All companies regardless of size spend some of their money on IT services. It seems that a one-person business would manage the IT services quite differently than an international corporation. With all of the IT outsourcing vendors on the market, however, even one-person businesses have access to well-managed, high-quality services. The unitary price of them in fact depends rather on their quality and maturity level than on the size of the organization which utilizes them. Why companies should consider buying the more advanced and more expensive services? Regardless of size, no business should waste money in places where it’s not necessary. Why not buy the cheapest services then and save some cash? What makes the better organized and better-managed ones worth consideration? Let’s see what are levels that organizations might go through to realize that by themselves.
Stage 1 – Basic operations mode.
This is where many companies start. What businesses with small profits can afford is just simple IT support. There is no money for advanced solutions nor for highly skilled employees. A small group of few all-in-one specialists provides a basic set of services like computers maintenance, software installation, and administration of an e-mail server and a fileserver. As the budget for software is very limited, the IT team utilizes a lot of free open-source applications. Free solutions, however, demand even more work to maintain than the commercially supported products, so the efficiency of a little number of IT staff is even worse because of it.
Everyone does everything
The very few IT employees cannot vary in terms of their functions to provide specialized services. Everyone has to do everything to ensure redundancy in a small team. The “everything” means a scope from user support, through network and systems administration, up to some simple cybersecurity tasks. As nobody has time for any type of resources management, these things are done ad-hoc to mitigate the urgent issues. Hardly any improvement is implemented, as the IT staff just jumps into solving another issue, as soon as the previous one is done, just to keep everything working.
Individual implementations away form the IT team
The organization is getting used to doing everything manually – in Word and Excel, or even on paper. Some non-IT teams, however, need more advanced IT tools. With the inability of the IT team to provide these systems, other divisions implement and develop them by themselves locally. These applications or services often don’t meet best IT practices. They are usually overloaded with different modules and functionalities and served by non-redundant infrastructure. The local non-IT teams usually don’t maintain them properly, as they don’t have both the IT competencies and IT resources to do it. After some time it may lead to a rising number of troubles and crashes. As these problems become bigger, more often, and more unsolvable by both local teams and the IT team, the affected systems may even be abandoned, as users come back to their Words and Excels to do any work at all. To keep their applications in usable conditions, some non-IT teams hire IT specialists by themselves to address that. It may lead to creating IT support positions distributed to many individual teams.
The IT work is being done outside of the IT team. The IT equipment is purchased outside of the IT team too. The management board sees it as a “part of the projects” rather than the IT expenses. With this point of view, they may be happy of keeping the “cheap IT”. It seems cheap but definitely is not effective. Hiding the costs in individual teams and projects make it very hard to identify these inefficiencies. The IT environment becomes a fragmented puzzle of randomly implemented pieces having no connections between each other and not fitting each other. The IT team is also distributed crowd of IT positions and semi-IT positions doing their work with no coordination, each making their effort in his or her own direction. As the company spends more and more money on fragmentary implementations and management of many separated services, it keeps being too poor to develop more advanced IT services company-wide.
All of these inefficiencies sum up to quite significant costs which don’t result in delivering a proper value. The result is that a little money invested in poor IT services is in fact wasted. As there are very few IT management skills in the organization, nobody takes care of utilizing the IT budget effectively. As a result, instead of spending money for increasing maturity and effectiveness, they are wasted on building some more separate systems.
It drives itself in this kind of downward spiral of scarcity until…
Stage two – The IT revolution.
One day the higher management decides that they need to centralize the IT services and get more value from the IT. In order to let the IT team achieve it, they gain some funding to upgrade the IT infrastructure significantly. They put together a project team. The team does some analysis and consults the market to learn that there are a lot of systems to be implemented, which can make the company’s life better. The systems are supposed to fix everything and let the organization do the shift to the tracks of the modern business model. The team, together with the vendor, performs the greatest internal project in the history of the company. Everyone is very excited at the end of it, thinking that now everything will be so much better.
And indeed it is incomparably better than before. New resources seem almost unlimited compared to the previous situation. It convinces the business that everything works well. Tons of IT equipment together with loads of applications and services do their job as the vendor promised.
New implementations blocks
The business expectations of the IT services grow instantly as the users want their return from the invested resources. They request new functionalities to have the desired services provided. Every implemented service, however, adds to the workload of a still very small IT team. Soon, it becomes obvious that the team is unable to implement any new functionalities because of a simple lack of manpower. Unfortunately, this is just the tip of the iceberg.
