The Consumerization of IT…putting IT Departments back on Offense

Inside IT: Consumerization

Can the Consumerization of IT (COIT), which many CIOs are not happy to embrace, actually change the perception of IT Departments and “save IT” from remaining a “utility” in the minds of the business?   Will COIT put IT Departments back on offense, providing strategic vision for the business?

What is wrong with IT Departments?

Why do they need saving?

IT once used to be thought of as having great knowledge and influence on the business models of companies.  When the Internet boom was ongoing, it was IT who was able to provide the brain trust to expand the use of the Internet to drive expansion into the new market of online sales.   Back then IT was able to drive technology and innovation into a business asset.   When the Internet was just coming of age as a new marketplace of information, ideas, products and services, IT Departments were key to helping the business understand the playing field.

SO WHAT HAPPENED…?

I often speak of how IT used to the “offensive-minded” in nature.  How during the Dot.com boom, IT departments were strategically linked to the business.  Then after the collapse,  IT had become “defensive-minded”, moving to a utility-like function; like a light switch…”turn it on, who cares how it works..just give me light”  was the business’s demand.

IT became its own worst enemy.  IT went from being strategic to being a utility, partially due to the false promises many made during the IT Dot.Com boom.  Requesting tens of millions from budgets on upgrades, expansions, etc, focusing on the technology without enough linkage back to the business objectives.  Not to say it was wrong, everyone was doing it, but IT paid the price when the boom collapsed.

IT departments, looked at as experts in the Internet and accompanying technologies did not do enough to qualify objectives with the business, but promised unrealistic results if the business invested by revamping all the applications, infrastructures, networks, data centers, and employees computers.

Now the build-out of the Infrastructure was a good thing, as IT laid the foundation for the e-commerce we have today, but the toll on internal IT departments was unmistakable.  CIOs lost their spot at the executive “table”, now reporting to the CFO or COO.  IT Departments were told to just “keep the lights on”, maintaining legacy systems, and becoming the department of NO, reducing costs, being “efficient”.  That dreaded word which to IT folks means “no strategic value”!

In 2003, Harvard Business Review published their infamous article “Why IT Doesn’t”t Matter Anymore”.  In this paper, the author, Nicholas G. Carr shows how technology went from less than 5% of capital budgets in the mid 1960’s, to over 50% by the end of the 1990’s.  So has IT budgets and expenditures grew over the decades, each company was able to benefit from the improvements in technology.

This phenomenon showed how IT lost it differentiator effect, yet bore costs to all within the business.  Adding to that was ITs penchant for throwing technology at business problems without fully understand what the business needed.  The terminology…or “IT-Speak” frequently confuses the business, and I have seen an overall lack of trust from the business towards IT.  In return, business leadership began to view IT as moving from innovator to caretaker.

In 2003, Nicholas said “With the opportunities for gaining strategic advantage from information technology rapidly disappearing, many companies will want to take a hard look at how they invest in IT and manage their systems. As a starting point, here are three guidelines for the future:”

1. Spend less. Studies show that the companies with the biggest IT investments rarely post the best financial results. As the commoditization of IT continues, the penalties for wasteful spending will only grow larger. It is getting much harder to achieve a competitive advantage through an IT investment, but it is getting much easier to put your business at a cost disadvantage.

2. Follow, don’t lead.Moore’s Law guarantees that the longer you wait to make an IT purchase, the more you’ll get for your money. And waiting will decrease your risk of buying something technologically flawed or doomed to rapid obsolescence. In some cases, being on the cutting edge makes sense. But those cases are becoming rarer and rarer as IT capabilities become more homogenized.

3. Focus on vulnerabilities, not opportunities. It’s unusual for a company to gain a competitive advantage through the distinctive use of a mature infrastructural technology, but even a brief disruption in the availability of the technology can be devastating. As corporations continue to cede control over their IT applications and networks to vendors and other third parties, the threats they face will proliferate. They need to prepare themselves for technical glitches, outages, and security breaches, shifting their attention from opportunities to vulnerabilities….Excerpted with permission from “IT Doesn’t Matter,” Harvard Business Review, Vol. 81, No. 5, May 2003.

So at the time he was correct.  IT had diminished on its strategic advantage claims, but there was one effect Nicholas G. Carr did not foresee, (nor anyone else).  With the advent of mobile devices led by Apple, 3G and 4G/LTE wireless speeds, the plethora of mashup-type applications, the Internet itself became a total application platform…The new Consumerization of IT within companies..

