Fast-growing companies like Square and MongoDB are driving IT innovation with leaner staffs, cloud-first computing, self-service everything and CTOs rather than CIOs.
As a high-tech startup, MongoDB gave no real thought to IT as it was getting off the ground.
Laptops were purchased on an as-needed basis by individual employees and expensed alongside printer paper and working lunches. Free cloud applications like Google Apps and Dropbox were the go-to productivity tools, and engineers coding the NoSQL database were certainly tech-savvy enough to spin up servers and troubleshoot problems on their own.
Yet as the company launched into hypergrowth mode, ballooning from four people in 2009 to 330 employees in a stretch of four years, MongoDB had to adjust how it handled IT. The tipping point came in 2012 when the firm hit about 70 employees, many of whom weren't developers.
"From an IT perspective, anything works with two people because the requirements are so sparse," says Eliot Horowitz, MongoDB's CTO and a co-founder. "Engineers generally want as little configuration, security and day-to-day support as possible. Scaling the IT organization had to happen when we started to support non-technical people."
MongoDB has formalized security standards and procurement policies and brought on a handful of full-time IT workers, yet its vision of IT is still a far cry from most traditional organizations. Like many newbie companies building an IT infrastructure from scratch, there's a shift away from on-premises enterprise applications to software-as-a-service (SaaS) tools and an emphasis on self-service, the goal being to empower business users and reduce the administrative and support burden on IT.
There is also a push for smaller, flatter IT organizations with more integration into the line of business. Instead of staffing up a dedicated department with dozens of network specialists, support staffers and business analysts, companies are relying on a core IT crew working in concert with business leaders and key outsourcing partners to build out and manage IT operations. Many are also folding IT into the domain of the CTO or chief operating officer as opposed to appointing a dedicated CIO.
For enterprises, two-speed IT
There's no question that companies building out a ground-floor IT operation have far greater latitude to experiment with new IT models since they are unencumbered by the baggage of legacy systems and cultural inertia, experts say.
Traditional IT shops have a lot to learn from the experiences of their much younger and more nubile counterparts. By applying some of the new deployment and organizational concepts, established IT groups can drive more innovation, particularly in the area of the front office, which has yet to be transformed by technology initiatives on the same level as back-office operations, notes Leigh McMullen, research vice president at Gartner.
For organizations that have left their startup days far behind, McMullen recommends "two-speed IT" -- where traditional IT organizations are augmented with a subgroup charged with pursuing "mission-enhancement" projects. Many of those projects are created for the front office, which Gartner defines as "the revenue or value-creating segment of the enterprise" -- think product development, marketing or sales.
To get a three-person, three-week project approved inside a traditional IT organization takes longer than three weeks. Leigh McMullen, Gartner
Here, IT needs to play by a totally different set of rules, McMullen says, applying a startup mentality to establish lean teams and new development models. "This is a very different organization that employs different funding and governance models and operates at a different tempo," he explains.
"The things that are going to help the front office are typically smaller, not the big monolithic ERP system" -- and IT typically doesn't have the ability to do little things, McMullen says. "To get a three-person, three-week project approved inside a traditional IT organization takes longer than three weeks. It's just not built to do that."
What else can enterprises learn from the young guns just now entering IT adolescence? Read on for ideas to steal from rising stars MongoDB, Square, Plum Organics and Alex and Ani.
Idea No. 1: SaaS speeds delivery
One near-universal way startups are injecting agility into their IT infrastructure is by ditching the monolithic enterprise application in favor of SaaS models, whether it's for back-office functions like order processing or front-office tasks like collaboration and brainstorming. Rather than building out a technology stack with discrete systems like ERP or CRM, today's startup firms are more focused on delivering cloud-based business capabilities that serve a particular purpose -- for example, to help salespeople track leads or to facilitate collaboration among global team members.
"It's not just a cloud-first strategy, it's a capability strategy rather than an application focus," McMullen says. "Instead of procuring the best technology to deliver everything they need at once, they are focused on delivering what's good enough to get the mission done today. They are not hung up on the conventions of picking a platform and sticking to it."
We try to keep everything hosted and scalable as much as possible. Eliot Horowitz, MongoDB
While readily available cloud-based tools like Google Apps and Dropbox were the underpinnings of MongoDB's IT infrastructure, the firm stuck to the SaaS model as it branched out to enterprise functionality, Horowitz says. For example, the team uses Salesforce.com for CRM and is leveraging Cisco's Meraki cloud-based, managed Wi-Fi system to bring connectivity to its remote offices without having to staff up IT.
While Horowitz had initial concerns about the scalability of early SaaS tools, he says things have stabilized in the past five years and any risk associated with the cloud delivery model has dissipated. "We try to keep everything hosted and scalable as much as possible," he explains.
Under Horowitz's direction, the three-person IT team, in tandem with senior business leaders, created standard use and security policies. That allows business users to tap other SaaS tools at their discretion as long as they comply with the overall IT policies, Horowitz says.
"SaaS has been key in keeping our IT organization small," he explains. "IT has become more of a policy center, and business teams manage their own deployments. It keeps things moving faster and is far more efficient."
Idea No. 2: Self-service rules
At Square, the hot e-payment company started by Twitter co-founder Jack Dorsey, cloud apps play a key role in an IT philosophy centered around customer experience, internal and external.
At Square, employees can frequent an IT bar, modeled after Apple's Genius bars, for day-to-day support.
