Vaughan Merlyn has a good post on how IT departments should go from problem solving to opportunity creation. This, to me, means stepping up to the third level of IT management (where the IT dept is facilitating innovation and change, the goal being business transformation. The two former is providing utility services (standard and basic, reliable and cost-effective, the goal being business efficiency) and being a business partner (being flexible and responsive, facilitating growth in scale and scope, the goal being business effectiveness). (See this post and many of Vaughan’s for more detail.)

We used to say that the first and second level activities will not go away even if you reach the third level. But I am beginning to wonder.

The utility business part, for one thing, can now be almost totally farmed out to providers that provide, well, services at expendable cost. In an era of cheap and cloudy services, I am beginning to wonder why IT departments own their servers or provide desktop functionality. If I were kitting out a small company (50 people or less) today, I would do it with cheap and small computers (with really pricey 3G/WiFi/whatever connectivity options) running mostly server-based stuff, and iPhones or the like for the mobile crowd. Productivity software through the Google suite, for instance, with Gmail/Docs/etc. (Google Gears ensures that you can edit off-line). Salesforce or something like that for CRM, a wiki for collaborative stuff. Typepad or WordPress for company web page.

Accounting would be an issue due to localization – it is one of the last holdouts of geographic differentiation, since each country still has its own accounting rules and tax levels. I am not sure about to which extent online accounting is available here in Norway, but I think it is available. (and if not, I would volunteer to be the test site – it should be fairly easy to webify.)

As for personal stuff – just let the employees install whatever they want locally. They are grown-ups.

In that kind of environment (and yes, I am aware of the legacy code/apps/most users are stupid and definitely old/mainframes are still important/no company can start over arguments) the role of the IT department lies in tying things together from the user perspective – orchestrating innovation through the creation of smart mash-ups of all these online services. As for print, backup, and initiating new employees to this liberation from the past – farm that out to someone who does it for a living.

Wouldn’t it be lovely….

PS: Here is an article from The Economist about the Zoho office suite saying essentially the same thing: "Sooner or later, Zoho or another emerging-economy upstart will let a lot of air out of the corporate IT balloon."