Mark McDonald

One of the reasons CIOs face the need to re-imagine IT is that most companies are pursuing a dual track strategy calling for growth and cost cutting.  These two goals are often seen as being mutually exclusive – creating a duel rather than a dual set of requirements. You are either supporting growth or you are cutting costs.

IT sits in the middle of both strategies.  Information and technology are crucial to gaining new customers and revenues through opening new channels, improving sales force effectiveness etc.  Information and technology are also critical to reducing costs and cost structures by integrating processes, eliminating waste and reducing errors.

Because IT can BOTH support growth AND cut cost leads some CIOs to try to do two things with one set of resources. This leads to a ‘both – and’ strategy and set of plans.

Seeking both growth and cost cutting, CIOs divide their resources into projects focused on growth and other projects focused on cost cutting.   For example, one project building out new customer mobile applications while another is consolidating data centers or retiring old applications.

CIOs who split their IT organization into two are trying a different version of the old axe DO MORE WITH LESS.

They are not reimagining IT.  They are just creating two smaller IT organizations in place of one IT organization.  In an attempt to divide and conquer, they are dividing their organization creating two subscale organizations, two groups, two cultures, and two logical organizations.

Bi-furcating IT

The notion of bi-furcating IT has come back into vogue recently.  It was an idea originated back in the late 1990’s when CIOs faced the need to support two radically different types of technology at the same time.  Do you remember the debates about having two IT groups?  It went something like this:

One IT group focused on maintaining our existing systems using traditional processes and practices.

while another IT group

Created the innovative solutions required to deliver eCommerce.  This group would be younger, not follow the same rules, be more innovative, work faster, etc.

That debate raged a dozen years ago was that the Internet required an entirely different approach to IT and therefore it was impossible to expect people who grew up on the mainframe to build for the web.

That same debate has re-emerged.  Either as a response to a ‘both – and’ strategy for growth and cost cutting, or as a way to handle building mobile, social media and other lightweight technology applications.   Geoffrey Moore has been advocating the latter, suggesting that CIOs need two IT organizations:  an old slow one to manage ‘systems of record’ ala ERP, etc. and a new sleek one to manage ‘systems of differentiation’ ala mobile, BI, social.

These lightweight technologies are different. Rather than describing a different set of requirements for IT, they describe a future for all of IT.

A house divided against itself cannot endure

The idea of separating IT into the good/cool/sexy and the costly/dull/boring responsibilities has innate appeal.  It is also insidious to IT’s culture, capacity and capability as it relegates your people into two separate and unequal groups.

Focus, skills, and funding are often reasons given for separating IT into two groups.

Splitting IT into two separate groups ‘haves’ and ‘have not’s’ in an attempt to gain focus is not re-imagining IT.  It is more like shrinking your way to mediocrity.  Responding to the fad with the full knowledge that once the glitter has worn off you will have to re-integrate the teams.

If splitting IT is such a great idea, like it was 12 years ago, then why don’t we see dual IT organizations today!

Simple reason is that a divided IT organization does not work because information and technology are integrated not segregated.

Re-imagining IT processes and practices provides the productivity to do both-and

Leaders facing these challenges address them not by splitting IT into two classes, an upper class where the rules do not apply and a lower class where the rules constrain them.  No, they seek to raise the productivity of the entire IT organization, both systems of record and systems of differentiation.  They recognize that three things are required to win in the future:  Productivity, Cycle Time and Throughput and that applies to all IT projects not just the ones that gain all the attention.

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Category: IT Governance Management Re-imagine IT     Tags: CIO Leadership, CIO strategy, cost cutting, IT organization, IT strategy, RE-imagine IT, Strategy and Planning

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