Today,  mobile devices gives enormous power to everyone who has one, turning them into the power consumer has never before.  Business operates at the speed of  posts, replies, likes, befriending, blogs, etc…with one tweet from the right digital source your product line can accelerate to unprecedented heights.  Mobile devices and consumer-oriented applications like social networking have shown the business what is possible, what you can do with technology.

All of these events and advances in digitization of information has now provided IT departments with the ability to become extremely relevant again. Where the build out of infrastructure gave new life blood into organizations during the Dot com boom, the Consumerization of IT will put IT departments back in the Strategic column for businesses.

So while some IT executives shy away from these new technologies and capabilities, I see tremendous opportunity for IT to be relevant again!

How Do CIOs perceive COIT?

From a recent Compuware Study, CIOs have demonstrated great concern and fear on how to manage COIT in the enterprise:

  • 77% of CIOs worry that further consumerization of IT will lead to greatly increased business risks
  • A lack of transparency into the performance of cloud and SaaS providers is currently reversing IT maturity across 64% of enterprises
  • 64% of CIOs say support for employee mobility is almost impossible due to reliance on external networks, making it much harder to control performance and the end-user experience
  • The consumerization of IT trend is already driving unrealistic expectations around role of IT in 74% of enterprises
  • 64% of CIOs say that enterprise mobility projects forging ahead without the full involvement of IT

COIT_CIO_Risk_graph1

CIOs are saying they see the COIT phenomenon more of a Business Risk, but I see it more of an opportunity.  For several years we have read report after report on how CIOs and IT departments were misaligned with the business (Google search returned almost 3.5 million results on this alone).  From Forrester, Gartner, and many other analysts, all espousing how CIOs and IT need to adjust their operating model to account for the greater lack of control they are seeing as the end-users make more and more demands. 

The concept of COIT is forcing root changes in the consumption & delivery models IT departments have delivered over the past 20 years, and that effect will not change.  In fact Gartner says in their BYOC publication (The Impact of BYOC on Management and Support 11 October 2011 | ID:G00217772), that

“IT should not manage what IT does not own — specifically, the hardware, personal operating system (OS) and personal apps on BYOC systems. IT should support only what it can fully control, which should be the basis for appropriate tools and infrastructure.”

I do not think IT can “manage” what it does not own in terms of technology & infrastructure, but at the same time, IT needs to be very clear in how this message is delivered to the business.  As new technology emerges in the marketplace, and employees adopt and embrace this new technology, IT Departments and CIOs will have continuous battle in explaining how the business benefits of new technology cannot be leveraged by an archaic IT Operational model that does not deliver benefits at the speed necessary.

In almost every company, there is the “Black-ops IT” or sometimes referred to “Shadow-IT”.  Meaning employees bringing in and using technology without the tacit approvals and consent of IT departments.  Too often those ‘shadow” technologies which have shown great business benefit become part of the normal or accepted technologies, as it would be impossible to remove them without some Sales or Engineering group claiming they would cost the company lost revenue or increase costs.

Historically, what has IT done when faced with that type of pushback?…relent, cave-in, and undertake the monumental effort of normalizing such rogue technology and adding it to the portfolio of applications\technology IT supports and manages.

I have seen over the years dozens of examples of mobile devices, servers, applications used under the table (literally), that have delivered true value, yet never sanctioned.  In fact, at one company a salesman bought servers off eBay, when he could not get his business case approved…a business case where IT gave him pricing for hardware….he simply went to eBay and made his purchasing, then declared how IT was useless and wrought with expense….

Again, looking at how these “Black-op” technologies enter the workspace, they are often very cheap, free, require no formal training, and can return results very quickly.  Business employees look towards IT, with its strict controls, processes, and habitual saying “NO”, and declare.. “IT is useless’”.  Unless IT Departments want to ONLY regal themselves to managing network bandwidth, regulatory\compliance, governance, and other administrative duties, the CIO needs to find another model.

Before talking about this new model, lets look at an excellent example of how Consumerization effect is impacting CIOs and IT Departments.  In order to change this, there needs to be a fundamental transformation in how IT operates.  As the business is introduced to new technologies, adopted from the public space, IT can either remain the Operating Function of “NO”, or become the voice of possibilities,  by preparing itself for this phenomenon, and moving its Infrastructure and Security architectures to enabling mobility and Internet Applications, in effect putting the “Shadow-IT” into the light.

