Eat or be Eaten - IT Transformation Underway

Let’s end the week with a little tongue in cheek humor. I started the week on a conference call on Monday and as I was looking out the window, a large bird came swooping past my window to land in a tree overlooking my patio.Curiosity of a Scorpion was getting the best of me to figure out what kind of big bird just landed so close. With a handy pair of binoculars I see it is a fairly large owl, that’s kinda cool, but what is it doing. It took a minute or two to discern what exactly it was doing, oh no it’s eating a mouse or rat. This provided my quote of the week, “Eat or be Eaten”.

I posted twice this week, IT and the CIO Fast Forward 5 Years - How Will You Get There? and IT Departments Need to Run Like IT Vendors and it seemed I couldn’t stop finding articles regarding the IT transformation:

• CIO Magazine – Top CIOs Predict the Five Year Future of the CIO
• CIO Magazine – The IT Paradox:  A Diminished Role in Technology, but Greater Clout in Business
• Forrester Blogs – The Empowered BT Era Will Force (Yes, Force) A New Role For CIOs - And Drag IT Out Of The Backrooms
• Forrester Blogs – IT Is Industrializing – What Does That Mean To Me?

On Tuesday the email I had been waiting for finally arrived, Fortune 500 2012 List. Yes, I’m a business geek. This is the same geek transition my IT technologists need to make as well, as I started out as an application developer. The first thing to notice in the list is Exxon is on top and Wal-Mart is #2 this year. I’m still pouring through the magazine, list and researching the companies comparing them to last year’s list, stay tuned for a future post on who the early innovators are for 2012.

Now my slightly morbid start of the week and title for the blog was becoming clearer. It’s not BYOD – Bring Your Own Device, it is Brought Your Own Device – they are already in the enterprise. Business owns more of the IT budget buying decisions; reactionary IT is being cut back, while new IT grows in the business; cloud providers are growing and taking advantage of that increased buying power in the business and selling to the business; it’s not that IT needs to start transforming, the transformation is in full force already – just without IT in many cases.

My good friend Glenn O’Donnell discusses the industrialization of IT and using it to power the business, while John Brand pushes the envelope into innovation. As this week comes to a close and the researcher in me ponders all of this new information and excitement for change in the coming year, I’ve come to these conclusions:

• IT as we know it transitions into a smaller organization more aptly labeled Operations running to drive cost out of running technology.
• CIO becomes a Chief Innovation Officer in the newly centralized office for innovation after a period of de-centralization driven by business buying technology and services. It’s not about supplying information any longer, it’s about driving innovation with technology.

We have been through these ebbs and flows of centralization and de-centralization in the past. What is different this time is the power of competition for IT spend and buying controlled by the business. No one outsources to save money, they may say that’s why they are doing it, but they are outsourcing to create change in the environment where they cannot change from within on their own. This is what is underway with regards to the great IT transformation today within the business.

Business will continue securing new services on their own forcing IT to shrink and de-centralizing the services. It will later be discovered that many business units are securing similar services and economies of scale with contracting are not being observed with regards to pricing and as a business entity they have difficulty rolling up information regarding the business as a whole. It will also be discovered that management of the vendor and the service has been overlooked and hence the hidden costs of outsourcing. Many of these service providers are one outage away from being out of business as they make risky operational investments or rather lack of investments and are operationally immature to manage the customers and services. There will be a shrinking number of service providers just as businesses realize they need to consolidate their technology acquisitions across the business for optimal spend and thus the revival of a new IT based in the business and focused on product and service innovation driving the business.

Business will also discover they are securing services that are commodity and the same from one organization to the next. While this is providing a lower cost for commodity services, they are lacking the thought leadership an IP to drive innovative products and services that will make them competitive and far superior in the market. They will also discover now that they have a highly de-centralized organization with many services with many providers that they will require a mechanism to federate the data from these various service providers in order to have a real pulse on how they are performing in the market and what their costs and revenue are in comparison to their competition.

A customer of mine who happens to be a very large service provider once told me “it is very hard to change behavior, but I can teach anyone a technical skill”. This has always stuck with me. Reactionary IT will disappear, the question is: “Will the new office of innovation be built with business employees and new hires or will existing IT make the transformation from geek to business?”

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