Booz and Company proclaims the death of traditional IT (and possibly shared services)

At HP, we have suggested for some time that CIOs need to evolve into what we have dubbed a “service broker.” However, Booz and Company sees the business need for better information, more differentiating technologies, and faster time-to-market doing something even more dramatic. According to “The Death of Traditional IT: And the Rise of the New Partnership Model,” a perspective authored by Booz’s Mike Cooke, Aveek Guha, and Ahmad Filsoof, business units are now in the process of gaining more control over the IT that they use. As well, the authors believe an increasingly competitive world will require greater differentiation in the kinds of technology that is used by individual business units. Over time, this will cause business units to manage their own IT and will spur a total rethink of the corporate IT function.

 

In turn, this will drive a very different IT-business partnership model. In this model, individual business units will devise their own go-to-market strategy and decide what “capabilities” are needed to support their business strategy. They will determine what technologies are needed to take their products and services to market. As a result of this change, business management will begin to own sourcing, program and project management, business architecture, and information management.

 

Whither traditional IT?

What will be left for corporate IT? Booz believes that corporate IT will provide strategic guidance; procure and deliver all back-office solutions; act as an integrator and tester when business units choose externally provided services; and help build the underling architecture, operating model, and governance mechanisms. The good news: They claim this will move IT departments from transaction-based service providers to strategic partners. The IT-business conversation will move from costs and service levels to the creation of value.

 

To transition to the new partnership model, IT organizations need to ensure that they put in place a series of key building blocks including fit for purpose, enterprise architecture, governance, and service management; as well as upgraded IT and business capabilities and skills. Once again, the new partnership model depends on the business taking on a much greater role in designing, building, and exploiting the technology, platforms, and data it will need to succeed. Booz believes, as this happens, large corporations will increasingly have very little centralized IT at all. The companywide IT operation will be focused on provisioning through infrastructure as a service (IaaS) via the cloud. More specialized needs will be supplied directly to individual business units and functions through a combination of platform and software as a service (SaaS) offerings. Each unit would deal directly with its own vendors.

 

Booz believes that over time, this will lower costs for companies as their scale increases. Booz says that IT departments that actively support the decentralization of business technology can play a critical part in boosting the overall business value of IT. To do this, they need to prepare the way by designing an overall enterprise architecture that prepares the companywide landscape for change. More explicitly, IT’s role will evolve into that of consultants to the individual divisions and functions, offering guidance on the benefits of digitization and providing essential services such as cross-Crystal Ball.jpgfunctional infrastructure and vendor management.

 

The role of the CIO will change as well. Rather than managing day-to-day aspects of a complex technical organization, the CIO will be freed up to help the entire company develop the analytical sophistication needed to maximize the rapid digitization of every aspect of the business—effectively reasserting the importance of the “I” in CIO. So what do you think? Does Booz and Company have the right crystal ball? Or is Booz off kilter?

 

Related links:

Solution page: IT Performance Management

Twitter: @MylesSuer

Labels: IT management
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About the Author
Mr. Suer is a senior manager for IT Performance Management. Prior to this role, Mr. Suer headed IT Performance Management Analytics Product ...


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