The myriad IT delivery mechanisms now available have created unprecedented IT complexity and a changing role for technical staff, writes Barclay Rae. A change in mindset and attitude to relevant skills – with shopping leading the agenda – is needed to guarantee that IT is still relevant in the modern enterprise.
The biggest challenge facing all IT organisations in the next few years is not just technology development, but the growth of new commercial and service models for IT: cloud and SaaS, managed and shared services, outsourcing, user-driven devices etc. The greatest issue here is not the ability of IT to implement and integrate these options, but the need for a paradigm shift in the skillsets and capabilities of IT people. How do we meet this challenge?
It used to be so simple; the IT techie guys knew ‘what was out there’ and bought technology on behalf of the business, based on their technical knowledge – and often the persistence and charm of their vendor account managers. No-one really questioned any of this – only the tech-heads could possibly understand the specifications, configurations and integrations involved. That was back in the days when we all thought in terms of systems rather than services. Also, we didn’t have a multiplicity of buying models and options available that technically allow us to create and maintain services without an infrastructure, applications or even IT people.
Bypassing IT
Like most people in IT, I instinctively shudder at the prospect of that scenario, where the marketing department buys its CRM service direct from a supplier which they use via their own Macbooks and iPads, without any meddling from those pesky geeks in IT. However this is the reality and is already happening – the challenge is how the IT industry (and particularly in-house IT departments) can change and adapt to this challenge, in a way that still adds value to its customers.
I remember the first time I encountered the role of ‘buyer’ – it was a family friend who worked in a department store. I really couldn’t understand (aged 12) what on earth this person did and got paid for. Surely it was the customers who were ‘buyers’ and the store simply sold them stuff? Well of course the ‘buyer’ is an absolutely essential and pivotal role in the success and profitability of any retail service organisation. They need to understand the market – supply and demand – buying patterns, products, latent need, pricing models and profit margins, plus they need to be skilled negotiators and dealers. They can’t be taken for a ride by suppliers or overcharge their customers – it’s a fine balance of sustainable life in the retail eco-system, and if they don’t get things right then no-one is happy and the business ultimately dies.
So, in relation to IT, we need to develop the ‘IT buyer’ role – we must get better at procurement and supplier management – otherwise someone else will be doing it. We should also be the best placed to help our customers and businesses to get the best value, cost efficiency and management of risk from their purchases. The truth is however that this is not a commonly found skillset amongst IT people – it’s the same sort of issue that we’ve had with (the lack of) marketing and communications skills in IT.
Poor procurement
I have recently worked on several projects where IT managed services, outsourced support and cloud services have all been very poorly procured – to the extent that the suppliers are meeting their agreed SLAs, yet these are wholly inadequate for the buyers business needs. The customers are unhappy with the service they are receiving yet their supplier (the IT department) is unable to drive more from the supplier, which is apparently meeting its contractual obligations. This is not an uncommon situation (it also sounds like a good argument for cutting out the IT department completely), but it’s one that will not be sustainable for long.
In all of these cases the problem lay with the fact that the contract that had been bought was actually insufficient to meet basic business needs, although it was bought on the basis of cost reduction. As a result the contracts required re-negotiation which actually cost more than the legacy services. The whole process costs time and money and means disruption to all parties. It could have been avoided with a more robust approach to requirements specification, vendor selection and commercial negotiation.
So IT must wake up to the fact that things like good commercial skills, market awareness, negotiation and vendor management are going to be critical for success and survival – more so than developing technical skills and keeping up with developments to ITIL. Technical knowledge will need to be focussed on commodity awareness at the commercial level, with deep technical knowledge and expertise in niche areas relevant to the business and customer requirements. One could argue that vendors should also take responsibility here and provide better advice and guidance on the impact of what is (and isn’t sold) – however ultimately it’s not really their problem and to me the responsibility for good purchase lies squarely with the buying organisation – that’s how it is with retail.
So let’s get more IT-aware, but mostly commercially experienced and skilled, people working in IT to ensure that our customers get the best value from IT services – and that IT maintains relevance and value.
