Whirled Class IT

The business advancements of the last three decades have demonstrated the amazing power of technology – in the hands of the right managers. That’s because good managers understand that good technology is nothing without good people. Due to the nature of the industry, globally, Information Technology (IT) departments are knowledge intensive organizations that require a continual flow of education and training. The more they know, the more they can benefit the organization. There are even times when we believe it.

Historically, IT cultures in the United States have struggled with a rapidly swinging pendulum, swinging from one extreme to the other. One day they need to be leading edge innovators, opportunistic and ad-hoc, often resulting in a Laissez-faire culture that tends to believe that their work need not be planned or governed. Then, overnight the pendulum swings to a dictatorial culture, a centralized cost controlling bureaucracy, reducing the organization to manageable silos and papered with thousands of policies and procedures.

Yes, things change and some have the ability anticipate the change, be ahead of the curve and capitalize it. Others just follow the pendulum. The more detailed and myopic the culture (the less big picture visionary), the closer to the pendulum. Today, business cultures such as those found in the United States tend to view IT as a cost burden, not a service benefit. Their strategic direction is to manage IT by allocating resources through fixed budget targets. To better control costs, managers attempt to direct the behavior of the organization by isolating it into asset related silos.

The shortsighted efforts to reduce budgets tend to increase turnover. Those replacements that fit the budget tend to be less qualified then their predecessor, thus requiring a greater number to accomplish the same amount of work. An increase in headcount tends to result in greater need for management attention. More managers we have, the more cost and the spiral continues. Failing to recognize that IT, like HR and Accounting, is an extension of management and their fiduciary duties, managers blindly reduce their own capacity and capabilities to be good managers, agents and stewards.

While the pendulum moves faster and faster in the United States, IT departments in Europe and Asia have introduced the human touch – fusing professional discipline and service management. Around the world, IT Service Management (ITSM) is an attempt to reframe IT from an asset oriented cost burden back to a service benefit. Like any new strategy, Service Management requires a new structure and system to be successful. In the United States, thousands of failed implementations of ITSM standards known as ITIL and ISO can be tied to asset centered cultures attempting a new strategy without changing the structure, the systems or the culture.

In 2007, the worldwide IT consulting market reportedly generated $300 billion in revenue, up from $280 billion in 2006. Global growth rates are forecasted at 5 to 10 per cent annually through 2010. In Asia, firms like Tata Consultancy Services (TCS), a large software consultancy organization from India are bucking the system and taking a leadership role in the IT industry. For 2006-07 TCS provided services to clients in 55 countries across the globe and employs 110,000 professionals, reporting global revenues of $4.3 billion.

Unlike US competitors, TCS seems to have accurately anticipated the global expansion and planned accordingly. TCS hires graduates from different disciplines and transforms them into software engineers through its own training model. The training model has evolved over the last three decades and has kept pace with technology trends. The strategy is deployed across TCS to drive its global Learning & Development initiatives and the effectiveness tracked through appropriate metrics. The use of multiple System models in addressing the problem has resulted in the sustained growth levels of TCS even during adverse market conditions.

Globally, trends in the IT industry are actually far more transforming. In Europe and Asia, the trend is for non-IT companies to outsource their IT services, lock, stock and barrel. The hardware, the software and the employees all move over. A practice long avoided by US firms, because the difference between US and Non-US cultures. In the United States, the employees are tied to the company. Their healthcare, vacation and benefits are all different. In Europe and Asia, it’s not the case. IT employees can move from ABC manufacturing to XYZ Computing Services, and not even skip a heartbeat. ABC gets state of the art service oriented results, and XYZ increases the economies of scope and scale.