CIOs: Time to Run IT as a Business

Larry Bonfante
News Analysis
Larry Bonfante
11/24/2017
50%
50%

Over the course of the past decade I've heard a lot about the idea of running IT like a business.

For years, the CIOs and IT administrators who ran these departments didn't consider technology as part of the main enterprises. IT was separate and not concerned with the bottom line thanks to top-down management and ability to control what technology products a company could buy. (See ExxonMobil Adds Fuel to a Digital Transformation.)

Now that attitude is changing, and it's a great idea and about time for a change.

Here are some reasons why.

First, for businesses to succeed they must delight their customers. Enterprises need to assess what the market wants and what the appropriate price points are for these products and services. It doesn't make sense to stock your shelves with Fruit Loops if the majority of your customers are looking to buy Cheerios.

CIOs need to rethink their IT strategy
(Source: PublicDomainPictures via Pixabay)
CIOs need to rethink their IT strategy
(Source: PublicDomainPictures via Pixabay)

Secondly, too many times IT organizations "support" legacy solutions and systems either because they are sacred cows or because of the old adage: "We've always done so." This simply doesn't work in the age of digital transformation.

In business, changes in market demand require us to shift our supply to address what the customers actually want and consume. We also know we can't continue to inflate the cost of these services because we are competing for the hearts, minds and dollars of our customers.

Too many times IT organizations think and act like monopolies.

However, it's important now to realize that we are not.

So where does our competition come from?

First, it comes from the myriad of potential outsourcers who are happy to invest enormous marketing resources to whisper sweet nothings into the ears of the members of your board of directors on how easy, simple and cost effective IT would be if they simply hand over control to Hewlett Packard Enterprise , IBM Corp. (NYSE: IBM), Accenture , ect… Fill in the black with the vendor of your choice.

So all our key stakeholders hear from these companies are the sweet sounds of the siren's call while the only time they usually hear from the IT organization is when something isn't working or they don't like our budgets.

How often and how well do we market our successes, or more importantly how we impact our businesses in a positive way?

Secondly we are competing against the dreaded "shadow IT" that seems to pop up in many organizations thanks to the growing ubiquity of the cloud. (See A CIO 'Renaissance' Needs the Cloud.)

If you are looking to blame someone for shadow IT in your organization start with the person in the mirror. Line of business (LoB) executives and managers have a job to do. If we can enable them to accomplish their objectives in a timely, effective and cost efficient way then they are happy to collaborate with us.

However, if IT is thought of as the "Island of No & Slow," these managers will find alternative ways to address their technology needs. In this day and age, if we are not the value added technology partner of choice, it’s all too easy for our business clients to pick up their iPhone, call the cloud or software-as-a-service (SaaS) provider of choice and spin up a new server in an hour or a new CRM instance in days.

So if you think you don't have to worry about running IT like a business, don’t evolve or innovate and wait around a while and I promise you that you’ll be having a going out of business sale.

Related posts:

— Larry Bonfante is an award-winning CIO and the founder of CIO Bench Coach. You can follow him on Twitter.

(21)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 3   >   >>
kq4ym
50%
50%
kq4ym,
User Rank: Light Sabre
12/8/2017 | 9:15:48 AM
Re: Always
Even when logic and experience provide a good map to follow, it's now always easy  to get changes in philosophy and management techniques to move forward and depending on the size and resources of the company big differences can prove to be stumbling blocks to that as well.
maryam@impact
50%
50%
[email protected],
User Rank: Light Sabre
11/30/2017 | 1:40:31 PM
Re: IT *is* the business -- but that bears responsibility
Exactly and that value should be a tangible efficiency it should be measurable and quantifiable to the organization.
kq4ym
50%
50%
kq4ym,
User Rank: Light Sabre
11/30/2017 | 8:48:54 AM
Re: IT *is* the business -- but that bears responsibility
It does seem as noted, that a heads up is needed for some organizatons and IT departments, that with the tendency to look now for a "value added technology partner," with rosy promises of efficiency and savings, the IT folks will have to become more lined up with providing a better bottom line for the organization.
maryam@impact
50%
50%
[email protected],
User Rank: Light Sabre
11/29/2017 | 11:36:57 PM
Re: IT *is* the business -- but that bears responsibility
Joe One answer the devil you know is sometimes better than the one you don't know! It kind of sums of these types of decisions fear of change often drives that type of thinking and negotiating. Many fear the work and change required with introducing a new vendor and the retraining on both sides.
Joe Stanganelli
50%
50%
Joe Stanganelli,
User Rank: Light Sabre
11/29/2017 | 9:00:34 PM
Re: IT *is* the business -- but that bears responsibility
@Michelle: Also important: Are they saying "Yup, it's fine," out of a combination of skimming things and placing a great deal of trust (albeit arguably too much) in others? Or are they saying "Yup, it's fine," because they have no earthly clue?

Two differently flawed scenarios that need to be handled in different ways.
Joe Stanganelli
50%
50%
Joe Stanganelli,
User Rank: Light Sabre
11/29/2017 | 8:59:11 PM
Re: IT *is* the business -- but that bears responsibility
@Maryam/Michelle: It's not even just caving to pressure from other groups, at a certain point. I'm convinced that at some point it gets internalized.

Case in point: I'm aware of one company who uses Vendor A. Everybody at Company who has anything to do with the things Vendor A touches hates Vendor A. They are sick and tired of Vendor A for many reasons.

And yet Vendor A continues to get their contract continued. A few of the people who are sick and tired of Vendor A have even made moves to *save* Vendor A's contract.

Company politics, man. Weird stuff.
Joe Stanganelli
50%
50%
Joe Stanganelli,
User Rank: Light Sabre
11/29/2017 | 8:56:32 PM
Re: IT *is* the business -- but that bears responsibility
@Michelle: Few, so many of them are already thinking the same way or don't feel strongly enough about it.

It's very easy to confuse someone who's passionate for someone who's well informed.
Michelle
50%
50%
Michelle,
User Rank: Light Sabre
11/29/2017 | 7:33:36 PM
Re: IT *is* the business -- but that bears responsibility
A yearly review of systems and tools could help a lot so long as there is direction for the future. Some departments may just look at everything and say "yup, it's fine". Let's hope that doesn't actually happen -- I suspect it could.
maryam@impact
50%
50%
[email protected],
User Rank: Light Sabre
11/29/2017 | 1:34:44 PM
Re: IT *is* the business -- but that bears responsibility
Michelle, it is very true that some CIOs cave to pressure from other groups inside and outside IT but IT and every functional area should be run like a business. There should be an objective cost and benefit analytics realizing that some services don't have an exact ROI but there should be some benchmarking every year against the functional group and business performance.
Michelle
50%
50%
Michelle,
User Rank: Light Sabre
11/29/2017 | 1:19:47 PM
Re: IT *is* the business -- but that bears responsibility
That explanation makes a lot of sense. People have strong preferences in personal life, why not business life too...

How many executive teams are ready to oust a person who thinks this way?
Page 1 / 3   >   >>
Featured Video
Upcoming Live Events
September 17-19, 2019, Dallas, Texas
October 1-2, 2019, New Orleans, Louisiana
October 10, 2019, New York, New York
October 22, 2019, Los Angeles, CA
November 5, 2019, London, England
November 7, 2019, London, UK
November 14, 2019, Maritim Hotel, Berlin
December 3-5, 2019, Vienna, Austria
December 3, 2019, New York, New York
March 16-18, 2020, Embassy Suites, Denver, Colorado
May 18-20, 2020, Irving Convention Center, Dallas, TX
All Upcoming Live Events