Original URL: http://www.theregister.co.uk/2006/11/16/aldon_outsource/
IT 'should be entrepreneurial'
It's about money, stooopid
Money...nasty stuff, I know, and it seems sad to think that the fine arts of application development should be sullied by association with the denizens of Mammon.
But that is also a key part of the real world that IT departments have to live in and, in the view of Daniel Magid, CEO of Application Lifecycle Management tools provider Aldon, it is about time IT departments and apps developers got their heads round this issue.
"IT departments now need to start acting as entrepreneurial organisations with their business," he said. "They now need to justify themselves and what they do in terms of money. The business needs to know what they can contribute in financial terms."
The alternative, he suggests, is that IT departments prepare themselves for the possibility – nay, probability – of being outsourced. And this possibility exists despite the fact that many outsourced applications development exercises are failing and being brought back inhouse.
The reason they are failing, however, is fundamentally because neither IT nor business managements have been able to establish an effective level of management over the outsourcing process. This is particularly so with geographically dispersed outsourcing, be that for economic reasons or because remote development teams have particularly valuable skill sets.
"If an outsourced project is not properly specified or managed, there will be problems," Magid said. "They can either produce what they think you want, or produce what they believe you really need, despite what you specified."
Managing outsourcing puts, therefore, the same demands onto IT – get the management right and communicate it effectively. What IT needs most of all is the ability to take control of co-ordination and communication, be that between the different teams in an outsourced development environment or between IT and the business units within a company.
In the outsourced environment that involves not only managing the communications between the teams but also the way in which the work is divided up into discrete component services that can be tackled by each of them.
And if IT departments are to maintain their existence, they need to make sure the business unit managers are in the same communications loop as the developers and IT managers, using tools that can report and record every aspect of a project, from the policies and rules that define it through to the detail of actions taken. ®