Getting IT departments to start thinking like service providers is an uphill struggle; getting beyond cost-to-value seems to be a leap too far for many. I wonder if it is driven by fear of change or simply a fear of assessing value. How do you assess the value of a service? Well, arguably, it is quite simple ... it is worth …
We however, do still control the anti spam filters.
It's amazing how few unsolicited emails offering to outsource IT services reach their destinations. Just dillegently doing our jobs of course, management wouldn't want lots of spam, i'm sure.
why all the change in IT
It generally has been and probably always will be seen as a cost or money pit alone. IT says we need this to inprove service to you execs look at it, do some beermat calculations of how this will affect bonus/bottom line/beer money and tell IT to do the same thing at a third of the cost or just not bother with it.
IT does not need to change, the perception that IT simply costs money and produces nothing needs to change. Yes IT stuff is expensive, but so is that Mercedes sl500 the CEO drives, he too could have bought a Toyota yaris or something.
IT is invisible when everything is working ( except t o the bean counters who use thick red permenet marker for IT related expenses (highlighted in yellow highlighter some more imaginitave ones use those little sticky arrows shaped like fingers that say EXPENSIVE COST too) however as soon as something goes remotely wrong/slow/ does not seem to give 250,000 worth of awesomesauce the eye of CEOron focuses on the IT dept yet again and asks why they spent all this money on something that clearly does not work, and at that point even the best greasy salesman IT manager cannot help but squirm in his nylon underpants.
Re: why all the change in IT
I don't think that this is entirely correct. Why should a company run their own email servers, if they can buy a reliable, well-maintained and secure email service from a trusted provider (not necessairly Google, though) ?
If email is not your core business you will struggle to do it correctly.
But there are many, many other ways IT departments can support the core business and acutally increase competitiveness of the core business. Too many people are running some sorts of clunky Excel reporting or even "database-like" things in support of the core business. Let go of the email server and help these people to quickly get a solution based on a proper schema, Postgres, Perl and a proper GUI. Or maybe just write a Perl script for them which properly processes their collection of Excel files.
Get yourself removed from the "datacenter" and direclty support the core business. That way you help your employer very directly to outdo the competition.
Re: why all the change in IT
Also, remove the amounts of paperwork "to set up a new database in corporate IT". Most people need rather small things done properly. Not all need RAID and 99,9999% availability. Not all need pricey Oracle. Address their needs instead of insisting on rigid rules of corporate IT.
Re: why all the change in IT
@Tasmanian God - "...a solution based on... perl..."
Perl? Seriously? You want a proper solution based on a scripting language that can barely do objects? Time for some new skills, I think.
Re: why all the change in IT
Why should a company run their own email servers, if they can buy a reliable, well-maintained and secure email service from a trusted provider (not necessairly Google, though) ?
picking google as an example, their google apps for business costs $50 per user per year. Let's just say that I have 37 users requiring mailboxes.
37 * 50 = $1850 per year or $9250 over 5 years (the lifetime of a mail server if your replacing it after 5 years when the extended warranty runs out). Running your own mail server is cheaper, simply on price.
The real costs
What is so often forgotten in most major companies is that IT provides the services that OTHER departments require.
It is not the IT department that is expensive , it is the other departments that use IT services.
To run the IT Dept I need very little equipment. ( My Computer and a small web connection)
To run the Call Center I need several databases, web servers, dedicated links, messaging systems, SMS systems, printers, large LCD screens etc etc etc etc ..
To run the Finance Dept, I need several databases, dedicated financial software, payroll systems, banking connections etc etc etc etc ..
To run the marketing and sales dept I need web servers, credit card transaction providers, fast DSL links for "Facebook" and "LinkedIn" etc etc etc etc ..
My lists are actually quite short and non exhaustive but I am sure that everyone gets the point..
IT for ITs sake is not so expensive, ITS THE OTHER BLOODY DEPARTMENTS THAT ARE EXPENSIVE.......
Costs should be attributed to the department that require them not to the department that runs them.
I have the least amount of manpower but the largest budget, go figure. ( Not including the salary budget ).
Sadly in many organisations there's still the view that any ideas originating in-house must by definition be not worth the paper they are printed on, whereas the identical proposal by an external company will be hailed as the cure for all ills and saviour of the company.
Or even worse, your proposal is binned but the idea behind it is hawked round a load of external companies for them to bid on.
Cynical? No, just spent many years in central government in the past.
Well, when there is "back channel" incentives to hire the consultants, of course they aren't going to accept in house solutions.
