SaaS providers like to brag that they are eliminating the need for IT because they provide technology without the IT headache. Like most SaaS providers, they don’t boast about having an integrated solution. They are more interested in creating a pleasant experience, being easy to use or solving a specific business need. Updates are a snap, one click help desk chat, and no need to deal with Jim the IT bottleneck.
In my experience this is an unfortunate reality of an overworked and under staffed IT department. Moreover, most IT professionals were hired because they understood how technology worked not how IT can solve business needs. That’s a shame, because more and more IT work is being outsourced to SaaS providers that better understand your employees’ business needs and treat them better than you do. This has lead to some executives who believe that IT departments are just lowest-common-denominator technology implementers.
More ominous for IT is the recent announcement from Amazon. According to Steve Bjorg, they are introducing a Virtual Private Cloud (VPC) that basically is a cluster of machines only accessible over an encrypted virtual private network (VPN) connection. (i.e. your own private cloud without the infrastructure). The VPC enables you to build a bridge between your existing IT resources and your isolated resources within the AWS cloud, enabling you to use both worlds in concert. The first domino has dropped and it’s a first step towards complete IT outsourcing.
I’ve been involved in countless ERP, CRM and other point solution implementations. I can only recall one implementation where IT decided to do a thorough needs analysis to understand my department’s requirements. It’s mostly been a “we’ll decide what you need and you’ll take it approach” to technology implementation. As technologists, they forget about the people part of the equation.
It got to the point where my team and I took control of our own requirements and implemented SaaS applications to solve them. I knew this position could hurt me politically, but waiting for IT to implement a solution was like watching an hour glass with an endless supply of sand. Worse, IT was usually not staffed with strategic business thinkers that understood departmental pain.
So if you’re in IT what can you do to become part of the solution? Stop being reactionary and start being strategic. You should also:
- Research then respond. Your executives and employees are obsessed with data now. Are you helping them solve their data issues? Proactively reach out to your department heads and ask them what business challenges they are facing. If technology can help solve the issue, then help them build a business case to get the project funded.
- Educate yourself on the SaaS solutions that exist and decide if they can replace your outdated internal systems. This is especially useful with outdated systems that are sapping your time and are expensive to maintain.
- Act as a consultant to the business departments when an initiative is raised that involves a SaaS solution. Help the departments understand the potential pitfalls and integration issues if the proposed SaaS solution impacts the ERP system.
- Build an IT best practices wiki that covers the companies current technology solutions. After all there may be one that solves a business need (cost savings) and is unknown to 90% of the company. Allow employees to comment and update the content in order to understand their perspectives.
- Be responsive. This is the single biggest advantage you have over SaaS providers. Not only are you in house, you also better understand the context in which your business manager is functioning.
So, don’t pretend SaaS doesn’t exist and will go away. Be proactive, partner with the business units and just be responsive.
Be honest, how does your IT customer service compare to your SaaS providers?
(Cross-posted @ Seek Omega)
I have to echo some of the comments by Fidelman. IT is not strategic but I believe that IT is farther along than Fidelman believes. They do see the writing on the walls and are moving in that direction.
Mark,
What a wonderful and insightful post. We at PivotLink are seeing the same pattern. Most Business Intelligence projects get stuck in IT for too long because the IT staff was hired based on knowing how the technology worked and not how it solves the final need of the business – getting insights and analysis.
We have been telling our prospects to unburden IT from the mundane activities of keeping the servers running, monitoring data loads, rebuilding indexes etc. and refocus. That’s the key – Refocus.
Refocus on business processes, ensuring data quality, gathering cross-departmental requirements, ensuring that we as Cloud vendors can meet the requirements and the service levels needed by the business. IT needs to change their role – they need to be more like product managers in a software company – who gather requirements to create products that align with customer needs. I was presenting to a prospect yesterday and when we showed them what we could do, this enlightened VP of IT said – “Wow. If you could really take care of all this complex BI that we have, we can focus on how we can make the results more consumable through mashups”.
The movement of the hardware and software to the Cloud reflects another macro-economic reality that has a significant impact on IT. In the mid-90s 50% of CAPEX of US companies was spent in technology. This fixed infrastructure became a huge drain on earnings when the downturn hit. In 2001 companies had few options. In 2008 they had SaaS options. This is showing up in the strong business results posted by Salesforce.com and Netsuite. Going forward, the right way to buy technology will be Cloud – it can be adjusted with the ups and downs of the business.
IT will still have a better role – someone will have to understand what technology can do, just that it will be more strategic. I think the movement to cloud is good for IT and business.
Mark,
This is coming up more often. Now is the time for IT to make a key cultural and organization shift to respond to SaaS and cloud demands. In my blog, I pointed out that line-of-business if moving into these applications so IT must catch up or be left behind.
http://blogs.sas.com/sascom/index.php?/archives/542-Why-IT-should-embrace-SaaS-and-cloud-computing.html
Having sold software myself of over 10+ years, I know IT can become very ‘inward’ thinking by laying out a set of IT standards (db, hardware) often keeping innovative software products out. This is often at the detriment of business itself. For years, companies were unhappy with the reporting tools in their ERP products. One ERP vendor created their ‘approved’ list of complimentary products and IT used this to keep out all the others. Of course, business users wanted their own choices.
I think IT can play a huge role in data extraction, collection, and cleaning for business. If they try to keep their role as controller or approver of these SaaS applications, they’ll only loose favor with the business.
Thanks for all the comments. I do hope IT becomes more strategic and is able to further support business managers. I have a lot of concern however, and don’t see IT investing in this area.