Outsourcing and cloud-based IT: Has the great offloading begun?

Outsourcing and cloud-based IT: Has the great offloading begun?

Summary: 'At some point you won't think of [IT managers and professionals] as an IT department at all'

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TOPICS: CXO
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I got some interesting reactions to my most recent post on ZapThink's 2020 vision, which included warnings about the potential "collapse of enterprise IT."

By 2020, IT departments will be about governance, not hands-on technology

Jason Bloomberg, author of the 2020 vision statement, provided some additional clarifications, noting that he was not recommending outsourcing IT, but issuing a warning about such practices gone too far: "Rather, many enterprises will be reaching a 'crisis point' as they seek to outsource IT, and if they don't understand the inherent risks involved, then they will suffer the negative consequences that Michael Poulin and others fear," he says.

The ZapThink 2020 vision was written to pull together multiple trends and delineates the interrelationships among them. Ultimately, the IT department of 2020 will not be about hands-on technology, but about governance, Jason explains. "One of the most closely related trends is the increased formality and dependence on governance, as organizations pull together the business side of governance (GRC, or governance, risk, and compliance), with the technology side of governance (IT governance, and to an increasing extent, SOA governance). Over time, CIOs become CGOs (Chief Governance Officers), as their focus shifts away from technology."

"At some point you won't think of them as an IT department at all," he says.

While Jason and ZapThink foresee IT executives handling less technology; ironically, another observer sees non-technical executives and managers getting more involved in technology. Prashanth Rai of the CIO Weblog picked up on my observation that most technological resources needn't reside within the organization as long as sufficiently technical strategic thinkers continue to do so.

However, Prashanth then goes on to say that the "technical strategic thinkers" that are emerging won't necessarily by CIOs or IT managers. "A very short jump to believing that the IT strategy for most organizations will become a part of the purview of the CEO or COO. Those offices have already evolved markedly in their appreciation for the capabilities of transformative and competitive uses of technology; indeed, in many cases, they have outstripped the ranks of IT architects and CIOs who have been trained by years of limitations and industry best practices to be cautious and reactive."

Jason also says any collapse of enterprise IT departments won't entirely be due to outsourcing -- cloud computing will drive much of it as well. "Outsourcing is a part of the story, but so is cloud computing," he says. "We also see a shift in the approach to enterprise architecture that better abstracts the locations of IT resources."

Jason delineates between outsourcing and cloud as separate categories, but with plenty of overlap. "Many Cloud initiatives outsource certain aspects of their infrastructure to a cloud provider, but not necessarily, private clouds being the primary exception. And outsourcing in general may involve various services that have nothing to do with cloud computing."

Also, reader prdmarican provided a great comment to my recent post titled "Is IT losing its relevance?" Here is what he said to that point -- and perhaps also a good counter-argument to the points made in the above post as well:

"I have a great idea... maybe this next Friday, all of us irrelevant IT workers should just shut all of our equipment off and take a three day weekend... and see how relevant we all seem on Monday when none of us are there...

"Outsourcing IT doesn't make anything less relevant, it only shifts the work to another location - either to a company that will cost you lots more, or one that employs folks in some far away land that make $2 a day in wages. And while some things may make sense to move to the "cloud", nobody wants the wait or the expense of having to call an outsider in for routine IT work.

"And the same folks that think that 'IT' is standing in the way of progress (please - what other group of folks love technology and gadgets more than us?) are the same ones who cry foul whenever some new virus or Trojan takes over their office - yeah, the one's that they refused to be under the IT standards, because they know more than the IT department."

"I've been in this business over 30 years now. Outsourcing may solve some problems, but it brings with it just as many if not more."

"Choose wisely."

Topic: CXO

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11 comments
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  • RE: Outsourcing and cloud-based IT: Has the great offloading begun?

    IT needs to wake up and smell the coffee. Remember the people entering the workforce for the past 10 years have never know not having access to a PC. The can download and install pretty much anything on the fly. We as IT professionals need to figure out a way to have our controls for security and governance and still enable the digital natives to do what they've been doing on their home PC for years.
    bill.haight@...
    • I disagree...

