IT transformation (ITT) as applied by the vast majority of IT vendors isn’t likely to help businesses meet their competitive challenges. That’s a fact I’ve been suspecting for five years, and I was finally convinced of it after a job interview a couple of weeks ago.
Vendors’ infrastructure culture is the problem, it suggests that to grow, the only thing businesses need is to transform their IT through migrating infrastructure to the cloud.
“So, your point is, to make a business profitable through designing innovative services, selling them, keeping customers loyal and increasing their value, cloud implementation is enough, right?” I asked the interviewer, a digital transformation executive. “Yes, there’s no question about it, our numbers show that cloud boosts the business. We’re committed to making [businesses’] lives simple. We give them the tools they need; that’s what ITT is about,” he sarcastically replied, repeating the same old IT vendor sales rhetoric. He still viewed IT departments as tools providers.
The digital transformation executive’s answer secretes the reasons, increasingly and desperately, business line leaders have been considering shadow IT — IT projects or systems managed outside of, and without the knowledge of, the IT department. They include:
Severe disconnect with the business concerns, expectations and requirements.
Vision of business growth strategy narrowed to IT infrastructure implementation.
Same old cost reduction and speed value propositions reworded using agile and digital technology terminology.
Consultants lacking true IT transformation experience, confusing it with infrastructure replacement.
CIO agenda driven by IT vendor marketing vision and sales strategies.
This should be said more often: The business value of IT as promoted by vendors is irrelevant; profit — what matters to the business — isn’t only a matter of how fast data is processed, how secure the network is and how extensible storage capacity is. It’s also and primarily about how well your employees, processes, practices and technology are mobilized across your marketing, sales, post sales, application development and IT operations to generate profit.
Let me say this straight: IT transformation must be redefined amid the changes in the ongoing industry disruptions with more consideration for the business vision. To achieve that, two major changes in the business approach must be addressed: industry disruptions and the rise of service thinking in IT implementation.
The changes in the business ecosystem and IT implementation that change everything
You might be surprised to read this, but IT vendors are missing out on two important elements likely to change ITT practices and in turn help your business prosper in the rising digital economy: taking into consideration the changing competitive environments and the rise of IT service delivery models commonly known as IT as a service (ITaaS). Let me clarify this.
The ignored changes in the competitive environments
A major mistake that makes vendors’ ITT approaches ineffective is that they ignore the competitive environment transformations triggered by the increasing adoption of cloud computing.
The accelerated entrance of tech startups and the proliferation of digital services substituting traditional offerings in various industries is forcing business lines to focus on innovation and market responsiveness. IT vendors and consultants continue to offer the same value proposition — cost effectiveness and speed — while the business concerns have shifted from technology efficiency to operational agility.
The concern isn’t how cheap and speedy IT is, but how to deliver the right innovation to the right market segments at the right moment.
ITaaS, or the new way of doing IT, isn’t fully adopted
One thing that’s not said enough is this: The actual revolution with cloud computing isn’t only the cost reduction and rapid resources provisioning derived from the implementation of vendor tools; more importantly, it’s the service approach to IT consumption. It demands a deep transformation of the IT organization’s operational model.
Indeed, ITaaS is neither a technology nor a tool as so many vendors pretend; it’s an IT operational model that seeks to speed business workflows through two mechanisms: agile environments and IT services. They both remove impediments to cross-functional collaboration, rapid problem-solving and decision-making. As illustrated in this image depicting the technology adoption life cycle (TALC), ITaaS isn’t fully adopted; most vendors stress the infrastructure issues and brush aside the organizational agility matters:
ITaaS is still at the early stages of the technology adoption life cycle. It has been fully adopted by tech startups and visionary leaders, but vendors’ infrastructure cultures and CIO resistance to change prevent its adoption by midsize and large businesses.
Redefining ITT, its objective and approach
Given the changes in the competitive environments and those brought in by the ITaaS paradigm, IT transformation can’t be reduced to a basic replication of in-house infrastructure in the cloud without consideration for the business vision. That doesn’t make sense.
The bottom line is that that ITT isn’t only about infrastructure replacement but about how IT can be deployed in way that concretely helps the business deliver the right innovations to the right market segments at the right moments.
ITT should be structured around three key activities:
Making agile and flexible the IT operational model through adoption of agile practices.
Deploying authentic IT services to simplify operational and technical complexity.
Deploying cloud infrastructure to cut IT costs and automate key IT processes.
Summing it up
Most IT transformation initiatives are labeled “business booster,” but the reality is, they’re not. Here’s a question worth asking: What’s the goal? Is it to improve IT or to boost the business?
I seriously urge you to settle this with your vendor one on one. You’ll quickly realize that the vendor’s bottom line is to improve IT only for the sake of IT, as if helping businesses absorb industry disruptions is only a matter of infrastructure change.
Philippe A. Abdoulaye has 25 years of experience as an IT transformation expert with a versatile background leading cloud, data center and ITSM transformation projects with consulting firms like Accenture and Cognizant. Philippe has advised the IT leaders of enterprises like Credit Suisse, American Express and Educational Testing Service (ETS) and has conducted workshops to provide insights into cloud transformation approaches for McKinsey consultants.
Philippe has been sharing his views on Linkedin and in his blog on topics around cloud computing, ITaaS and digital transformation. His articles are regularly cited by online media outlets, including Sys-Con and ZDNet.