Cloud computing has brought with it a raft of benefits for businesses and is completely transforming the way we work. As with any major upheaval however, there will be winners and losers. For every triumphant revolutionary there is the guillotined noble. With our new cloud-enabled ability to deliver IT ‘as-a-service’, it has been tempting to view the traditional IT department as the ones with their head on the chopping block – but is this really the case?

Some cloud evangelists will tell you that the role of centralised IT departments within businesses is fast becoming redundant and soon all IT will be delivered via an OPEX model by third parties. In our view it is highly unlikely that the IT department will completely disappear in this way. Instead it will adapt, adopt and improve – becoming all the more important to the business in the process. Rather than being a threat to the IT department, ITaaS is in fact one of the best opportunities it has ever been presented.

The Emergence Of Shadow IT

The evolution of IT is being driven by a new competitive threat and a new strain of shadow IT: third party IT-as-a-Service (ITaaS) providers that deliver capabilities directly to the business user, without the consent (or even the knowledge) of the IT department. The emergence of this new shadow IT is a huge challenge for IT departments – a recent EMC survey, carried out by IDG, indicated that over half of today’s business leaders now turn to outside providers to supplement what is being delivered by in-house IT.

In fact, our survey revealed that the faster service delivery and time-to-market of shadow IT, its ability to leverage technical expertise not available in-house, and the lower cost make it highly attractive to business users. In our experience it is these considerations around agility – rather than cost – that are driving the uptake of shadow IT.

Even though many of the core IT functions in large businesses have been to one extent or another virtualised – meaning that in theory they have the power to provision a compute platform in minutes – such provision times are seldom met. This is due to the operational and process controls as well as the governance structures of large business; structures that can hold back compute provisioning by weeks. In this environment it makes complete sense to look to shadow IT when speed and agility are required, as such providers can get the necessary resources up and running in minutes.

The importance of this to businesses cannot be overstated. By using ITaaS, new revenue-generating ideas can be built and tested in no time at all. Then, depending on the market response the idea can be easily scaled up, or if unsuccessful wound down, without much budget having been eaten up by development. Businesses can take an idea from concept to production and expansion in less time than it takes for the traditional IT function to set up a development environment. Through shadow IT services both time-to-market and time-to-fail are decreased and all done so in a highly cost-effective way.

The problem for IT is that if these services are subscribed to without their consent, and in many cases without their knowledge, meaning that there is neither governance nor control in place around them – a nightmare from both management and compliance perspectives.

How IT Should Evolve

It is important to note that the emergence of shadow IT is not a competitive threat that the IT department can simply try and outmanoeuvre. The benefits of being able to source IT resources quickly and cost effectively means that shadow IT will not simply go away – no matter what cloud services IT can put in place. Instead, for the IT department to flourish in this new world, IT needs to embrace these third party services and work out how they can make them work best for their organisation.

One way of achieving this goal is for IT to become the service broker of choice for IT users within the business. In addition to delivering on its traditional function – which will need to become more agile – IT will also need to deliver a portfolio of choice or a catalogue of self-service that drives the user towards the most appropriate service according to requirement and budget.

In this way, instead of competing with shadow IT, the IT department can bring it into the light – and make these services part of the wider catalogue it manages. Importantly, this gives IT the oversight and control of the ITaaS solutions used within the business, making it easier for it to manage them as part of the wider infrastructure strategy.

So, in an oil company the trading function would, due to compliance and oversight reasons, need to reside on its internal systems. The service portal – owned by the IT department – would therefore automatically direct the user to the correct, compliant systems. On the other hand, If a user from the retail side of the business wants a compute platform for a couple of months at a low cost, the portal would direct them to the best third party provider.

This evolution of the role of the IT department involves a huge cultural and emotional change; one that should not be underestimated. While there will still be a requirement for traditional IT skills as we transition from legacy technologies, over the years there will be a see-saw affect where these skills become outmoded and the role of ITaaS increases in importance. IT workers will need to use this transition to understand what will be required of them in the IT department of the future and ensure that they have the relevant skills and mind-set to thrive in this new environment.

Making IT Central To The Business

The good news for the IT department is that if it can manage this cultural change in the right way, the rewards will be felt in an increased respect for its role within the enterprise. Today, core IT is often seen as a cost centre and the business value it delivers is too often overlooked. By putting more agility into the business through IT-approved ITaaS solutions this can begin to be addressed.

Revenue-generating services can be delivered much more quickly, with an immediate impact on the bottom line. Once the benefits of agility have been felt, the business will be in a much better place to look at how they can monetise the data they hold and launch into new markets and product categories. At a stroke, the IT department is elevated to the role of a strategic engine for business growth.