Presentation is where it is at. I've heard complaints like yours my entire career and no matter how great the ideas (often superior to outside ideas) IT folks generally can't sell.
It IS sales and even a bit of marketing if you want execs to sit up and take notice. Execs don't speak tech and neither do salespeople. Speak the language of your audience and use glossy pictures and lots of colors to distract them. They are easily distracted.
I suspect that there is a sinister motive behind that style of thinking: the baton of responsibility. If you experiment in house, screw up the implementation, waste a few million, then you're the one left the proverbial bag; if you pay someone else to handle it, even if their business proposal is printed on construction paper with crayon, it's not your problem if everything goes south. IT is used to be yelling at, and being responsible for everything under the sun; I imagine people come to IT if the 3rd floor bathroom runs out of toilet paper some days...even though it's not in their kingdom, so to speak, purely because IT is stacked with problem solvers / people who will fix your problem if bugged enough. Other departments, who have been around longer, have learned...they don't like responsibility, and outsourcing things is the easiest way to prevent your department from having to take on any additional responsibility.
Good arguments but the fact remains....
In the states if you carry ITAR related documents and that stuff is cought on a public service like google then you can kiss your employment gone.
As a service would be best for regular ISP types and not the small tech company but would be good for an advertising company or a company that does not have secrets and such.
Service providers are not the underlying success factor
I work in sales for a global SP. I am constantly amazed at how few of the IT leaders I meet can easily and coherently articulate the company's strategy and how IT are aligning their projects to match.
IT needs leaders in the same way that any organisation needs leaders. Where IT is brilliant and aligned to supporting the business the organisation is given a boost in every area. Where they simply providing services at the lowest cost with no focus on the major initiates then they are drag holding back the whole company.
Using SPs is not the critical factor in the success of IT.
PS - if you are going to us SPs then find one you trust and get them to help you sell to your business. You will have to trust us though.
other depts. do cause IT costs to go up, but since a database server comes out of an IT budget, or the storage for the database does, so do most other things, then it is IT that bears the brunt of the cost, also trying to explain what ifs to (most) bean counters is as futile as using a wet noodle to tow your car, They do not want to hear words like redundancy (unless it is an employees) they want to know what you need a 100k SAN array when newegg says you can get the same amount of disks for less and build it yourself... Backup generator? surely that large UPS you have in the building will cover all your needs...
DR? offsite? why the hell do you need to keep buying those tapes can't you reuse them?
We generally do not interface with the client ,so we cannot be seen as doing good, regardless if we do actually do good and prevent the world from falling down, we have a reputation of greasy socially inept cost centres who do nothing but play WoW all day and want more money for the elusive uptime beast
In house servers cost 3 times as an external provider. Response time is in days and weeks. External provider responds in 20 minutes and is 24/7.
More than half the staff export their mail to Gmail and use the Google Calender. Their Google store works with most devices.
No sympathy with our BOFH, complains he has too many apps and servers (hence response time in days and weeks). Told BOFH outsource the basic crap, and focus on the specialist stuff we f*&cking need.
When to outsource:
Any cost benefit, economies of scale from outsourcing CRUD apps/servers?
Is provider financially sound? Are they likely to go under? Is it CloudsR'us from BOFH's garage?
Are you free to take data in and out, with non-propriety formats?
So...you got anyone else working there in IT, or just the BOFH? No mention of a PFY?
And while we all love Google this week...well, smarter IT directors have contingency plans built around Gmail & friends not being there tomorrow. You certainly don't want to be like one of those companies who built their livelihood around some of Google's free services, who then faced a collapse when Google turned off said services.
Finally, what exactly are you doing that requires you to talk to your BOFH so often? Are you a developer? I am trying to wrap my mind around the reason that you'd need to speak to the network admin about an issue that no other tech of a lower rank could not solve that this would be an issue. What more, why you would wait days / weeks, which I assume is via a ticketing system, as opposed to seeing him / her in person, if the problem is of any urgency.
From the comments already, it seems like the old "Us" and "Them" attitude is still alive and well.
You know what? The IT within a company exists to provide a service, bitching about "the idiots" and how everyone else is the problem except "Us" doesn't help. Some people may not get why it's so expensive, but we provide the service, if they can't or won't pay for a more expensive service, you set out why it is needed, what the reasoning is, why it's more expensive and what the implications are in terms of service provided. You don't commit to an SLA which you can't achieve and stick to your guns. Usually when I've had these sort of discussions, more budget has been found, but it is the job of the people purchasing the services from the IT department to challenge costs and not accept the first thing put on the table. In the same way that when the hardware and software suppliers come in to tout their wares, we don't just get the shiny expensive product, we evaluate and make educated decisions.
