Typically, the analysts and outsourcing vendors have categorized the users of IT-services in terms of their size, industries that they belong to, and sometimes, geographical markets. They often wonder why this classification does not adequately explain the behavior of the organizations towards IT-services purchase.

A classification by Forrester research director, Laurie Orlov can probably give a better clue on how to understand IT’s role, and by extension, purchase decisions of IT services in different organizations. Orlov, divides the organizations into three categories in terms of what the strategic role of IT is—solid utility, trusted partner, and the partner player.

In an interview with our sister publication, Optimize, she explains further. Here is an extract.

The first one is the solid utility. The IT organization must provide cost-effective, dial-tone reliability. That is, the network is always there, the PCs function, the help desk responds, and the back-office applications are up and working. The CIO typically reports to the CFO, and costs are expected to be transparent and reduced over time.The second is the trusted supplier, in which you add project delivery to the solid-utility model. Some firms need centrally managed application projects to support process changes in and between functional departments. In these IT organizations, the CIO is likely to report to either the CEO or the COO and the enterprise expects to have all the infrastructure capabilities of the first level, in addition to having application projects managed centrally, delivered on time, and being within budget.

The third is the partner player, where the business is IT and IT is the business. IT organizations in these firms pour their energy into creating unique and competitive solutions for customers, suppliers, and internal business users. As a result, there is little time for the delay in requirements translation between business groups and IT. In addition to the reliable infrastructure of the solid utility and the project discipline of the trusted supplier, partner player organizations must deal with C-level expectations and are thus governed by the executive team.

Though the interview is targeted at the CIOs on what they should expect and how they should plan their moves — including career moves — it nevertheless gives a good framework for evaluating what an organization would look for in an outsourcing relationship, what sequence it will follow in outsourcing different components of overall organizational IT, and what vendor competencies/qualities it will value most.This will also help the IT-services providers in understanding what to sell to whom. For example, trying to sell business value creation in the long run to a solid-utility IT organization is hardly likely to succeed. Conversely, boasting about lowest cost, will surely not impress a partner-player IT organization.

The interview also explains how some companies follow a multi-tier IT organization with a mix of the above roles for CIO. That will also help the service providers to decide what to sell whom.