Reacting to some debate over at IT Skeptic:
"Run IT as a business". What a mantra. It is of course rubbish.
Well....
Just going through some references on the "IT as a business" topic. It is a thought experiment with a long pedigree and has less to do with the Wallys of the world fantasizing, Walter Mitty-like about their little kingdoms, and more to do with attacking IT exceptionalism and obfuscation.
While Cary King notes that Dean Myer (www.fullcost.org) has been using it for about a decade, the history goes way back... the earliest cite I can find is from 1971:
DATA PROCESSING AS A BUSINESS ENTERPRISE
In management terms, the EDP function can be looked at as a cross section of the business as a whole. Definite parallels can be drawn between the medium-to-large-sized EDP organization and an overall company. This book will cite several examples comparing the EDP function as a business-in-miniature with comparable functions in a typical manufacturing company. However, it should be stressed that similar comparisons exist and can be made between the EDP function and virtually any type of business organization. To illustrate:
■ The computer as a unit of production equipment parallels large machine tools or other units of factory equipment.
■ Systems analysis and engineering are comparable skills.
■ Programming and drafting are functions of similar position within and importance to the overall processes of which they are a part.
■ Technical services for EDP and manufacturing engineering are parallel functions.
■ Scheduling, line supervision, personnel, payroll, budgeting, and accounting functions all have direct counterparts between the EDP function and a manufacturing business as a whole.
In management terms, then, the EDP function is a business-in-miniature.
Ditri, A. E., J. C. Shaw, et al. (1971). Managing the EDP function, The Touche Ross Management Series. N.Y., McGraw-Hill.
Similarly from 1981:
We believe that the solution to this "image" problem lies in the disciplined application to data processing of the same general management principles that have been used successfully for many years in the management of other similar business operations in, for instance, the manufacturing and processing industries. In other words, a management system needs to be established that provides a sound basis for control of the data processing operation, provides a proper mechanism for effective communication between all parties concerned with data processing, and encourages a businesslike attitude in the individuals involved.
To emphasize this business approach, we will expand the traditional view of data processing into an Information Systems (i/s) business within the overall enterprises business environment. This business within a business concept will allow us to identify the role of corporate and user management in guiding and monitoring this l/s business.
IBM Corporation (1981). A Management System for the Information Business, Volume I, Management Overview, 2nd ed. A Management System for the Information Business. White Plains, NY. (Famous "Yellow Book" series)
And my favorite quote:
IT service development activities parallel those of commercial R&D organizations. IT service delivery and operations activities parallel those of corporate manufacturing and customer service departments. IT governance activities parallel corporate governance activities. IT is dynamic, but so are other disciplines, such as finance and logistics. IT is complex and uncertain, but no more complex or uncertain than engineering and demand forecasting. Get over IT! In concept, the fundamental management principles of all the disciplines are identical. We just need to do a little translation.
Kaplan, J. D. (2005). Strategic IT portfolio management : governing enterprise transformation. United States, Pittiglio Rabin Todd & McGrath Inc.
Other citations along these lines, either with a title clearly indicating the "IT as a business" meme or significant internal content discussing it:
Van Schaik, E. A. (1985). A management system for the information business : organizational analysis. Englewood Cliffs ; London, Prentice-Hall.
Curley, M. (2004). Managing Information Technology for Business Value, IT Best Practices Series. Hillsboro, OR, Intel Press.
Lientz, B. P. and L. Larssen (2004). Manage IT as a business : how to achieve alignment and add value to the company. Amsterdam ; Boston, Elsevier Butterworth Heinemann.
Lutchen, M. (2004). Managing IT as a business : a survival guide for CEOs. Hoboken, N.J., J. Wiley.
Hunter, R. and G. Westerman (2009). The real business of IT : how CIOs create and communicate business value. Boston, Mass., Harvard Business School Press ; London : McGraw-Hill [distributor].
Ryan, R. and T. Raducha-Grace (2010). The business of IT : how to improve service and lower costs. Upper Saddle River, NJ, IBM Press.
Finally, if one chooses to disregard the IT authors, then there are still Womack & Jones to consider, in Lean Thinking:
Finally, we've discovered that these value stream and product line managers, like so much in the lean world, are 'fractal'.
That is, a product line manager overseeing an entire product may work with a number of value stream managers at lower levels taking responsibility for different courses of the value stream. For example, a chief engineer (to use Toyota's term for a product line manager overseeing an entire automotive platform) works with a development leader in design, a value stream manager in the assembly plant, and value stream managers in each of the component plants working on major items assembled into the finished product. Each manager is essentially doing the same job but with varying scope—wide at the top and narrow at the bottom.
Womack, J. P. and D. T. Jones (2003). Lean thinking : banish waste and create wealth in your corporation. New York, Free Press.
I think such approaches represent a valuable and necessary thought experiment, fundamental to my own writings as well. I also think it scales to IT problems in the small as well as large. Certainly, it doesn't imply turning IT into a profit center.
So, I guess my question is whether someone wants to attempt a more systematic statement, e.g. "'IT as a business' considered harmful." I think that debunking the concept will take a little more than invoking Wally. Are all these authors misguided?
Updated: some relevant excerpts from my book on the next post.
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