How Can You Measure and Compare Service Providers – Including Yourself?

What does it really cost you to deliver a given service?  How does that cost change as you adjust service quality parameters?  How does it change if you incorporate elasticity into service quality – allowing, for example, for peak loads to increase by a factor of 100 on, say, Valentine’s Day?

These questions have never been easy to answer.  Even with attention to Service Management, and with the use of frameworks such as the IT Infrastructure Library (ITIL), most IT shops are not great at measuring these things.  Then, along comes Cloud Computing, with some very appealing value propositions, and potentially, a quick way to offer business services, flexible service levels and agile platforms.  Just how well do the various cloud vendors perform?  How can you compare one vendor against another – or against your internal service capabilities and performance?

To help answer these questions, there’s a new game in town called the Service Measurement Index. According to the Cloud Commons web site:

Hailed as an industry first, the Service Measurement Index (SMI) is a set of business-relevant Key Performance Indicators (KPI’s) that provide a standardized method for measuring and comparing a business service regardless of whether that service is internally provided or sourced from an outside company. Designed to become a standard method to help organizations measure business services based on their specific business and technology requirements, the SMI enables individual preferences to be the basis for what defines a good service.”

The SMI framework, originally created by CA Technologies, was recently transferred to the Cloud Service Measurement Initiative Consortium (CSMIC) to be independently developed and run.  The CSMIC is a consortium of academic institutions and representatives of business and government that is led by Carnegie Mellon University – source of the Capability Maturity Model Integration (CMMI).  The CSMIC currently comprises four Working Groups:

• Service Characteristics & Definitions (includes Taxonomy)
• Measures and Metrics
• Literature and Relationship Review
• Adoption and Strategy

The SMI Framework

The SMI Framework provides an holistic view into the entire customer experience for cloud service providers in six primary areas:

• Quality
• Agility
• Risk
• Capability
• Cost
• Security

Somewhere between JD Power & Associates and Consumer Reports, the SMI promises to provide a standardized way to describe, measure and, ultimately, benchmark service providers using ‘apples to apples’ comparisons.  Users of the SMI Framework should be able to compare cloud service vendors against their specific business and technology requirements.  They should also be able to make real-time decisions about where and how best to migrate or deploy an application.

Tackling the Largest Part of the IT Budget

While the White House attempts to reign in an ever expanding budget deficit by nibbling around the edges, most IT shops realize that the largest component of their budget goes to “keeping the lights on and the trains running on time.”  Making a serious dent in this budget could free up money and resources for higher value activities.

The jury is still out as to whether cloud computing will live up to all its claims for cost-effectiveness, but with the SMI, at least over time we will have the means to make those comparisons and make informed decisions about how best to source computing resources and services.

Join Me In a Live Conversation About The Cloud

As a reminder, I head out this week across the US for a series of CIO Forums about Threats and Opportunities In The Cloud.   Please click on the link for details and to sign up for this event!

Related articles

• Enabling Trust In The Cloud (chucksblog.emc.com)
• Addressing the Need for Cloud Service Assurance (blogs.cisco.com)
• Cloud services: trust, but verify (zdnet.com)

Some Principles for ‘Social’ IT Management

Over the course of several client engagements, Roy and I have developed a short list of principles to guide the way we help a client move towards a ‘social’ approach to IT management:

• Create a baseline quickly, set the quality bar high, and make rapid, incremental improvements thereafter.
  • Rationale: The emergent and more parallel process implied by a social approach can feel a little intimidating at first.  “Will I look like a fool?  How will my co-authors react?”  We’ve found that the best way forward is to “Just do it!”  Get started, and damn the torpedoes!  But also, don’t ask people to begin with a blank slate.  While some clients are o.k. starting from scratch, most prefer a starting point – a straw dog, if you will.  Having said that, it’s important to make it clear that the straw dog is just a starting point – that the expectation is that this will be refined into something we can really use and be proud of!
• Follow a ‘cascading’ approach – deploy in waves, starting with IT leadership, rapidly engage Process Owners, then members of Centers of Excellence, and finally everyone.
  • Rationale: To be frank, there is something “1.0″ about this cascading approach – it’s rather top-down which flies in the face of a truly emergent, egalitarian and collaborative approach.  But most organizations have a hard time jumping from the “1.0″ to the “2.0″ paradigm.  So, we’ve found a “1.5″ approach to be a useful interim state.  It acknowledges the special role of the IT leadership team, and the reality of engaging them first.  It also puts them in a better position of experiencing the new approach and being able to model desired behaviors.  The trick is not to get stuck in a mode where everything has to start with the IT leadership team.  Get the process owners appointed early (they usually already exist, even if that role has not been formalized) and they in turn will engage process teams.  Typically, there are Centers of Excellence or Communities of Practice that are already blogging and participating in wikis (the IT architecture community is often an early adopter) so it is a natural to bring them into the tent.  Just be careful to not shut down their activity by legitimizing it.  They thrive as a 2.0 collaborative community because that was a truly emergent practice for them.  Legitimizing this practice as “leadership sanctioned and monitored” can shut it down, or drive it back underground, so don’t be too heavy handed in this sanctioning – shine a light on it, but not a floodlight!
• It is far more important to instill pride-in-workmanship than to install a complex review and control process.
  • Rationale: Coming from the 1.0 world, it is natural for leadership to want to place controls all over the wiki environment.  I recall one client executive, when I first described the plans for their ‘social’ IT management, looking aghast, and saying, “You aren’t seriously suggesting we’d let stuff go up on the Wiki before it was fully vetted and approved?”  This is a natural reaction, but must be resisted.  The power and wisdom of the crowd to shape and continuously improve is relentless – if you let it be!
• A Power-Law Distribution is expected and good; a few will contribute a lot and some will contribute little, but everyone has something worth contributing.
  • Rationale:  There’s no way around this.  It’s a well-researched and documented phenomenon.  Your major contributions will be limited to a small proportion of the IT organization.  Many will seemingly be bystanders.  The fact that they aren’t in the Wiki every day, participating in discussion threads, creating Wiki pages does not mean they aren’t participating or getting value from the it – they are.  Don’t be put off by it – just accept it and be thankful.
• Leaders must demonstrate their commitment ‘by example’ while avoiding the temptation to criticize (which will be initially easy).
  • Rationale: Early on, people will look to IT leadership to see if they are “walking the talk.”  If they are, others will join the revolution.  If they are not – this too shall pass!
• Consistency is a key to success; if every content page looks different, the Social platform will not create a sustainable social web.
  • Rationale: The emergent properties are a good force to tap, but can be a double-edged sword.  We’ve seen many clients with SharePoint (or Lotus Notes way back) where people were encouraged to participate. And participate they did – in spades!  Before long there were SharePoint sites everywhere – each with their own structure and style.  Pretty soon, the collaboration ecosystem is un-navigable.  You have to strike a balance between emergent and structured – and consistency in style and structure are important to sustain this.  Provide templates to make it easy for people to conform to a common style.  And have active Collaboration Managers and Wiki Gardeners whose role includes encouraging a clean and consistent style.

We will end this 3-part series here – but please keep an eye open for upcoming posts that further explore our work in this space.  Or ping Roy or me for a discussion on how this might apply in your organization.

And, of course, please comment on your thoughts and experiences – this is an emerging space, and we all have lots to learn about social means to improving IT management!

Graphic courtesy of Literate Web

Related articles

• ‘Social’ IT Management – Part 1 (vaughanmerlyn.com)
• ‘Social’ IT Management – Part 2 (vaughanmerlyn.com)
• Who should be in charge of Enterprise 2.0? | ZDNet (zdnet.com)
• Enterprise 2.0: at an Inflection Point – Express Computer (expresscomputeronline.com)

I was at a speaker at an nGenera Executive Summit recently where one of my co-speakers, Jeffrey Pfeffer, Professor of Organizational Behavior at Stanford University cited Deming’s “Drive Out Fear” dictum, from his 14 Management Points.

This reminded me of the genius and timelessness behind Deming’s teachings, and inspired me to tackle a couple of posts examining his 14 Points in the context of today’s economy.  Dr. W. Edwards Deming was an interesting and key figure in the quality movement.  He taught statistical process control (SPC) techniques to World War II workers and applied these methods to help improve crop and food yield during the war.

Regrettably, in the post-war frenzy for American products, he was largely ignored (rejected, even) by American industry.  However, due to his early work on the US census, he was invited to help with the census in Japan.  As a result, his work became visible to Japanese industry, and was wholeheartedly embraced and built upon by the Japanese, whose cultural inclinations were very compatible with Deming’s teachings.  The rest, as they say, is history!

