I have previously introduced “non traditional IT” notions such as ”Time to Market”, “Cloudsource”, ”Make or Buy”, “Cost and Demand drivers”, “An IT Business Model and Value Proposition” and ”An IT service Strategy”.
Within this context I believe that a new notion and function will have to be instored, the IT department as effective broker of services (cost effective and that meet demand drivers). Where most IT department perform well, some decisions are still based on “gut feeling” or external pressure from executive management influenced by vendors / management consultants “as a strategy of survival” rather than on fact based logics.
“Time to Market” – The notion of time to market is critical within the context of a business. The delayed launch of a product might erase up to 70% of potential earning (the rest is gummed by the cost of the resources absorbed to solve the problems that delayed the launch). “Time to market” can be applied to the context of the IT department 1) in the frame of how well do we set up a new service (bundle of application with a coherent architecture) 2) How well do we support the business to launch a new service / execute the business strategy supported with IT (when needed).
“To Cloudsource” – Cloudcomputing is the result of 2 trends. 1) The survival of salesforce.com (that is to outsource data in an application that we have decided not to buy / run on an internal server) 2) the decision of amazon, google and other cloud (external storage space) providers to leverage their capability to buy and run server parks more effectively then an IT department would / could (external cloud). A decision to run applications on a server outside the firewall can be motivated by cost or demand (time to market) where an architecture and applications are set up to rapidly respond to the needs of the business. The “service bundle” can then either be brought inside the firewall and run on an internal cloud or continue to run on the cloud provider’s server (outside the fire wall). Social media and cloudsourcing. Social media applications can either be run as in example 1) by an external provider to whom you outsource the data (Facebook* would be one example) or as in example 2) where an application / a bundle of applications that respond to the needs of the business “for example to interact with our customers” would run on an external or internal cloud. To cloudsource, Bottom line: 1. The new concept of delivering IT services to support business agility, 2. Alternative solution to acquire to support business agility compare with the IT department (internal). These 2 are the driver of the business/mission, however, the complexities and the maturity of the the application to support business mission critical is not ready. I think the ROI is still questionable of the cloud supporting complex business solution.
“Make or buy” – To outsource / cloudsource (external cloud) is a traditional “make or buy decisions”, that is “do we perform this well internally at benchmarked cost or do we outsource for success”. One of the critical decisions in apple’s current success was to outsource a manufacturing that was defunct (cost / quality) and did not meet the expectations of the final customers. But to outsource / cloudsource effectively as well as to validate the successful set up of a shared service centre, we need to understand the cost of the service delivered before and after the set up function (the cost to change provider should be taken in to account in the business case).
“Cost and Demand drivers” – With “to keep the lights on”, to optimise the cost of the services delivered is among the critical functions of the IT Department. Demand drivers are linked to the business emerging needs to support the execution of the business strategy with IT when needed.
“An IT Business Model and Value Proposition” – To obtain funds in the business world an investor would require a good business case with a clear “Business Model” and “Value Proposition”. Our experience is that an IT department that does not have a clear “business model” defined as “This is how we deliver IT services to the business” and “Value Proposition” defined as “This is how we support business objectives with services in a time to market perspective” will continuously find it difficult to obtain sufficient funds from executive management and the board for the above mentioned reasons.
“An IT service Strategy” – In order to effectively communicate with the business the IT department need to adopt the notion of services a bundle of applications to be run cost effectively and set up in a time to market logics in accordance to cost and demand drivers where demand drivers are linked to the business emerging needs to support the execution of the business strategy with IT when needed.
Feed forward appreciated!
