Thoughts on IT and Business

I think it’s important for one to understand what Information Technology (IT) is, and what it means for businesses. Business Schools would traditionally argue that businesses have four core functional areas, or “pillars”: Operations/Production, Finance/Accounting, Organizational Behavior/Human Resources Management (HRM), and Marketing/Sales. I would argue that just as HRM touches all areas and is still a pillar unto itself, one should view IT as a pillar unto itself as well, the fifth pillar of modern business.

But let’s take a step back and think about that for a moment. Is a function still core, is it still a pillar of business, if it can be outsourced? Jim Collins would argue no. But Accounting has been outsourced for decades, and we’ve entered the phase where Human Resources can be as well. Production, in the manufacturing sense, can also be outsourced (think Apple, Inc.). The list goes on. These functional areas of business are still core despite ability to outsource. They impact every part of the business. This is why I argue that IT should be a pillar as well, and successful knowledge economy businesses get this. In-house or outsourced, IT is core to successfully operating your business in a competitive fashion whether you consider your business a technology company or not.

And if IT is a pillar of business, to paraphrase some digital signage alongside a Chicagoland highway, “You need a Partner, not an IT guy.”

Disrupt or Be Disrupted

IT has become core to business because it is an agent of change. IT has sped up the process of creative destruction that is inherent in capitalism. Industry after industry has been disrupted, often unexpectedly, by a competitor wielding IT to its advantage. This goes well beyond “online ordering” (e-commerce) - every aspect of your business has, or could have, an IT solution underpinning it.

Marketing & Sales: Customer Relationship Management (CRM), measurable advertising, etc.
Organizational Behavior & HRM: HR Information Systems that power recruiting, engagement, and now people analytics
Finance & Accounting: Financial Information Systems going well beyond taxes and payroll to actionable real-time metrics
Operations & Production: Supply chain management, Voice over IP (VoIP) and other productivity tools enabling work from anywhere, robots, 3D printing and other automation tools - you name it.

With all of these digital abilities, it is increasingly difficult to operate a business in today’s world without IT practitioners in your company, just as you’d find it difficult to scale hiring beyond your first several employees without HR practitioners. And yet I’m often surprised to find companies meandering along without a CIO or CTO, no formal IT strategy in sight, other than the thought that “the cloud” will take care of things when the time comes. I’ve seen companies with a Director for every department under the sun, but that rely on a local high school “computer whiz” to devise and implement all digital and technology projects. “It’s just like hooking up the phones, right?” was a common mantra as businesses became connected and office telephony took its disruption. The telephone guy became the network guy, with mixed results.

Software is Eating the World

There seems to be some confusion as to what IT really is. So let’s review what comprises it.

An application is a program, or group of programs, that is designed for some use, by some users (sentient or otherwise). In business, it’s typically some kind of business use - productivity and process automation, finance and compliance, etc.

There are two distinct components of IT: software (of which applications are a subset) and infrastructure (that which supports the software). Going back to the very earliest days of computing, a programmer would hand off a punch card to a datacenter professional (“computer operators”) who would schedule its processing by a large, unwieldy mainframe (or DevOps pioneers would be granted access to put the card into the mainframe themselves, mainly in smaller shops or universities). The days of punch cards are gone, and we’re approaching the end of these two roles being distinct, at least from the average businesses’ perspective. But there is no end in sight for these two components of IT, even if much of the infrastructure is software-defined. There are many types of infrastructure:

Development Infra	Application Infra	System Infra	Datacenter Infra
Integrated Development Environments (IDEs)	Application and Web Servers	Virtual Servers	Racks
Version Control Systems	Content Delivery Networks (CDNs)	Physical Servers	Cabling
Browsers	Databases	Storage	Buildings
Compilers	Rules and Reporting Engines	Networking	Physical Environmentals
Testing Tools	Directory Services		Electricity
	Messaging Systems		External Connectivity

This is hardly an exhaustive list (for example, Security bridges all areas). As a business leader, you have to develop and apply strategy as to why you will implement software in support of a business need, and how you will execute that implementation, keeping in mind the components above. Will you pilot some Commercial Off The Shelf (COTS) solution, or are your needs so specific as to warrant custom development? There are significant considerations in either direction. Will you host the solution in-house or in the cloud? Public, hybrid, or private cloud? Your business and its customers, and the environmental contexts of each, drive these kinds of choices and its up to you as a business leader to make the right choices. Your brother-in-law’s neighbor’s kid might be sharp, but you should retain professional leadership on making the right software and infrastructure choices for your unique business. At the end of the day IT is supporting your business in doing what it’s best at, just like any other pillar. If you as the business leader don’t understand one or more components of IT, surround yourself with professionals who do.

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