The Rise of Shadow IT - Page 5

Sep 19, 2006

Hank Marquis

“IT is changing the way companies do business, making them smarter, more productive, and more profitable,” said Diane Berry, managing vice present at Gartner. “But some companies manage their information technology better, faster, and smarter than others and a big part of the reason is the effective structure of their IT functions and the deployment of IT staff.”

Just Like Dell

The practical objective of the 21st Century corporate IT department must be to transform from offering static “one-size-fits-all” project solutions to allowing knowledge-workers to choose and construct the IT services they need dynamically, as did Dell.

Simply put, long-term goal orientation toward win/win relationships is more effective than short-term transactional relationships. This concept is vital to achieving competitive advantage from the IT organization.

An article in the Journal of Business & Industrial Marketing documented that many managers see business relationships through a war metaphor and their strategies derive from military philosophies. The article suggests: “Rather than bemoan the fact of dependency, we should seek to set that dependency in the context of an overall relationship strategy.”

Interdependent relationships are balanced or unbalanced. Unbalanced or outcome interdependence is competitive (win/lose); balanced or behavior interdependence is cooperative (win/win).

Interdependence causes uncertainty, and organizations take steps to reduce uncertainty, for example, choosing alternative suppliers. The actions taken in response to uncertainty can affect other organizations positively or negatively.

Positive solutions to outcome interdependence include increased coordination and shared control of resources, known as behavioral interdependence. Think of such interdependency as a form of branding, for example “Intel inside.”

While this may be frightening and challenging to IT, they can follow the World Class Manufacturing model by delegating the authority over what services they deliver to the knowledge workers, while retaining responsibility for how it delivers those services.

This is hard for IT to accept since they have always “known what’s best” for users, customers, and the business, and are still inclined to think users and customers don’t know anything about IT.

The business units in turn must accept responsibility for assembling and using IT services appropriately. History indicates that sourcing decisions based on task and process uncertainty deliver the most value, and thus outsourcing certain IT tasks and processes to knowledge workers is critical. However, they must realize they do not have the training, visibility, experience, or right to perform ad-hoc modifications to IT infrastructure.

Senior executive leadership must enforce and support this division of labor. The catalyst for successful behavioral interdependence is management commitment, and without managing business consumption, the result is chaos.

The successful 21st century IT organization must be a federation between decentralized knowledge-workers and centralized corporate IT, with engaged senior executive leadership and guidance.

The lessons of manufacturing economics—customer choice, supply and demand, quality and production, and organizational contingency theories—apply equally to IT. World Class Manufacturing, and its Kanban philosophy as exemplified by Dell provide a clear path for IT and the business.

This realization becomes a transforming moment for IT and the business, and while it represents uncertainty, all involved must embrace and nourish their interdependence.

Commoditized IT holds the keys to sustained competitive advantage, but obtaining it requires a significant organizational and managerial shift by all involved. Only senior executive leaders have the power to welcome, encourage, and initiate this transformation—the final commoditization of IT into a high-quality manufacturing organization.

The result is world class IT: Sustained competitive advantage from the organized interdependence between teams of decentralized knowledge-workers and centralized IT, formally supported and managed like a modern high-quality manufacturing operation.

Hank Marquis is a managing partner and CTO at itSM Solutions. You can contact Hank at

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