ITaaB: IT as a Business

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There’s a lot of aaS in tech circles right now: Software as a Service (SaaS), Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and so on. They’re all generally lumped together into the one concept of ‘cloud computing’.

The basic idea is that a lot of IT these days can be provided as a pay-as-you-go utility, like electricity or water. You can buy compute power from Amazon EC2 and Google. There are hundreds of companies that will host a virtual machine for you. You can buy cloud storage from dozens of places.

Why Have Internal IT?

That’s a great question. Why indeed? If I can buy my infrastructure by the month from a cloud vendor, why do I need you, Mr. Internal IT man?

If I can buy all the components for my IT needs from external companies, and then they have to hire the IT weenies to keep it running, then they have all the problems of dealing with them and I don’t. That’s a pretty awesome value proposition.

What’s yours?

If you’re a manager in an internal IT unit, you’d better be working on your answer, because this question is going to come up more and more often. If you don’t have a good response, you’re history.

Build a Business

If no one runs their own IT because they all buy it from IT providers, you’ll have to start becoming an IT service provider. Or get a job with one of the providers. Or just leave the industry.

I figure you’re here because you’re a bit of a go-getter who doesn’t want to just run sheepishly for the protection of a safe, boring job inside a utility computing company. You want to show you can run your own show.

If nothing else, you’ll have polished the skills you’ll need if you don’t manage to pull this off.

You need to start running internal IT as if it was external IT. You need to be entrepreneurial. You need to build your own small business inside whatever larger business you’re in right now.

That means you need to learn a lot more about non-technical things, like sales, marketing, customer service, product management, profit margin, cost control, debt collection.

It’s not longer enough to just know how to configure a router. You have to be able to figure out why customers need routers configured, and why they should pay you to do it for them. And then make sure they actually pay you.

No More Geeks

The first thing you need to do is to hire some non-geeks. You’ve already got plenty of techos, but what you don’t have are the people who can talk to other humans outside of IT.

Sales people. Marketing people. PR people. You need people who can sell your department to the business units. People who can manage expectations. People who can solve the “they don’t understand us” problems.

You need people who can make your documentation look pretty. People who can make sure the business units transfer money from their budget into yours (and drag the finance department kicking and screaming into a chargeback model). People who dig people, not just computers.

But they aren’t the people you should hire first. Who should you hire?

Product managers.

Product Managers To The Rescue

You need product managers to bring all the different parts of what you do together, and make them easy to buy. Standardise on whatever is closest to what your customers want to buy already, and then sell it to them. Think McDonalds, not Alfonso’s Boutique Bikes and Custom Rides Emporium.

You need product managers to bundle up these newly created products and put them in front of the sales people you hire second, and get them to go out into the business and sell your products. And come back with valuable intel on what products the customers wish you sold (and better yet, about the products customers actually pay for).

You need product managers to figure out what it costs to make and maintain these products/services that you sell, and make sure you charge enough to at least cover costs.

You need product managers to be responsible for the end-to-end delivery of everything you do right now, only better.

You also need to hire marketing people to help your product managers ensure you’re building the right products, and that the business knows you have them for sale.

These people may actually all be one person, or you might have one product manager and one sales/marketing person. You get to figure out what works best for you.

But know this: you don’t get to slide by with just IT people any more.

Make Money

Finally, you need to start earning your keep.

IT is a huge cost for most companies, but I’ve seen few who even attempt to justify the value of what is spent. Compare and contrast that with the Marketing department. They at least try to measure the effect of dropping 50 large on a Twitter campaign. It might not work, but they try.

In most companies, IT is just a massive black hole that swallows insane amounts of money. And what do customers get back? “We will be unable to meet the timeframes for the next iteration of the account code management system because the alpha-wave interference caused by the oscillations of super-frob have caused everyone to stop reading your email by now and start daydreaming about how much I’d love to get rid of these pointless weenies who keep stopping us from getting things done!

How do you justify your existence? Oh, they need you? Really? I’ll bet they don’t need you nearly as much as the sales department. Or the CEO. Or accounting. Or HR.

You need to start building products and services that your customers want so badly that they’ll fall over themselves trying to give you money. Look at anything Apple makes. Even when it’s got major flaws they still sell millions of them. Do any of your customers love you like that?

You need to start thinking about profit and loss, and to stop doing the stupid things that cost more than they make. Still running old hardware and operating systems that went end-of-life five years ago? Windows NT 3.51? Why? “Because the business said so”?

Your customers are paying pennies for something that costs dollars to maintain, so you’re losing something on every transaction but making it up in volume, and you’re complaining that your customers are idiots?

Are you sure you’re cut out for this manager thing after all?

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One Comment

  1. Couldn’t agree more. Agree with your analysis and straight shooting. Keep it up Justin.

    Would make some smart observations to help add to your case. But right now, I got nuthin that rates worth mentioning.

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