In the power struggle between retail marketing and retail IT, IT is getting its server farms kicked. It started with E-Commerce and is now growing with mobile and social. And if you CIOs don't want to see yourself falling to the lowest ranks of support departments, right below the mailroom and maintenance staff (if you're good, you might still outrank cafeteria staff, but I wouldn't bank on that), you're going to have to surrender. No, not everything. But you're going to have to surrender some long-held IT areas so you can truly retain control of the most strategic areas.
What has to go? If it can go in the cloud, get rid of it. E-Mail? Gone. Web hosting? Out of here. CRM? Exit, stage right. If it can be easily outsourced by specialist firms or even done by people in the business unit, you need to let it go, too. It's time to evict Web and mobile app development, along with pretty much any marketing initiative that isn't core to your business and doesn't use data from other parts of the business. Heresy? Certainly. But it's necessary if you have any hope of keeping your arms around information security, data and information services, and core business systems.
In three years, the chief marketing officer will have a larger technology budget than the CIO. With cloud-based applications popping up every second and ridiculously easy-to-use technology platforms such as iPads becoming more pervasive throughout the business environment, marketing teams are able to deploy applications in less time than it takes to schedule a meeting with the CIO.
So what does this mean for the already embattled IT teams that are already caught over a chasm between "keeping the lights on" with the old technology and "keeping up" with marketing and operations? It means they had better start learning to let things go. Because a good portion of what today is considered part of the IT realm is going to be quickly absorbed into the business units directly. What was once considered "shadow IT" will quickly become "business as usual." If you are spending your time trying to put the brakes on projects that aren't IT lead, you may very well find yourself on the wrong side of history.
I was brought up through the traditional IT ranks and hated it when the business tried to do IT projects without IT involvement. But those days are no more. Technology is coming too quickly, and the business can't wait for IT to approve the project only to get involved and slow it down with a bunch of "red tape." So the business stops asking IT and just makes it happen. I've seen it all: online ordering applications, mobile applications, retail tablets and even an entire POS platform chosen and implemented by the business without any IT involvement. It used to make me pull my hair out. Now I've come to realize that this is the direction business is headed (that, and I ran out of hair).
You don't have to look very far to see the factors behind this shift.You don't have to look very far to see the factors behind this shift. Social media is bigger than porn. Ninety percent of the world's data has been created in the last two years. Netflix accounts for more than one-third of the world's Internet traffic. Over a billion mobile apps were downloaded on the last week of 2011. Your users have as much computing power in their pockets as the server running your tape backups.
The business IT world has been slow to keep up with these new developments. It has been called "The Consumerization Of IT," and it's what happens when you take powerful computing platforms and make them very easy to use and very cheap. One of the results of this shift is that users are becoming highly savvy technology people. The bar has been set on how easy it needs to be to deploy and use applications. Technology has become so pervasive in our everyday lives that many projects traditionally considered IT projects are now being done without any involvement from the IT team. Is there an IT person out there, who bought their mother or father an Android phone for Christmas, who really thinks their world isn't about to change dramatically?
In many cases, these aren't small skunk-works projects that are destined for failure but medium-to-large projects that are often huge successes. Can you define the role of the IT department in deploying SalesForce.com to the sales team or Radian6 to the customer service team? (Not the role IT is given in the project, but the role that matches its expertise with the project's needs.)
I can deploy a great looking, fully functional restaurant mobile application for well under $10,000. I can manage all social media activities on highly effective, low-cost cloud-based services. Looking at it from a pure dollars-and-cents perspective, why should a company waste highly paid IT resources in participating in the project or support?
Listen, I get it. I've been in IT for 17 years. Before you get out the pitchforks and boiling tar, let me explain. Neither accounting system nor the ERP system is going to be turned over to the users any time soon, and many E-Commerce sites are massive systems containing dozens or even hundreds of servers. These large and complex systems will remain within the confines of the IT department to deploy and manage (for now).
I am not saying that IT departments will go away. The point I am trying to make is that not all technology projects will continue to be managed by the IT department. For each IT person who is reading this column, it's my bet that if you look at your current projects list there are at least a couple (if not more) projects where you would define your primary responsibility in the project as "not letting them shoot themselves in the foot." If that is IT's primary role in a project, then things need to change.
You will start to see the marketing and operations groups hire what would have been traditional IT resources.You will start to see the marketing and operations groups hire what would have been traditional IT resources. The roles of project managers, vendor managers and business analysts will shift first. Marketing and operations will hire business analysts to help them define their needs and determine which vendor to use. Project managers will help them make sure projects are executed on time, and vendor managers will make sure things operate smoothly after go-live.
If you think about it, these roles are all traditionally IT, but they are non-technical in nature. They have been part of the IT organization as an extension of the IT team's discipline, process and methodologies (something marketing teams are not known for). By hiring these resources directly, the marketing team is no longer competing with other business priorities. These people will likely come from other IT departments (or even internal IT), but they will have their brains rewired to think of "what can we do" versus "why that won't work."
So what does this mean for traditional IT? Big data + mobile technology + outsourced services = big headaches for IT teams. These teams will turn their focus on governance and information management. Governance will become key; organizations will struggle by enabling these business units to deliver autonomous IT services while at the same time protecting the company's interests. Just because something can be outsourced doesn't mean it should be. CIOs will find themselves in the position of reviewing IT contracts for projects they are not involved in delivering. Getting an IT review of a contract will follow a similar process to the one legal departments use today.
Traditional IT teams will start to build robust information supply chains and strong enterprise service bus architectures. They will spend time thinking about mobile device management and information security. In short, they will focus on either the large and complex IT systems or the glue that holds them together. This will put significant cost pressures on the CIO, whose budget will now not be tied to many, if any, revenue-producing projects. CIOs are going to have to fight for every dime.
Another very legitimate fear about this is IT departments might be gutted to the degree that they won't have the budgets or resources to deal with things the business units aren't interested in, such as infrastructure. For example, there are lots of legal and regulatory reasons why putting everybody on personal Gmail accounts might not be a good idea, even though that would still get a message from Shirley's desk to Bob's desk. Part of this facilitation is helping figure out what the units actually should take over versus what they really should not take over.
Business technology will be absorbed by the business. It's happening in your organization today. My advice is not to fight the tide but to embrace it. Take a look at your project portfolio and determine which projects could be shed to your business partners with the least amount of risk. Start having conversations with your operations and marketing counterparts about the business analyst role transitioning to work directly for those business units. Spend time on documenting and training your counterparts on solid vendor management practices such as contract negotiation and service-level agreements. Focus on how to make them successful without IT involvement in their projects.
What do you think? If you disagree (or even, heaven forbid, agree), please comment below or send me a private message. Or check out the Twitter discussion on @todd_michaud.