Sometimes you will get requirement which doesn't make sense, such as "we use Oracle, no other databases, you will not install MySQL." These tend to be because the larger, more powerful equipment is needed for some systems, but the department doesn't want to shell out for multi skilled DBAs, so a pragmatic decision is made. This is the reason that UNIX Dave has to run Windows and not a Linux build of his own making.
IT is a service, hang on to that, focus on delivering service to the customer, rather than making an IT infrastructure, sometimes a 3rd party product is best, sometimes it's homegrown.
The IT dept within a company is not to provide a service (that's what an external company does), it is to support and facilitate the business objectives. This is usually to maximise profits. So you look at ways to increase income and reduce costs. Eg - this can mean outsourcing (reducing costs) so staff doing 3 people's jobs at 1/3 of the quality can focus on doing their original job at 100% (increasing income).
The article is more or less correct, and it’s interesting to read some of the comments saying it all wrong. The thing is an IT departments is not necessary for a company to succeed. As you are down voting me think on this, successful companies existed before IT came along.
Despite what you may think an IT department is a service department, it exists to provide services to the company to allow the company sell its wares, and make money from doing so. The IT services may be provided to Sales, Marketing, HR, Finance….. as such an IT department is no different from HR or Finance, though maybe with less legal restrictions in IT.
As a wise man once said: There is no such thing and an IT project, only IT lead projects.
Successful pre-IT companies
Successful companies also existed before electricity came along. Successful companies learned to use electricity; unsuccessful ones went out of business. Technology is an essential part of most businesses, one which reduces overall costs by automating repetitive manual tasks or which adds value by creating capabilities where none previously existed. Excel, these days, is more than just a replacement for paper spreadsheets, it's actually a development platform in its own right which enables business analysts to automate their own business logic. Arguably, this capability allows them to bypass IT, but who do they turn to when Excel crashes?
IT definitely does need to be service-driven (and most IT departments, in my experience, actually are), but saying that companies don't need IT is simply incorrect, by and large.
An external provider's job is to milk you, IT's job is to make things work
An external provider can do the same thing IT does, while charging you more than if you paid the staff yourself, so they make a profit while paying the same staff you would have otherwise paid, as well as paying their marketers. Now instead of rising and falling with you, the people who own your data are interested in their own profit, not yours. Staff at external service providers is rewarded for costing you money, not saving you money like your IT staff is. An IT department that starts acting like an external service provider, not members of an organization is bound to fail. Everyone needs people to fix broken things and make things work, which is what IT should be doing.
Re: An external provider's job is to milk you, IT's job is to make things work
*shrugs* IT is playing the scapegoat, apparently, for a number of popular sins at companies these days. I believe it may be due, in part, to the paranoia brought on by the fear that computers / technology represent to the masses (IT might be spying on you!), as well as the massive inferiority complexes exposed by interacting with the machines on a daily basis (30+ years on, machines are still magic to some people; and they are hell bent against taking a course to reveal the wonders behind them / get comfortable with them).
But the fact is, IT really is such an easy victim. There isn't enough data, yet, being pounded into business school graduates about the effects of a long-term slash and burn on a company's IT department. Hell, what they're doing now is part of the learning process, albeit on a global scale -> many businesses out there are stuck between various versions of Windows, let alone Linux, Unix, or Mac OS X, with varying degrees of IT support (or no support), with some businesses paying to be on the bleeding edge of technology, while others are trying to 'suck it and see it approach'; the latter continue to use Windows XP machines, for example, until they are run into the ground. This strategy, of not paying for upgrades / keeping up with capital investments, appears to pay off handsomely at first; the skills for operating the machinery are well-known, support is common, replacement parts are rapidly depreciating in cost. This works for 5-10 years. However, at some point, a critical part breaks, or a pressing need to upgrade becomes apparent. The critical part probably costs a little too much, or can't easily be replaced...or so on. An upgrade is needed. However, since the machine is so dated, it can't be upgraded. It has to be replaced. And not just a little bit. The entire thing, as well as all of its attachments. Nothing can be salvaged. The business owner will probably try to find a way to keep it going a little longer, but it quickly becomes apparent that this golden goose is dying, if not dead. And now, shock of shocks, he has to pay a whopper of a price for a new machine, with totally new software (possibly from a new developer), wait for someone to learn how to use this software (several months of training), and that's assuming that it fits all the business's needs...ouch. And that's assuming a single machine...if it's multiple machines, with some proprietary manufacturing interfaces hooked up to them....could be rough. You're looking at serious down time.