I was asked to deliver a BrightTalk webinar on the question – “Should the Modern CIO build, buy or configure their IT Systems?” It really made me think about the decision matrix that would lead to a properly considered answer to a less than straightforwards question. The answer I came up with was – it depends!
Lets look at the variables:
- What kind of company do you work for – what is the appetite for risk and the demand for flexibility and agility?
- What kind of IT Systems are we talking about?
- What is the operational status of the system we need to support?
- What part of the product lifecycle are we delivering against?
- Four key questions that directly impact the answer to the conundrum.
There are three types of company and I categorise them as thinking like; Special Forces (startups), the Army (mid-cap contenders) or the Police (market leading enterprises). The appetite for risk reduces as the business grows, just as the importance of business agility and innovation shrinks, with startups more attracted to unique and ground breaking business models and technology than enterprises.
There are three different types of business application:
- Invest – critical to the business and helps drive competitive advantage, kills the competition, drives customer wins or some other key advantage that the CEO cares about. Making Invest applications better makes the business better. CRM or ERP applications are often good examples.
- Operate – critical to the business but not game changing. Making the system better does not lead to business advantage, no one cares. Email might be a good example here.
- Contain – typically old legacy applications that no-one dare touch in case they break. No incentive to improve them as the risk is just too high.
- There are multiple operational statuses of applications; production, development, test, disaster recovery. Each of these has different operational needs in terms of flexibility, stability and cost.
As business products evolve, we move from development, through introduction, growth, maturity and decline (as defined by marketing). Each product stage needs different operational characteristics and needs.
The answer is clear – it depends. Listen to my webcast for more information.