Standing at the Crossroads

But we are only on the cusp of this transformation. Even though automated management solutions seem to abound, many organizations today don’t even know how many applications they have running, let alone who is using them and for what purpose. As new IT management and simplification technologies like virtualization, auto discovery tools for asset management, auto provisioning, etc. have come online, IT has finally been able to begin focusing on reining in the hardware side of things.

Application rationalization efforts are also under way, but the technology to distribute, say, one hosted instance that replaces 10 or 100 instances of SAP to the entire organization via SaaS has only recently become feasible. Also, like the chicken and the egg, it’s hard to know which to do first—hardware or software consolidation—so it seems many organizations are trying to do both at the same time. This is fine, but it takes more time and you have to avoid the deadly peril of unintended consequences—a bad day for IT is no longer an inconvenience. It can cost millions in lost revenue. High stakes, indeed.

New Roles, New Responsibilities

By all accounts, IT today is being asked to assist with roles once the solitary domain of say Marketing, Sales, Operations, or Finance. Because so much of today’s world depends on IT to function, everyone thinks IT has all the answers. It’s just not the case. To date, for the most part, IT has only provided the solutions the business has asked for. Little in the way of impact or RIO or TCO or benchmarking studies has ever entered into their calculations of what the business wants. Hence, IT’s enduring reputation as a cost center.

And it is a cost center. No doubt about it. IT is expensive. On average, two percent to four percent of a company’s gross earnings. But, without IT, there are no gross earnings, so the business pays. What’s changed is now the business wants more bang for its buck. Had Y2K not passed almost unnoticed after all the Chicken Little talk of the late ‘90’s and had the dot-com bubble not imploded, IT may still be doing things just for the sake of doing them. But these events did happen and IT now finds itself having to justify—at least to the CFO—why things cost what they do and why IT needs the budgets it needs. Of course, all business units have to do this. The point is, until recently, IT has never really had to—at least not in business terms.

The very people who run and staff it are also being asked to change. Traditionally, IT has been the home of computer science grads and other, like-minded “techies” or “geeks”—heads-down people very good at technology but with very little interest in or understanding of the business they were supporting. And that was fine for a long time. Today, however, IT folks are being asked to think like business people. But, it’s still the same people in most IT departments. Most CIOs today come from IT, not the business. This means they still lack a deep understanding of how business, any business, works. And this means that asking them to become Marketing folks or Compliance officers or, indeed the leaders their C-title implies, is a tall order.