Key organizational changes are needed to shift to ITaaS model

By: Hyoun Park


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Sponsored by IBM.

In part 3 of Blue Hill Research’s blog series on IT-as-a-service (ITaaS), we explore the key organizational changes needed to effectively transform from a traditional IT organization to a flexible IT department that treats IT as a capability. The key organizational changes that need to occur as IT shifts from a CapEx to an OpEx model are:

  • Centralized governance across all cloud services.
  • Shifting from vertical management to business-centric horizontal management of IT resources across network, database, analytics, processing and storage.
  • Self-Service-enabled resource catalogs available to all relevant stakeholders.
  • Sales, marketing and pricing mechanisms — to bid against external resources and to serve as a management control.

The first of these capabilities, centralized governance, may seem to be a standard capability from an IT perspective and may not look like an organizational change at first. However, the ease of cloud resource deployment, the variety of options and the lack of centralized tracking and governance across all SaaS (software-as-a-service), PaaS (platform-as-a-service), and IaaS (infrastructure-as-a-service) options can make it extremely difficult to ensure that businesses are managing technology effectively.

To effectively manage these services, IT needs to transform its governance approach from a proscriptive approach that forbids the use of technology, to a prescriptive one that accepts that there are a variety of enterprise-grade technologies that can solve a wide array of IT challenges. This approach requires policy changes in technology evaluation. It also means that security, governance and compliance personnel may have to work more closely with business analysts and product managers to determine which services and technologies are being sought to solve technology problems, and then ensure that those services have enterprise support both from financial and policy governance perspectives. In doing so, enterprise IT can provide a consistent standard of governance and compliance for the computing resources being used, while allowing business users the flexibility to launch their own instances for developing, stress-testing and launching new capabilities and products on the behalf of the organization at large.

The second big shift in ITaaS may be confusing to IT 1.0 managers and employees: IT is changing from a set of technology silos to a scaled-out horizontal stack of capabilities. As this change occurs, IT becomes less of a technology provider and more of a managed services provider that will need to provide department-specific capabilities.

The most visible aspect of this shift: Over time, businesses can expect to start changing out IT specialists across storage, processing, database and network groups with generalists who are used to working with all of these services on a virtualized level, while ensuring that the correct resource levels and controls are in place for specific areas of the business. IT will become increasingly departmentalized and role-based as IT deployment personnel become less focused on individualized and certification-based troubleshooting capabilities and more focused on how to aggregate and provide adequate services. Rather than simply managing role-based access controls, companies will start providing role-based IT services and capabilities based on the level of computing performance, analytic complexity, storage and networking resources needed to support business activities.

The third key trend focuses on identifying relevant IT services and providing them in a self-service catalog so business managers can choose what they use. By bringing email, messaging, collaboration, telecom, mobility, enterprise apps and IT infrastructure resources into a storefront, managers can simply order new services rather than go through onerous procurement or IT request processes. In addition, IT has to be responsive to adding new services at the speed of business or the catalog will quickly become yet another IT silo to be avoided. In effect, IT trades offer direct IT management responsibility for the demands of tracking and understanding the newest and most interesting technologies that can drive future growth and productivity. This shift should be a joy to IT personnel focused on the future of technology, even though it may be a burden to those who had hoped to simply manage a mainframe, PBX or relational data environment throughout their careers.

Finally, ITaaS requires IT to act more like a business in terms of internally marketing and selling their capabilities while providing competitive pricing that can be charged back to relevant geographies, general ledgers and cost centers. Marketing, pricing and sales are not core competencies for the IT department, other than the managers who are involved in vendor and service sourcing or those who are close to the numbers associated with the profit/loss of their business units.

Thankfully, this does not mean IT will have to start calling up every employee to close them on buying internal resources, although it is amusing to envision a helpdesk turning the tables on its most troublesome and demanding employees! Rather, internal marketing means that IT service managers need to work with internal corporate communications and branding personnel to ensure their services are provided in an employee-friendly and comprehensible manner that allows employees to take advantage of the IT services provided.

From a pricing perspective, IT should theoretically be the ultimate insiders when it comes to bidding on a service — they should be able to create the best mix of price, security and ease of use. This is the real job IT is tasked to achieve. And by providing IT at an optimal price, departments can consume technology at its true price and self-regulate if they are overspending on technology relative to profitability.

And if employees are trying to use a non-IT sanctioned service to solve a problem, IT needs to either effectively “sell” the value of the solutions supported or bring the non-sanctioned service into the fold to create a more cost-efficient or business-aligned portfolio. This is the aspect of selling IT needs to master: The internal politics of demonstrating why IT is providing superior services and capabilities based on the business need for greater productivity, flexibility and pursuit of new business capabilities.

Prescriptive governance, contextualized scale-out aggregated services, self-service shopping and embracing IT as a business are all aspects of IT that have previously been thought of as idealistic, but impossible to support in a corporate IT environment. IT-as-a-service allows companies to take advantage of a once-in-a-generation opportunity to fundamentally change their use of technology and prepare for an age of digital transformation. Although CIOs may be prepared to understand the technology and finance of ITaaS, they must also embrace the cultural and organizational aspects of ITaaS to maximize the benefits this approach can provide to the business at large.

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About The Author

Hyoun Park

Chief Research Officer, Blue Hill Research

Hyoun Park is the Chief Research Officer of Blue Hill Research where he oversees day-to-day research operations, delivery and methodology focused on vendor and technology selection. In addition, Park covers analytics and enterprise mobility technologies as a noted advisor, social influencer, and practitioner. Park has been named as a top 10 Big Data, analytics, and... Read more