Out Of The Crisis

In 1982, Deming published Out of the Crisis, a classic text that resonates especially strongly today.  Deming posited that,

Long-term commitment to new learning and new philosophy is required of any management that seeks transformation. The timid and the fainthearted, and the people that expect quick results, are doomed to disappointment.”

As one who has been involved in dozens of organizational transformations over the years – both as a consultant and as a “victim”, I say, “right on!”  Out of the Crisis offered a theory of management based on Deming’s 14 Points.  I will list them below, then pick a few to examine in each subsequent post.  From the perspective of 2009, and our Twitter/Facebook culture, Deming’s language may seem heavy and stilted, but, please, don’t let that put you off!

Deming’s 14 Points

1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and stay in business, and to provide jobs.
2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.
3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move towards a single supplier for any one item, on a long-term relationship of loyalty and trust.
5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.
6. Institute training on the job.
7. Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.
8. Drive out fear, so that everyone may work effectively for the company.
9. Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.
10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
11. Eliminate work standards (quotas) on the factory floor. Substitute leadership.  Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.
12. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.  Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia,” abolishment of the annual or merit rating and of management by objective.
13. Institute a vigorous program of education and self-improvement.
14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.

We will examine each of these in subsequent posts, and place them in the context of the current global economy.

Process Culture is REALLY Important!

There are some fundamental disciplines that are at the heart and soul of the IT profession – project management, program management, portfolio management, service management, product management, and Enterprise Architecture.  All these disciplines depend upon the “meta-discipline” of process management.  It is easy in an age of Web 2.0, Enterprise 2.0 and Cloud Computing to take these fundamental disciplines for granted.  This is a massive mistake!  From my experiences, few IT organizations have mastered these disciplines, and in those companies where process culture is mature, I often find that the IT organization is the exception!

Do yourselves a favor – check out the Simple Processes blog!

Graphic courtesy of BizManualz

I’ve Looked At Clouds From Both Sides Now

Back in August 2008, not being able to resist the title to the wonderful Joni Mitchell and her reference to “cloud illusions I recall”, I posted on the denial I was witnessing among my client base.   I likened it to the denial that was common among CIO’s back in the early 1980′s.  To quote from that post:

(CIO’s) were mostly in denial, even as executive offices just down the corridor from the CIO’s office were beginning to become home to a variety of rogue PC’s – machines such as Apple II’s and Radio Shack TRS 80’s.

Fast forward 25 years or so. Now the press is full of predictions and prognostications about Cloud Computing, several key players are investing heavily in this space (pun intended) but many CIO’s and CTO’s either just don’t believe it, see it as warmed over service bureau computing from the 60’s and 70’s, or believe it’s the greatest threat to enterprise computing sanity since computer viruses first appeared.

Now, nearly 1 year later, I’m still seeing the same denial – Cloud Computing, for the most part, is on the back burner – a technology to watch!  Clearly, there are significant risks with the untried, standards are still evolving, and there’s something intimidating about such a simple concept being able to replace so much enterprise technology and expertise – the “heart and soul” of the typical IT organization.  In fact, for many IT shops, this “heart and soul” is where they’ve invested many of their improvement efforts over the last few years, implementing ITIL and process improvement approaches.  That’s been a hard-won fight, and CIO’s are loathe to admit that there might now be an easier and better way!

In another post earlier this year on The Dangers of Cloudy Thinking, I wrote:

I’m fascinated and bemused by this Cloud Computing phenomenon. Never before have I had such a strong feeling that something really, really important is happening – a fundamental discontinuity, if you will, in the way we leverage IT – and yet most of my clients and those I am interacting with in a couple of multi-company research projects are essentially standing on the sidelines.

Hincliffe’s “8 Ways That Cloud Computing Will Change Business”

Dion hits the nail on the head once more with his excellent June 5 post in which He says:

(Cloud computing offers) benefits that can potentially change the game for many firms that are willing to be very proactive in managing potential downside. These include access to completely different levels of scale and economics… Easier change management of infrastructure including maintenance and upgrades (cloud vendors extensively virtualize and commoditize the underlying components to make them non-disruptive to replace and improve) … Cloud computing also offers an onramp to new computing advances such as non-relational databases, new languages, and frameworks that are designed to encourage scalability and take advantage of new innovations such as modern Web identity, open supply chains, and other advances.

He goes on to show the major pros and cons, and then to cite 8 compelling ways that cloud computing can change business.

Cloud Computing – Ideal for the “Edgy” Opportunities?