Maintenance blocks
As the pressure for implementing more services grows, the IT team has to prioritize what to do. The business keeps pushing, so systems of lower importance are inevitably become abandoned by their support. Additionally, it occurs that many systems are not fully implemented. Some of them are used in a very small part because the IT team doesn’t have enough resources not only to finish the implementation but even to use them.
Replacements blocks
As time passes, some more bad things start to happen. The great IT environment keeps rolling and growing all the time with more computational power being utilized and more data being stored. Everything becomes bigger but also gets older. The gear and the systems are maintained as much as the IT team can, but it isn’t enough. After a while, it breaks more often and with a bigger impact on the users.
Lack of IT competencies and resources
The whole work necessary to maintain this big infrastructure fell on the shoulders of the same IT team as before. Of course, during the project implementation, the IT employees get all the technical education they need to operate the environment. They even may differentiate a bit to take the roles of system admins, network admins, helpdesk, and so on. In fact, however, all of them still do some of the end-user support as there is not enough of them to form strictly separated support teams. They do their operational jobs as they were trained, but this is all they can do. They are busy dawn to dusk by solving the most urgent issues in a large number of systems. They have not enough time to do the management job, the planning job, the resource management job and to do it all in a well-organized, thoughtful way. They don’t even have time to learn each system well enough to properly operate and support it. What’s even worse is that they don’t have time to maintain and oversee the cybersecurity tools and mechanisms. With so much infrastructure and systems, it leads to a big and quickly growing number of vulnerabilities to be exploited by cybercriminals.
Lack of financing on IT team expansion
The IT team starts to request more employees, but the management board doesn’t understand why these expensive IT systems suddenly don’t do their job. They blame the IT team for failing to provide services despite having all the toys. The board invested so much money in the IT infrastructure and applications after all, so it wants to see their return on the investments. What they get instead are problems with continuity of services delivery, lack of new implementations, and high risk of cybersecurity threats.
If the management board keeps failing to provide appropriate funding to hire more skilled employees, the IT environment degrades more and more as time passes. After another few years, the ad-hoc improvements made by the relatively low-qualified employees, make the IT environment virtually unmanageable and unmaintainable.
All of these result in even more losses of resources than before the revolution. A wide range of advanced and expensive IT systems are not used. These, which are used are not maintained properly so soon they break and there is no one to fix them. Of course, there are still more IT services than before the revolution, but a lot more money is wasted.
Depending on the company’s financial conditions and the management decisions, this degradation state can last for many years. Sometimes though something happens and the management changes its mind and then becomes…
Stage three – The rise of an IT management.
The management decides to face the reality and provide the budget for expanding the IT team by hiring highly skilled staff. What’s very important is that not only the technical staff that starts to appear in the IT team. For the first time first real managerial position is created and the IT ship starts to be steered by a real captain.
Back to normal operation
Systems are fixed and brought back to normal operation. Old, obsolete infrastructure is replaced systematically. Both equipment and software start to be supported and maintained again. Slowly but systematically things start to improve.
Issues with showing additional value
Unfortunately this time it’s not as exciting nor spectacular for the business as the IT revolution. The changes happen much slower. In fact, they happen so slowly, then from the users’ perspective, it’s barely noticeable. IT management may have a hard time proving the value of highly skilled employees. The most of improvements are made in the IT infrastructure, which is not as visible to the users as the applications and services layer. It makes it even harder for IT to show how the money provided by the company management work in favor of them. Fortunately, after some time the IT environment looks considerably better than before and then…
Additional value expected
The management board starts to request more value again. They want more IT services to improve the business operation. More implementations need to happen to fulfill these requests. For them to be processed successfully analytical, communicational, organizational, and managemental work is needed. But except for the single IT manager, there is no other management role in IT division. Business management representatives may not want to double the operational competencies already present in the operations team, so they refuse to hire IT project managers. They assign projects coordination roles to the IT technicians, to the specialists in the operations team, or even to some employees from the other departments.
It kind of works. Projects go forward. Some new systems are implemented. The management board sees the value coming from the invested money. New functionalities support business operations quite well. It’s really good. Unfortunately – again – something wrong starts to happen beneath the surface.
Development and implementation issues
Technical staff from the IT team is not able to understand the business properly, so their solutions work well technically, but often don’t suit the business needs well enough.
