Monday, November 2, 2015

IT as a Business Solution Provider

Define, Manage, Optimize to build an agile IT as a business solution provider.

With emergent digital technologies, many IT organizations reinvent themselves to ensure value and quality of deliverable. The core vs context is a business decision and not just an IT discussion. CIOs are gradually realizing that their organizations are not in the commodity server business or just a back-office cost center. With a growing trend in Cloud Computing, namely Managed Cloud, the agile IT of today via an enlightened CIO is becoming a "service broker," and business solution provider, instead of just a "service provider."

Define, Manage, Optimize, Commoditize. Every business has a large number of necessary but non-differentiating functions to manage; these are areas where well-considered multisourcing solution will always play a role. As soon as something becomes commoditized, you can leverage cloud or other sourcing solutions to free up your employees' hands and rather use their brains. Also at the beginning, when you do not have the required skill, you can source and then make a strategic decision later on whether this is something that you want to have in-house, or rather just manage.The strategic and differentiating capabilities should always be managed closely, whether in-house or with trusted partners. The best companies are ones that understand the difference. Short version - Unless you can justify the overhead, focus on what you want and need from technology, and bring in folks to provide it for you. Effective service providers typically have a wide range of exposure and are not tied to any one network, solution, or technology, they gain insight from working on hundreds of environments across many verticals. They have seen more environments in one day than most in-house staff see in a lifetime; that is typically worth the investment alone. More importantly, companies should look for finding strong technology partners who will co-innovate with them - doing more with innovation, not just doing more with less.

Aligning IT agility to the Capex/Opex appetite is what drives the cloud adoption emerging as trends. CIOs expressing a need to free up their staff from commodity activities to spend more time on strategic or business initiatives. The use of a range of Cloud Services delivered by a range of niche companies as a unified internal solution to the end users and governed and owned by the internal IT function seems to be the present and the immediate future. Why is this occurring? Of course, there is still a widespread need to reduce costs. But, increasingly, there is a need for increased agility and a desire for usage-based cost models. These and a few other strategic needs are driving IT organizations to look at alternative hybrid delivery models. Those who are not there yet, risk falling behind their competition. These automated and often niche cloud-based Managed Services allow organizations to assemble a unique and agile portfolio of services consumed by third parties whilst maintaining control of their strategy and direction. The main drivers remain access to capacity, skills, and flexibility over ramping up and down according to project demands, amongst others. Overall, in the long run, it seems whatever you do there is a similar price to be paid and the time penalty incurred. The time phasing and cost profile varies between the choices. Moving to SaaS or Cloud-based services is not the panacea for IT management issues, and in many cases brings more challenges with less control. There needs to be a good mix of sourcing solutions, so that employees, customers, and IT management can safely meet together over a short path decisions.

IT is business, and IT strategy is an important component of business strategy. IT is an integral part of the business with the omnichannel. This brings different perception on sourcing strategy. C-levels are listening more into the IT Strategy and how this has become the fundamental part of the company's future. That's why it is fundamental for the business to have an in-house and pro-active IT team, which will be able to create the future path for the companies, Still, cost optimization, immediate availability of talents, scalability of operations, 24x7 global operations are effectively delivered through the cloud or other sourcing solutions. IT alignment with business design, project portfolio management, continuous innovations is typical in-house retained activities. Companies are now looking at a little higher level of help in advisory and consulting services first. Many industries/businesses are looking to update their IT to make it more agile and responsive to the business while further reducing the cost. Leveraging cloud, mobility, and analytics are a means of achieving the same end - better decision making for increased revenue and profits.

Either IT chooses to build products in-house or leverage cloud solutions, there is not a black and white answer here. One needs to selectively look at the corporate culture and needs of the business to determine where it makes sense to out-task or keep in the house. Numbers always are important, but not investing in technology also, can become a very negative side in the company's future. With the criticality of technology for most businesses, you need some way of growing talent that understands your particular business, and a comfort with technology to help envision and architect what tomorrow should look like for you. IT leaders need to continue to “trim” and refine IT via consolidation, integration, modernization, and optimization. You also need to keep in mind the human nature of reacting to change and going too far one way or the other (a pendulum), but hopefully over time settling somewhere in the middle. In short, IT should always laser focus on the ultimate business goals as a solution provider and business enabler regardless of which approaches to take.


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