In this rapidly evolving age of technology, business demands are constantly changing. New technology innovations are introduced into the market at a dizzying rate. IT departments have the core role of providing technology solutions for business problems within organizations.
However, instead of delivering these solutions themselves, IT departments of tomorrow will deliver solutions by managing relationships with multiple third-party IT innovators. This is to ensure the latest technology; a wider depth of technical expertise, as well as higher efficiency and allocation of manpower resources internally.
To understand this shift in roles and relationships, we first examine how third-party IT innovations have helped businesses meet the changing demands of the current age with cloud and security solutions, and the various benefits of maintaining relationships with third-party IT innovators.
Third-party innovations to meet changing business demands
Robust third-party technological solutions are valued above all, for these bring a drastic increase in efficiency, productivity, agility and more importantly, competitive advantage.
A 2012 study by the IBM Institute for Business Value and Economist Intelligence Unit, which surveyed 572 business and technology executives across the world, found that 90% expect to have implemented cloud in their organizations in the next three years. This brings the expected growth now to 41% from 13% at the time of the study.
In this digital age, consumers have drastically changed their browsing and purchasing behavior. According to research by Gartner, it is predicted that more than 7 billion people and businesses, and at least 30 billion devices will be online by 2020 — which means most of the world will communicate and transact in the online sphere. To cope with this change, businesses have to adapt their strategies accordingly — i.e. find more efficient ways to conduct processes, share and exchange information, reach consumers and at the same time, ensure these transactions are accomplished in a secure environment. An example of an organization that has reworked its business model with a cloud computing solution is Etsy, a widely used online marketplace for handmade goods. Etsy “is able to cost-effectively analyze data from the approximately one billion monthly views of its Web site and use the information to create product recommendations.” (Forbes, 2012)
According to research by Gartner, in 2015, “at least 20% of all cloud services will be consumed via internal or external cloud service brokerages, rather than directly, up from less than 5% today”. While the debate has mostly revolved around internal (private) and external (public) cloud models, it seems like the hybrid model may be a more viable solution amongst businesses concerned primarily with security. For example, Action for Children works with about 50,000 children and young adults in more than 600 projects worldwide. The organization needed to keep sensitive data in-house, and at the same time, manage web traffic and conduct data analysis for a deeper understanding of their customers for fundraising activities. They achieved this through a hybrid cloud solution.
“Through 2015, mitigating data breaches will cost 10 times more than installing data protection mechanisms on mobile devices.” Gartner, November 2010
Security has become critical aspect of the digital age and will require the know-how of third-party service providers. The adoption of solutions from multiple parties, coupled with vast amounts of information shared and transacted online between and among service providers and organizations require security solutions to shield sensitive data. Organization networks today are subject to targeted attacks and intrusions. Denial-of-Service (DOS) attacks for example, can knock out critical applications, which in turn affects both businesses and its customers. Hackers are also constantly evolving their attack vectors. This online battlefield can prove bewildering to the IT department. Third-party service providers offer both expertise and robust infrastructures to ensure the protection and availability of organization’s networks.
The advantages of brokerage
There are multiple plus-points to IT departments forging and maintaining relationships with third-party service providers. These relationships can be put in place through various contractual agreements, including Service Level Agreements (SLAs).
First, service providers are equipped with all the new technologies available and most applicable for use in the organization, as well as the knowledge of best practices within the industry. IT departments can therefore avail itself to the best technology fit for its organization.
IT departments can also better manage and deploy their internal manpower. IT departments have been accused of being ‘disconnected’ from the business. In this way, IT staff can be devoted to understanding the business and propose the best technology from its service providers.
This model will also make it easier for the IT department to demonstrate value, as they will be able to reduce and manage cost and measure productivity. Furthermore, this can be done at a faster pace. Days when enterprise application implementation took 1 to 2 years will remain in the pass. IT departments can move from a cost center to being a cost controller.
The role of IT departments in businesses is continuing to evolve more in light of changing consumer demands. The full realisation of this has yet to be seen, but we look forward to what’s yet to come.