Todd Biske: Outside the Box

I just listened to Anne Thomas Manes’ podcast, “What Does it Take to Succeed With SOA?” that was released on Burton Group’s Inflection Point channel. One of the things that Anne pointed out is that many organizations do not have the right culture, especially on the business side, that promotes the sharing of services. A culture of sharing, collaboration, and trust is required to be successful. She also pointed out that the IT organization frequently mirrors the organization of the business, and if those business organizations don’t share, it makes it very difficult.

I started thinking about the organizational aspects of this. Many people in IT only have awareness of the highest levels of the business organization, and it may not be apparent that there’s a problem. But here are two common patterns that clearly point out the potential problems. First, there’s what I’ll call regionalization. Whether we’re dealing with global entities, or national companies with regional presence, it’s very likely that they have business units aligned along regions rather than along business capabilities. There may be very valid reasons for doing this, but it must also be recognized that they may all be performing the same business functions, only with the expected regional nuances. While it’s oversimplifying the problem, if a company sells widgets in 52 countries, there should be enough commonality to warrant some common services that all of them can leverage. Second, there’s product specialization. I have first-hand experience with an organization that had separate business units (and associated IT staff) for different products that the company offered. There were opportunities for shared services that were recognized within IT, but never made it to reality because of the cultural challenges within the organization. In this case, the cultural challenges were within IT, but it’s just as likely that the same challenges existed on the business side as well.

As Anne rightly points out in the podcast, somehow, we need to present the business value associated with the sharing. In some ways, this shouldn’t be any different than the value that makes companies choose to centralize sales and marketing. One of the big challenges faced within IT, however, it that the associated costs of redundant technology can be a bit harder to quantify. Yes, there are software licensing fees and maintenance agreements, but some of these one time costs are glossed over in deference to the project schedule. While I’ve never personally been involved with a centralization of sales and marketing, I’m guessing that a big part of the equation was an associated reduction in cost attributable to staff reduction, or in a more positive light, getting the cost to revenue ratio looking better by resource re-allocation. If we’re talking information technology, while it’s certainly a possibility, staff reduction doesn’t necessarily come into play, so that associated cost reduction must come from somewhere else, and at least in my experience, IT isn’t very good at quantifying it. So, across the board, our work is cut out for us, but that’s not to say it can’t be done. The one takeaway is to invest heavily in making your pitch. If you don’t have baseline metrics to be able to show the value improvement, whether in increased revenue or decreased cost, take the time to get them together before trying to make your pitch. It needs to be in terms the business can understand and is used to dealing with.

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