Barclay Rae is an independent consultant specialising in IT service management. Subscribe to his newsletter here.
bjr@barclayrae.com
Barclayrae.com
Twitter: @barclayrae
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The myriad IT delivery mechanisms now available have created unprecedented IT complexity and a changing role for technical staff, writes Barclay Rae. A change in mindset and attitude to relevant skills – with shopping leading the agenda – is needed to guarantee that IT is still relevant in the modern enterprise.
The biggest challenge facing all IT organisations in the next few years is not just technology development, but the growth of new commercial and service models for IT: cloud and SaaS, managed and shared services, outsourcing, user-driven devices etc. The greatest issue here is not the ability of IT to implement and integrate these options, but the need for a paradigm shift in the skillsets and capabilities of IT people. How do we meet this challenge?
It used to be so simple; the IT techie guys knew ‘what was out there’ and bought technology on behalf of the business, based on their technical knowledge – and often the persistence and charm of their vendor account managers. No-one really questioned any of this – only the tech-heads could possibly understand the specifications, configurations and integrations involved. That was back in the days when we all thought in terms of systems rather than services. Also, we didn’t have a multiplicity of buying models and options available that technically allow us to create and maintain services without an infrastructure, applications or even IT people.
Bypassing IT
Like most people in IT, I instinctively shudder at the prospect of that scenario, where the marketing department buys its CRM service direct from a supplier which they use via their own Macbooks and iPads, without any meddling from those pesky geeks in IT. However this is the reality and is already happening – the challenge is how the IT industry (and particularly in-house IT departments) can change and adapt to this challenge, in a way that still adds value to its customers.
I remember the first time I encountered the role of ‘buyer’ – it was a family friend who worked in a department store. I really couldn’t understand (aged 12) what on earth this person did and got paid for. Surely it was the customers who were ‘buyers’ and the store simply sold them stuff? Well of course the ‘buyer’ is an absolutely essential and pivotal role in the success and profitability of any retail service organisation. They need to understand the market – supply and demand – buying patterns, products, latent need, pricing models and profit margins, plus they need to be skilled negotiators and dealers. They can’t be taken for a ride by suppliers or overcharge their customers – it’s a fine balance of sustainable life in the retail eco-system, and if they don’t get things right then no-one is happy and the business ultimately dies.
So, in relation to IT, we need to develop the ‘IT buyer’ role – we must get better at procurement and supplier management – otherwise someone else will be doing it. We should also be the best placed to help our customers and businesses to get the best value, cost efficiency and management of risk from their purchases. The truth is however that this is not a commonly found skillset amongst IT people – it’s the same sort of issue that we’ve had with (the lack of) marketing and communications skills in IT.
Poor procurement
I have recently worked on several projects where IT managed services, outsourced support and cloud services have all been very poorly procured – to the extent that the suppliers are meeting their agreed SLAs, yet these are wholly inadequate for the buyers business needs. The customers are unhappy with the service they are receiving yet their supplier (the IT department) is unable to drive more from the supplier, which is apparently meeting its contractual obligations. This is not an uncommon situation (it also sounds like a good argument for cutting out the IT department completely), but it’s one that will not be sustainable for long.
In all of these cases the problem lay with the fact that the contract that had been bought was actually insufficient to meet basic business needs, although it was bought on the basis of cost reduction. As a result the contracts required re-negotiation which actually cost more than the legacy services. The whole process costs time and money and means disruption to all parties. It could have been avoided with a more robust approach to requirements specification, vendor selection and commercial negotiation.
So IT must wake up to the fact that things like good commercial skills, market awareness, negotiation and vendor management are going to be critical for success and survival – more so than developing technical skills and keeping up with developments to ITIL. Technical knowledge will need to be focussed on commodity awareness at the commercial level, with deep technical knowledge and expertise in niche areas relevant to the business and customer requirements. One could argue that vendors should also take responsibility here and provide better advice and guidance on the impact of what is (and isn’t sold) – however ultimately it’s not really their problem and to me the responsibility for good purchase lies squarely with the buying organisation – that’s how it is with retail.
So let’s get more IT-aware, but mostly commercially experienced and skilled, people working in IT to ensure that our customers get the best value from IT services – and that IT maintains relevance and value.
Barclay Rae is an independent consultant specialising in IT service management. Subscribe to his newsletter here.
bjr@barclayrae.com
Barclayrae.com
Twitter: @barclayrae