“If only the business understood IT, then the company would get move value out of IT.” This statement is a common belief among IT professionals. Understanding begins with the basics, framed in a language that is acceptable to the audience rather than the teacher. Talking about IT using the language of organization, its role, what it does, position, etc provides a starting point for teaching the business about IT. Using this staring point here are a twelve things that every business leader needs to know about IT.
#1 – IT is horizontal
#2 – IT is a hybrid organization – this post
#3 – IT is part of a capability – next post
2. IT is a hybrid organization
A hybrid inherits the characteristics of its parents, often through a process of cross breeding. IT is a hybrid organization as it has enterprise wide responsibilities like other corporate functions such as HR and Legal. IT resources are shared across the enterprise, but they do not do the same type of work (establishing and administering policies) as these other groups.
IT is an operating unit, unlike HR, Legal or Finance, which concentrate on establishing and administering policies. IT does things, they deliver services, they have operational responsibilities that if not executed well will harm the business.
At the same time, IT contains processes related to transformation, development, support and operations. This means that IT not only delivers current operational services, but also delivers the new solutions and innovation required for your future. Think about it this way, the average business unit is able to allocate about 3-5% of its budget to future transformation. This is in contrast to the average of about 30% IT organizations have to build solutions for the future.
Recognize that your business will continue to operate if temporarily loses its HR or Finance capabilities. The enterprise will not operate if it loses IT operations. Don’t believe me, then how are you reading these words? You are using information technology.
As a hybrid organization, IT can take on things that other organizations cannot. Most often this involves working on initiatives and changes that cross business unit or operational lines. Recognize that in these circumstances IT is working ‘without a net’ and that sponsorship needs to come from the top where the business units and operations meet. Otherwise, IT is in the position of advocating for the enterprise and the performance of the whole which is an uphill battle against business unit leaders who are responsible for the performance of the pieces.
IT as an enterprise wide operating unit has the experience housing scarce skills, such as business process improvement as well as incubating centers of excellence (COE’s) for new ideas. The hybrid organization benefits the enterprise in two ways. First these resources are in a position where they can be readily shared across operating groups. Second, these resources are close enough to the technology to be better able to effect changes in systems that often accompany improvement projects.
Finally, as a hybrid organization, the IT unit can drive changes and improvements that streamline operating costs well in excess of the specific IT budget. This often happens where the IT budget is small, but IT solutions create leverage saving the organization 10 – 30X in expenses versus the IT budget.