VC: Sell IT Directly to Users


CIO Insight's latest research report reveals a number of critical issues around the use of collaborative tools like blogs and wikis. One particular issue that struck us was the

disconnect between the tools most widely used without IT support and their strategic value, as perceived by CIOs.

The Wall Street Journal's Business Technology blog weighed in today with an interview with Kevin Efrusy, a partner with VC big-wig Accel Partners. Efrusy talks about the old model for selling software, and how his preference has shifted to investing in tech companies that market directly to business users.

The concept isn't new, at least to us: my colleague Eric Chabrow has written about tech giants like IBM and Google developing products aimed directly at users.

But the fact that a big-name venture capitalist is leaning in that direction may be troubling to IT executives.

So tell us, CIOs: what's your take on Efrusy's views? What sorts of benefits or challenges does this present to your job?


6 Comments for "VC: Sell IT Directly to Users"

  • KM April 02, 2008 4:08 pm

    Let's face it, many good requests and ideas for software use (build or buy) come from across the organization anyways, not only from CIO's. The real issue is how the business as a whole reacts to this. Complexity of software solutions usually extends across business units. And the CIO department is a component of the business like any other unit, right? So, the question is: what benefits or challenges does this present for the entire organization? Everyone must come to appreciate that it is not technology alone anymore -- successful software solutions involve contributions from across the organization; people, process and technology -- and this both challenges and benefits everyone in the organization. Any business unit today operating as a silo faces the challenge of creating greater awareness and relationships across the organization. As a business executive or owner, would you want all of your business units (including the CIO) involved from the start to contribute and facilitate change up front, or call upon some of them afterwards risking additional costs to business? Remember, additional costs to business extend beyond dollars; it can be information quality, productivity, user satisfaction, missed opportunities and ultimately client or customer satisfaction. Put something in place that allows for software ideas to originate from anywhere in the business and then cultivate those ideas across the organization. Involve everyone who is or can be touched by the software's use (input and output) and support (local and global) before any firm decisions are made. This is a group effort. It shouldn't matter where software ideas come from. What matters is enabling a cross-functional decision process and creating awareness. Oh, and don't forget that the software should be facilitating a strategic business objective. With that in mind, business objectives could be revisited based on new value or opportunities discovered while discussing new software - make strategy part of your cross-functional discussions. Kathy M. Director, Applications and Information Strategy

  • R Gaston April 02, 2008 11:00 am

    Unfortunately, the divide between those with practical IT knowledge and those with practical business-line knowledge is growing, not shrinking, due in no small part to increasing complexity on both sides. This generates growing frustration on each side. A well-rounded business analyst should be ahead of the ball, anticipating the needs of the business and regularly researching new products & technology. Unfortunately, business analysts often know neither side well enough to do this.

  • D Starek April 01, 2008 1:39 pm

    Without more specific information, it sounds like a CIO nightmare. When users bring in software and applications on their own, without IT input, it introduces more complexity into IT's job of support and maintenance. It also usually falls within IT's responsibilities to make it work with anything else it needs to integrate with. Sometimes, that's no easy task. In a worst case scenario, you get an uncoordinated, inefficient and expensive way of accomplishing business goals. The best way to bring in software tools is with a project team consisting of business area and IT representatives evaluating the products for business value and technical properties. Users may not always be able to assess the full cost of purchasing a package. Vendors may approach the users directly, but IT should always be involved before selection is made. Cooperation and communication is the key.

  • NG April 01, 2008 1:14 pm

    OK, here's the vicious cycle. 1. IT is set aside as a COST CENTER. That's a euphemism for a "BLACK HOLE" that business pours money into, trying to make more money. 2. This Cost Center (aka Black Hole) has all the characteristics of a real Black Hole. It sucks in incompetent management, who, if they could manage, would be managing a Profit Center, which is a euphemism for 'Tooth Fairy' that hands out goodies to all its staff. 3. Because IT is a Cost Center, businesses all over try to short change and divert valuable resources FROM IT to its Profit centers, because, everyone would rather receive a present and charms, rather than a poke in the eye with a sharp stick. 4. As long as IT remains a "BLACK HOLE," it will never really partake in the business gains and esteemed presence at the leadership table as a trusted ally and partner. 5. Given that IT is never really rewarded properly, and rarely treated to the same pay and bonus structure PROFIT CENTERS get, it cannot attract senior executives who know how to manage their way out of a cardboard box. And thus, the cycle repeats, leaving us with the current crop of crappy CIOs and senior execs who routinely fail to deliver timely, targeted, viable business solutions. So, how does this get fixed? Easy. Less than 4 steps needed. 1. Treat IT as internal partner, and pay it thusly, like all the other PROFIT centers. Oh, yes, that means no hiding what IT actually costs from the rest of the business. This way, if a line of business wants a solution, IT makes it happen, either itself, or advising the customer directly. 2. Make IT feel wanted, so stop sending the jobs out to the lowest bidders or outsourcing, they rarely have the ONLY or BEST solution. 3. Grow IT leadership by mixing them up with the rest of the business, so everyone can learn the business, rather than fund a 'Black Hole'. Some IT managers may prove more valuable elsewhere in the business. And, if they came from the IT rank and file, could provide a broader career path, rather than limit IT workers to always being in IT. (They tend to be pretty smart folks...) N Director, Business Relationship Management

  • Dana April 01, 2008 1:12 pm

    Selling directly to users has the net effect of taking control of the business IT infrastructure from IT. If the business users are astute and can maintain systems integrity and security to management's satisfaction then it is a good method to advance ideas and processes. Too often, however, the net result is for a particular individual or small group to use this to circumvent established practices and policies for their own ends without regard to how it affects the rest of the organization. At times the damage inflicted is much worse and costlier to remedy than the well-intentioned cost savings of those who added the unknown software. Bypassing IT may work well in some organizations but could prove disastrous to a career in others. I'm not sure if this will be effective in all businesses. I'd be surprised if many businesses with license management in place tolerated the nightmare of license management that would follow.

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