Tuesday, March 17, 2009

How IT departments plan to make themselves irrelevant in the down turn

Since the beginning of the year its been rather clear that the business imperative is cost cutting. From renegotiating licenses, looking at Open Source to looking at using Cloud and SaaS to provide a more "scale down" model for IT (we've always been good at scale up - pay more, use more). Now what I've observed is two very clear approaches from IT

Firstly there is the business centric view which says "oh crap, lets start looking at where we can rationalise" and pushing pieces like cloud, server rationalisation, apps rationalisation and the like as a way to drive cost out of the business. These folks also tend to look at the business model they are supporting to understand where the costs are most out of kilter. The mentality here is basically the same as the business and its about changing the imperative to face the current climate.

A big part of this mindset is also the drive to use new technologies that support the business model better, especially that "scale down" problem that most traditional approaches have. The business IT view is that cloud and SaaS represent a good solution you just need to be clear where they work and then overcome the hurdles.

The other mindset however is the technology centric one and the mindset that basically says "fine the way it is, don't want technology that is outside of my control". I've described Terry Pratchett architects before and I'm hearing lots from the later camp at the moment. It almost sounds like the old phrase about the business
I don't understand the hardware, I don't understand the software, but I can see the flashing lights
The problem is that with cloud and SaaS they don't get to see the flashing lights and they don't get to even design what the hardware will be.

This will be the biggest impact out of the year around IT, business focused IT folks who understand the model and can actively suggest new approaches to rationalise cost will do well. Those that put barriers in the way will do very badly, especially if those barriers are placed their to maintain a comfortable status quo.

The key for IT is to understand the business model, understand the business services and then understand where IT adds real value and where it should simply be a utility, then plan against that utility. That means cloud and SaaS will figure largely in how you build, deploy and manage those business services because differentiation is not important.

The final point is that when an IT person comes up with barriers around security or compliance then you have to be rock solid, 95% of the time someone has tried that in the areas I've dealt with it has turned out they were wrong. Being cautious is one thing, but in this market the erring on the side of caution is also a business issue, not just a technology one.

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Noons said...

Differentiation is the key aspect of deriving value from IT use.

The approach that it can all be reduced to a common set for all businesses is akin to asking every business to act the same way.

In other words: a perfectly demented approach, in line with utter nonsense of SOA and cloud.

Steve Jones said...

Not sure on your point here if you are agreeing or disagreeing.

But differentiation is certainly not the only way to get value out of IT. IT can be used to reduce business cost and standardise the way of working, this reduces costs but certainly will not differentiate.

Clearly this is different for different businesses, although certain things tend to apply (e.g. the backoffice should be standardised) and my point is that it is the focus on your business that matters.

If you are proposing that a business centric way is wrong then good luck with that. SOA and cloud are nonsense.... Ummm are you part of the problem?

Noons said...

The "problem" only exists in your mind...

Steve Jones said...

Cheers for answering my question, clearly you are exactly in the later "its all fine, lets carry on with our old databases and systems, no need to rationalise and no need to change the way we work" category.

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