Is it time to get rid of the IT department? Some people advocate that IT should be fully distributed in individual business units. Dr. Joe Peppard argued this case, and I just read his reply in the Wall Street Journal to the various objections he received.
I find the binary “IT department yes/no” discussion to be a useless polemic. Every organization has some mix of central and decentralized IT. The question is whether each IT capability is correctly placed.
Systems of record make up the foundation of your business and do not provide a competitive advantage. That’s things like email, accounting, and HR. Those fit well in a centralized IT function. You want to focus on reliability, and you don’t want each department or country running its own accounting or email server.
Systems of engagement that provide you with competitive advantage need to be closer to the business and the customers and move faster. That requires a different mindset with more risk-taking. That’s why these systems are often a poor fit in centralized IT. But letting each department roam free means you end up with a dozen incompatible cloud services without synergy.
Conundrums like this cannot be solved at the organizational level where they occur. Because the choice pits the agenda of the CIO/CTO against the CFO, CMO, and CSO, the final arbiter has to be the CEO. He or she is impervious to technical arguments. If you are a CIO or CTO, you owe it to your organization to be able to speak the language of the CEO.