Can’t pour old IT into new bottles

By Michael Kirven

Companies are increasingly shifting to cloud computing for savings and performance improvement. However, expect a mixed bag of results for this simple reason: traditional IT department structure isn’t built for these new technologies or the new business world, for that matter.

For starters, traditional IT tends to be built around a transaction-based business model, but we’re seeing a shift from that to collaborative business.  Shani Harmon, partner at the management consultancy Trium Group, told me,  “While it often feels inefficient and even painful, the benefits of true collaboration — the free flow of competing ideas and meaning — is a source of unrivaled advantage in today’s environment.”

The kind of collaborative process that the “just Google it” generation has come to expect is in fact facilitated by the new IT systems. However, if you want evidence that companies haven’t exactly adapted to recent cultural change, try getting through to anyone in IT at the company of your choice with a specific service question. If you need more quantitative proof that traditional IT isn’t cutting it, consider a recent study by Oxford University that analyzed 1,500 global IT revamps and concluded that one in six projects went over budget by an average of 200 per cent. Dubbed “black swans,” these projects demonstrate that the big, expensive, old school IT implementation is ill-adapted to the needs of modern business.

While traditional IT’s preference for perfectionism and order may be an admirable ethic, it’s hardly the direction that business is going. In a socially-oriented enterprise, solutions are continual works in progress that are developed to a satisfactory position, and then iterated through a collaborative process of user feedback and small changes over time. Not surprisingly, this may go against the grain in many IT departments where the overriding philosophy is one of “we create the solution for the user/customer.”

However, with the speed of business and innovation increasing exponentially, having the patience to keep a solution in development until perfection may give the competition the opportunity to seize thought leadership. This holds true for internally-focused implementations as well — priorities and the needs on the ground change so quickly that, when a project takes too long, it often outlives its own usefulness before completion. Not surprisingly, the authors of the Oxford study concluded that “risk increases in line with the size of the project and its growing complexity.” The new IT model needs to get off the “big implementation” and give IT departments the flexibility to quickly react to the opportunities at hand, making small but steady improvements that show measurable value.

An additional area of concern highlights a general change in business, as organizational structure changes from hierarchical to flat team structure. As companies become much less rule-based, IT will need to follow suit in order to keep pace. In terms of hiring, it means that you need to look for people who can assert themselves across departments, while remaining grounded in the overall company strategy.

With its preference for perfection, hierarchical communication and big projects, the traditional IT generation is almost conditioned to failure in today’s environment. On the other hand, the new generation of IT pros — who grew up on the web — largely “get” it and operate with relative ease within the new emerging model. Does this mean that the successful IT department should be made entirely of hipsters? Not at all — the need for change does not negate the value of experience and perspective. However, late GenXers and Baby boomers who run the departments are going to need to adapt along the following lines:

• Willingness to release a less than perfect product and modify on the fly
• Adopt the mentality: “The end-user plays a role in creating the solution”
• Accept failure as part of the innovation process
• Embrace flat team structure
• Shift to a less rule-based, more strategy-oriented culture

As the Oxford study indicates, departments that resist change may find that rather than solving the problem, they have become the problem.

Michael Kirven is co-founder of agile business consulting firm Bluewolf, which provides lifecycle innovation, cloud implementations, IT staffing, managed services and other services to sync business and IT for efficient, adaptive performance. He also co-authored the book “Iterate or Die” along with Bluewolf co-founder Eric Berridge.