IT departments, regardless of industry, are under enormous pressure. Businesses have become dependent on IT as a way of delivering a competitive advantage. Yet traditional IT departments have always had their roots in skills such as development or operations and have not been equipped to manage a business and technology environment that is trying to evolve to meet the needs of a rapidly changing marketplace. As a result, it seems that many IT departments are headed for a crisis.
In the past, IT departments have often led technology adoption in support of business. When a new technology entered the marketplace — departmental servers, for example—there was a substantial period of time before businesses incorporated it into their processes and even longer before they became dependent upon it. Yet once a business did adopt the technology, it became subject to business rules— with defined expectations and parameters for reliability, maintenance and upgrades that ensured the technology was kept up to date and allowed the business it operated within to keep up with the market.
With IT becoming more entrenched within organisations throughout the 1980s and 1990s, IT systems increased in size and scope as technology companies fought to cope and stay ahead of market forces. In large enterprises, IT’s function increasingly became the maintenance of infrastructure estates, requiring small armies of IT workers to sustain them.
Multiple factors have now converged to change all that. Today, most business operations are done digitally—what Constellation Research analyst Andy Mulholland calls "Front Office Digital Business." The emergence of technology-as-a-service models has changed how technologies, applications and services are delivered and supported, with assistance and upgrades coming from outsourced vendors, not in-house staff. The arrival of the Cloud model has meant that an IT department may not even be necessary. Entrepreneurs can set up a company with the swipe of a credit card and have the technology they need at their fingertips, remotely hosted in the Cloud.
The divide between IT and business
While the gap between IT and business is steadily closing, the gulf in how IT is run still remains. Structurally, most IT departments today remain close to their technology-centric past. In part, this is because IT departments continue to be run by technologists and engineers whose core skills remain in the challenge (and excitement) of creating new technologies. Not every skilled engineer makes a good businessperson, but in most organisations, those individuals good at their jobs are often promoted into management roles regardless of whether they are ready to manage or not. The Peter Principle is a problem that hinders many organisations, not just IT departments.
What has occurred is that IT departments have traditionally not been run as if they were a business. Examples of good business models for how IT should be run have been piecemeal or slow to develop—despite IT’s role in how the rest of the business is run. While some standards have been introduced as guides for how differing parts of IT itself should be run (COBIT for governance, ITIL for service management, TOGAF, an Open Group standard, for architecture), no overarching standard has been developed that encompasses how to holistically manage all that IT industry, from systems administration and development to management through governance and, of course, staffing. For all the progress made, IT has yet to become a well-oiled business machine.
Both the business and technological environment is not the same as when companies took three years to do a software upgrade. Activity in today’s climate appears to happen instantaneously. The “convergence” of technologies like cloud computing, big data, social media, mobile and the Internet of Things are significantly changing the nature of IT. New technical skills and methodologies are emerging every day, as well. While languages such as Java or C may remain the top programming languages, emerging languages such as Pig or Hive are developing every day, as are new approaches to development, such as Scrum, Agile or DevOps.
The impact of continuity
Faced with these various forces, departments will have to either change, and adopt a new model where IT is managed more effectively or face the prospect of growing chaos that will hinder their organisations.
Without a clear and effective management model for IT, companies won’t be able to mobilise quickly for a digital age. An inability to utilise data, for example, could result in wider problems such as investing in a product prototype that customers aren’t interested in. Such mistakes are unaffordable these days.
Having an umbrella view of the entirety of the IT activity allows the department to make better decisions. With trends in technology and development shifting so quickly, how do you know what will fit your organisation’s business goals? You want to take advantage of the trends or technologies that make sense for the company and leave behind those that don’t.
If we consider DevOps as an example, one of the core concepts is to bring the development phase into closer alignment with the releasing and operating of software. To do so you need to know your business’s operating model to determine whether this approach will actually work or not. Understanding this also allows IT to make decisions about whether it’s wise to invest in training or hiring staff skilled in those methods or buying new technologies that will allow you to adopt the model.
A lack of such a management view can leave companies subject to the whims of technological evolution and to current IT fads. Without understanding what’s valuable to your business, you run the risk of following every new fad that comes along. There’s nothing worse—as the IT guy—than being the person who goes to the management meeting each month advocating a new approach to solve a problem that never seems to get solved. IT needs to be decisive and choose wisely.
Such issues not only affect the IT department, but they also impact business operations. Ineffective IT shops will not know when to invest in the correct technologies, and will miss out on working with new technologies that could benefit the business. The absence of a framework to plan how technology fits into the business means that you could end up in the position of having great IT bows and arrows but when you walk out into the competitive world, you get machine-gunned.
The other consideration is cost and efficiency—if the entire IT department isn’t running smoothly throughout then you end up spending too much money on problems, which takes money away from other parts of the business that can drive competitive advantage . Failing to manage IT can lead to a significant competitive disadvantage across numerous areas within a business.
Taking a new approach
As a way of preventing the possible consequences of IT not being run like a business, industry leaders have recently formed a consortium to look at how to better run the business of IT. With billions of dollars invested in IT each year, consortium members realised their investments must be made prudently with tangible results in order to succeed.
The result of their efforts is The Open Group IT4IT Forum, which released a Snapshot of its proposed Reference Architecture for running IT more like a business in November 2014. The Reference Architecture is meant to serve as an operating model for IT, providing the “missing link” that previous IT-function specific models have failed to address. The model allows IT to achieve the same level of business, discipline, predictability and efficiency as other business functions. Above all else however, the Reference Architecture provides more than just best practices for IT—it puts IT in the context of a business model that allows IT to be a contributing part of an enterprise, providing a roadmap for digital businesses to compete and thrive for years to come.
About the Author
David is Chief Technical Officer (CTO) and Vice President, Services for The Open Group where he ensures that The Open Group’s people and IT resources used effectively and leads the delivery of their collaboration and certification services within the organisation and in support of third-party consortia.
David has been with the Open Group for over 20 years and has held posts including VP Advanced Research and Innovation, VP of the Collaborative Development Group, and Director of the Distributed Environment Engineering group.
Prior to coming to OSF, David worked for Prime Computer as the manager of the Multiprocessor Operating Systems group and led the Open Systems technology group, which developed a variety of networking products including SNA, TCP/IP, and OSI Ethernet.