All I Really Needed to Know About Titanic’s Deck Chairs I Learned From ITIL

Headline have a tendency towards hyperbole to grab attention, and there is no shortage describing the dwindling role of the CIO. Here is a recent one: IT department ‘re-arranging deckchairs on the Titanic’ as execs bypass the CIO.

As reporting of technological change increases,the probability of comparing IT tor e-arranging deck chairs on the Titanic approaches 100%. 1 – Tucker’s Law 2

It is true, CIO’s are challenged by technological change. The widespread adoption of cloud-based services by business units bypassing the traditional IT function is well documented. Support and adoption of consumer devices, including mobile phones, tablets, and non-standard operating systems such as Mac OS and Android, is also challenging traditional IT functional units.

Specific to the cloud example, some further examination is helpful. We don’t need to reinvent a framework, because ITIL 2011 already provides one. Service Strategy section 3.3 (p.80) describes three types of service providers:

  • Type I — Internal service provider. Embedded in an individual business unit. Have in-depth knowledge of business function. Higher cost due to duplication.
  • Type II — Shared services unit. Sharing of resources across business units. More efficient utilization.
  • Type III — External service provider. Outsourced provider of services.

Furthermore, ITIL describes the movement from one type of service provider as follows.

Current challenges to the CIO role come in 2 directions:

  1. Change from Type II to Type I, or dis-aggregation of services to the business units.
  2. Change from Type II to Type III, or outsourcing of services (presumably) to cloud providers.

In fact the CIO may be seeing both at the same time, as traditional in-house applications are replaced with cloud services and the management of those services and the information supply chain are brought back to the business unit. The combination of those two trends together could be called a value net reconfiguration, or simply, re-arranging the deck chairs on the Titanic.

Is this a necessary and permanent shift? Maybe but probably not. I personally believe that part of the impetus is simply to bypass organizational governance standards such as enterprise architecture and security policies. Business Units can get away with this for a while, but as these services realize failures and downside risks, aggregated IT functions will have take back control.

This does not mean the end of cloud adoption. Far from it. It means that the CIO will orchestrate the cloud providers, in order to optimize performance and manage risk. The CIO is as necessary as ever albeit with a different set of requirements.

Peter Kretzman has successfully argued that the reported demise of the CIO has it backwards: IT consumerization, the cloud, and the alleged death of the CIO.

Kretzman has also argued the dangers of uncoordinated fragmentation: IT entropy in reverse: ITSM and integrated software.

 

1 In 1990 Wired Magazine published the observation that as an online discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches 1.0. As an experiment in memetics, it taught us a lot about psychological tendencies towards hyperbole. The Wired observation is now termed Godwin’s Law of Nazi Analogies. http://en.wikipedia.org/wiki/Godwin%27s_law
2 Consulting firm Forrester has provided us enough ammunition for Tucker’s Law as a corollary.
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  • Aale Roos

    I think ITIL misses the point here. The concept of shared vs. internal is strange. When did corporations have non-shared IT service providers? I have been in IT since early 1980’s and I do NOT remember seen such things as a normal situation. The only cases have been loose corporations where the management has been in the process of restructuring the company and integrating It made no sense.

    Shared vs outsourcing is too rough, there are so many types of sourcing. One popular model has been incorporating IT, creating IT Inc, which has (mainly) one customer. Then there are all these partial outsourcings which may leave the internal IT as a service integrator role. Service providers may provide application services, desktop infrastructure, servers, networking etc. ITIL does not really understand these different roles.

    The latest move is about business buying it services without IT. This is completely different from IT doing outsourcing.