I consult, write, and speak on running better technology businesses (tech firms and IT captives) and the things that make it possible: good governance behaviors (activist investing in IT), what matters most (results, not effort), how we organize (restructure from the technologically abstract to the business concrete), how we execute and manage (replacing industrial with professional), how we plan (debunking the myth of control), and how we pay the bills (capital-intensive financing and budgeting in an agile world). I am increasingly interested in robustness over optimization.

Wednesday, May 13, 2009

Are You Ready to Restructure?

Global business faces unprecedented changes. Earlier this year, I wrote in an article for alphaITjournal.com:

Revenue forecasts aren’t materializing, capital structures are proving unsustainable, and operations are being scrutinized for inefficiencies. This, in turn, means that businesses are being completely restructured in how they are capitalized, organized, managed and governed. As businesses restructure, so will IT.

The need to restructure will be with us for a while. The financial economy isn't functioning normally, as capital markets remain on life support. The real economy isn't functioning normally either. We're still in the midst of business bailouts. Bailouts will give rise to bankruptcies, which will give way to restructuring. "Restructuring," says Gilles Moec, economist with Bank of America, "is very much the story of 2009." And business leaders seem to expect to face restructuring for some time: in a recent survey, IBM found that 91% of CEOs believe they need to restructure their businesses.

IT won't escape this phemonenon, and it must also restructure. Procurement, management and execution of IT have traditionally been focused on effort. IT has the opportunity to restructure for results, to be a transparent, efficient, responsive and collaborative participant in the business. There is tremendous upside for doing this, as it will make IT less a captive supplier of technical services, and of more an engaged business partner.
ThoughtWorks recently released a webinar I recorded on restructuring IT. I've also posted articles specific to restructuring IT on alphaITjournal.com. One covers challenge of change management during restructure, the other governing restructure. In the coming months, I'll be posting a blog series on IT restructuring that covers the deficiencies in the "industrial IT" mindset, defines a better future state for IT, and ways to go about remaking an IT organization to achieve that.

IT faces unprecedented challenge today. We have our work cut out for us, but we already have many of the solutions at hand that will allow us to meet those challenges. The opportunity is there for IT to get in front of this, and be at the forefront of corporate leadership. In turbulent times, better to be in a leadership role than relegated to a supporting position.