Do you agree that the words “shadow IT” already sound a little quaint? The term, which only recently applied to the bad behavior of business technology freelancing seems to have fallen from the lexicon. In meetings, at conferences, everywhere I stick my foot these days, what used to be shadow IT is now just departments and lines of business going out and buying stuff.
I’m not talking about the IT that keeps your business alive and compliant with transaction management and reporting - not just to keep lights on, but to keep everyone employed. That IT isn’t in a shadow and isn’t going anywhere. That IT is executing the investments, carrying the risk and we'd have a serious mess if it disappeared.
Opportunities in services and hosted apps on the other hand are reasons for excitement and optimism where a lot of cool activity is taking place. It's just a bit disappointing to hear business opportunists abusing Big IT as hopelessly out of date, an impediment to business, progress and agility; bureaucracy wrapped in a firewall. What sometimes passes as IT planning now is when an executive waggles an iPad with someone else’s blinking graphical interface on the screen and says, “Why don’t we have this?”
CIOs and other information managers I have been meeting at conferences for the most part don't expect these two realities to reconcile and some expect severe consequences. They walk a line, part bootstrapped infrastructure owner, part adviser to department heads and managers. If the folks at Forrester Research are right, a lot of organizations are going to disappear in the next five to 10 years because they will not be able to get their back office processes in order with enough efficiency to support a modern business.
That makes your CIO suddenly seem more valuable even as business managers want more tech spending autonomy in order to innovate and compete. So who’s not managing expectations rationally? Both sides, analysts say.
What IT needs, says Forrester’s Bobby Cameron, is to deliver dependable systems to manage 80 to 85 percent of their business workload without constant upgrades and maintenance. Only then can they free up their best people from whole careers in ERP consolidation and put them to work creating software and services that match the core competencies of their business. Even with a mandate it would take more years than many IT organizations have left to get there.
The business manager expects analytical support on their tablet and points to the free conveniences they’ve already adopted - email, drop box and virtual documents - as more examples of IT inferiority and unwillingness to merely sign off on the technology of the day. Business can be tone deaf to what’s actually hamstrung IT in reporting accuracy and compliance - and might forget that their CEO actually cares very much about these things. Business doesn’t appreciate that commodity services for payroll, travel and sales force automation have already been offloaded to competent providers, with HR and finance waiting in the wings. What’s left in most IT groups is already mission critical.
If the business gets into the idea of serious departmental tech outsourcing, says Rob Sullivan, senior partner at Philly-based management consulting firm Navint, it had better bone up on acquisition and carrying costs, service level agreements and how to make sure they have the right “teeth” in them. IT consulting's experienced view is more often about practical simplification than it is about a silver bullet. “You’d better know these things going in, your implementation will be easy but you won’t get the level of customization as when you own, so you look first for mature areas to let these guys take over.”
It's not to say SaaS and other services aren't paying off; Navint finds that they absolutely are. With former shadowers now taking ownership, one organizational response has been to swallow the medicine and push operational tool decision approval into the departments and lines of business. This is incremental and the best analytical tool examples I've seen are about creating convenience, not more technical complexity. Mark Smith, the CEO at Ventana Research, says the mission is to create time for people, not fill it with more tasks, productive or otherwise.
Our analyst friends tell us that greater organizations do want to break the silos that once held all the analysts and architects and embed them in finance and marketing and HR. The enterprise view of empowering the many is giving way to easing the process and the moment, and service and cloud providers have been sharpening their tools for this day. In other words, business owners are going to get what they asked for.
Last week at Ventana's annual Business Technology Innovation Summit, I also heard analyst Rob Kugel pushing hard on the linkage between sales and finance and how tools for this purpose are coming to deliver value. “The sales guys bring in the money, the finance guys are in charge of the money yet there hasn’t been a whole lot of interaction between them,” he said. It’s just one powerful example, the kind of missing link where analytics and big data and other data looking at trends in demographics and customers will reveal and predict rising and falling returns for organizations. It’s not the sort of project IT would or ought to initiate.
The example of Salesforce.com’s Dreamforce conference made Kugel think about the points where services can intersect revenue-bearing processes. “If you work in finance it’s usually because you have an accounting background. What’s considered goodness in accounting is doing the same thing over and over and over again,” Kugel says. “It can impede progress that should have taken place.”The same spreadsheets that accountants like don’t support a lot of change or collaboration, the analyst says. But change a dreaded monthly sales review into a six month predictive forecast and it’s much more interesting and value.
Newer tools and services from a cloud vendor can blend into a useful patchwork of old and new, meant to merge internal sales competencies with market data and expertise without eliminating the laws of accounting. In any such mashup - in sales or marketing or HR or finance – you might increasingly choose an external provider, especially when it’s as good as what it does as ADP is with payroll stubs. Business owners will still bash IT even though they can’t live without it, and they will increasingly procure for themselves the technology they use at the edges of the business. They’ll need to know a dashboard isn’t going to transform the business by itself.
Experts say it’s important to collaborate with the CIO and understand skill sets for important jobs. And wise people have shown me over the years that to take responsibility is to understand your core competencies and competitive differentiators, their priority to your success and who performs them best. If you’re going to own IT at the edges, then you need to ask a few questions: How important is this process to us? How well do we do this process? If it is critically important, why haven’t we hired the best internal resources or chosen the provider who does it best?
Advances in analytics, in big data, in-memory, cloud and other areas will create lots of new discrete opportunities with better tools and services that will make these choices more frequent. There’s a lot to be excited about but It won’t obsolete the skill and responsibility of ownership or execution. Even if we think we can do it all, technology and business both are still about choices and execution. It will be interesting to see who ends up owning them.