Alright… By show of hands, how many of you work in IT organizations that are considered strategic assets of their respective businesses? Wait, I said strategic. Okay, let me re-phrase that… How many of you are considered a cost and constantly struggle to prove your worth? How many of you feel like IT custodians? Yep. That's more like it.
So what is strategic?
Consider the competitive marketplace. What makes a strategic asset within a competitive business? Are the power lines running into your office spaces strategic? Are the desks, PCs, or even servers strategic? I would contend they are tactical resources that are absolutely necessary to do business, but wouldn't you agree your competitors have those things too? So will the quality of desks or servers be the competitive differentiator that sets your firm ahead of the competitive race? Tactical assets tend to be commodities, things that are used commonly and quite frankly, are interchangeable and inevitably disposable; these things depreciate. There was a time when PCs and servers were considered strategic but then everyone got them and now they're not so strategic anymore. Now how they can be used, that leads me into the next thought: Consider intellectual property and to the brilliant minds that create it… What about the business models and opportunities the intellectual property and thought leaders provide? Sure these things can change, get replaced and disposed but typically the cost and risk of so doing is substantially larger than tactical resources. You don't see the capacities of a company's top leadership get outsourced do you? There's a reason why Microsoft, Google, or Amazon (amongst many others) don't freely publish its entire code-base or infrastructure blueprints and specifications. It's invaluable, unique, irreplaceable… It creates significant opportunities for competitive differentiation. Strategic assets are difficult to put a value on and when you can't assign a value, you can't get too picky on what it costs you to keep it or improve upon it; these things appreciate.
Is IT strategic?
Now many cite the Nicholas Carr article IT Doesn't Matter in response to this question. The title doesn't exactly do the article justice but he does get points for making it catchy enough to warrant its notoriety. Essentially Mr. Carr's assertion is that information technologies cannot be strategic because they are mired in the continuous mode of commoditization; innovations in Information Technology become so common that everyone adopts and thus no one gains differentiation and the strategic value therein. But would those responsible for the architectures of Google, Live, or Amazon agree with that? Let's pick on Amazon… Would Jeff Bezos say that their IT organization doesn't matter? Consider the Amazon Web Services such as the E-commerce service, the Elastic Compute Cloud (EC2), the Simple Storage Service (S3) and then read Jeff Bezos' defense and positioning of Amazon's emerging strategy. It will become clear to those who follow these pointers that Amazon is not just about selling books. The bottom line is that Amazon's IT group has created an architecture so solid in terms of scale, availability, performance, etc. that they can sell its capabilities to others and actually generate revenue. Yes, that's right… An IT organization not being viewed as a cost. This is an example of the strategic value potential of architecture and the ingenuity of engineers who build it. While the technologies themselves can be considered commodities, the architecture of using them skillfully and creatively can yield strategic value and I think Amazon (among others) is an example of this. With this, I suggest that an architecture can be more valuable than the sum of its individual parts.
Selling the Strategic IT Proposition
Don’t. At least not explicitly. I don't know for sure (obviously) but I would venture a guess that the IT gurus at Amazon circa 1995 did not start suggesting to build their infrastructure so they could sell it. Instead, their goal was to create the best infrastructure to exploit the Long Tail and sell tons of things most people at the time were constrained by scarcity. Amazon's architecture had proven to be so versatile and resilient that some could argue it was a primary factor in Amazon's survival through the dot com bust. Now I realize that you're probably murmuring that not every company is like Amazon and that IT can't be strategic in that sense… My point is not to suggest that all IT organizations have be Amazon, Google or Microsoft. Be pragmatic and practical but have big aspirations; such is good advice for architects. Value starts with trust and credibility and actions speak louder than words. No IT organization will ever be considered strategic by the business if the website is constantly going down or solution delivery is consistently overdue and past budget. Leverage existing technology investments and skills, be smart about acquiring and new technologies and talent and use them as the pieces of a solid architecture whose primary goal is world-class reliability in its broadest sense.
As a general point of advice, as technologists, we need to think beyond the gibberish of compilers and runtimes, configurations and scripts and become entrepreneurs constantly thinking of ways to add competitive differentiation and value to the business and its employees, partners, and customers. As I stated in a previous post, finding ways to make the IT organization (and thus the business) more agile is a great strategic proposition; proven over time, it is priceless and worthy of a cheesy MasterCard commercial.
Comments welcome as usual...