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May 20, 2005

Who is IT's customer?

It's the spring of 2005, and this week's reading was similar to most prior weeks in that analysts and consultants pointed IT towards achieving more strategic delivery of value by focusing on the "customer". But as usual, there is a buffet of choices about who the IT customer actually is: direct, indirect, internal, external, and more, and mixes of them to boot. Does this make the original question to unwieldy to be helpful?

As a preface to answering, it's worth noting that there are different reasons for IT in a business because there are different kinds of businesses. It's reasonable to assume that the focus of IT should "default" to the needs of the business model.

This assumption makes the discussion begin with how those needs are articulated into supporting operations that IT enables, producing the satisfaction of the needs.

How does the business define and measure that satisfaction?

One perspective looks at results that represent the concrete outputs mandated for delivery to stakeholders. The stakeholders include customers, employees, shareholders, and basically any other "business partners" who measurably and intentionally contribute to the protection, health and growth of the designated business.

Another perspective looks at the functional mechanism for the production of those outputs. This mechanism includes the resources, systems and fulfillment processes that day-to-day generate the business deliverables within established costs, priorities and locations.

We're used to seeing assessment techniques that hold IT "accountable" -- sometimes for the results, but sometimes for production. Those assessments have a lot in common, though, because the implications of doing any of them is always the same. They investigate whether IT's impact is:
- desirable;
- optional; and/or
- exclusively or uniquely due to IT.

With those facts in hand, the next stage of consideration is:
- should any of those impact characteristics change?
- who cares if they do or don't?
- why do they care?
- how much do we care about who cares?

Imagine not asking those last four questions: omitting them leaves no way at all to determine a connection of IT to business strategy. This argues that there is a level on which what IT does is promoting things either towards or away from strategy, but that there is a different level on which the business actually responds to the opportunity given it by IT and closes the deal in the form of measurable value delivered and gained.

That level is... business management. And this means that business managers are the direct customer of IT. To make this point more strongly, let's look at what it means to be a "customer".

As a customer, you have what we'll call a need. Your need is based on the desire to have and use a capability of some kind for yourself. To satisfy that need, you search for and acquire an enabler of that capability. The enabler is what we call a "product". The way that the enabler works for you is what distinguishes it as one kind of product versus another kind. Typically, what IT provides is an impact that can be delivered as a product. The impact may be delivered in the form of a tool or a service (and therefore note that a "service" is a product). Once the recipient starts doing something with the impact/product, the capability exercized by that user becomes the sign of the "customer's" presence.

If we look at a business, and we think of how IT gets used, we usually come up with multiple types and populations of users. But if we imagine removing IT impacts (the enabling "product") from any of those user-groups, the effects on the business will be most crippling when IT impacts are removed from managers. Why? Because the success of the business is fundamentally predicated on targeted functional organization, not on labor output -- and at a fairly low threshold of combined speed and size, competitively sustaining the organization is virtually impossible without IT-enabled management.

So, if we assume that the business must have IT, then it is easy to see who is the primary "customer" of that IT.

Posted by Malcolm Ryder at May 20, 2005 12:21 PM

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