Running IT as a Business: an alternative viewpoint

I’m an employee in the government’s I&IT organization. But I generally view myself as really only halfway there. For Ontario.ca, I’m the business owner, not the technology provider. And a lot of my work involves providing business advice and solving business problems, rather than technical ones.

I’ve never felt myself straddling the two worlds more than I do with a project I’m leading now. On the one hand, we’re updating some key technology platforms (the Enterprise Content Management Service and the Portal Software Service). The project teams includes cluster and intrastructure technology people and I’m reporting up to the cluster CIO as the executive sponsor. A real “IT project”. However, one element of the project involves consolidating government websites. That’s really a business activity and involves a lot of work with comm branches and program areas.

One way that we are connecting the two is using the consolidation work, and the connections we are making with all of the website owners (and their cluster support teams) to gather requirements for the updated technology platforms. What are they really looking for in the technology service that will be supporting their websites. The theory is that if we understand that well enough, we can build it and we’ll be in a better position to expect that “when we build it, they will come”. Because we need them to come for it to be a sustainable service.

After all, we’re running IT as a business. These will be cost recovery services and we’ll have to run them on the revenues from business customers. If we want to keep prices as low as possible, we have to get as many customers as possible to share the costs. It wouldn’t make sense to spend all of this money upgrading a service only to have it shut down shortly afterwards due to lack of customers.

Running IT as a service, cost recovery-based, meeting the identified and specified requirements of our business customers is built into the fabric of how we run our I&IT organization. And it’s not just us, it’s the dominant model out there “endorsed by our holy trinity, too: analyst firms, most consultancies, and ITIL”. It’s a model that Bob Lewis challenges in his InfoWorld article “Run IT as a business — why that’s a train wreck waiting to happen“. There’s a lot of food for thought in that article. Here are some points that resonated with me (quotes from the article):

• Huggett explains what happens when the conversation is about the software: “We have always been good at delivering a quality application. It functions exactly as designed. Unfortunately, that doesn’t always line up with what the ‘customer’ wanted or expected.”
• When IT is a business, selling to its internal customers, its principal product is software that “meets requirements.” This all but ensures a less-than-optimal solution, lack of business ownership, and poor acceptance of the results.
• the client’s information architecture was in shambles because IT’s internal customers weren’t willing to invest in sustainable engineering. Why would they? To achieve a quality architecture, the internal customer of one project pays more so that a different internal customer, some time in the future, receives the benefit.
• When IT acts as a separate, stand-alone business, the rest of the enterprise will treat it as a vendor. Other than in dysfunctional, highly political environments, business executives don’t trust vendors to the extent they trust each other.
• Chargebacks are an attempt to use market forces to regulate the supply and demand for IT services. If that’s the best a business can do, it means the business has no strategy, no plans, and no intentional way to turn ideas into action.
• When IT is integrated into the heart of the enterprise, its priorities aren’t defined by who has the budget to spend (by chargebacks). Rather, they’re defined by a company leadership team whose members have a shared purpose, who understand what the company must do to achieve that purpose, and who understand the role new technology will play.
• Nobody in IT should ever say, “You’re my customer and my job is to make sure you’re satisfied,” or ask, “What do you want me to do?”

  Instead, they should say, “My job is to help you and the company succeed,” followed by “Show me how you do things now,” and “Let’s figure out a better way of getting this done.”

• These enlightened companies don’t have IT projects — they have business change projects that aren’t done until the planned business change has been accomplished, and users are trained, not in how to operate software, but in how to do their redesigned jobs using the new software.
• Where did the standard model [IT as a business] come from in the first place? The answer is both ironic and deeply suspicious: It came from the IT outsourcing industry, which has a vested interest in encouraging internal IT to eliminate everything that makes it more attractive than outside service providers.

Food for thought.