The non-technical staff leading the IT projects, on the other hand, may not understand the underlying technicals, so their systems happen to become hard to maintain and integrate with the rest of the IT environment. They may also find it hard to agree with the IT team on the technical requirements, especially if the IT team is not involved in the whole process. As the IT services are implemented and sometimes even maintained away from the IT division, the IT environment becomes fragmented again. A single IT manager is obliged to keep all of them in good condition and, of course, properly secured. As the lives of the systems are managed in different departments, IT not always knows what important changes are being made. From time to time it leads to technical problems, interoperation issues, and cybersecurity vulnerabilities.
Services distribution again
In this model of distributed IT project management, the responsibility of the application’s architecture is often taken by the top management representatives. They may make the decisions based rather on the fact who has more resources than on how to ensure proper interoperation between the pieces of the puzzle. Often the IT department is not the one with the most resources. The whole distribution of the IT projects around the organization was intended to overcome the lack of managemental and analytical resources in the IT team after all. The IT manager, even if he or she is not responsible for the process of implementation of each system, needs to coordinate all of the distributed systems at least on a technical layer. As the number of the systems grows, it becomes harder and harder to maintain. Some projects fail to be implemented properly, others wait forever to be integrated with other parts of the environment.
Inefficiencies come back
As the technical staff is quite adequate now, there are fewer wasted resources in the area of utilizing the IT systems and keeping them in good shape. As infrastructure and applications are maintained properly, they don’t end their lives as an unmanageable mess anymore. Unfortunately despite putting more funds into the IT environment, the company still fails to use a significant portion of it efficiently. By implementing the systems not fitted properly to the organization or to the technical environment, their potential value of them for the company is lost. They could support business much better if they were implemented and operated properly by and in the IT division.
Finally, it becomes quite obvious for everyone that if the organization wants to implement some more functionalities, something has to change again. This is when the next level of IT maturity emerges, the level of…
Stage four – IT as the leader of the business transformation.
Inevitably organization comes to a place where the projects of IT systems implementation have to be coordinated by someone else than top management and managed by proper IT project managers. As all agree on that, the company hires its first IT project manager and IT business analyst. They take tasks of managing the projects from all of the people around the organization and lead them to a successful finish.
Growing demands fulfilled
Of course, as it starts to work well again, the business wants more great implementations, so more IT project managers are needed. The amount of work becomes challenging for the technical teams too, so the IT department needs both the technical staff and the lower-level managers. At this point, however, the top management finally understands that in the digitalized organization, the IT department has to be strong and has to play the first fiddle in the area of IT management. They agree on the expansion of the IT department to make it happen. As the IT department gains necessary competencies, the board of enterprise architecture can be appointed to ensure that the implementation of the individual system leads to the development of a consistent IT environment.
Big costs for great value
At this stage, the IT department becomes the major cost of the organization, but it also becomes the division that brings the most value to the organization’s operation. It starts not only to respond to the organizational changes but also to drive them. With the strong IT operations wing, the company can benefit from digitalization like it always wanted. As the IT systems develop at a very fast pace on the market, the business always wants more, which puts growing demands on the efficiency of the IT systems to deliver more functionality of the higher quality. At this point, however, the IT department has some real competencies to collect appropriate data and plan the effort of implementations accordingly to both demand and the resources. It also has competencies to constantly work on improvements of its own efficiency, so it grows adequately to the growth of the rising business needs. At this point also, the IT department can also utilize the leverage of previously implemented solutions to integrate new functionalities there.
Conclusion
This route is not universal for all organizations, but almost all organizations are at some of the levels described here. Many of them are stuck at the first two stages, which makes them waste a big part of their money on inefficient IT which doesn’t improve the company’s operations significantly. The third stage is where inefficiencies start to decline, and the fourth is where there are enough resources for IT to make the IT department the main force of driving the company’s operations improvements.
This journey is worth to be taken as quickly as possible. It’s driven by the organization’s needs and the willingness of the management board to provide resources for these needs to be properly fulfilled. What can accelerate the process is the effective dialogue between the business and the IT department. Unfortunately, this is the case that is addressed in stage four, where these kinds of issues are sorted out. Before that, it’s really hard to establish the proper communication as the technical IT staff and the top management look at the IT operations from quite different points of view.
As it was a quite long text, it must have taken you some time. Hopefully, you’ve found some interesting insights, so this time was spent productively. I appreciate you stayed with me until the end!
