If You Had a Choice, Would You Buy Your Brand of IT?

Acme Brand Anvil

People of a certain age might remember the Road Runner cartoons from their childhood. In each episode, Wile E. Coyote suffered numerous accidents attempting to snare the bird using products from Acme, Inc. Aside from the opportunities for a product liability lawsuit, I always wondered why he didn’t just quit buying from them.

Sometimes I wonder the same thing about IT organizations and the business units they serve. How many business units, given a choice, would choose their own in-house IT as their provider?

Recent research by Cisco (as reported on CIO.com) suggests that quite a few would not:

Consulting with CIOs and analyzing network traffic in a set of large enterprises in a variety of industries, Cisco determined that the typical firm has on the order of 15 to 22 times more cloud applications running in the workplace than have been authorized by the IT department.

And by Cisco’s tally, there is quite a bit that CIOs aren’t seeing. On average, CIOs surveyed estimated that there were 51 cloud services running within their organization. According to Cisco’s analysis, the actual number is 730.

And it cuts across sectors. Even in highly regulated industries such as healthcare and financial services, Cisco found between 17 and 20 times more cloud applications running than the IT department estimated.

What’s worse, many recommend heavy-handed tactics on the part of IT to deal with their “unruly” customers:

Now, note the potential benefits, “…can improve productivity and collaboration with little or no financial cost to the company…” versus the potential downside, “…corporate data may be put at risk or even lost if the employee leaves the company”. Given that both are valid, it would certainly make sense to evaluate the risks involved and whether they can be mitigated. Instead, a draconian knee-jerk is recommended.

The advice to tighten controls on users and consider replicating applications in-house where necessary is laughable. IT traditionally has a customer service problem to begin with, getting stricter probably won’t help. You would also think someone would have noticed that offering to replicate products in-house seems like an empty promise when the reason for going outside is that IT isn’t able to provide what’s needed. It seems like piling on to mention that replicating commercially available services probably won’t make a CIO seem very business-savvy.

Building trust in the process and trust in the product would be a good start to making the customer a partner rather than an antagonist. Or you can rely on their being forced to use you. Monopolies can be a sweet deal…while they last.

Would you buy what you’re selling?

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4 thoughts on “If You Had a Choice, Would You Buy Your Brand of IT?

  1. I think the challenge here is that technical people (the assumed audience for the blog) are not the ultimate customers for IT. That is usually businesses. In the absence of any objective, reliable way to determine quality, cost is the main determinant and, by being cost-driven, IT departments are training their users to accept lower and lower levels of service.

    However, the consumerization of IT (e.g. corporate use of iPhones) and cloud-based products have given IT departments a way to acceptably increase user satisfaction. It comes down to a change in business model that allows a better technical solution.

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    • I’d argue that IT is testing the limits of their customers’ patience rather than training them. There’s a breaking point (they’ve already reached the point of stealth rebellion), and I shudder to think what the result will be when that’s reached. Customer focus has been and continues to be lacking in the IT world. I think part of that is structural (IT “owning” the IT budget) and part is cultural.

      I blame the budget process more than anything else for the mistaken emphasis on cost. The shadow IT figures show that the customers will voluntarily pay more to get something usable. To the extent that fixating on “objective” measures is driving it, that reinforces the disconnect with reality. Focusing on the wrong things because they’re easier to measure is like looking for your car keys where the light’s better rather than where you actually dropped them.

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      • I think we need to be careful about blaming budgets. Low budges and cost focus is a symptom, not the problem. If I could objectively demonstrate a better quality IT organization (likely to cost more) or where IT benefits the company, some companies may choose to adopt it.

        If people are unhappy with IT, that is the responsibility of the executives running and funding IT. That is how management works, and is driven by incentives and KPIs. Thinking ad absurdum, if I told an IT executive to raise customer satisfaction and doubled their budget, I am sure things would significantly improve.

        As for shadow IT, the main rationale is not necessarily cost. As you say, shadow IT often costs more. Instead, it is the hurdles and hoops IT departments place for procurement and integration. This is a much wider problem. Most non-IT people are ignorant of security risks, for example.

        The underlying problem is people want better IT but are not willing to pay for it. Therefore, IT organizations and the companies that service them need to work out a way of providing a more user friendly product at a lower cost. As I said, consumer-oriented products (e.g. iPhones) have adopted enterprise features, pushing out less user friendly incumbents (e.g. Blackberry). Other companies have leveraged economies of scale to push better products (e.g. cloud vendors, Atlassian’s recent IPO).

        It has taken IT vendors, and therefore departments, time to come up with better business models that give customers (organizations) and the end users what they want. The future has potential. Whether we get there depends on people continuing to push for the “and” (better and cheaper products) instead of the “or” (better or cheaper products).

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      • I’m not blaming low budgets, but the budget process. Absent context, it would be impossible to say anything defensible, one way or the other, about the amounts. It is possible (and I believe, quite defensible) to comment on the traditional budget process where the IT organization “owns” the spending on IT. In my opinion it promotes conflict and risks money being spent in ways contrary to the overall enterprise’s goals. Likewise, it decouples the spending from the benefits and makes it harder to tease out whether money’s being spent wisely.

        The whole “alignment” issue is a huge red flag. When’s the last time anyone’s heard about “business-HR alignment” or “business-Legal alignment”. I disagree that doubling a CIOs budget would result in a satisfaction gain – I’d be willing to bet that a large percentage of those operating in the traditional manner could maintain or even grow the level of discontent with IT after doubling their budget.

        I disagree that people aren’t willing to pay for better IT. Again, the whole shadow IT issue points out that they are, at least at certain levels. Higher levels may be less willing to spend more, at least in the actual IT budget, but I suspect that has a lot to do with the decoupling I mentioned above.

        I think we’re in agreement re: causes of shadow IT and the risks that come with it. IT concentrating more on facilitating and less on control would, in my opinion, go a long way toward helping in this area. Better business models would indeed be the answer.

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