Much like at MongoDB, Square production engineers in the early days pitched in on IT chores like configuring servers. But once the company hit 30 people, the firm hired an IT contractor to handle routine IT tasks like imaging, setting up new machines and maintaining file servers, Wi-Fi and automatic backups.
"We needed to build out an IT organization so production engineers could devote 100% of their time to building products for merchants as opposed to troubleshooting systems or finding a power cord," explains Bob Lee, Square's CTO, who is also responsible for internal IT.
In addition to the outside contractor, Square maintains an IT staff that works closely with Lee and the engineering team -- a synergy Lee says make sense because it promotes collaboration while aiding in scalability. "Rather than the IT team performing the same rote task over and over again, they engineer [internal] solutions. Coupling them with the rest of production engineers aids in collaboration," he explains.
The combined team has been charged with building a self-service IT infrastructure that Lee says makes it easy for Square employees to get their jobs done. For example, an internally developed iOS-based central tracking tool helps employees keep tabs on everything from upcoming Square product enhancements to lost-and-found items.
One of the keys to easy collaboration is providing [employees] all the information needed to do the job. Bob Lee, Square
In the same vein, the team developed an internal app that delivers shortcuts to hundreds of pieces of documentation or websites that can help employees do their jobs better, from signing guests into the building to finding out who's working on what product or getting the scoop on the best local pizza delivery.
What's not self-service is designed to be as easily accessed as possible: when workers need help, they can frequent a new IT bar, modeled after the Genius Bar in Apple stores, to get day-to-day support and handholding.
"It's all about making things fast and frictionless for internal people," Lee says. "One of the keys to easy collaboration is providing all the information needed to do the job."
Idea No. 3: Simplify the org chart
Building out IT with an eye toward a leaner and more compact organizational structure is another common characteristic of adolescent technology operations. Plum Organics, a maker of baby foods, worked with an outsourcing partner early on to handle the heavy lifting of setting up servers, managing email and establishing connectivity to external partners.
When the company entered its fiscal 2012 year expecting to hit the $60 million mark, it realized it was time to retire the spreadsheets and QuickBooks system in favor of companywide ERP. Still, Plum didn't staff up internally, according to Mike Meyer, the company's COO/CFO, who oversees responsibility for IT.
We will continue to leverage cloud capabilities to grow and be competitive in the market. Mike Meyer, Plum Organics
Instead, Meyer and a business team spent eight to 10 months planning and mapping out business processes and then working hand-in-hand with an external implementation partner (Meyer declines to name it) that got an SAP cloud-based ERP system up and running in a scant two months. Today, Meyer and other senior operations and finance leaders continue to set direction for IT, though the company is about to hire a full-time IT manager to help with implementation, Meyer says.
In addition to serving as the point person working with the third-party outsourcing partner, the new hire will play another critical role given the latest chapter in Plum Organics' growth -- the now 90-person company was bought in June by Campbell Soup Co. "The IT manager will be the person on the ground working with our teams to figure out how to best leverage the technology and existing infrastructure Campbell has," Meyer describes. For example, Campbell has a data center packed with file and email servers that Plum Organics can use as well as a fully staffed help desk.
"This gives us the opportunity to have someone with technical skills on site who can help us leverage [Campbell's] larger and established infrastructure," Meyer explains. "At the same time, we can remain nimble and continue to leverage cloud capabilities to grow and be competitive in the market."
Idea No. 4: Fail fast, stay agile
At jewelry maker Alex and Ani, the internal IT group, at just under 40 people, is more akin to a traditional organization, but there are still real differences in its approach to technology. The 300-plus-employee company, founded in 2005, hired its first-ever CTO about a year ago to oversee both internal IT, including a recent on-premises ERP implementation, as well as customer-facing initiatives, such as a new mobile point-of-sale system.
"It's fun to have the blended role, and it creates a much better and more cohesive technology stack for the company," says CTO Joseph Lezon. For instance, Alex and Ani has a sizable digital team focused on e-commerce and social media, which benefits from some of the initiatives undertaken internally, Lezon says. "When you have the CTO and CIO role blended, it gives you a cross-functional view of external and internal initiatives," he explains.
When you have the CTO and CIO role blended, it gives you a cross-functional view of external and internal initiatives. Joseph Lezon, Alex and Ani
Another stark difference between traditional IT shops and Alex and Ani's is that the team frequently test-drives technology and doesn't hesitate to pull the plug if something doesn't meet expectations. The company has that kind of flexibility, Lezon says, because with few enterprise systems in place, there are no integration points to create challenges.
"We have the ability to be nimble and do trial-and-error pilots," he explains. "If something works, great, if not, we move on to something else." It took multiple iterations, for example, to get the mobile point-of-sale system working to satisfaction, Lezon says. And an initiative to put video displays in stores, to help promote the brand, products and events, changed midstream to a different product when the initial implementation didn't work as expected, he says.
Without the legacy baggage and red tape that are the hallmarks of old-school enterprise IT, companies in startup mode have a lot more flexibility, allowing them to push the envelope and be far more innovative with IT.
"Corporate America is risk averse and is not encouraged to fail," Lezon says. "We, on the other hand, are moving at battle speed and are going to make mistakes. We just have to learn from them, pick up the casualties and move forward. We have a lot more leeway in what we can try in terms of innovation."
Frequent contributor Beth Stackpole last wrote for Computerworld about companies courting customers with mobile apps.
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This story, "4 ideas to steal from IT upstarts" was originally published by Computerworld.