Dion refers to the use of cloud computing beyond “edge” computing (which he describes as minor applications and non-critical business systems).  This is the only place where I take issue – I think “edge” computing is where the exciting action is, where the high value and innovative opportunities lie.

Back in July 2008, I posted on “Edginess and Innovation.”  In that post, I differentiated between “core” and “edge”:

Many IT leaders when talking about the “core” are referring to the “legacy” systems…  built over the years and have to maintain.  But in reality, the core goes much deeper than the systems and technologies. Business processes – especially when you include the unautomated practices and workflows that interact with the automated ones, are hard to change. The mindsets that dominate “core” thinking and “edge” thinking are radically different. I’ve noted before that quality guru Joseph Juran distinguished between “preventing bad change” (keeping processes under statistical control” and “creating good change” (innovating processes and products, or creating “breakthrough” performance as Juran put it) and the different management approaches and structures each requires. Most IT leaders have focused for years on management approaches more consistent with preventing bad change than creating good change. This has created a mindset that abhors risk taking.

I believe most of the “core” opportunities have been addressed in the typical global enterprise.  Sure, there’s always more to do (and the trap of saying “yes” to all the business requests to continually tweak and bolt onto core systems) but I believe you can move the business value needle significantly to the right by tackling more of the “edge” opportunities, and that is where, to Dion’s point, the Cloud (and its related technologies) offers real promise – now!

I was thinking about this admission from a multi-billion dollar, global enterprise, and thinking about analogies.

Businesses that Can’t Deliver What they Promise

Supposing, when you booked a flight, the airline said,

That flight might not get you to the destination you are paying for.  In fact, it might not get you anywhere with safety!”

Or, when you booked a hotel room (can you tell I travel a lot!), the hotel operator told you,

We can’t guarantee a room will be available, or that it will have clean sheets and towels.  We will try, but we really don’t have the discipline to ensure it!”

Or going to a hospital for surgery, and the admissions officer asking you to sign a waiver acknowledging that,

I understand that my surgery might not be performed by a board certified surgeon.  Or by anyone actually qualified to perform the needed surgery.  We will try to do no harm, but we don’t have the discipline to ensure it.”

For all the criticism we might throw at airlines, hotels, and even hospitals, by and large, these organizations have the processes, controls and disciplines to mostly do it right the first time.  IT service management is hardly open heart surgery, but the IT organization is being paid a significant amount of money to deliver services that people depend upon.  The customers of these services expect that they are being delivered consistently, reliably, accurately and at the best possible cost.  I can’t imagine what they would say or think if they knew this was not necessarily the case – that their service provider “did not have the discipline” to do it right!

Process and Service Management Discipline – Not Optional!

I’ve posted before about ITIL and about it being necessary but not sufficient.  I’ve never posted anything that implied that process discipline is not a critical success factor, or that ITILv3 is not a highly effective framework for bringing process and service management disciplines to an IT organization.  I do acknowledge that any process improvement methodology when applied without a modicum of intelligence can go overboard.  We see this in a phenomenon I call ‘death by Six Sigma‘ when the race to green belt certification leads to hundreds of mini process improvement projects without any overarching change architecture.  We saw it with Total Quality Management, and the Baldrige Award and Deming Prize winners that got into serious difficulty as the end of the prize became more important than the means to make money!

Do you have the necessary discipline to provide the best possible services at the lowest possible cost?  If not, what can you do to develop some commitment to do it right, and the discipline that comes with that commitment?  If the answer is “nothing,” how can you look your customers in the face?

• Manage the IT Infrastructure
• Deliver Business Solutions
• Manage the IT Organization

They also (and sometimes, of great significance) assess those IT capabilities that are jointly owned by business and IT, such as:

• Manage the Business-IT Portfolio
• Manage Business-IT Relationships
• Manage Enterprise Architecture

Capability vs. Process

An important element of capability is the concept of process.  Processes tell you how work should be done, where inputs come from and outputs go to, what results should look like and how they should be measured and evaluated, how efficient and effective the process is, and how it should be evaluated and improved.  Capabilities bring in the dimensions of people and technology that use processes to get work done.

Some capabilities (typically those whose primary value proposition is Operational Excellence) require rigorous and robust process definitions.  For example, this is the primary domain for frameworks such as ITIL and COBIT.  Other capabilities, where the value proposition is Customer Intimacy or Innovation have a far higher “human content” requiring special competencies and judgment.  In these cases, processes may be less rigorously defined, but they are still important, even if only in the form of a checklist for the major steps, entry and exit criteria, and examples of the deliverables they create or outcomes to which they are intended to lead.

