The corporate IT balancing act: agility vs. stability

You are the CIO.  You have a choice.

On one end of the spectrum, you can control costs by delivering a centrally architected set of solutions, probably on one platform (like Oracle or SAP), and make the businesses change to the out-of-the-box processes.  Your IT costs can come under control, but your business change costs will be through the roof, and you will get 'commodity' transaction handling.  Forget about IT being a strategic partner. 

On the other end, you can empower the business by allowing the business to buy any solution they want, and you just roll it into production and keep it running.  The business can roll out a new idea or a new program as quickly as they can buy technology.  Sure, you can write some things, but you are just one vendor out of many.  You don't even try to integrate things until the data hits the data warehouse, where you attempt to cobble something together.  Programs roll out fast, but business intelligence suffers, the number of applications grow geometrically, and the overall cost of IT grows uncontrollably.

Many of you, dear readers, will recognize your current environment in one of these extremes.  If you do, send an anonymous letter to your board of directors and point them here.  I'll say the obvious: your CIO is a moron and should be fired.

Somewhere in the middle is the right answer. 

Business needs agility to survive in a competitive marketplace.  Business is not served by cost controls that hinder creativity.  In addition, IT can only be a strategic partner if it is not hamstrung by its own red tape and cost controls.  If you are in the centrally controlled model, you need to lighten up, find common ground and make a new relationship between the business and IT. 

On the other hand, rolling out hundreds of solutions when a dozen will do means that the business cannot get good business intelligence about your customers, partners, suppliers, and business trends.  That puts your company at a competitive disadvantage, especially over new competitors who may be smaller, more tightly focused, and eating away at your biggest profit center.  If this is you, you need to focus on key platforms, cut off investments gone wild, establish muscular governance and enterprise architecture, and reorganize IT around core business capabilities, instead of business functions.

It is a balance.  You have to allow freedom, especially in the areas where freedom can be the difference between a big profit and struggling to get by.  You also have to be efficient, and find ways to keep the wild-eyed marketing ideas from sucking your budget dry. 

Right-sizing IT is possible.  With the paradigm of solution domains and Service-Oriented IT, it can be done.  I will be discussing many of these ideas on this blog and in my upcoming book over the course of the coming year. 

Know this.  Sticking to one extreme or another is turning IT into a liability instead of an asset.