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04 Aug Adapt or Die: The Necessary Evolution of Corporate IT

(By Mike Raftery)

Like most Armies, the majority of IT organizations are set up to fight the last war. The last battlefield was large scale IT organizational sea change. Project acronyms like Y2K, ECC, and APO all come to mind as the project of the day. These large scale, enterprise-wide projects were groups unto themselves. But what does the post-enterprise project era look like? And how can you set your organization up for success in this new world? Adapt!

Gone are the “good ol’ days.” The days of 9 (10?) figure budgets, theme park rentals under the thinly veiled guise of team building, legions of consultants and constant trays of food. Those days are over, most likely never to return. So now what? There is a moment in every organization where the project starts to fold up tents and people start asking, “Now what?” I’ve been around to eyewitness three of these moments, and the first response is usually to recreate the big project environment. The remnants of the team ask for big projects with big timelines and usually get neither. The business is exhausted and not quite ready to sign up for another long project. But a world without big IT project structure is a new world to these IT folks. They do not know how to function without budgets, requirements, testing and implementation cycles.

The end result is an IT organization structured much like an internal consulting shop. Project management is high on the skillset list, everyone’s time needs to be accounted for and the new group lives and dies on discrete projects funded from someone else. This structure is a remnant of the bygone era. With tight capital budgets, higher focus on productivity and the lack of a “next big thing,” this structure is a recipe for downsizing, frustration and animosity. In this declining model, IT is generally seen as a limitation to productivity, not an enabler of it. From the business side, every conversation seems to end with IT asking for funding like a greedy teenager. This separately funded model results in a few debilitating behaviors:

  • Mistrust, limited contact – What’s their angle? Business thinks IT is looking for money, and IT thinks business is changing the requirements. Well both are right; with a separate funded model, any action requires funding and any change to how the business operates is a massive effort. The result is a lot of awkward meetings.
  • Opposing goals – With different org structures and different priorities come differing incentives. Minimizing costs and delivering projects on time may or may not be in line with running a business. After all, who cares if a project is on time if it misses the target? In that case, you just fail faster.
  • Outside solutions – The above all lead towards outside solutions (read: excel). The business must move on regardless of IT’s ability to help. So people get creative and excel takes over. All of a sudden, IT seems like a burden and irrelevant to those that have to make, move or ship product every day in a constantly changing world.

To survive, and even be a valued partner, the tone, conversation, talents and teams must change. The new reality is that IT should not operate day-to-day as a project-focused entity, but rather a productivity engine side-by-side with their respective business partners. There will be the occasional project, but your organization should staff up for that when it occurs. This is in contrast to the model that is built to live and die on the existence of discrete projects. This is the time for the emergence of the business integrator.

The first and most important step to this change is the way IT is structured. There will always be a need for project management, but it should not be the core of the organization. The model of discretely funded “life and death by project” is not one that will last. Instead, the IT organization needs to have a focus on productivity: business productivity. As an IT organization, the focus needs to be less on “we deliver IT” and more “we make widgets.” The shift to realizing the benefit of the applications delivered, not just delivering IT, is a necessity to truly make the transition to true business partner.

By now, organizations should realize that IT is a necessity; it’s not going away. So they need to fund them like one. Internal charge backs and cross charge scenarios for full time employees needs to go away. This takes trust on both sites. The business side needs to believe they have an IT partner that can deliver actual value and the IT team needs to feel secure in their roles. Easier said than done, I know. However, the benefit of an integrated IT organization is going to empower both sides of the fence. A successful transition makes no difference between the value of IT and business driven projects. There should not be IT projects or business projects, just projects to work on as a team.

Over the next few weeks we’re going to examine what it takes to make a successful IT organizational transformation occur. We’ll cover the following topics:

  • Organizational Integration – What does the new IT organization look like? Who does it report to, and what counts as IT and what doesn’t anymore? Get to know your business, because guess what? You’re a part of them.
  • What to outsource and what to insource – What key competencies are needed in a modern IT organization and what can be outsourced? Getting leaner and better means shifting the talent requirements to a smaller set of critical individuals. But what to buy and what to rent? That’s the key of a sustainable organization.
  • Metrics and Performance Incentives – New goals mean new carrots. In order to act integrated with your business you must feel their pain and realize their gain. So what’s important to a new IT organization? How much weight do you give to IT goals and how much to business goals? Change the motivation and change the behavior.

Despite the fact that I’ve passed the rigorous tests required to spout my opinions on a blog, I’m not a fortuneteller. I do see a lot of conflict and wasted effort in IT organizations these days, so this blog series is intended to give an updated portrait of what IT roles will look like in the future. With the changing needs and shrinking of budgets, the IT organization needs to get more nimble, more responsive and more integrated into the operations of their business. IT projects that stand on their own are a thing of the past; get to know your business and unlock the productivity those projects promised.

Read the rest of the series here: