I was in an interesting discussion with one of my consulting clients recently. I was with a group of IT managers responsible for their firm’s shared IT assets. This is a large, global enterprise that has been on an aggressive journey over the last 5 years to transform business-IT maturity. By any measure, they have been successful – rationalizing and consolidating a patchwork of data centers, networks, systems and dispersed IT groups – some “official parts of an IT organization”, others “shadow IT organizations” operating outside of IT budgets and controls.
In essence, this group is responsible for the firm’s “infrastructure.” We talked about the definition and meaning of “infrastructure” in order to get a handle on their scope of responsibilities, and how these might change over the next 3-5 years. A typical dictionary definition of infrastructure is: “the basic facilities, services, and installations needed for the functioning of a community or society.” For IT infrastructure, I find Professor Peter Weill’s definition especially useful: “The base foundation of budgeted-for IT capability (both technical and human), shared throughout the firm as reliable services, and centrally coordinated.”
Let’s examine the keys to this definition.
Budgeted-for implies conscious analysis, planning and funding. This is critical for IT infrastructure given its characteristic that it tends to be invisible until it breaks. Therefore, an effective IT infrastructure management group has a hard time getting funding for improvements – “If its working fine, why do you need more money?” is the typical refrain. (Public infrastructures suffer the same fate – hence our bridges are falling down, and, as an Atlanta resident, I have to suffer continuous drought conditions while 20% of the water traveling from reservoirs to homes is wasted through leaky water pipes!)
Both technical and human helps correct the common misunderstanding that IT infrastructure is all cables, computers and disc drives.
Shared throughout the firm as reliable services introduces the notion of ‘firmwide sharing’ which sets scope, and ‘services’ which takes us to the disciplines of Service Management, and frameworks such as ITIL.
Centrally coordinated tells us something about how IT infrastructure is managed – note here, its not necessarily centralized management, but central coordination, implying Enterprise Architecture and Governance.
The big question for this group is how should they evolve over the next 3-5 years, given all the changes in the business ecosystem (Next Generation Enterprise, anyone?) One of the key elements of IT’s contribution to business success and growth in the next few years is through the notion of “platforms.” A platform is a set of assets whose roles and connections are defined so that they can be configured in a variety of useful ways. My company, BSG Alliance, recently kicked off a new multi-company research project, Platforms for Business Growth, so the research team has been giving a great deal of thought to IT-enabled business platforms for some time.
“Platform thinking” originated with manufacturers who wanted to build a variety of products using standard designs and interchangeable parts. It then migrated to the software industry. For example, as Microsoft Windows operating system became popular, partners began developing products to work with the Windows platform. Today, companies such as Amazon offer their ecommerce systems as a business platform, YouTube provides a platform for embedding video clips, and Apple’s iTunes/iPod has become a successful entertainment platform.
A key element of platform thinking is easy and open connection and collaboration with customers and suppliers. Customers want to collaborate in the creation of customized products and services. Business partners offer an ever-growing variety of services to leverage. A flexible platform is an engine for growth – because the business is more nimble and responsive, because it is better able to connect and collaborate, and because it maintains a larger portfolio of “options” for innovation and future action.
So, what are the differences between IT infrastructure and IT-enabled business platforms? Building a business platform certainly depends upon a sound infrastructure. But platforms also depend upon clearly defined and published specifications and ground rules for what assets do and how they connect. As IT infrastructure requires the mastery of IT Service Management, IT-enabled business platforms, on top of IT Service Management requires the discipline of Product Management. For many IT organizations, this is a new and unfamiliar discipline – one rooted in the disciplines of marketing, and therefore quite foreign to the world of IT. I will get more into the distinctions between Service Management and Product Management in a subsequent post.