None of your business! Why IT is every business' core business in 2023

The past years I have had countless discussions with engineers, salesmen and managers about IT strategy. I find it very interesting, because many times we have vastly different ideas, since we work in the same industry but with different priorities and goals. Such discussion are always very valuable learning opportunities.

As 90s kid, I have had the privilege to witness the exodus to the Cloud first hand. In my first IT job I was responsible for administering legacy on-premise systems, and execute migrations during the first wave of companies moving to the cloud. Interestingly, such a migration does not only entail an operational improvement (for example, enabling remote work), but also a financial shift. Outsourcing IT to a Cloud Service Provider, often means shifting costs from CAPEX to OPEX.

You probably already are familiar with the concept of outsourcing. The popular idea “Do what you do best and outsource the rest” has become widespread, and while it can be beneficial on many levels, there are also many case studies where outsourcing unfortunately was a bad move. To be fair, I do agree with this idea when done properly, there are many situations where outsourcing makes a lot of sense.

However, today I want to challenge the idea that a business should outsource IT because it isn’t its core business. We are in the era of digital transformation, and just like other utilities such as energy and water, IT is crucial for efficient, rapid and clear communication with colleagues, customers and other stakeholders.

Never before have we seen business grow so rapidly, because they make use of technology in an intelligent way: smart engineering in combination with an excellent digital customer experience, has proven to be able to outperform traditional means of interfacing (for example, brick and mortar shops). Using internet technology, a business can reach more customers, service them on demand and use (better) data to drive decision making. That’s almost a no-brainer.

As I see it, it is not a question whether the core business of your organisation is technology or not. I rather think the question is; how should a business approach its transformation to digital?

Digital transformation risks

Transitioning from a traditional to a digital business, is not at all easy. Like with everything in life, high rewards mean high risks. When you start changing things in an environment where most people are satisfied with current conditions, you will quickly understand that the goals of the business aren’t necessarily aligned with the agendas of its employees. Everyone has different reasons to do what they do.

While the opportunities get the most attention, it are actually the risks that will make or break a business. One of the big risks associated with digital transformation projects is having unclear goals. The IT landscape has become so complex that if you can not accurately describe why you do what you do, costs will rapidly spin out of control without increasing business value.

In my experience, I see this happening when the leadership team lacks knowlegde about IT, or fails to source that knowledge externally. In fact, in many organisations there is a big cultural gap between the management and the engineering teams, while they inevitably depend on each other to succeed. Partly I think this is happening because technology is evolving much much faster than leadership teams. People tend to grow into leadership positions after a decade of experience, on which they can rely to support their descision making.

But in this era, the internet has so severly changed the way we communicate, that a lot of the experience current leaders possess with regards to technology, is completely outdated.

Sourcing vs. Hiring

When your organization is evolving, it probably lacks the expertise and know-how about many of the new possibilities. Often, it’s tempting to buy an off the shelve product to fill that gap. In itself, that’s not a problem, but it can become a problem if the organization doesn’t develop inhouse knowledge alongside it. What is often overlooked, is that becoming a technology company, is not a temporary thing. A transormation is not a project, that’s finished after one year. The digital transformation fundamentally changes the DNA of an organization, which comes with new roles and responsabilities that will stay for the long term.

Early cloud adopters already know this: using managed services for core components of your offering might seem cheap at first, but can quickly become very costly. As a simple example: a traditional hard disk that you buy once, might cost you 0.08 euro / gigabyte once*.* Outsouring that gigabyte of storage to a cloud provider, can become 0.8 euro / gigabyte monthly, depending on the offering. That’s not just a 10x increase in cost the first month, that’s a 100x increase, annually!

Leadership that does the math well, should identify the hidden costs, and might be better of by hiring new employees with skillsets that were previously not found in your teams. Often I hear the explanation “but we don’t have that knowlegde, so we use a managed service”. But not having the knowlegde today, doesn’t mean you can’t acquire that knowlegde tomorrow.

Using managed cloud services can be useful during the transformation period, as long as there is a plan to develop the in-house knowlegde to support the core business in the long term.

Team topologies

When your organization decides to start hiring, beware for a few pitfalls. Some clients are very keen to just add a “DevOps person” or even better a “DevSecOps person” to the current team and think all their problems will be solved by the end of the year.

Becoming a modern, software driven organization requires much more effort: you will have to critically think about how your (product/development/infrastructure) teams are composed, and how you can align them without compromising on autonomy and agility. While doing this excercise you might decide to create a platform team, or not.

Whatever your situation, it is important to regularly evaluate progress, and be critical toward the latest trends. Don’t blindly follow, but understand what makes a trend trendy, and make the elements yours, that work for you and your organization.

A very fine book on the subject of team composition is Team Topologies by Matthew Skelton and Manuel Pais. It’s already some years old, but still relevant for organizations in the process of transorming their business to digital.

DORA (DevOps Research and Assesment) metrics and other measurements

When you are in the process of transforming your business, it’s extremely important to measure that process from the start. To help you get started, make sure you learn about the DORA metrics, scientifically proven useful metrics that measure your DevOps maturity. You can use them to compare your organizations to others, regardless of their size and or industry.

DORA metrics alone are not enough; you should also measure costs closely. Don’t just calcultate the monthly spent on managed services, but also add the cost of experts, contractors and lead times in the mix, so you get a detailed picture of your organization’s efficiency.

By measuring the success of your transformation journey from all angles, you will be able to tell a more compelling story of going digital to teams and leadership altogether.

Conclusion

To wrap up this article, remember this: don’t blindly move technology to the cloud because someone says it’s going to be great. Make sure that you thoroughly forecast the return on investment, and define an intelligent strategy to make the cloud work for your organization, and not vice versa.

I hope you liked this read, don’t hesitate to share it with your colleagues and leadership.