Cloud and ‘as a service’ models abstract the technological complexity associated with traditional IT project deployments. Organisations today in search of such solutions are not so much interested in the technology as they are in a set of services enabled by that technology. As we discussed in last week’s blog, the cloud and digital technologies have helped to transform expectations of IT service delivery, resulting in the rise of the managed service provider and the demise of the traditional IT outsourcing model. But this is affecting change inside organisations too, as business units have come to expect the same level of service from their IT departments. Many CIOs in turn have recognised the need to be a ‘broker’ of IT services that cater to the line-of-business’ demands.
IT as a service broker
By its standard definition, a broker is an agent that provides information about prices, products, market conditions, and vendors to facilitate transactions between parties. In the new IT organisational model, the CIO functions as a broker by consulting with the line-of-business to better understand their technology needs and objectives, and sourcing internal or external IT services or partners to meet those demands. Service broker CIOs combine their knowledge of the market, technologies, and vendors with their deep understanding of stakeholder needs to help the business select the right solution, and the most appropriate means for delivering that solution.
The key to being an effective IT service broker is to have a solid understanding of the business requirements. CIOs use to base technology decisions on what fit best with the IT environment, but now it’s about what makes the most business sense, and this means assessing whether various applications and workloads would be better running from an external environment. This approach is based on the increasing commoditisation of technology and enables IT to leverage a range of cloud-based services. Most importantly, it means that internal IT talent isn’t being wasted on what are now commoditised services, which are much more cost-effective to outsource.
The Australian Museum is one organisation that is currently going through this process. Speaking on a panel at the CMO-CIO-ADMA Executive Connections event held last year, the museum’s head of digital, ICT and online, Jason Wong, explained how he and his team are transitioning to the service broker model to facilitate new ways of working. He said, “I’m trying to outsource, use managed services or cloud for everything down the bottom of the technology stack, and which I can automate, then outsource things at the top to gain highly skilled expertise. What I’m left with is this middle ground, which means my IT people now have to be more like IT service brokers. This means they need enough technical background to have conversations with highly skilled people, but aren’t wasting their time doing log checks and monitoring. This frees them up to spend their time on business and understand what’s going on and what their needs are”.
Not off the hook
Yet, despite much of the operational burden being offloaded and having time to dedicate to new projects, life as an IT service broker isn’t just fun and games. Deloitte CIO, Tim Fleming, believes that the concept of brokering services on demand means his team must always find a better way to deliver IT. He told CIO Magazine, “We can’t be sitting around building servers and taking weeks to deploy things. There are cost demands and we are increasingly getting services from anywhere and everywhere. Every week, I have seen more services that we are not directly supplying but we still need to be there to broker them and make sure the data architecture is correct.”
First, virtualisation and the cloud changed the way IT providers operate, and now they, along with other digital technologies, are changing the way the IT organisation operates. Gone are the days of order taking and keeping the lights on – the new IT organisational model sees CIOs and their teams acting as value-added service brokers and innovation drivers.
How much progress have you made towards setting up your IT organisation to run as a service broker? Read our white paper on the topic to learn how to go about this transition: Why every CEO wants to lead a service defined enterprise - and why the CIO needs to make it happen.