Making ITaaS Core to Your Business Plan

Transcription

1 Making ITaaS Core to Your Business Plan By Cesar Fernandez, Director of Product solutions In a recent independent survey of North American IT professionals conducted by PMG, 53% of the respondents indicated that various departments within their organizations were running shadow IT operations. Shadow IT refers to a situation where standard IT processes are circumvented. Instead, services are obtained from either independent service providers or solutions are built by users. This is typically done because of a preferred user tool familiarity or user convenience, or to speed up delivery time. And it generally happens because IT is seen as a hindrance and stumbling block to getting things accomplished. Shadow IT leads to significant consequences across the enterprise. It jeopardizes compliance and security of sensitive data. It creates inconsistencies and inefficiencies between departments that leads to issues of sharing and duplicating data. It also drives up costs due to redundant licensing or failure to take advantage of established negotiated rates already in place. Not to mention the time, cost and frustration that IT experiences when problems inevitably arise, leaving them to clean up a mess that they did not create. Adopting the concept of ITaaS ensures that the business perceives IT as an advantage, rather than an obstacle. In fact, a 2012 survey 1 uncovered several examples of shadow IT and their rate of prevalence within organizations: Instance rate Instance rate Excel Spreadsheets 19% Web Sites 8% Software 17% Hardware 6% Cloud 16% VoIP 5% ERP 12% BYOD 3% BI Systems 9% Other 10% 1 Résultats de L Enquête sur le Phénomène du Shadow IT, Thomas Chejfec

2 The existence of shadow IT operations can result in significant consequences across the enterprise. Consider the following examples: Compliance and Security In an effort to move forward with time-sensitive campaigns, the marketing department obtains external hosting services, which inadvertently offloads sensitive client data to unsecured areas susceptible to a breach. Or, someone from the finance group copies information from the database to their laptop for processing and manipulation, temporarily exposing sensitive data on their local machine. This also introduces a possible risk of data getting out of synch with the source database. By not procuring these services directly through the IT department, the marketing and finance teams could potentially compromise sensitive data unintentionally, without even being aware of the related risks or consequences. Waste Operating shadow IT essentially requires non-it personnel to assume the role of an IT engineer. Someone in this role would presumably need to know how to install and maintain applicable hardware and/or software components, as well as understand the wider impact of installing such components. However, non-it resources frequently lack this kind of knowledge and foresight. If and when anything goes wrong, IT would likely need to clean up the ensuing mess. The net result is wasted effort and wasted time, on both the business and the IT side. Inconsistencies and Inefficiencies The lack of standardization across departments typically seen with shadow IT can make even simple operations complex and time-consuming. Something as common as moving data between departments can become a significant challenge. For example, maybe one department relies on MS Access to house and maintain their data, while another uses Excel to manipulate that data. Meanwhile, a third department may use Word to report on that same data. As such, all data updates must be manually replicated across the disparate applications, or data will be lost. Additionally, different versions of those applications and/or the absence of version control mechanisms in them can cause confusion or errors. And worse what happens when the creators of these documents leave the organization? Cost Overruns When departments go outside of IT to secure what they need, they run the risk of paying more for the same services, software, or hardware than necessary. Typically, an IT department can negotiate better rates through their ongoing vendor relationships, and often has existing licensing deals already in place. Purchases made outside of IT tend to lead to redundant software licensing. And, in the case of cloud services, shadow IT can often lead to continued payment of unused resources when cloud services are not discontinued properly.

3 Departments bypass internal IT departments with the intention of getting their work done more quickly and efficiently. However, the unfortunate result of such efforts is frequently an atmosphere of dysfunction. Subsequently, when applications don t work, expenses rise, or security is breached, this can ultimately lead to finger pointing between IT and the business units they support. The PMG survey indicated that the growing specter of shadow IT was not isolated to specific areas, but was impacting the likes of marketing, sales, human resources, and finance. More and more, departments are looking outside of internal IT, and are reaching out to independent service providers. The reasons usually cited include availability, scalability, flexibility of choice, cheaper pricing, and better customer service. But, what is the real, underlying cause for the business to circumvent IT? The evidence suggests it may be IT s lack of partnership with the business, and their unwillingness to assume the role of service provider. External providers sell the concept of partnership. Their message is simple: If you are successful, we are successful. That is hard to dispute. It seems IT needs to adapt quickly and convey the same message, or the traditional IT organization may become as obsolete as the Commodore 64 has become to personal computing. ENTER ITAAS: IT AS A SERVICE Adopting the concept of ITaaS ensures that the business perceives IT as an advantage, rather than an obstacle, which drives that notion of a partnership. With an ITaaS mindset, IT becomes the cohesive, single service provider for the organization, regardless of whether a solution is developed internally or externally, or some hybrid approach is taken. IT provides the organization the hardware, software, and support as a single service offering. This is starkly different from the traditional silo-based model, where different areas of IT work as independent business units providing individual services such as hardware procurement and installation, software support and management, development services, support services, and so on. Change the Mindset So, how does IT begin heading down the ITaaS path? The answer is simple: CIOs need to change the mindset of the organization. Their managers need to stop thinking as independent organizational support units and come together to think like a business. The IT department needs to recognize they re no longer the only game in town. Just like any business small or large it s in constant competition with external hardware suppliers, software vendors, cloud providers, and service centers. Many articles have been written about ITaaS, including a number of top 10 lists for executing on ITaaS. Trends illustrating the shift to ITaaS have even been named, and various calls to action identified for getting started with ITaaS. However, very little has been said about how IT can develop effective strategies to beat out the competition. Small businesses know they need to differentiate themselves in order to compete with the big boys. They need to be innovative, creative, and offer more. So does IT.

