IT Service Provider of Choice – NOT

In a few weeks I have the privilege to do a joint webcast with Bill Keyworth, founding editor of BSMReview.com and former Gartner analyst, where we will discuss the recent findings from the 2011 BSMReveiw Survey - but, more on that another time. I find it interesting that the reality of Nicholas Carr’s prediction in his Harvard Business Review article “IT Doesn’t Matter”, is beginning to materialize just as predicted with the advent of the cloud and the litany of service providers. Buying decisions are moving to the business and business expects transparency of service to answer 3 simple questions:

• Are we open for business?
• Are we performing well – customer experience?
• Current risk of outage?

Slide 14 of the Survey findings outline that IT is not strategically aligned with its business objectives. IT merely operates, or simply put, “keeps the lights on” without much regard to business value, driving revenue and/or competitiveness in the market with technology. Where as on slide 21, the business views technology as its competitive advantage and revenue driver as exemplified by quotes on the following slide from those that took the survey. Time to wake up and smell the coffee IT! You provide a valued service, but are not measuring and communicating as such.

A few slides further into the deck  it appears that ~65% of the investment decisions are joint and only 13% are trusted to the CIO.  A little further on (slide 29) the basis of buying decisions are identified as these 3 key drivers:

• Cost reduction / containment
• Revenue driving
• Keeping customers – Quality of Service

In the original article by Nicholas Carr and many analyst findings that followed, the role of IT was expected to change from hands on technology provider to a service delivery manager with the commodity monitoring outsourced. Fast forward 9 years and the advent of the cloud; IT is mattering less and those that don’t seek to evolve are replaced. Business units are owning the buying decisions and are in essence creating the “New IT” within the business unit - service delivery managers managing service providers of choice outside the organization.

One could debate how economically beneficial this transition will be, but it acts as the catalyst for change. As a former analyst in this space, I often advised clients, “you don’t outsource for cost, you outsource for change that is not possible or too difficult within your organization”. Now that brings us to the service providers. Those that see this frustration and see the catalyst to their new found business are embracing the challenge to deliver service performance transparency to their new found customers. It illustrates two things: Operational maturity and a Competitive advantage.

IT is now a utility within a business to just operate and provide a good customer experience and it is viewed as the ability to drive new revenue and competitive advantage in the market with new services. This requires IT to monitor, manage, measure and communicate in terms of business performance and change in both the roles and tools leveraged to make this linkage. IT projects are viewed as no value add. So it isn’t about selling the business on cloud technology or ITIL processes for the sake of technology and process, but rather right cost options for service delivery and operational efficiency. Business is investing in the ability to communicate and deliver higher degrees of business / service performance for quality of customer service and competitive advantage over pure cost cutting within IT.

In most cases, IT spends 1-2% annually just maintaining and reacting (85% of their time) and very little time focusing on innovating. 1-2% of revenue is impacted by service impacting IT events, so why isn’t it a no brainer to make the marginal investment to make the shift to service delivery manager? Change is hard and we are spending our time maintaining and reacting and thus business is seeking new avenues as the service provider of choice within their business units – short cuts. The service providers are answering the call of business units and baking in the visibility of service performance as their value add, differentiator. Now I would say buyer beware or better put by my father, “a short cut never got anyone anywhere faster”.

It is no longer IT and business, it is the business and all forces driving revenue and competitive advantage. The sooner IT organizations realize this and put the measures in place to communicate in terms of business performance, the sooner we will see the shift in buying decisions as it relates to technology again. Businesses that are driven by technology versus just operated by technology will lead their industries.

I'll end this with a quote from a long time customer who has leveraged the Operations Center solution for many years now. Their implementation, while it started technically as a single-pane-of-glass, has evolved into the trusted Business Service view and situational awareness of the environment running the business. Because this customer made the transition to trusted adviser and communicator as to the health of the business, he is trusted with purchasing decisions because as he states, "I provide value". This is the secret sauce - providing business value and relevance for IT.

| Follow us on Twitter | Follow us on Facebook