On 11/27/21, the Wall Street Journal published an op-ed by Joe Peppard, a principal research scientist at MIT Sloan School of Management. The article is called “It’s Time to Get Rid of the IT Department.”
The tl;dr version of his op-ed is that IT Departments should go away and each department in an organization should have a single IT admin to take care of their technology needs. This is my rebuttal to this frustrating MBA theory-over-reality methodology:
IT Departments aren’t optional for organizations, and a hodge podge of policy choices on a departmental level is a recipe for disaster that comes from lack of consistency, forethought, and centering of user experience.
IT’s Role Within Business Over the Past 25 Years
I have been fortunate enough to have run a successful IT Consultancy/MSP for more than a couple of decades. I have seen many changes over that time and astounding growth in the field. Until the past 10 years or so, the IT department typically fell under the control of Finance. The Finance Director (or VP of Finance or Controller or some other finance title) was the decision maker for all things IT. And because of their role in the company, decisions were made on the basis of expense to the company rather than what was technologically best for the company. More often than not, more expensive solutions (even if they offered many more benefits to the company) were set aside in favor of lean solutions.
But in the past 10 years or so, a shift in corporate thinking raised IT management to the same level as other officers. So now, seeing an organization with a CIO/CISO alongside the CFO, COO, and CEO isn’t unusual. And the CISO’s responsibility is over the IT Department as well as Security and, possibly, Facilities. Decisions get made because they are in the best interest of the security and betterment of the company, not just because a solution is the cheapest. Finally – we can move forward with cohesive direction and team impetus.
Mr. Peppard claims that IT Departments should be dissolved and each individual department should have an IT person. The basis of his claim is found here: “Go to most IT departments and ask how they are measured, and it’s almost always inputs—money they have spent, systems that don’t break down, or projects that come in on time and on budget. But there’s almost nothing about the contributions that technology is making to business outcomes.”
In other words, he doesn’t see their value. I wonder if he sees the value of preventative medicine or auto insurance.
CapEx, OpEx, or ROI
There is some small nugget of truth in his statements, but only in that IT has, historically, been seen as an expense line. That’s why it always fell under Finance in the org charts – because it doesn’t – directly – make sales. But neither does the Finance Department. Nor HR. With his thinking, why not get rid of every department except sales? It was a long-standing frustration for me as a consultant when IT would fall under Finance. The bean counters (as we so affectionately called them) were always concerned with NOT spending money when, sometimes, the way to profit is with strategic spending.
Mr. Peppard’s statement about a lack of business outcomes can be overcome by simply changing the method by which IT is measured. In other words, teach the IT Department managers how to create a positive, business outcome-based statement. For example, they could create a measurement showing how many DDOS attacks were thwarted by the new firewalls installed, how many hours of productive work happened, how much data was saved, and/or how many sales were completed because IT put the right equipment in place. It’s not hard to measure the benefits. The managers just need to look at their data from a different perspective.
Look, IT consultants are put in this position all the time. In order for us to make a sale, we have to convince the client that we are a BENEFIT to the business’s bottom line, rather than simply an expense. I learned early on that I was going to have to show clients an ROI on their IT spending. As an example, I showed one design agency how purchasing 10 new, top of the line, MacPro design workstations had an ROI of under a year, ultimately saving them enough time (and time=money) to either:
- Let one employee go or
- Bring on more clients ($$$) to keep that extra employee busy
I showed the owners a direct link to how IT influences business outcomes. There is no reason that IT Departments managers shouldn’t learn to frame their budgets in this way.
Without the power and influence of a department manager, an IT administrator is simply tech support for a particular group of individuals. Company-wide policies would cease development. Security decisions would be made per team. It would be a cacophony of servers. Company-wide IAM policies would never happen. Security standards would plummet while the cost of trying to meet compliance standards would skyrocket. I can just picture the IT lead from each department running into the server room: YOU get a server room key and YOU get a server room key and YOU get a server room key! <ahem>
MBAs live in their business plans. Part of a business plan includes a technology plan. But without a centralized IT Department there is no technology plan. No direction from experts in the field. No pooling of resources and knowledge. While standardization for standardization’s sake is poor reasoning, it does create a method for cost control, enforcement of security compliance, clear expectations about technology compliance for the users, and backup resources in a way that a departmental IT lead can’t.
The World Without an IT Department
These are some of the all-too-real examples of life without IT departments. Did these happen? In a world before my clients had centralized their IT (either internally or with an external IT Professional), yes. And they can happen again at an organization that doesn’t understand the value of a centralized IT department.
Example 1: No IT Means No Technological Leadership Is There When It’s Needed Most
It’s March 2020 and you’ve been told Company, Inc is going to work from home for the next month. So you and your 300 fellow employees take your desktop computers and displays off the desks and schlep them to your cars and then into your houses. Folks who take public transportation will just use their personal computers.
The company files are inside the office. And there’s no VPN because there’s no IT Department. And there are still client calls to make and meetings to conduct. Each person uses their own personal Zoom instance to fire up meetings. Some folks use Google Meet. Some use Teams. Where’s the data? How do you collaborate? Who controls the security of the data? Who makes the decisions for the company on what tools will be used? What happens if Department A wants to use Zoom but Department B is using Teams? Who wins? And what happens when there’s a ransomware attack? Because without centralized IT there WILL be ransomware attacks.
Example 2: No IT Means No Efficiencies Can Be Realized
Joe in Marketing has a problem on his computer – it’s restarting at various times during the day. He tells his departmental IT person, who applies some “fixes”. Meanwhile, Janice in Sales has a problem on her computer – it’s restarting at various times during the day. She tells her departmental IT person, who applies some “fixes”.
Without an IT Department there is no single ticketing system, because there is no single source of support for it. That ticketing system’s data analytics would track recurring issues. Without the cohesiveness that comes from a departmental source of expertise, there isn’t a method to flag similar problems across trouble tickets. Because there is no IT Department, there is no standard ticketing system, there is no standard for setup, there is no standard for patching and updating, there is no standard for workstation configuration, there is no standard for allowed apps or mandatory apps. There is no centralized testing for anything IT. It’s, basically, IT: the wild west edition.
Example 3: No IT Means Employees Are On Their Own
Jake is in engineering. He works his computer hard. And now it’s begun to slow down to the point where he can’t get any work done. There are no spares because having a spare would be an unnecessary expenditure that, according to Mr. Peppard, doesn’t speak to the business outcome. The departmental IT person is off on maternity leave. With an IT “department” of one, there is no redundancy of personnel and Jake’s productivity falls off, causing the department to miss deadlines, causing a loss in profits, causing a poor business outcome.
Conclusion: Retain Your IT Department
Friends, you need an IT Department for so many reasons that aren’t financially-based. Mr Peppard’s attempt at increasing profit by decreasing personnel is short-sighted at best and a productivity-killer at worst. Our advice to IT Department Managers is to learn how to reframe your staff’s value to the company as a way to increase profits, rather than as simply an expense to reduce.
Once they decimate the IT Departments of the world, I wonder who the MBAs will come for next.
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