Different Kinds of IT Organization

It wasn’t all that long ago that IT in one corporation was pretty much the same as IT in another corporation.

We are, however, entering a transitional period, which will end with the total reconstruction of IT.

Many of today’s IT roles will have migrated to service providers; new roles will have emerged within the enterprise to help maximize returns on the outside services.

In the meantime, IT organizations will undergo an evolution. Different needs will be met by different types of organization.

If you are a “best practices” follower, this will mean that only practices from a similar kind of IT group should be studied for implementation: the practices for the other evolutionary paths would be, for the most part, dead wrong.

The “Tight Control” Path: Many IT organizations will default into the path of tightened controls. Decisions will be made financially. There will be little experimentation. They will be late followers, often driven to the next release of a product because the vendor has withdrawn support for the one in use.

Machines will be locked down to ease support burdens; security will be a pressing concern.

On this path, traditional outsourcing (“here’s our IT, please run it as is”) will be a common item in the configuration. On this path the business will lead into software-as-a-service. Not until pricing is predictable will utility computing replace owner-operated (or outsourcer-operated) physical plant.

The “Engineering” Path: This group will look to create competitive differentiation through IT. It may or may not slough off traditional items.

It will have its attention firmly on copying the kind of processing centre and applications that, for instance, typify a Google.

This may or may not be coupled with a “for profit” idea aimed at the company’s industry (usable services, possibly as a service provider for specialized needs). Great asymmetries will exist in this group: some parts will be very avant garde, while others lag and are drained of key resources to move the engineering work forward.

The “Service” Path: This group will look to accelerate the transition of IT roles toward the future early, by developing competence in strategy and scenarios, the management of suppliers, deployment support, benefits realization and portfolio management.

Very little traditional IT may be done in house on this path, whether it could be or not: the goal will be to move to a centres of excellence / office of … / practice area model and configure as an in house consultancy.

There may, on this path, be little left in the formal IT organization, as much of the capability may move to enterprise-level offices or be dispersed to the business.

The “Technology Shop” Path: This fourth path recognizes that a diversity of choices will exist for technology, many deriving from the consumer side of the market.

They will specialize in being the “internal store”, satisfying needs and providing the necessary field support and integration work to allow the business a fairly free hand in picking its technologies.

This path may well see the IT organization report even lower in the table of organization, for the goal will not be to set the agenda, but to respond to it. Whereas the “service” path looks like a consulting firm, this path acts in an a la carte manner, creating demand through peer interaction techniques.

The “No Change” Path: There will be a fair number of organizations who resist any of the other paths and look to continue much as they are.

Oddly enough, this will not be driven by a stubborn attempt to cling onto existing power in many of these cases. Instead, it will be driven by outside examples: regulations, legal requirements and compliance issues that seem too hard to meet without in house operations, unique business conditions and models that make providing for oneself a practical alternative, etc.

Consider, for instance, the four Canadian provinces with public auto insurance schemes: the flip side of public sector provision in this area is that these are not precisely pure property & casualty insurers, either. Legal add-ons [run the licensing branch, work with local municipalities to rebuild trouble spots, work with local police forces to reduce situations that lead to claims] that are beyond a competitive insurance market can limit options, just as laws that preclude out-of-jurisdiction storage of data about citizens can.

Knowing why an organization is not moving down one of the other four paths will be as important as studying what this one might be doing. Again, please note: this path does not preclude traditional outsourcing arrangements.

The reality, of course, is that most organizations will be “impure”: 60% this path, and 35% this other path, with a dash (5%) of this third one for one particular situation.

But each path offers the firm a very different business future — and requires a different IT personnel transition to unfold over time, as well as a different stream of reinvestments.

Choose your path, therefore, with your eyes open and careful consideration for the future — and then follow it, paying close attention that you interact with others on the same road (and not others).

For there are no best practices, only ones that are made appropriate to your needs.


About passionateobserver

I am a passionate observer of our society, the economy, and politics. Mostly I don't like much of what I see, so I write as a concerned citizen. To the fray, I bring a background in the philosophy of history, a lifetime's reading, a work history in information technology management, consulting and education.
This entry was posted in Enterprise Architecture, Governance, Outsourcing, Services, Strategic positioning and tagged , , , . Bookmark the permalink.

4 Responses to Different Kinds of IT Organization

  1. donsheppard says:

    Sounds like a great post for the “why IT” topic on BlogIdol

  2. Mark Roman says:

    Absolutely agree that there are no best practices – only better practices. The fallacy of “best” practices assumes you can stop improving as soon as you have copied someone else’s best practice. Improvement must ceaseless, and as you say, tailored to your specific needs.

    • Thanks, Mark. The other big problem with the whole theory of best practices is that they apply only to simple forms of work (see Dave Snowden’s “Cynefin” model), and then only when adapted. For chaotic, complex or complicated work they are always wholly inappropriate, in my experience.

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