Software as a Service to the Rescue: Part 3 – Make the IT Department the Hero, Not the Goat

Some enterprise computing applications, such as manufacturing systems, financial reporting, and email, will always be the responsibility of a centralized IT organization.  But some applications are ideal for other IT delivery models.

One of the trends brought about by the recent deep recession is that Software as a Service (SaaS) has been endorsed as a valid IT solution delivery model by IT departments.  This is a significant point of discontinuity; prior to the recession it was only the more visionary IT departments that were on-board with Software as a Service.

But as IT budgets were hammered in response to the weak economy, the old model of “we build and run everything” became untenable.  IT was charged by executive management with a single mission: cut IT costs.  Forget discussions on long term strategy, forget deploying new capabilities, forget investing to enhance business agility — just cut costs, cut more costs, and cut ever more costs.

With the business units demanding more  information technology to deal with their increasingly competitive markets, and budget cuts reducing IT resources, IT departments have come to feel that they were unappreciated within their organizations.  Working the ballooning IT backlog became the IT department’s no-win suicide mission.  The situation for IT departments became so bad that Reuters published an article last summer entitled, “IT Career Burnout: What to Do When the Thrill is Gone” after Reuters read some of the commentary on CIO magazine’s LinkedIn forum.  To quote from the article:

“The demanding nature of IT jobs, coupled with a perceived lack of respect and appreciation, leads many IT professionals to lament, à la blues great B.B. King, that “the thrill is gone.” Many eventually wonder whether a career in IT is still the right choice.  These days, even more IT leaders seem to be suffering from burnout, judging by the experiences they recently shared in a conversation on CIO’s LinkedIn forum. It’s no wonder: The recession has forced them to spend the last 18 months focused on the more tedious aspects of IT management–namely cost-cutting, politics and more cost-cutting.  The burnout conversation was kicked off by an IT director wondering if there was anything more to the CIO role than “paperwork, politics and squeezing the last penny out of every dollar.”

When reading the above, remember, these are CIO’s speaking.  How bad must the morale be for IT executives below the CIO level, , IT middle managers, and IT staff?

IT leadership realized that their only hope for meeting the needs of their organizations was to expand their department’s scope to include quickly-deployable, already-built-solutions operated by application specialist third parties.  Software as a Service can be, relatively speaking, just “turned on,” or at worst, “configured” as compared with long development cycles of in-house solutions.

The switch in the model from “we build it and run it” to “we help the business unit pick the best SaaS solution” transforms the game for IT departments.  Instead of dealing with the hopelessly large backlog and trying to eventually slog through one project after another, frustrating everyone inside their organizations, IT becomes a key and valuable resource to the business units — consulting, advising, critiquing plans, setting requirements for security, and vetting outside SaaS providers for the business units.  Suddenly, involving IT expedites the project for the business unit instead of sending it into “backlog hell.”  IT becomes the hero, not the goat.

And if the business unit thinks the solution form the third-party is worth it, the business unit budget can pay for it without IT having to squeeze it into its own reduced funding.  This improves the quality of decision making because the cost and the benefit of a specific project are traded off within the affected business as opposed to an enterprise-wide IT priority list that often proved indifferent to the merits of smaller-than-enterprise-wide projects.

One application that is particularly well-suited for Software as a Service is search of external content repositories or market and technical research.  Any corporate IT department that sets out to build a strategic research portal has to reinvent the wheel, with all the cost and inefficiency that goes along with that.  There are no economies of scale to realize.  All the business and technical relationships required with third-party content providers are one-off’s for a corporate IT department, whereas a provider that specializes in this application has most (if not all) of those relationships in place and the cost to operate the system is shared across many enterprises.

Ultimately, it comes down to time and money.  A strategic research portal project might take two years to bubble up to the top of corporate IT’s priority list, and then another 18 months to build – only in the end to discover that IT isn’t set up to manage content flows from third-party suppliers. Using a dedicated provider of research portal and content aggregation services helps the portal be up can be up and running in as little as 90 days.

While the numbers favoring Software as a Service are compelling, culturally within large organizations it can be tough for corporate IT to let go.  But there is a clear trend: many computing projects are being successfully downloaded to business units and functional departments where the affected business managers can determine project priority and investment-worthiness against other needs at the business unit level.  Software as a Service providers directly serving the needs of the  business units are moving projects rapidly through to deployment with the blessing and assistance of the organization’s corporate IT departments.  The advantage of this approach is that projects that pass muster with the business managers can actually be carried out in a timeframe consistent with the business needs.  And for beleaguered IT departments and IT executives, this is a godsend.

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