      @bill.haight@... Every day, I work with these so called "Computer Literate" People and they all know who I am because I'm always the guy who will fix their issues and make this stuff work.

      Sure, people can install whatever they want whenever they want but you know what, there's alway those companies like Adobe that slip Google Toolbar on to the machine and next thing you know something else isn't working.
      slickjim
      • Only incompetent IT personnel .....

        @Peter Perry

        Only incompetent IT personnel will allow users to install whatever they want on a corporate computer. We, as users, may not like not being able to install whatever we want on a computer we are using, but most intelligent people will understand why the control is 100% necessary.

        From virus infections to illegal installation of pirated software. The negative implications and risks are too big to ignore.
        wackoae
    • Install versus knowledge based diagnostic

      I have been in IT since 1976. Evolved through every twist and turn in that time. Here is something simple for you to think about as an example. Explain how to fix ITunes (Bonjour ) turning off your access to the net and which application caused the issues. Then fix it. Boy I bet ITunes was real easy to install as well as the offending Adobe CS pack. Anyone can do it. But who can fix it. As long as software is flawed so also is the life of an IT department. I think you need a couple of good scenario's like that to wake you up. You are dreaming of some mystical place where everything you install works seamlessly with everything else. What movie did you watch.
      jhad77
  • RE: Outsourcing and cloud-based IT: Has the great offloading begun?

    Remember End-User computing, the great paradigm shift of the 90's, whereby centralised IT monoliths handed over control to end users with all the answers. It's just a memory, and cloud computing and outsourcing will be in a couple of years too. Organistions need technical people on the ground who understand the business and understand it's people. Organisations migrating to clouds and other temporary climate manifestations are spending $2 for the pleasure of paying $3 to fix the mess up. You could have had us for $2.50.
    Braunt
  • DEMAND CLOUD TRANSPARENCY

    In the traditional outsourcing model, trust is usually a direct outcome of extended interaction between client and provider. Some believe that the ?utility? and ?agility? characteristics of the Cloud will make the maintenance of such relationships impossible ? and that security will suffer as a result.
    cloud_zone
  • RE: Outsourcing and cloud-based IT: Has the great offloading begun?

    It is not "down to governance"... it should be "up to governance" but too many CEOs and COOs outsource responsibility to the CIO and then to the typical TPAs without treating outsourcing as seriously as M&A would be treated. This is a fundamental governance issue and boards are not strong enough to poke their noses into the huge risks and future commitments which are part and parcel of most outsourcing transactions. Dealing with such core issues is our bread and butter at Burnt Oak but can we wait until 2020 to get governance where it should be or will we have more and more DBS type failures. JL Bravard
    JLBravard
  • RE: Outsourcing and cloud-based IT: Has the great offloading begun?

    Being a former 1 person IT dept a few years ago, my job was 'outsourced' to an outside company. I saw the list of what my company thought my duties were and it was laughable...one item was 'think up ip addresses'. They totally failed to consider my knowledge level of their ERP system and internal processes. Long story short, the outsourcing company lasted about a year and they replaced them with another internal IT guy. Brilliant!

    Outsourcing/cloud has it's place in bits and pieces, but it's silly to think that any reasonably sized company could outsource the entire IT dept. One big component that top management doesn't consider is that the internal IT dept is beholden to the company's best interests...the outsourcing company is not. However, internal IT needs to provide services beyond outsourcing/cloud.
    bobavery
  • By the way...

    your website is very slow today. Maybe you should have your weatherman clear up your 'cloud'.
    bobavery
  • Timely article

    Choose wisely indeed.
    klumper
  • RE: Outsourcing and cloud-based IT: Has the great offloading begun?

    ?I have a great idea? maybe this next Friday, all of us irrelevant IT workers should just shut all of our equipment off and take a three day weekend? and see how relevant we all seem on Monday when none of us are there..."

    He's missing the point. The real question is, what happens if you leave the equipment on and take that 3 day weekend? Probably nothing. Turning the equipment off raises questions of unethical and perhaps even criminal behavior. It's your employer's equipment and turning it off under those circumstances is sabotage. Kind of a dumb statement.
    data345@...