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Transforming IT into an Internal Service Provider



Guest post by Deborah Anthony

Business is becoming increasingly digital. And as companies such as Hewlett Packard Enterprise, Amazon, IBM, and others provide computing services from the outside/in on a pay-as-you-go basis, internal IT organizations are experiencing heavy pressure to transform into internal service providers. This evolution is appropriate, timely, and even essential in the face of rapidly changing business models and growing business demand for digital solutions. However, becoming an internal service provider can have its challenges:

  • There are many interpretations and meanings associated with the terms “service” and “provider,” both as individual words, and when combined to form a noun. Add “IT” to the mix and things can get even more difficult to clearly define.
  • Second, over the past two decades, IT organizations have had to become more “customer-focused” as well as learn how to “run like a business.” They are now called to “become a service provider,” but without being given any specific information about what the true goals are for this are.

According to Wikipedia, the business term service provider covers the following types of providers:

Communications service providers, including:

  • Network service providers, including:
  • Telecommunications service providers
  • Broadcasting service providers
    • Internet service providers
    • Managed service providers, including:
      • Applications service providers
      • Storage service providers
    • Hosted service providers, including:
      • Communications service providers
      • Internet service providers
      • Managed service providers, usually applications service providers


In the technology space, the word “service” and its usage begins with the function performed by a computing server and includes:

  • Network service


  • Telecommunications service, including:
    • Web services
    • Chat services
  • Value-added service, including:
    • Web hosting services
    • GSM services
    • IaaS, PaaS, and SaaS

You get the idea—and perhaps a strong sense that this latest command to repurpose IT may be insurmountable. Before throwing in the proverbial towel, let’s visit the root cause behind the ongoing mandate of IT to “transform” into something new.

In reality business isn’t actually becoming a digital enterprise. It already is a digital enterprise. To a degree, neither businesses nor IT departments have truly internalized this truth and embraced what it means.

That’s why the calls for IT to “run more like a business,” “be customer-focused,” and “cost less” are all ways of saying that traditional IT operational output no longer provides what the digital business needs. Given the degree of dependency that the business has on technology and how many times IT has been asked to change, I believe that it is in the best interest of both IT and the business to overcome this challenge and create a functional definition of what IT needs to evolve into, in order for the term “service provider” to be relevant.

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