There always seems to be a lot of controversy over the concept of running IT as a business. There has been a recent backlash over whether or not it's a smart strategy and there has been a long running industry discussion over what it really means to run IT as a business. I think that the biggest problem is that most IT folks aren't actually business folks, so they say the words, but don't really know what it means or how to make it real.
But the recent dust-up has really been about the idea that running IT as a business is the wrong strategy in that it creates separation between IT and the business. This was all brought to mind as I read a recent article from Information Week entitled, "Global CIO: What's IT Worth?"
The article and Northwestern Mutual Life's story of IT transformation really had two key messages:
- Words Matter - How you describe your IT organization and the services you provide/activities you perform are the tip of the spear as you try to transform your organization. Where your words lead, your organization will follow if you make them real.
- IT Assets Have Business Value - and should be measured as such
The article has a lot of good ideas and information on measuring IT value, but the thing that struck me the most was Tim Schaefer's (the CIO of Northwestern Mutual Life) focus on changing the language to remove the perceived barriers between IT and the business. A lot of the targeted terms will be very familiar to those of us who are proponents of "running IT as a business" - internal customers, IT leaders, alignment, etc.
I understand why this is - words used improperly can create divides between people. His focus on the words was a statement that he was demanding intimacy and partnership between the IT organization and the business - to integrate IT into the business itself. And I can see where on the surface this seems like a repudiation of the whole "running IT as a business" mantra. But I don't think it is.
The issue is that "running IT as a business" was never meant to be a literal construct. It is meant to create a "service attitude" within the IT organization to combat the greatest ill that most IT organizations have - that they focus on the technology rather than on the business value that the technology provides. The intent - at least to me - was never to create this little stand alone business within a business with all of the separation that seems to imply. Instead, the model should be the one that the greatest businesses in the world follow - the creation of such intimacy, that they become an integral part of their customer's business. I believe that this gets to the same place that Northwestern Mutual Life is going.
In the end, maybe "running IT as a business" has a limit to its useful life. I think that it's a critical metaphor and place to start as you begin the process of transforming your IT organization to think in terms of services and consumers of services and the derived value of those services. But perhaps the metaphor begins to break down as the service context matures and leaves a residual of separation from the business as people take it too literally. Then maybe, the next evolution is to one of true intimacy with the business to finally make IT and the business one. Could be.
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