At RedArch, our mantra is Run IT Like a Business.

It’s a principle that affects everything we do – how we build best practices, how we design the IT organization, and how we implement enabling systems.

We find many business executives still see IT as a captive function – one whose sole purpose is catering to needs expressed by other, more essential functions. Those that make products, serve customers, or otherwise contribute to the bottom line.

IT is firmly planted in the back seat. It’s a cost center, overhead, an order-taker.

That mindset is at odds with an ideal long exhorted in the business press, one that daily seems closer to the right order of things: IT should be a thought-leader, an innovation engine, even a core competency.

Why the gap? Interview 100 executives on the topic, and 97 will say something like this: IT doesn’t understand business. IT doesn’t think like a business.

Well, that’s understandable, because IT isn’t a business. Or is it? Consider:

• By some traditional measures – numbers of customers served, people employed, budget expended – many IT organizations actually qualify as pretty significant businesses. By other measures, like revenue and margin, of course, they aren’t on the map.
• IT faces competitive pressure unlike that of any other corporate function. Most of its capabilities can be purchased on the open market from competitors with greater scale, better access to resources, and well-crafted offerings targeted directly to IT customers’ business problems.
• IT, like the enterprise, has to monitor and navigate a highly dynamic external environment of technology, regulations, and sometimes-existential threats.
• Informed and emboldened by the proliferation and sophistication of managed service providers, cloud software and consumer technology, customers are demanding new solutions at a pace beyond IT’s capability to deliver. Forced to choose between fulfilling emergent customer needs and providing basic services, IT struggles to maintain a sense of core mission.

In short, IT faces many of the challenges of an independent business. But most organizations don’t treat it like one. If they did, along with the challenges they’d see some entrepreneurial benefits:

• Innovation
• Motivated customer service
• Ability to attract talent
• Self-directed accountability

So why don’t more organizations run IT like a business? There are many possible objections. Most boil down to complacency, lack of precedent or fear of change.

The good news is, with broadening awareness and acceptance of ITIL, COBIT, PMBOK and other relevant frameworks, and the emergence of supporting cloud software suites, the benefits of running IT like a business have entered mainstream thought, good examples are more numerous, and adopting an IT-as-a-business approach is easier and lower-risk than ever.

Our next several posts will discuss key imperatives for running IT like a business, starting with a new way of thinking about IT’s identity and mission.