Like Kevin Costner’s character in the beloved baseball film Field of Dreams, many CIOs hear a divine voice in their head that reassures them, “If you build it, they will come.”
If they create an application, they assume, users will use it. If they migrate data, users will leverage it. And if they offer support, users will seek it.
What the omniscient voice in CIOs’ heads failed to see coming, however, was the rapid rise of cloud computing, which over the last several years has catalyzed a transformational shift in the way individuals and organizations consume IT services.
Thanks to cloud computing’s low cost and high convenience factor, employees and the departments they work for are increasingly cheating on their IT departments by flirting with “shadow IT” providers like Dropbox and Evernote, whose unsanctioned services appear better, faster, cheaper and easier than those developed and approved internally. Although IT departments are still building, fewer and fewer users are coming.
The mass exodus from internal IT departments to shadow IT hurts not only CIOs, whose function appears increasingly ineffective, inefficient and irrelevant, but also the businesses they serve.
In fact, a 2016 survey of legal technology professionals by e-discovery and document review company Consilio found that shadow IT creates numerous risks for organizations using cloud-based applications. including: inadvertent disclosure of sensitive data (64 percent), theft of intellectual property (39 percent), regulatory compliance failures (26 percent), service outages (21 percent), and inadequate application of document retention (16 percent), among others.
And that’s to say nothing of lost opportunity costs, which are significant in the face of external solutions that support organizational silos, and shadow IT’s lack of insight into business objectives (which therefore undermines strategic alignment)—all of which can undo the productivity gains and cost efficiency purported by shadow IT providers.
Clearly, cloud computing has spawned just as many thorns as it has flowers. For CIOs, however, the question going forward isn’t how to raze the garden that shadow IT has planted in their organizations; rather, it’s how to grow a better one.
There are many reasons shadow IT is so popular with users. For starters, external cloud solutions are easy and affordable to acquire and deploy. They also evolve quickly, in direct response to user needs. Finally, they’re elegantly simple to use and, if problems arise, are well supported by help desks and other customer support functions.
At its core, ITaaS seeks to duplicate those benefits by structuring internal IT departments to provide valued solutions as if they were external service providers. Essentially, it’s turning the IT department into a “business within a business.” The CIO is the CEO of that business, which, like any other free-market enterprise, must compete with its competitors—shadow IT providers—for paying customers (i.e., other departments and lines of business within the organization).
In order to win market share, the IT department must create value for its customers by finding and exploiting a competitive advantage. In the case of enterprise IT, that advantage is its line of sight to the organization’s strategic business objectives, as an internal IT department is better positioned than an external service provider to deliver solutions that align with the company’s mission, vision and goals.
Imagine, for instance, a pair of lemonade stands. Both sell lemonade. One sells one variety, served in one size, at one price. The other allows customers to customize their lemonade with different flavors and sweeteners, and to choose from a variety of sizes and price points based on their tastes, thirst and budget. Which lemonade stand do you imagine has more customers?
The focus of ITaaS isn’t changing the product—the lemonade. Rather, it’s changing the way it’s delivered so the IT department, like the lemonade stand, can optimize its offerings in response to customer needs.
Reorganizing and realigning IT departments around the customer has many benefits, which organizations that embrace ITaaS can take advantage of. Chief among them are:
One of the primary things IT departments must do on their ITaaS journey is productize and commoditize their offerings for easy consumption by internal customers. Doing this requires them to simplify and standardize their services so they’re replicable and scalable. Along with a consistent user experience and predictable IT outcomes, the result is increased efficiency and, from that, lower costs. Additionally, IT departments that offer ITaaS function are just like external vendors; they establish transparent prices for their services and charge their customers to deliver them. This business model transforms IT from a cost center into a value center by encouraging lines of business to monitor the costs and consumption of IT resources, enabling IT to build better solutions at a lower cost.
Traditional IT departments are often siloed from the business. IT departments that deliver IT as a Service, however, must be strategic partners with it. This means the IT department is constantly tearing down walls and building bridges to meet its customers where they are. By creating a shared understanding of business objectives, this increased collaboration bears fruit for the organization in the form of increased productivity and higher success rates.
A major goal of ITaaS is to give business users access to “always-on” services that can be consumed in an “on-demand” fashion. To achieve this, IT departments must reuse existing services and components, and embrace automation in areas such as incident management, request fulfillment and even DevOps. When they do, they can spend less time on reoccurring issues and deliver scalable capabilities faster.
Because they price their services for customers and partner with them more closely, IT departments that embrace IT as a Service give their organization increased visibility into the costs and benefits of IT projects, which facilitates more strategic decision making at all levels of the organization.
IT departments that execute their ITaaS vision successfully will be primed to compete more effectively with shadow IT. As a result, lines of business will use fewer unsanctioned IT services and more internal solutions, increasing organizations’ compliance with government regulations in areas such as data privacy.
In the same way ITaaS helps improve compliance by competing more effectively with shadow IT, it helps IT departments increase security to safeguard sensitive data, intellectual property and proprietary information.
IT as a Service catalyzes IT innovation by encouraging increased collaboration with the business, which can yield new insights and inspirations companies can use to develop outside-the-box services. Likewise, its focus on automation means ITaaS frees up IT department bandwidth, allowing IT personnel to spend less time on routine and redundant tasks and more time on ideation and innovation.
ITaaS encourages IT departments to align their services with business needs, which helps CIOs and their teams advance organizations’ strategic business objectives in ways that directly benefit the bottom line.
ITaaS puts the customer at the center of every IT transaction, producing happier end users who see IT as an indispensable tool, instead of an insurmountable obstacle.
Individually and collectively, these benefits make a strong case for transitioning to an ITaaS delivery model for a small to mid-size business. Next week, we’ll be discussing how to implement ITaaS in the second part of our three part series: CIO’s Playbook: A Complete Guide to Implementing IT as a Service
Have any questions or comments? Fire away!