The distinction between capability and process is important for many reasons.  I sometimes find myself in debates with clients along the following lines:

We have assessed that your (fill in the blank) capability is low – not in place or only partially in place.

Which garners the client response:

That’s wrong – we have processes and artifacts to do (fill in the blank) – it’s fully in place, or at least mostly in place!

To which we respond:

You might think you have a process, but the people who’s role it is to deliver the capability associated with that process either don’t know about it, or are ignoring it – the net result is, you don’t have the capability maturity you need for (fill in the blank)!

The Characteristics of Real Process

So, how do you know you really have processes that are driving (or at least, shaping) behavior?

1. Do you have a process definition that is known by and used by impacted stakeholders?
2. Is it defined at a level appropriate to its purpose?
3. Does it provide “best practice’ examples of input criteria, exit criteria and deliverables for each major step?
4. Does it clearly spell out all roles associated with each given step?
5. Do those roles call out or point to descriptions of the competencies (knowledge, skills and behaviors) needed to satisfy a given role?
6. Are there outcome and in-process metrics and are these used to drive continuous improvement?
7. If a new person, once familiarized with the formal process, stepped into the work mid-flight, would they know what to expect (and would find) what work has been done so far, and what steps need to be performed next?
8. Do you have approaches to assure that key process steps have been followed (risk management)?

Some Questions to Reflect Upon…

So, think about your major IT capabilities:

• For which ones do you really have good processes?
• Where are your biggest gaps?
• What would you gain if you closed those gaps?
• Would it help with communications – internal to the organization and with your business partners?
• Would it help clarify roles, responsibilities and accountabilities?
• Would it help clarify the ‘rules of engagement’?
• Would it make work more predictable and more easily repeatable?
• Would it help identify non-value adding steps and activities, or missing roles?
• Would it enable process improvement and innovation initiatives?
• Would it help bring new employees or partners up to speed more quickly – accelerate ‘time to value’?
• What would that all be worth?
• What’s standing in the way of doing it?

To the right is a picture of the mix typical of a mid-level business-IT maturity organization.  The relative emphasis on technology had dropped somewhat, and the emphasis on process – both business process that is the object of automation efforts, and IT process as the means to manage and improve the work of the IT organization.  Also, the emphasis on people – on the IT professional and on the people aspects of managing organizational change has increased relative to the meager attention this received at lower business-IT maturity.

Typically, in a mid-level business-IT maturity shop, the almost dominant emphasis on technology skills and issues prevalent in low maturity IT organizations has been counterbalanced with process skills and attention to process issues.  This may or may not be via a programmatic approach such as “lean” or “six sigma”, but it’s real and it’s important to the work of the IT organization – both in terms of the type of work that is done, and how it is done.  In terms of work type, there is far more attention to processes analysis and process reengineering of business processes that are being automated.  In terms of how IT work is done, there is more attention to formal, consistent, documented processes.  This is especially true in the “IT factory” processes associated with data center operations, networks and help desk support.  Sometimes this is via programmatic approaches such as ITIL, COBIT or CMMI, or via Six Sigma or other process quality methods and techniques.

In mid-level maturity shops, the people dimension gets far more attention that it does in lower maturity organizations.  This can be seen in the form of improved performance management, competency development, career planning approaches.  It can also be seen through increased attention to the human aspect of people and technology change – increased attention to the organizational change management issues.

In high business-IT maturity shops, the relative balance of technology, people and process has shifted even further away from technology and more in favor of process and people.  In such companies, the IT organization may well have become the enterprise center for Six Sigma or for process and quality improvement.  It may well have become the center for Program Management and for Organizational Change Management activities.

Typically, high business-IT maturity organizations have become masters of global sourcing and inter-enterprise processes.  It is not unusual to find the CIO has now evolved to the head of global shared services, or has global responsibilities for one or more core business processes such as supply chain.

So what does all this mean to you as an IT professional or IT leader?  Think about your own organization.  Are you giving sufficient attention to people and process issues?  How has the balanced changed in the last 3 to 5 years?  How should it change in the next year or so?  How will it change?  If not as much as it should, why?  What are the barriers?  What can you do to remove those barriers?

