wants, is going to take some time.


 Turning the Corner


Of course, there is the communication issue that must be bridged, as well. Techies running IT mean business folks and IT are still struggling to understand each other. In a recent conversation with the former head of Requirements for Zurich Financial Services, I learned that many of the developers working on in-house projects had no idea what the most basic business terminology meant. To gauge this, he would go around and ask what “insured” meant and almost no one knew even though the projects they were working on were for the insurance side of Zurich’s business.


It’s not that IT doesn’t want to provide what the business needs, it’s just that the business can’t wait for IT to catch up so it is always demanding more. But markets move too fast and the competition is always looking for an opening so there is no lag time, no time for IT to catch it’s collective breath and change. IT today is so busy with so many new and fundamental changes—technological, operational, staffing, governance, leadership, etc.—that the business doesn’t understand, nor care to, that conflict is almost unavoidable. This leads to friction because without IT there is no business. Today, more than ever, business has to depend on something it doesn’t understand, can’t control and needs to work. That is scary.

Looking ahead, though, there is reason to believe that the two sides will come together with a common purpose and a common language. There are many hurdles yet to overcome, but progress is being made on almost all fronts. Software is finally powerful enough to deliver to the business what it really wants—simplicity, reliability, speed, agility, depth, connectivity, collaboration—while IT is finally able to employ its own management applications and architectural methodologies (think SOA/ITIL) that will allow it to be able to deliver on the promise these strides in software engineering are bringing about.


Granted, what appears to be simple on the surface is often supported by a complex, cobbled-together mash-up of old and new technologies that requires constant vigilance. But this is the point. Software is becoming truly plug and play for the vast majority of users; even if IT knows all too well the headaches associated with making that happen. But, that’s IT’s job now—to make the difficult appear effortless, almost whimsical. And that’s all that business users want. They don’t want to know, nor do they care, how hard it might be on the back end. They just need technology to work. It has to work. They have their own convoluted challenges to overcome if the business is to survive and figuring out how to use the software tools that have become so indispensable in just a few short years, shouldn’t be one of them.


This is what many IT shops still need to learn about business. Even though many think they know, it’s best not to assume too much until you walk a mile in “their” shoes. Spend some time in sales—the heartbeat of every company big and small—to get a feeling for what the word “competition” really means. You can then go back and complain to your staff about the demands placed upon you if you want, but chances are you won’t be quite so vociferous about it once you see how the real world of business works (or doesn’t work or make any sense whatsoever sometimes).


This is the reality today. At some point in the not-to-distant future, there will be very little distinction between IT and business. One will absorb the other just as the network is likely to absorb what we call IT today. Like the telephone, IT will just be there. It will in the truest sense of the word be ubiquitous. It will simply mesh into the fabric of business just like electricity, the cubicle or the fluorescent light bulb.


The ‘Short’ List


Here’s a “short” list to share with whomever you think will feel the pain of your plight. It’s just a listing in no particular order (since on any given day any one of these things can rise to the top of the list) of the many projects, technologies, and, basically, things that you as the CIO and IT in general are having to deal with on a daily basis. Every single one of these has a break out of sub-headings that can and often does fill volumes of 3-ring binders:


       Keeping the Lights On

       Consumer Products Entering the Workspace

       Legacy Hardware and Software (and making it work with new stuff)

       Project Management (business projects as well as IT projects)

       IT Service Management


       ITIL, CoBIT, ValIT, et. al.




       eDiscovery (i.e., the legal implications of data archiving)

       CRM, ERP (yes, they’re still out there taking over the world)

       Outsourcing/Offshoring (not always the same thing)

       Data Center Consolidation (or expansion!)

       Increasing Maturity Levels based on the CMMi index.

       IT Security – VPNs, war driving, hackers, laptop, PC, etc., WAN, LAN, gigabyte key fobs, iPhones, encryption, etc., etc.

       Physical Security

       Compliance Issues

       Web 1.0, Web 2.0 … Web 3.0?

       Mobility/VoIP/Unified Communications

       Application Rationalization



       IT Commoditization

       Green IT

       New Market Enablement

       Silos (organizational and technological)


       Budget Issues – RIO, TCO



       Staffing – H1B, aging workforce issues, Gen X/Y, work/life issues

       Open Source Software vs. Buying Proprietary Licenses vs. In-House Development

       Cloud Computing

       Business Intelligence




       Running IT like a Business

       Etc., etc., etc.