The broad proliferation of cloud services, managed services, and hosting options has brought IT to a place where nearly everything could be run and maintained outside the “four walls” of the enterprise. Enterprise IT leadership is now revisiting fundamental services, and assessing who should source them. Successful enterprises are leading the way in this transformation. Rather than starting with the assumption that internal resources are the best way to source a service, effective IT leaders are taking an objective look at both internal and external resources, and choosing the alternative that makes the most sense for the business. Rather than trying to protect budgets, CIOs are working with CEOs and the rest of the business to map investments to priorities.
For enterprise IT, deciding on how and where a given service will be managed ultimately comes down to a choice: core or chore? Core represents those functions that do or can contribute to the organization’s competitive advantage. Customer experience and business model innovation clearly fall into the core category. These are the functions that need to be sourced internally, and invested in. CIOs need to ask, “Is this something no one else in our industry can do and is it really a differentiator?” If the answer is yes, it may be impractical, problematic, or even risky to move to an external service provider.
Quite simply, chore represents everything else. Sales force enablement is critical, but supporting an on-premise sales force automation (SFA) application clearly isn’t core for most IT departments. That’s why SaaS-based SFA platforms have become the norm; it simply makes more sense than deploying and maintaining an on-premise application. Similarly, having a robust, scalable network is a critical mandate, but, in most cases, the network on its own won’t yield competitive differentiation.
As CIOs start viewing sourcing decisions within this core vs. chore framework, it’s clear the role of IT changes in a fundamental way. A few years ago, ITs focus was on building and supporting the in-house infrastructure. Today, IT is effectively becoming a services broker, a single store front where business users go for IT support and services. The team that actually implements and maintains those services will be an increasingly diverse mix of internal staff, cloud providers, service providers, subcontractors, and so on. IT’s role, and success criteria, will be less about technology administration and much more about researching and vetting various vendors, tracking and managing their performance, and holding them accountable for SLAs.
For the vendors that serve enterprise IT, the possibilities created by this change are virtually limitless, and for many the growth has already been frenetic. This transition in enterprise IT also poses some fundamental implications for service providers and resellers. The following are necessary realizations and adaptations service providers and resellers will need to make to remain successful:
Successful IT organizations are in the midst of a fundamental transition, moving from being operations-driven to being value-driven. Clearly, service providers and resellers working with enterprise IT organizations must not only adapt to, but thrive within, this new paradigm. Those that react most quickly and effectively to these new requirements will be well positioned to capitalize on all the opportunities that are emerging. The opportunity is there. Seize it!
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