I have to confess that the mechanics of getting this done first time around have proven quite challenging!  I’ve done quite a lot of video editing in the past, shooting film on a camcorder and editing it on my home iMac using iMovie HD.  For some trivial logistical reasons, I wanted to do my video posts on my Lenovo laptop with my Microsoft webcam and using the free Windows Movie Maker software, which I’d never used before.  I had all sorts of problems – especially with sound.  Some of these were learning curve issues, others related to “free” software with a less than perfect user interface (compared iMovie) and pretty weak help support.  Anyway, here is my first effort.  Let me know what you think – is this worth the added production effort?  (I find writing so much easier!)  Thoughts on a poscard please…

I was in an interesting discussion with one of my consulting clients recently.  I was with a group of IT managers responsible for their firm’s shared IT assets.  This is a large, global enterprise that has been on an aggressive journey over the last 5 years to transform business-IT maturity.  By any measure, they have been successful – rationalizing and consolidating a patchwork of data centers, networks, systems and dispersed IT groups – some “official parts of an IT organization”, others “shadow IT organizations” operating outside of IT budgets and controls.

In essence, this group is responsible for the firm’s “infrastructure.”  We talked about the definition and meaning of “infrastructure” in order to get a handle on their scope of responsibilities, and how these might change over the next 3-5 years.  A typical dictionary definition of infrastructure is: “the basic facilities, services, and installations needed for the functioning of a community or society.”  For IT infrastructure, I find Professor Peter Weill’s definition especially useful:  “The base foundation of budgeted-for IT capability (both technical and human), shared throughout the firm as reliable services, and centrally coordinated.”

Let’s examine the keys to this definition.

• Budgeted-for implies conscious analysis, planning and funding.  This is critical for IT infrastructure given its characteristic that it tends to be invisible until it breaks.  Therefore, an effective IT infrastructure management group has a hard time getting funding for improvements – “If its working fine, why do you need more money?” is the typical refrain.  (Public infrastructures suffer the same fate – hence our bridges are falling down, and, as an Atlanta resident, I have to suffer continuous drought conditions while 20% of the water traveling from reservoirs to homes is wasted through leaky water pipes!)
• Both technical and human helps correct the common misunderstanding that IT infrastructure is all cables, computers and disc drives.
• Shared throughout the firm as reliable services introduces the notion of ‘firmwide sharing’ which sets scope, and ‘services’ which takes us to the disciplines of Service Management, and frameworks such as ITIL.
• Centrally coordinated tells us something about how IT infrastructure is managed – note here, its not necessarily centralized management, but central coordination, implying Enterprise Architecture and Governance.

The big question for this group is how should they evolve over the next 3-5 years, given all the changes in the business ecosystem (Next Generation Enterprise, anyone?)  One of the key elements of IT’s contribution to business success and growth in the next few years is through the notion of “platforms.”  A platform is a set of assets whose roles and connections are defined so that they can be configured in a variety of useful ways.  My company, BSG Alliance, recently kicked off a new multi-company research project, Platforms for Business Growth, so the research team has been giving a great deal of thought to IT-enabled business platforms for some time.

“Platform thinking” originated with manufacturers who wanted to build a variety of products using standard designs and interchangeable parts. It then migrated to the software industry.  For example, as Microsoft Windows operating system became popular, partners began developing products to work with the Windows platform.  Today, companies such as Amazon offer their ecommerce systems as a business platform, YouTube provides a platform for embedding video clips, and Apple’s iTunes/iPod has become a successful entertainment platform.

A key element of platform thinking is easy and open connection and collaboration with customers and suppliers.  Customers want to collaborate in the creation of customized products and services.  Business partners offer an ever-growing variety of services to leverage. A flexible platform is an engine for growth – because the business is more nimble and responsive, because it is better able to connect and collaborate, and because it maintains a larger portfolio of “options” for innovation and future action.

So, what are the differences between IT infrastructure  and IT-enabled business platforms?   Building a business platform certainly depends upon a sound infrastructure.  But platforms also depend upon clearly defined and published specifications and ground rules for what assets do and how they connect.   As IT infrastructure requires the mastery of IT Service Management,  IT-enabled business platforms, on top of IT Service Management requires the discipline of Product Management.   For many IT organizations, this is a new and unfamiliar discipline – one rooted in the disciplines of marketing, and therefore quite foreign to the world of IT.  I will get more into the distinctions between Service Management and Product Management in a subsequent post.