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|In: Cloud|Last Updated:

“I have two questions for you,” a client told me, shortly after I launched IT Catalysts: “The first is, how can I instill a better customer-service attitude among the IT staff? The second is, how can we stop all of the shadow IT [he called it ‘rogue IT’] that’s going on in the company?”

My answer was, and continues to be, pick one. If they’re really your customers you have no business telling them they can’t do what they want to do. It’s the difference between being a restaurateur and a dietician.

And even that answer is less than the best, because neither one is a particularly good idea. So pick neither.

There are no internal customers, as regular KJR readers are tired of reading by now, and anyway, the word “customer” is superfluous. Instill a service attitude and have done with it. “We’re here to help everyone else take care of the people who pay the bills … the company’s customers,” does the job just fine.

Meanwhile, IT’s attempts to stop shadow IT are like squeezing a closed tube of toothpaste. The toothpaste just moves around inside the tube, just as shadow IT is moving from the PCs hard drive to the cloud.

We used to be able to pretend. We’d lock down the desktops, hoist up the landlubbers, and congratulate each other over having followed security best practices.

We can’t pretend anymore, though. Back when, we were able to prevent the sales force from installing Act! on their laptops, thereby reducing an already-minor security risk while helping make sure the company’s revenues were smaller than they could be.

That was then. This is now. We can still lock down their laptops, but we can’t lock down the cloud, which means that while we can stop the sales force from buying Act! licenses ($550 each one-time), the only way to stop them from “installing” Salesforce.com licenses ($780/year ongoing) is to use a website blocker, which means the cost of blocking Salesforce.com (blockers aren’t free, and someone needs to administer them too) probably exceeds the cost of buying Act! licenses.

Here’s what kills me: Salesforce.com has to have the most amazing PR machine in history, because the usual cant about Software as a Service is how much more economical it is than the usual IT-installed solutions.

And lots of CFOs believe it!

There are, at a rough level of analysis, two types of CFO. One understands only costs, and sees IT as the company spendthrift, always trying to increase them; the other understands both the concept of investment and the value of better tools.

The CFOs who believe the “the cloud saves money” stuff are mostly cost-CFOs, I think, probably because:

  • It fits the IT-as-spendthrift narrative they’ve already bought into. Few people scrutinize statements they agree with.
  • As Salesforce.com charges are paid monthly, and out of the Sales Department’s budget besides, they’re pretty much invisible, even though they’re a helluva lot higher.
  • IT has locked down the desktops to stop shadow IT, which means IT has to buy the Act! licenses (there’s that spendthrift thing again), handle the installations, and support the users (we’ll have to hire more staff).
  • Because we’re IT and think this way, we’ll first do a bunch of business analysis to determine whether Act! or an enterprise CRM suite would be a better choice.
  • Also because we’re IT and we think this way, we’ll do more business analysis to determine how to configure the solution we decide on to fit the company’s sales process, and to integrate it into whatever other systems it has to integrate into.

By the time we’re done, Salesforce.com costs a lot less … not because it has to, but because we’re so determined to stamp out shadow IT and do things “right.”

Imagine that instead of trying to stamp out shadow IT, we embraced it. The sales director would have told us that many of the sales reps wanted to install Act! Is there any problem with this?

No. No problemo, so long as they’re willing to be self-supporting (just as they are with Salesforce.com) and aren’t looking to integrate Act! into any of the company’s other systems.

And if Sales wants IT to provide integration and support? That also isn’t a problem, and costs the same whether IT is integrating and supporting Act! or Salesforce.com.

There are three bottom-line “goods” in any business: Revenue, cost, and risk. Stamp out shadow IT and you’ll reduce risk a bit. Embrace it and you help improve revenue and cost.

Tough choice.

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|In: Career Management|Last Updated:

A popular outsourcing rationalization has it that companies should “keep the core and outsource the rest.”

I call it rationalization rather than rationale because:

  • It solves nothing: Outsource something you don’t know how to manage and you still don’t know how to manage it, only now, you’re badly managing a company that wants as much of your money as it can get.
  • It suffers from recursion failure.

KJR has already covered the first two points—click on the links or buy yourself a copy of Outsourcing Debunked (Bob Lewis, 2011). But what’s recursion failure? Glad you asked.

Outsourcing is like anything else in business—to succeed, you have to be good at it.

But as anything that isn’t core must be outsourced, and as the notion that managing outsourcers might be a core competency is absurd, the only logical conclusion is that companies that outsource must outsource outsourcing management to an outsourcing management outsourcer.

To succeed at that, the company must be good at outsourcing outsourcing management. And so on, ad infinitum—recursion at its finest.

Okay, I wouldn’t want to try that logic on a business executive weighing the pros and cons of outsourcing, but it was fun, wasn’t it?

What isn’t fun: Why an increasing number of American business managers are receptive to the even-more absurd arguments in favor of IT outsourcing, both the traditional kind and its current commodity end-point, cloud computing.

Look, even those unenlightened IT shops that thought they had internal customers usually involved themselves in the business processes and practices they were helping improve through automation to some extent. Few business analysts strictly limited their conversations to “what do you want the software to do?”

IT outsourcers, in contrast, deliver software that fulfills requirements and meets specifications. If they do that, all is good with the world, whether or not the software does anything useful.

Deep down inside, every business executive who ever endorsed an IT outsource understood this difference, and yet it didn’t matter. They considered overseeing IT to be an aggravation, and so they willingly “kept the core and outsourced the rest.”

Now we have the cloud, and software as a service (SaaS). The “new” question is, “Why should we spend lots of time with IT on a CRM implementation when we can call Salesforce and be up and running the next day?”

What’s sad is that they know the answer to this seemingly rhetorical question: If they do this they’ll be up and running with what we used to call, in more enlightened times, an island of automation.

Multiple islands, really — as many as they have sales representatives configuring Salesforce as they prefer. Add to that a database that’s completely unusable for reporting and analytics, as each sales rep stashes the data they want in whatever data fields appear convenient for that purpose.

Heck, IT could do that in a day, too, if it was amateurish enough to be satisfied with an implementation that banal. It could buy Act! licenses for a fraction of what SalesForce would cost, too, installing the software on individual sales rep laptops with no attempt to integrate them.

Nothing to it.

We in IT have failed in at least three respects, and we’d better fix all three soon, or we won’t be around to say “I told you so.”

The first is that we thought business executives long-ago absorbed the islands-of-automation argument, so we stopped making it. They had absorbed it, but ideas have a half-life, and because we stopped repeating it, this idea long ago lost its potency.

The second is that we argue rather than discuss. Faced with a sales executive who is thinking about Salesforce, too many CIOs say, “You can’t do that. Here’s why …” instead of, “We can do that … in at least three different ways, depending on what you want to accomplish and how much you’re willing to invest to get it.”

Then there’s the third — failing to focus everyone in IT, from the CIO on down to every help desk analyst—on the importance of managing relationships throughout the company. Without this, nobody will give the CIO or anyone else the time to have these discussions, or the patience to listen to the to-them complex engineering issues we need them to engage in.

So of course they outsource, and go to the cloud without involving us.

We’ve given them no reason not to.

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