Over the last several years, there has been a lot of talk about “Running IT as a Business.” But in practice, it has been little more than a marketing buzz word that a variety of vendors have employed to try to create differentiation. While IT organizations may have adopted some of the toolsets being sold by these vendors, few if any IT organizations have really taken any steps toward truly operating IT as a business. This is unfortunate because the paradigm of IT as a business represents a real transition that must occur if IT is going to remain relevant in the coming era of the Technology Driven Enterprise. For these enterprises, a new type of IT organization will be required – the Market Driven IT organization.
There has been much controversy in the industry since Nicholas Carr published his now famous (or infamous, depending on your perspective) 2003 article entitled, “IT Doesn’t Matter.” In it, Mr. Carr hypothesized that as foundational IT services became commoditized and widely adopted, that IT itself ceased to be a strategic differentiator for any business. That while critically necessary, IT would be relegated to the non-strategic position of other “infrastructural technologies” such as power or railroads. While there is a certain amount of truth to this perspective, it incorrectly views technology as a one-dimensional resource that is easily quantified and manipulated. In truth, the effective utilization of technology is extremely complex and becoming more complex every day. While it is true that many “routine” uses of technology have been commoditized, strategic and differentiating uses of technology are being created and employed at a rate that exceeds the rate at which those technologies are being commoditized.
A significant split is beginning to occur within business enterprises that will continue to evolve over time and will separate those enterprises that invest in technology-driven initiatives and are able to extract competitive market value from those investments and those who accept the premise that IT has been commoditized and is therefore solely a non-strategic corporate asset. This split will separate those companies that will come to be recognized as Information Driven Enterprises from those that will be known as Commodity Driven Enterprises. The result for IT will be stark. In Commodity Driven Enterprises, IT will, in fact, not matter. Its functions will be largely, if not entirely, outsourced and any remaining IT staff will simply be caretakers of the delivery of a commodity service.
For Technology Driven Enterprises, it will be a very different scenario. The business units of these enterprises will demand extreme levels of reliability, responsiveness and adaptiveness from both their underlying technology architectures and the organizations servicing them. They will demand a set of strategically-driven technologies that are only now beginning to emerge. The IT organization required to support these Technology Driven Enterprises will look unlike most IT organizations of today.
So the choice for today’s IT leader is distinct. Become a nimble, responsive IT organization that is closely in tune with the strategic needs of the organization, or prepare to become a commodity caretaker. There will be little space in the middle. But, IT has been struggling with this concept for many years. Will “Running IT as a Business” really create the necessary change? And if so, what will it really mean to transform IT into a business, to become a Market Driven IT organization?
That's what this blog seeks to discover.
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