So how does IT go back on the “Offensive”? Providing that strategic edge to organizations when technology is no longer a competitive advantage?

…The competitive advantage is now in the desire and attitude of the CIO and IT department to become more agile, open to embrace new ideas, while providing the portfolio of services the business expects.

1. Change the IT culture inward and outward…The CIO and IT leadership must create an atmosphere of change, flexibility, and openness.  How the CIO does this is by communicating the business model IT works within, the financial\technology cost per user, and to encourage all IT staff to find ways to be innovative every day.   It sounds silly, but attitude and transparency can go a long way to build confidence and relationship with the business.

Accommodate the velocity of change the business embraces, and have a good IT-marketing plan to show the business your taking steps to be more creative and agile, which will go a long way as IT requests investment to build out the consumerization capabilities the business is asking

2. Communicate the mission… to the IT Staff and business stakeholder.  Hold town halls and meetings to clearly communicate the intention to embrace in manageable quantities Consumerization of Technology.  If outsourced, work with your outsourcing partners to ensure the IT business model can accommodate the benefits of consumerization, and if you need to make changes to the outsourcing contract, look for ways to improve the offering to the company.  If in-sourced, look for quick wins and simple ways to improve the offering of IT,  looking to improve collaboration and roadmap sharing within the IT teams.  COIT efforts must be embraced across the IT department.

Publish road-maps to the organization and stick to the timelines.

Transparency to the other CxO leadership would be a great way to showcase IT’s willingness to be open, accommodating, yet still provide the core services necessary for the business to operate.

Pick teams in the business who are the most ardent requesters of consumerization capabilities and use them as pilot subjects.  Have open discussions, respecting the security and capability aspect of the request.  Show examples of good and bad consumerization technologies, and how it affects the company.

3. Be technologically flexible…Virtualization is one way to offer a private cloud to the business.  Utilizing existing Storage Area Networks or attached storage which is underutilized can offer alternatives to external cloud offerings.  Perhaps have multiple levels of  SLA’s for enterprise applications, have flexible data center operational options to keep the costs down to the business, yet provide consumer-like functionality.  Provide Mobile Device Management Infrastructures to help the business with using consumer devices…

Remember, the business only sees technology as a utility, so IT needs to think from the business perspective…Being agnostic to specific technologies may help drive agility for IT departments and promote their “offensive-minded” capabilities.

When refreshing old technology, think Security coupled with Consumerization!

4. Review & Adjust Policies\Procedures…Review current usage policies and security models to provision for consumerization and BYOD models..Make adjustments where necessary…This does not mean to throw out security and risk management practices, but craft solutions for a balanced approach…Let’s face it, IT does not bend, then users will simply go to the Shadows…

Consumerization is a reality now!…

Forrester did a survey in Q3-2011[Consumerization Drives Smartphone Proliferation, by Ted Schadler], asking 1,663 technology workers, a series of questions specifically on consumerization mobility…and found some very interesting points:

Q. “How did you choose the primary smartphone you use for work?”

A. 48% of those surveyed chose their mobile device WITHOUT considering what their organization supports….23% had no choice…

Q. “Who paid for the primary smartphone you use for work?”

A. 48% said they paid for their own devices….41% said the company paid for the device…9% indicated a shared expense.

Q. “Who pays the monthly bill for the primary smartphone you use for work?”

A. 40% said they paid the monthly charges…46% indicated the company picked up the bill….14% said it was a shared expense.

– 58% of all Smartphone usage in the enterprise was NON-Blackberry devices.

So clearly, the consumerizational aspect is in the enterprise now!  The above survey is for mobile devices, and I think laptops should also be part of the BYOD discussion, as well as Private cloud offerings for enterprise applications.

How the CIO and IT departments prepare and craft their services to the business will be paramount to the resurgence of IT in the organization.  There is really no other choice however….Should CIOs and IT refuse to embrace this phenomenon, what is their future then?

No, I think Consumerization of IT is a gift for CIOs and IT departments, and now is the time to accept the challenge, and for IT to re-establish itself as a strategic enabler and becomes the “offensive-minded” differentiators to the business it used to be.

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