Smaller is better!…

 

While the pressure of the global competition is increasing on all industries and businesses, companies try to find out more effective and efficient ways to win or even to survive. One of the best leverages of them is, of course and always, using information technology (IT) wider and deeper in all areas they can apply.

On the other hand, IT is still one of the biggest cost centers of the companies and investing in IT may have a huge negative impact on the profitability. In such a case, business management start pushing IT to do more with less. The question is “How IT can do more while spending less?”.

From traditional point of view, the best way is using internal resources for IT and providing all solutions requested by business with them. Although it may seem very simple and cost-effective, it cannot provide enough flexibility and agility for the business in long-term. Further more, in order to increase the capability of IT, companies may prefer to increase the number of resources of IT and that makes the situation worse.

The right and best solution in today’s environment is increasing the flexibility and agility of IT, while reducing its cost. The recent concepts and technologies allow us to easily modernize entire IT organization and we call that process as IT transformation.

A modernized IT organization shouldn’t be a large organization any more. A small and business focused IT may easily be more effective and efficient than a traditional one.

There are a couple of key principles which could be applied for that purpose. The first one is focusing on the value and benefits the IT organization should provide for the entire company and its customers. That approach makes IT a “value creator” instead of “cost center”. Although it seems very easy, it is not and requires a major mind change entirely.

The second key principle is outsourcing all the operational and deep technical functions like datacenter management, desktop support, solution development and application maintenance. Those functions don’t have a direct added-value on our business and can be easily provided by more experienced suppliers with a lower cost and higher quality. If you consider the current technologies and concepts like cloud computing, virtualization, mobility and remote management, working with outsource suppliers provides your company more flexibility and agility in giving response to market conditions and costumers while you can keep your focus 100% on your core business.

That transformation requires a major profile change in IT organization as well. Transformed IT organizations don’t need so many technical resources and technicians like traditional ITs. New IT people should be more senior with a deeper experience in business processes. Their focus should be primarily on creating more value with a lower cost and higher quality to the company’s customers. Just a small ratio of the organization could be technical experts who are responsible for IT governance.

This transformation is not so easy and takes 3-5 years. It also requires a clear leadership both from IT management and company’s executives. Getting support from an experienced consultant is a must in order to implement the proven technics and methodologies like ITIL and COBIT. “Lean” from manufacturing is another powerful and effective method and can be used for transformation.

The way to IT transformation might be tough and painful but it is worth to go.