By Bill Keyworth and Annie Shum
A fantastic BSM article appeared last week (1/18) in InfoWorld entitled "Run IT As a Business - Why That's a Train Wreck Waiting to Happen." The author, Bob Lewis, identified the futility of IT organizations continuing down the same broken path that is not connecting IT with their business counterparts ...yet he sees too few IT executives who are willing to initiate the necessary BSM changes. One of Bob's central messages to IT is that "no one inside your company is your customer." Fairly basic principle ...but highly compelling to initiate change in the way IT performs their labors.
Bob provides some outstanding examples of IT executives that struggle with providing the "same old ...same old" IT services to business people who can't see the benefit of paying what they perceive as premium prices for products and services that they see advertised elsewhere for a fraction of the cost; or who fixate on short term deliverables that are "good enough" but don't address the company's strategic business opportunity for the longer term; or who won't document requirements in a way that ensures IT can deliver on expectations. In these cases, IT consistently finds itself in a defeatist catch-up mode.
The article provides some common-sense advocacy that running "IT as a business" ensures that IT doesn't satisfy corporate business needs. It's an interesting twist to the dichotomy of how BSM is perceived by IT versus how BSM should be positioned and executed by IT. Bob concludes with a vision on what an IT organization actually does and looks like when it is integral to the business community, and not an add-on cost center that depletes profits. Again... great BSM article!
Bill, I have to disagree. IT IS a business, those using your service ARE your customers!I think the referenced article misunderstands what it means to 'run IT as a business.'
The author imagines a model of 'IT operating as a business' that is lacking in any understanding of real business operations. The article describes a process that assumes an IT business expects the customer to make all the decisions about product development, services definition, technology used, etc. No successful business manager would abdicate their responsibility in such a manner. None expects a customer to provide them a road-map of how to use technology to solve problems, or control how a service is designed to meet the customer needs. That said, the recommendations for what IT should do mirror exactly what a well-run business does.
Yes, there are naive IT executives and operations managers operating in a passive manner, waiting for business partners to search them out. I ran into them a decade ago when JP Morgenthal, Simon Forge and I wrote a book about that very problem.
The burst financial bubble, recession and market pressures of outsourcing - meant that now, all but the most oblivious IT staff understand their jobs depend upon their success in communicating to their 'customers' the benefits that IT provides. Any idea that you could financially justify technology investment or acquisition for the sake of technology alone, was an idea that died in the 90's, along with some very large companies that never caught on to that fact.
While many business executives and managers are PC-literate and cognizant of technology, very few have the ability or interest to become fully steeped in the benefits of what technology can do for them. It's the responsibility of IT, just as it is for any business, to make the case why they exist and the benefits they bring to the organization. IT does, indeed, have to reach out and demonstrate its value. The case study section of this website provides multiple examples of how this is happening with IT departments in government, manufacturing, banking, etc.
Operating IT as a business means understanding your customer and working to make them successful. It doesn't mean turning over management, research and operational responsibility to the customer. It means assuring you get the maximum results from the available resources. It means assuring your customer knows the cost as well as the benefits of the services provided. It assures IT provides what will help your customer succeed in their business role.
IT is the expert in what the technology can do. IT has to understand,explain and demonstrate their ability to solve the problems of their customers.
Running IT as a business is the ONLY way to go.
Rich, thanks for the feedback …and especially the pushback. We might be in the same place on this and we might not …but let me put my positive reaction to Lewis’s comments in perspective. For me, BSM is a higher level “business” discussion that simply managing my IT environment. Notice the word “level” in that last sentence ...as it relates to maturity level of an organization striving to become more BSM enabled. We’ll be publishing a BSM maturity model next week in BSMreview that would make my end of this discussion easier, but let’s not wait for that documentation.
Bob was indeed pushing back on the more primitive IT shops that are in a reactive mode …just doing what they’re told and operating in an ad-hoc fashion. Such organizations (…as you point out) need to run IT as a business in order to reach the next level of maturity which I call predictive and where the business objective is a stable and reliable operating environment …one in which there are no IT surprises to the business community. Yes, the “customer” at this predictive level is the business entities.
However, BSM should be a discussion that moves the IT organization to a higher level of business maturity (…not a higher level of IT efficiency.) We don’t want IT shops to be damned (stopped) in their BSM momentum. In order to achieve a higher level of a proactivity (…where business value is delivered to the enterprise by IT …not just IT cost efficiency or IT governance ) or a higher level of alignment (…where competitive differentiation is delivered to the market by IT) … then the IT organization must move beyond treating the business entities as their customer and become focused on the customer of their business entities. I read that as the proposed value proposition of Bob Lewis in his InfoWorld article …and wholeheartedly support that advancement to a higher level of BSM maturity. We might be saying the same thing …and then we might not. My 2 cents.