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CIOs need to reboot supplier relationships

IT leaders need to rethink the balance of spending between maintaining traditional suppliers and introducing innovative new providers

While large amounts of IT spending still goes to maintaining systems from the big four software providers - IBM, Microsoft, Oracle and SAP - all the real innovation seems to be coming from elsewhere.

At the same time, experts are talking about "bimodal" or two-speed IT, where back-office IT systems that support corporate "systems of record" applications, are separated from a more agile, customer-facing IT function, working directly with the business on social, cloud, big data and mobile initiatives - so-called systems of engagement.

As a result, what it means to be in IT is changing. Games developers are in the entertainment business; app developers are in the phone business; and the internet of things is making many traditional manufacturers start acting like software companies.

But in-house IT has resisted change. A recent PwC report recommended IT, data security and compliance chiefs take a very traditional approach to managing cloud services.

PwC recommended CIOs find the applications that are running in cloud services; the data they contain; where they are running and how; who has connected to them; who has used them; and what sort of anomalous behaviour patterns might be associated with their use.

Once the cloud services that are running have been identified, PwC said the chief information security officer (CISO) should lead efforts to immediately shut down, eliminate or block cloud services that present high risks.

Does such an approach fit in with the latest thinking on how businesses should become more agile and operate bimodal IT? One could argue a cloud strategy that puts compliance and security front and foremost, is exactly the kind of message that resonates with traditionalists - the more conservative IT and business leaders.

Meanwhile, the large IT providers fine tune their extensive sales and marketing efforts to closely match traditional enterprise requirements.

Innovation vs maintenance spending

Given there is a lot of innovation coming from startups and tech suppliers the IT department may not have previously used, CIOs should be assessing why large sums of expenditure are still going on maintaining systems from the likes of IBM, Microsoft, Oracle and SAP. 

Martin Thompson, an analyst at researcher ITAM Review, said: "Modern IT needs to be wary of spending large sums of money on maintenance renewals that do not have an impact on the efficient delivery of IT services or generating revenue."

By starting from scratch with an IT strategy that considers the role of an IT department, the CIO has the opportunity to consider alternative approaches to making IT fit the needs of business more closely.

One of the problems for some CIOs is that IT has expanded to the point where the IT department has attempted to take ownership of almost anything computer-related. Over-zealous adherence to regulatory compliance has meant that rather than facilitating the business, IT has behaved as a barrier under the guise of protecting corporate data.

But for Mulesoft founder and CEO Ross Mason, who spent many years in the banking sector, this is not the approach a CIO should be taking. "Challenge your assumptions," he said. "IT can decentralise its capabilities, and start by opening up data internally."

Mulesoft provides API management, which offers CIOs a way to open up IT-centric application programming interfaces (APIs) to the rest of the business and external partners in a controlled and secure manner. In doing so, IT is no longer the bottleneck. The CIO can effectively pass access to new data and application development back to the business.

Culture clash

According to Gartner managing vice-president Alexa Bona, IT staff often feel locked into agreements with the big four suppliers.

Rather than look at alternative products, ITAM Review’s Thompson said: "It’s all too common for fast moving and busy IT departments to renew maintenance because they have budget for it and they paid for it last year so it must be providing value."

IT staff have also built their careers specialising in running and managing systems from companies like IBM, Microsoft, Oracle and SAP. "Change comes from the top. But there is no impetus for change in the middle management layer," Mulesoft’s Mason said.

Mark Ridley, director of technology at recruitment website, recommended that CIOs look at modernising the skills in their IT  team. He said: "An IT team has lots of skills which you may feel you need to protect and maintain. But you need to embrace change. You cannot be effective in business if you try to keep the status quo. You need to look to what you can achieve."

Ridley previously worked in in traditional IT at recruitment company Reed, before heading up a cloud and software-as-a-service IT strategy at

He said that IT certifications are often hard to attain. But beyond demonstrating technical aptitude, he said certifications demonstrate the capability of someone to learn and understand complex  issues: "These are foundations that can be applied in other products. The more widely read you are and wider your experiences, the better prepared you are to cope with new things."

But clearly, some people will be unwilling to adapt; some may not want to change and changing the culture of an IT team can lead to job losses.

In a recent interview with Computer Weekly, VMware’s cloud chief, Bill Fathers urged CIOs to look at the make-up of their IT teams and be prepared to make dramatic cuts. "Invest forward," he said.

"Chances are, 95% of your team understands your existing infrastructure technology platforms extremely well. You’ll be getting rid of a third of them to invest in people who understand what the next version of your business is going to look like."

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