Industrialization of IT & IT-as-a-Service - Driving towards low cost IT

Like many movements before it, IT is rapidly evolving to an industrial model. A process or profession becomes industrialized when it matures from an art form to a widespread, repeatable function with predictable result and accelerated by technology to achieve far higher levels of productivity. Results must be deterministic (trustworthy) and execution must be fast and nimble, two related but different qualities. Customer satisfaction need not be addressed directly because reliability and speed result in lower costs and higher satisfaction.

IT should learn from agriculture and manufacturing, which have perfected industrialization. In agriculture, productivity is orders of magnitude better.

Genetic engineering made crops resistant to pests and environmental extremes such as droughts while simultaneously improving consistency. The industrialized evolution of farming means we can feed an expanding population with fewer farmers. It has benefits in nearly every facet of agricultural production.

Manufacturing process improvements like the assembly line and just-in-time manufacturing combined with automation and statistical quality control to ensure that we can make products faster and more consistently, at a lower cost. Most of the products we use could not exist without an industrialized model.

The industrialization of IT services is also enabling a greater orientation toward outcome-based and pay-per-use services. Early offerings like infrastructure utilities or cloud e-mail show that providers can deliver one-to-many services at price points that are one third of in-house/traditional costs, due to the right combination of industrialized one-to-many services, offshore outsourcing and technologies such as virtualization and automation. Based on the proliferation of advertising 'IT as a service' as a pricing model, business buyers would force traditional providers to switch to PUPM pricing models by 2012.

Economic fluctuations and business uncertainty, accelerated service globalization, and increasing competition of IT services are major factors that could force businesses to move further toward low-cost IT, according to Gartner, Inc.

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