The Business of Managing IT: The Open Group IT4IT™ Forum

By The Open Group

At The Open Group London 2014 event in October, the launch of The Open Group IT4IT™ Forum was announced. The goal of the new Forum is to create a Reference Architecture and standard that will allow IT departments to take a more holistic approach to managing the business of IT with continuous insight and control, enabling Boundaryless Information Flow™ across the IT Value Chain.

We recently spoke to Forum member Charlie Betz, Founder, Digital Management Academy, LLC, about the new Forum, its origins and why it’s time for IT to be managed as if it were a business in itself.

As IT has become more central to organizations, its role has changed drastically from the days when companies had one large mainframe or just a few PCs. For many organizations today, particularly large enterprises, IT is becoming a business within the business.

The problem with most IT departments, though, is that IT has never really been run as if it was a business.

In order for IT to better cope with rapid technological change and become more efficient at transitioning to the service-based model that most businesses today require, IT departments need guidance as to how the business of IT can be run. What’s at stake are things such as how to better manage IT at scale, how to understand IT as a value chain in its own right and how organizations can get better visibility into the vast amount of economic activity that’s currently characterized in organizations through technology.

The Open Group’s latest Forum aims to do just that.

The Case for IT Management

In the age of digital transformation, IT has become an integral part of how business is done. So says Charlie Betz, one of the founding members of the IT4IT Forum. From the software in your car to the supply chain that brings you your bananas, IT has become an irreplaceable component of how things work.

Quoting industry luminary Marc Andreessen, Betz says “software is eating the world.” Similarly, Betz says, IT management is actually beginning to eat management, too. Although this might seem laughable, we have become increasingly dependent on computing systems in our everyday lives. With that dependence comes significant concerns about the complexity of those systems and the potential they carry for chaotic behaviors. Therefore, he says, as technology becomes pervasive, how IT is managed will increasingly dictate how businesses are managed.

“If IT is increasing in its proportion of all product management, and all markets are increasingly dependent on managing IT, then understanding pure IT management becomes critically important not just for IT but for all business management,” Betz says.

According to Betz, the conversation about running the business of IT has been going on in the industry for a number of years under the guise of ideas such as “enterprise resource planning for IT” and the like. Ultimately, though, Betz says managing IT comes down to determining what IT’s value chain is and how to deliver on it.

By The Open GroupBetz compares modern IT departments to atoms, cells and bits where atoms represent hardware, including servers, data centers and networks; cells represent people; and bits are represented by software. In this analogy, these three things comprise the fundamental resources that an IT department manages. When reduced to economic terms, Betz says, what is currently lacking in most IT departments is a sense of how much things are worth, what the total costs are for acquisition and maintenance for capabilities and the supply and demand dynamics for IT services.

For example, in traditional IT management, workloads are defined by projects, tickets and also a middle ground characterized by work that is smaller than a project and larger than a ticket, Betz says. Often IT departments lack an understanding of how the three relate to each other and how they affect resources—particularly in the form of people—which becomes problematic because there is no holistic view of what the department is doing. Without that aggregate view, management is not only difficult but nearly impossible.

Betz says that to get a grasp on the whole, IT needs to take a cue from the lean management movement and first understand where the work originates and what it’s nature is so activities and processes don’t continue to proliferate without being managed.

Betz believes part of the reason IT has not better managed itself to date is because the level of complexity within IT has grown so quickly. He likens it to the frog in the boiling water metaphor—if the heat is turned up incrementally, the frog doesn’t know what’s hit him until it’s too late.

“Back when you had one computer it just wasn’t a concern,” he said. “You had very few systems that you were automating. It’s not that way nowadays. You have thousands of them. The application portfolio in major enterprises—depending on how you count applications, which is not an easy question in and of itself—the range is between 5000-10,000 applications. One hundred thousand servers is not unheard of. These are massive numbers, and the complexity is unimaginable. The potential for emergent chaotic behavior is unprecedented in human technological development.”

Betz believes the reason there is a perception that IT is poorly managed is also because it’s at the cutting-edge of every management question in business today. And because no one has ever dealt with systems and issues this complex before, it’s difficult to get a handle on them. Which is why the time for creating a framework for how IT can be managed has come.

IT4IT

The IT4IT Forum grew out of a joint initiative that was originally undertaken by Royal Dutch Shell and HP. Begun as a high-level user group within HP, companies such as Accenture, Achmea, Munich RE and PwC have also been integral in pulling together the initial work that has been provided to The Open Group to create the Forum. As the group began to develop a framework, it was clear that what they were developing needed to become an open standard, Betz says, so the group turned to The Open Group.

“It was pretty clear that The Open Group was the best fit for this,” he says. “There was clearly recognition and understanding on the part of The Open Group senior staff that this was a huge opportunity. They were very positive about it from the get-go.”

Currently in development, the IT4IT standard will provide guidance and specifications for how IT departments can provide consistent end-to-end service across the IT Value Chain and lifecycle. The IT Value Chain is meant to provide a model for managing the IT services life cycle and for how those service can be brokered with enterprises. By providing the IT similar level functionality as other critical business functions (such as finance or HR), IT is enabled to achieve better levels of predictability and efficiency.

By The Open Group

Betz says developing a Reference Architecture for IT4IT will be helpful for IT departments because it will provide a tested model for departments to begin the process of better management. And having that model be created by a vendor-neutral consortium helps provide credibility for users because no one company is profiting from it.

“It’s the community telling itself a story of what it wants to be,” he said.

The Reference Architecture will not only include prescriptive methods for how to design, procure and implement the functionality necessary to better manage IT departments but will also include real-world use cases related to current industry trends such as Cloud-sourcing, Agile, Dev-Ops and service brokering. As an open standard, it will also be designed to work with existing industry standards that IT departments may already be using including ITIL®, CoBIT®, SAFe® and TOGAF®, an Open Group standard.

With almost 200 pages of material already developed toward a standard, Betz says the Forum released its initial Snapshot for the standard available in late November. From there the Forum will need to decide which sections should be included as normative parts for the standard. The hope is to have the first version of the IT4IT Reference Architecture standard available next summer, Betz says.

For more on The Open Group IT4IT Forum or to become a member, please visit http://www.opengroup.org/IT4IT.

 

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