IT departments have a number of options to combat the perception that they are no more than non-strategic suppliers of technical services, says Clive Longbottom.

Organisations have been making small but valuable datacentre investments, which have resulted in more responsive, highly-available technology for the businesses, according to two cycles of global research by Quocirca in 2011.

However, the research shows that the chasm between IT departments and the businesses they serve is not decreasing much.

In the first cycle of the research, carried out in February 2011, 14 per cent of respondents said there was little alignment between IT and the business. That figure only dropped to 11 per cent by the second cycle of research in November 2011.

A further 27 per cent – only slightly changed from 26 per cent – said the business dictated strategic needs without involving IT management in the decision-making process.

In just 11 per cent of organisations had IT managed to embed itself using business-focused dashboards to provide visibility into how technology helps the business, positioning IT as a strategic partner.

Graph: Two cycles of research show the changing perceptions of the IT department

Two cycles of research show only minor changes in perceptions of the IT departmentImage: Quocirca

In many cases, it seems as if IT departments are treated almost like external suppliers. They are viewed similarly to an already outsourced group who are told what they should do after the business has made a strategic decision.

If this chasm is not addressed, it could be the one thing that has the greatest impact on the future of the corporate datacentre. If IT is seen as a non-strategic supplier of technical services, then it may as well be outsourced completely, with the datacentre resources procured from the cloud.

A decision to outsource IT completely – strategy, implementation and running – will be bad for all involved. Once the total IT provision is outsourced, the capability to make strategic business and IT decisions is compromised, unless the company being outsourced to is capable of ensuring that it does what the internal IT department failed to do.

That the business never placed sufficient pressure on the internal function points to a likelihood that it will see the new external function as purely a supplier – and so IT continues to be perceived as a commodity with little perceived added strategic value .

The internal IT department will suffer, because little is required from it now that everything is outsourced. And the outsourcing company will also suffer in the longer term because…

…the customer becomes less enamoured with what is rapidly perceived as a constraint on the business, rather than a facilitator.

The new role of IT department should be as a trusted translator. IT has to be able to identify what functional services it already has at its disposal in its asset base at the datacentre.

It has to be able to understand what the business requires now and in the medium term, carry out a gap analysis between what is already available and what will be required, and advise on the various pros and cons of implementing the required functionality inhouse, in a co-location data centre facility or in sourcing it on-demand from the cloud.

This philosophy is a major change for IT departments. The need for strong technical skills in how to set up IT equipment, how to install and maintain operating systems and application server platforms ceases to be one that has defined value to the business. All these things can be managed more effectively by external organisations with specialist expertise.

The real skills come in being able to identify how each option lowers any risk and cost to the organisation while increasing the business value of IT through enabling improved competitiveness. For example, the capability to sell more of the same products or services at the same or greater margin or to bring new products or services to market at a reasonable margin.

The technical skills required lie in understanding how the new IT environment needs to be pulled together – who owns the relationships between different facility owners and service providers, how the security of data is managed and how the user experience is optimised.

Internal IT departments need to change and become slimmer as the ultra-techie role moves from inside an organisation to the cloud providers. This shift is no bad thing – such skills are more cost-effective when shared between multiple customers, and skills can be kept up to date more easily when the core business of a supplier is the provision of IT services.

The new inhouse IT professional will need to be someone who is willing to work with the business. They need to sit in on business discussions and advise on what is possible at the technical level, but in business terms.

Only through bringing IT back into business decision-making process can the chasm between IT and the businesses be bridged.

Without this change, many organisations will find themselves in a technological cul-de-sac, with the ever-present threat of extinction through lack of capability to evolve effectively.

Quocirca is a user-facing analyst house known for its focus on the big picture. Made up of experts in technology and its business implications, the Quocirca team includes Clive Longbottom, Bob Tarzey, Rob Bamforth and Louella Fernandes. Their series of columns for seeks to demystify the latest jargon and business thinking.