4 Be Inclusive One of the ways small businesses successfully compete against larger corporations is by identifying ways to provide added value that the big guys aren t providing. Many do this by being inclusive and partnering with their employees, giving them the opportunity to shape the corporate vision. In much the same way, IT needs to become inclusive not only with its employees, but with the businesses they serve. IT and business leaders should be proactive and communicate regularly, providing information and feedback on products and services, support needs and business needs. Traditionally, the relationship between IT and the business has been reactive. IT puts out fires caused by businesses that circumvented IT because IT was not being responsive to their business needs in the first place. Typically, this is, because the business did not fully communicate its needs, or IT did not fully understand the need and/or was slow to respond, because it was busy putting out fires caused by the business who circumvented IT and on it goes in a circle. Changing the mindset from reactive to proactive, and partnering and soliciting ideas, information, and feedback from both sides is the first step to IT transformation. Don t Discount Increase Value Another way small businesses compete against the big boys is through adding value, instead of offering more discounts. Small businesses know that when they discount a product or service, they are losing money directly from their bottom-line profits. Making a product or service seem more attractive by making it cheaper frequently only cheapens the perception of the product or service. Successful small businesses know that customers will pay the asking price, as long as they offer value-added propositions across their products and services. Additionally, by introducing low or no-cost extras, like follow up calls, on-time scheduled delivery and high-availability, satisfied customers will spread the word to other prospects, which tends to increase the customer base. IT doesn t necessarily offer discounts on products or services. But, customers have more choices than ever before. If they don t perceive that IT is offering the added value they are looking for, they may view the IT services as subpar offerings, and they ll take their business to a competitor offering more value. IT organizations must understand not only what their customers need, but, more importantly, what their customers value. Beyond that, IT departments need to help their customers understand and quantify the value of the products and services they offer compared to their competitors. Write a Business Plan What? That s right a business plan. If ITaaS proselytizes that IT organizations need to think like a business, then the IT organization should write a business plan. Before most small businesses open their doors or make their first sale, they prepare a business plan. Most times a business plan is prepared in order to borrow money.

5 It helps place a valuation on the business by detailing what the business is doing, what services or products it is providing, when it expects to reach milestones and the expected expenses and anticipated revenue. But, borrowing money is only one reason. A business plan helps small businesses manage their business. It defines management and organizational structure, so lines of responsibility are apparent. It defines what the business will focus on over the course of the first year, and typically sets a five-year plan for the business direction. It helps address what if scenarios that may cause business disruption, and assists a business in seeking alliances and partnerships. A business plan can help an IT organization in much the same manner. While not necessary for a loan, IT business plans can still help place valuation on the services and offerings it provides to its customers, describe how these are made available, and what levels of support are in place. By creating and publishing a business plan to their customer base, IT organizations can also set specific objectives for their management team. In this way, IT can better plan and communicate priorities, strategies, and actionable steps as needed over the long term to their customers, helping to set expectations and providing a level of transparency. Think of the business plan as a strategic tool that helps IT remain competitive in the ever growing marketplace. It s a strategic tool that depicts, at a high level, the value IT brings to the business, so the business brings its business to IT. SUMMARY ITaaS has been defined as a method by which IT manages itself like a distinct business entity, competing against external providers to deliver the necessary services and products to the business. However, it s more about the value that an IT organization brings to the business, so that the business will not turn to the competition. And, the biggest value IT can bring is to begin thinking in the same manner that businesses think. Include customers in the decision-making and vision process; provide low and no cost added-value to their current offerings. And, don t be caught without a plan. about pmg PMG s powerful yet easy to develop solutions go beyond traditional IT service management, helping you create a better, smarter set of automated business processes that streamline operations, reduce costs and improve efficiency. The PMG Enterprise Service Catalog unites the best features from e-commerce, Business Process Management (BPM) and content management systems (CMS) into one tightly integrated solution. By implementing a flexible PMG solution that easily integrates with existing tools and your established business environment, you can handle internal service requests faster with fewer manual processes and less reliance on staff intervention. The result is a more efficient, less costly set of business operations. And that s just smart! Cesar Fernandez is the Director of Product Solutions for PMG, a software company that deploys enterprise service catalog for the Global With a Six Sigma Black Belt and ITIL v3 certification, Cesar has over 20 years of experience in business process management. After several years of working closely with the PMG customer base, he now leads the company in developing service catalog solutions targeted to specific customer and industry needs. PMG 211 Perimeter Center Parkway Suite 450 Atlanta, GA phone toll-free sales@pmg.net