Adrian Hollister, Digital Transformation, August 2015
By now it should be clear that buying IT the old way has long gone:
tin + software + installation + maintenance + staff + training + management + support tools = expensive + slow + poor value
Cloud has been coming for some time, but it’s the everything as-a-service (XaaS) element of Cloud computing that is so compelling. Removing the need for expensive and all consuming IT departments, thinning them down to an intelligent customer layer.
So what does that mean in practice?
Part 4 – Being an intelligent customer
It’s a long time since IT underwent any real structural change. Like many other administrative parts of the business, they are formed into a self contained unit based on one of a number of very similar organisational building blocks. It’s like looking through a book of 1980’s housing plans – all very similar, all designed without the context of whats around them and all without concern for a sustainable future.
These copybook IT structures work for the old powerhouses of IT demand but are distant from the dreams of dynamic and flexible digital businesses.
Poor quality, low value
The jokes about poor quality, low value, cheap IT provided by in-house teams are a result of a culture of pushing down price at the expense of quality and value; and the business often reduces budgets in line with their perception of the service. It is a self fulfilling prophecy that IT seems to be determined to perpetuate.
Moving the culture
The difficulty now is that people spend more of their lives in the digital world. They know how to use the digital world, they know how it works for them and they know what would help them. Long gone are the days where IT knows best.
Imagine just the simple things – you want to get hold of someone. Depending on how close you fit into the ‘digital native’ stereotype, the chances are you would send a message – text, Facebook, Skype, iMessage. Your conversation would be disconnected and you would pop-in and out of interacting with it.
In business through we still seem to assume that the telephone, face to face meetings and email is the only answer. We do this partly because we like to divide work and personal life and clear separation helps, but also because there is a control culture coming from IT inspired by the cost/value/quality argument and the need for a quantitive evidential trail.
The legend goes that to control cost you must actively manage the value and quality; and if you own all the knowledge no one can question you through fear of being shot down by an evidential trail of ‘I told you so’.
This culture of fear, accountability and control appear in the digital world, but they are self and peer managed. Knowledge loosing it’s power. Freedom of expression, innovation and sharing become the seat of power. Look at the power of WikiLeaks: highly valuable and classified information became worthless overnight.
The requirement to share as part of the digital business world is a great threat to the old power bases within IT (and other parts of the organisation). Traditionally these power bases have relied upon their knowledge being locked away into a ‘dark art’.
However, there is no place for this in digital business. Everything-As-A-Service is the enabler to change the culture of old traditional locked-in IT. Those services with dark art documentation (or lack of) and even more dark art maintenance (with overtime) are moved into the cloud. Provided by professionals, documented by professionals, managed by professionals.
The opportunity of change
Changing the profile of the in-house team is also an opportunity to reinforce this cultural change. A move is required from hands-on to a shared knowledge model. The move is often called the ‘intelligent customer’.
Despite moving into a world that embraces revolutionary change, everything-as-a-service also requires a level of interpretation. Not only to allow the business to choose wisely, but also to manage the supplier base and support business change. The focus shifts to the relationships, to better understanding the business and to ensuring that sustainable business can be created in the digital world.
The example organisation chart for everything-as-a-service appears to remove ops, help desk and many of the traditional part of IT; but they do still exist. They are provided by 3rd parties under the guidance and support of the in house team.
The in-house team guides and steers the direction of the suppliers to best meet the needs of the business. They introduce targets for suppliers that are mutually beneficial, achievable and allow the business to flex and change. They create an atmosphere of IT being guided by the business and not the technology.
This is stepping back from the coal face and focusing on what actually matters: making business work in the digital world.
Know what to keep and what to move
Be caution though, poor quality managers often move the difficult things to 3rd parties. They do this because it’s easier than attempting to solve the problem themselves (often the motivation behind outsourcing).
The foundation of everything-as-a-service is based on moving out the commodity IT elements but keeping the highest institutional value items. This is where IT add their real value to the business.
By moving the commodity elements of the IT service to 3rd parties, the shackles of old IT are gone and IT is released to work with the business for the business.
Simple rule of thumb: if it’s a commodity IT element, then get a 3rd party to do it; if it is requires high levels of organisational or customer knowledge then it’s going to be better done with in-house teams.
Key targets when moving to create an intelligent customer function:
* Move from fear, blame and power led cultures
* Knowledge is something to be shared not hidden
* The business knows how to do business, so let IT facilitate business needs
* No fear of failure, innovation or sharing
* Customer first
* Taking ownership, listening and spending time understanding
* Embrace change and innovation
Cost vs Value
* Understand the impact of low cost on quality and value
* Let the business choose and let them be honestly informed
* Create a clear and open cost model with no hidden costs and no fake savings