IT Transformation, EA, and the Cloud (Part 3)

IT Transformation, EA, and the Cloud (Part 3)

Thought Leadership | Princeton Blue

In this series on IT Transformation, we’ve talked about the fundamental changes on the horizon for your IT departments, and we’ve talked about why the ability to weave your solutions together into a single fabric – enterprise architecture – will be the most important function of your IT department moving forward. Now let’s talk about the role Cloud computing will play in IT in the coming years.

We’ll refer back to the list from the first post again:

  1. Define the enterprise architecture – how the systems fit together to provide the business solutions that the business units demand,
  2. Manage the delivery of code for specific software packages – as part of cross-functional business/IT teams that will be run by the delivery managers situated within business units, and
  3. Provide system and infrastructure support for those solutions that are developed.

Need for IT Transformation

Business leaders have talked for years about core competencies – that businesses differentiate themselves based on what they can do better than their competition. Interestingly, that concept has largely been lost in the IT world. Sure, companies have outsourced development and support, but they’ve held onto very costly functions that don’t provide any sort of differentiation. That’s part of the reason why it’s taken so long for Cloud-based solutions to “find their legs”, so to speak. That’s just now starting to change.

Now, let’s talk briefly about what will happen to companies who don’t change – who keep their traditionally structured IT departments and who don’t move their solution delivery personnel and their business analysts closer to their business counterparts (see part 1). In short, their business counterparts will get tired of the cost of interacting with IT and with the inability to directly prioritize initiatives, both of which will result in obvious inefficiencies. Companies like Salesforce.com will sell to these business owners and will tell them that they can build better solutions more quickly and more cost effectively. The business owners will purchase those solutions, and those purchases will start those IT departments on a slide down a very slippery slope… past the loss of enterprise architecture control and eventually into irrelevance. Although a slide into irrelevance for an IT department will likely mean an IT reorganization – most likely to a structure similar to the one outlined in part 1 – that reorganization would take significant time and would seriously impact the business’ bottom line. It would be far better to proactively reorganize for greater efficiency and greater ability to meet the business’ needs and enable IT Transformation.

Organizations who recognize the inevitable change in the IT landscape and who do move their solution delivery personnel and business analysts out of IT will be able to partner with Cloud solution providers – and with outsourcers – to provide an extremely cost-effective overall solution set to their business counterparts. Let’s look at the list above again briefly, and let’s go in reverse order in this context. The third item in the list talks about system and infrastructure support. This is a completely undifferentiated function within a business. Is an SAP support team remarkably different at a major retail chain than at a major manufacturer? Of course not. Well, this can be outsourced, and the most effective way to outsource this is to pool resources with other businesses who need similar functions. The last clause in the previous sentence effectively describes the reason why Cloudsourcing is so cost effective… and it’s why your business needs to plan its course in that direction in the near future. But we’re not finished… The second item – the delivery of code – is also completely undifferentiated. Let’s use the same test that we did above: Is the delivery of code remarkably different at a major retail chain than it is at a major manufacturer? No! This can also be outsourced. Now, the question of how it can be outsourced is a bit more complicated, but ultimately it will be significantly more beneficial for businesses both large and small to leverage the pool of resources in the industry for this significantly undifferentiated function. And that leaves enterprise architecture – the decision-making regarding how these undifferentiated solutions fit together to provide differentiation – as the only segment of IT that is critical to be kept in-house.

In this series, we’ve painted a picture of the next generation of IT, in which solution delivery managers and business analysts are more closely aligned with their business counterparts and in which IT organizations will focus on differentiated core competencies. These changes will significantly increase efficiencies and will allow businesses to be much more competitive. Will your IT Transformation be enabled? Or will it be left behind?

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