IT Exists for One Reason

I found a blog entry at CIO.com that asserts that, "The sole reason for IT's existence is to manage the flow of data." To be honest, the assertion is kind of underwhelming but it did strike a chord in my brain about outsourcing. (Don't ask why. I stopped trying to understand my own brain years ago. ... just enjoy the ride, Mickey me boy!)
 
The blogger makes the interesting observation that in the early days of electricity there were heads of departments in organizations designated to manage electricity: a Chief Electricity Officer, if you will. Electricity is now a commodity to which we barely pay thought. Someday IT will be a commodity as well.
I'm guessing 20 years ago that brilliant insight hit me one day - that IT will become a commodity. In the too-soon-old too-late-smart category, I could have done something in a business sense to capitalize on that but I didn't.

For the last ten years, the IT universe has been absorbed with outsourcing - particularly from the US and Europe to India. My contention is that outsourcing (while a significant issue) is much less important than the leveling of IT into a commodity.

It's easiest to see this today in Cloud Computing. My organization now uses a hosted (in the Cloud) CRM system and we did that for speed of implementation. The secondary effect is that we do not need an administrator for that system so we have at least one less headcount.

I contend that IT is still immature - even after 40 to 50 years of existence. As it continues to mature, organizations will move ever faster in the Cloud and focus their internal IT resources into less and less operational and more and more strategic areas.

How does this play out? Twelve years ago email was not yet the pervasive feature it is now in modern organizations. I had just joined a $60 million company with a small, four person, IT staff. One of my first moves there was to outsource the email system to what we would today call a Cloud service. At the time, the IT manager was as nervous as a long-tailed cat in a room of rocking chairs about this. After a couple of years, he agreed that it had been a good idea.

Later, I joined a larger, $2 billion organization as a divisional IT director. We had three Outlook Exhange systems in the organization and within two years we had none; they'd all gone to the corporate data center and were under their management.

Why do this? Email is a commodity. Why should I devote highly paid expert staff to a commodity?

My current organization right now has four Outlook Exchange systems spread across North America and the UK. Guess where that will be in a year?

So, what do I think this trend means for the future, and my future? I will be working hard to determine what aspects of my business are strategic. What can IT do that will help us fight our competition?

First, determine which business competencies are strategically competitive. Second, push into the Cloud anything that is not a strategic edge. Third, concentrate the business and IT on the strategic issues and use that to hammer down the competition.

Email? Gone. Data network management? Gone. ERP operations? Gone. (ERP management is different because some parts are strategic.) Marketing and engineering systems stay with us and we use them to drive the competition into the ground.

I'll let you know how it goes.

How Do Meme's Work?

If you follow politics at all, there's been a recent uproar in the blogosphere over a political ad by Carly Fiorina in California where her opponent is portrayed a demonic wolf dressed as a sheep.

Within days, I see this comment, "Something to think about as regulators here and abroad start targeting Google (it's amazing to me how seamlessly Google has replaced Microsoft as the demon sheep of technology companies ..." at Reason Magazine on line.

Wow! This internet thing, and it's power to create memes, might just catch on.

Interesting Facts

As someone once remarked to me, "Facts are stubborn things". Here are some interesting facts regarding the United States economic environment of the last decade.

A Dose of Sanity

This is the best suggestion I've heard in a long time. It's a simple and effective way to reign in excess leverage and risking behavior in the banking system. Manage the reserve requirements.

I'm Just Wondering

It is my affliction to read widely on finance and economics - darting like a waterbug on a lake and seldom dipping under the surface. (Can a person digress in the first sentence of a note? I think I just did.)

In the last few years there have been countless articles discussing how the Boomer generation (my generation) will burden its children with unimaginable social and financial costs as we reach our dotage. It occurred to me this morning that while this is true, it doesn't reflect the truth our children will inherit.

This focus on how the Boomers will afflict our children and grandchildren is, in fact, yet another example of the Boomer generation's absolutely, unblinking fixation on itself. I'm not a social historian but I'm guessing that no other generation in Western history has been so self-absorbed, all throughout its life. I have always been a little ashamed of this.

Maybe it's time for we Boomers to stop worrying about our aging and passing and start worrying about how the world our children will have and provide the best world we can for them. That's what my parents did and it seems right to me.

(On reflection, this is a rather sophomoric thought ... but then it's still early in the morning. Would that I were the philosopher to state the question more profoundly. Uh .... nah!)

Quote of the Week

P.J. O'Rourke is one of my favorite authors. I heartily recommend "Parliament of Whores" if you like to see American legislators ridiculed with great gusto.

O'Rourke has written a book on the great Adam Smith called "On the Wealth of Nations". I'll put it on my Amazon wish list but, in the meantime, the line of the week which comes from O'Rourke's reviewer.

"On occasion, one wishes the Invisible Hand would smack O'Rourke upside the head ..." The review itself is a pretty good read.

Salesforce Again

In August, I commented on the high P/E ratio of Salesforce.com (Symbol CRM). It was $50.50 with a P/E of 104.5. Now, even after a recent decline of over $74 a share, it's down to $64.99 (or up from $50.50, if you will) with a current P/E of 110. I'm keeping an eye on this one and wishing I'd put some money into it in August.