All Posts in Strategy and Tactics

|In: Industry Commentary|Last Updated:

Dear Bob …

Yesterday I saw a headline about how the IT Department would disappear, which I thought meant IT people would be inside other departments, but the content actually implied the IT Department would simply be renamed to something like Business Support. These ideas have been tossed around before. I’d like to know what your current perspective is about that.

Thanks,

Barbara

 

Dear Bob …

We are [Vendor’s Name] customers, and we’re pretty happy with them. But I just got a piece of their marketing fluff, offering webinars on their “top three resolutions for IT in 2015,” which are to (1) “Get out of the data center business” (they’re in the data center outsourcing business); (2) “Become a service provider to the business”; and (3) “Modernize your people, process, and technology.”

These three resolutions are all bothersome to me, but the become-a-service-provider-to-the-business one is just a rebirth of the old “treat the business as a customer” canard. I’m guessing the webinar will urge us to set SLAs, at which point I would just lose the ability to speak rationally, so I’ll be skipping these.

I thought this outbreak of sloppy thinking by a major IT player, revealing its profound misapprehension of what it and its own customers should be doing, might be of interest.

Personally, I’m disappointed that these resolutions were thought up by anyone with more than a couple of months in the industry. I feel like Ted Cassidy as Lurch, quietly growling in disapproval of something done by a stupid guest.

Thanks for listening,

John

 

Barbara, John, and everyone else who subscribes to KJR …

I trust you aren’t actually surprised at the near-infinite supply of shallow thinking available from those who should know better. As the National Lampoon said so long ago, “Be assured that a walk through the ocean of most souls would scarcely get your feet wet.”

And so …

Re-naming IT as “Business Support” mistakes the part for the whole, as does the whole internal-customer refrain.

Yes, of course. Supporting the business is an important part of IT’s responsibilities. Also, this name change would let IT invade HR’s, Marketing’s, and Accounting’s turf. So for an empire-building CIO, once the CEO approved IT’s new name, every department that “supports the business” would be folded into IT.

Or, the CIO could simply ask for a promotion to the title of Chief Administrative Officer, to which these other departments would now report.

Either way, the CEO might reasonably respond that not only isn’t IT providing technology leadership to the business, it isn’t even collaborating as a peer to help business managers and executives figure out the best ways to use technology so as to make the business maximally effective.

All it’s providing is “business support,” which means waiting for the phone to ring to find out what information technology the caller wants, and then more often than not saying no.

Why should the CEO provide a more expansive domain for which the CIO can fail to provide leadership?

As for the vendor’s other proposed resolutions …

While this is probably too obvious to need pointing out, getting out of the data center business is sometimes a good choice. And sometimes it isn’t. Change the resolution to “Determine whether you should stay in the data center business,” and I’m on board.

See, once a business has invested in a well-engineered facility it’s set a trajectory. Unless it can reclaim at least some of its investment, and unless it has a use for all that freed-up space once it gets out of the data-center business, the business case often falls apart even for a business that would outsource its data center if it was starting out fresh.

As for modernizing IT’s people, processes, and technology, I’d think the first of the three would give the head of HR a heart attack. Even though it actually means investing in education (I hope!) it sure sounds like a suggestion to fire your codgers and hire young whippersnappers willing to work for a lot less.

Lots of companies do this, of course. But relatively few are stupid enough to make a neon sign out of it.

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|In: Cloud|Last Updated:

My friend Adam Hartung, author of Forbes‘ “Phoenix Principle” blog, is convinced we’re in the throes of a megatrend away from owning stuff. He’s further convinced this trend spells the end of corporate IT.

As covered in last week’s missive, this trend toward rentership is nowhere near an open-and-shut case. As correspondent Tim Harris points out, it’s a simple algorithm: If the costs of ownership (including intangibles), divided by total usage exceeds the cost of renting, rent. Otherwise don’t.

As for the death of IT:

According to The Phoenix Principle, the reason we wanted PCs in the first place was because of all the data we wanted to put on them. That data will now be in the cloud, so we don’t need PCs anymore.

This is bad history. I was there. We wanted PCs because of the programs we could run on them. That’s why we want smartphones too.

Yes, mobile devices can do some of what PCs can do. But does anyone seriously think you can replace a customer service rep’s PC and voice terminal with a smartphone?

The Phoenix Principle’s clincher: “What will a company need an IT department to do if employees use their own mobile devices, across common networks, using apps that cost a few bucks and store files on secure clouds?”

Answer: If?

We’ve seen this movie before. In the PC’s early days there were those who figured business users would soon be able to do on their PCs everything IT did on the mainframe, using cheap, simple programs without any need for IT involvement.

Another Phoenix Principle point: “If corporate technology is reduced to just operating some “core” large functions like accounting, how big — or strategic — is IT? The “T” (technology) becomes irrelevant as people focus on gathering and analyzing information. But that’s not been the historical training for IT employees.”

I agree. This entirely imaginary IT that never, for example, existed, will go away.

Unlike real IT, which runs, not “just” some “core” large functions like accounting. It runs systems that support every function in the enterprise, from supply chain to manufacturing to sales to finance and accounting to human resources to marketing. Oh, and information technology is required for every change business executives can envision, too.

It’s as strategic as things get.

So best of luck running an enterprise on apps that cost a few bucks with files stored on secure clouds. I can see JPMorgan Chase’s CFO right now, closing the year-end books with his Android edition of Quicken.

Or, for that matter, the CMO calculating some complex analytics on a petabyte Hadoop data set stored in the cloud with her ten-buck iPhone app. “Siri, which customer demographic and psychographic segments are most likely to want our new line of fashions? Rank them in order of size and willingness to buy, correlated with color and fabric preferences.”

This latest forecast of IT going away because it’s now all so easy completely misses everything IT has actually been doing all these years:

  • IT has never insisted on owning anything. IT always performs a lease/purchase analysis for hardware. As for software, IT licenses it, except when it “rents” it via a subscription. To my direct knowledge, these practices all date to the 1970s.
  • The historical training for IT employees hasn’t included information? News to me. Designing efficient data structures is at the heart of the discipline.
  • IT isn’t, at its core, about the technology. Or about information either. The heart of IT’s job is to configure and integrate … especially integrate … the multitude of applications a large enterprise needs to operate effectively. Owning vs leasing vs renting is a blip.
  • In ownership lies risk avoidance. As someone once said, those who ignore the lessons of history are doomed to repeat the seventh grade. This lesson goes back to 2000 when Pandesic, a cloud-based joint venture (back then it was called an ASP) between Intel and SAP didn’t pan out. The result: Intel and SAP shuttered it, giving its customers three whole months to make other arrangements.

IT isn’t going away any time soon. One wonders why, for so many years, so many management pundits have engaged in so much wishful thinking on the subject.

My guess: IT is expensive and hard to understand. Shipping it all offshore, into the cloud, or both means not having to worry about it anymore. Sure it does.

And if the logic required to accept this proposition is shaky, that’s okay, because the rules of confirmation bias are clear:

We only scrutinize evidence and logic that disagrees with what we want to be true.

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