In many of my discussions with companies focused on website optimization, one question comes up repeatedly: How can their brands create and manage a modern technology organization similar to what Monetate has done with its own agile software engineering team?

To start answering this question, you have to go back a decade or so to when enterprise IT departments used best practices and tools that were expensive, but considered top-notch. A great example of this is relational database management systems like Oracle and Microsoft SQL, which generally performed well, but ultimately delayed the quandary that many companies now face: outdated technology, ironclad contracts, and large bills to pay.

While this was happening, smaller companies used cheaper alternatives, and typically were not happy with the outcomes. These much leaner organizations looked up to big enterprise operations, wishing they had the deep pockets to buy the latest technology, hire more, and stay ahead of the competition.

The tides began to turn with the emergence and growth of open source software and cloud implementations. A lot of today’s best solutions are open source and freely licensed. Perhaps most important to business leaders, these products offer new ways to solve old problems.

Today’s successful companies often don’t have a single piece of commercially licensed software in their production web environments, while large companies now envy what is being done by smaller organizations.

This is a story I hear over and over again when asked for suggestions on how to transform a legacy IT department into an organization of progress and innovation like we have at Monetate. My response always comes back to three critical areas.

1. People

The rise of open source application platforms like Ruby on Rails, Django, and JBoss has quickly led to software development becoming a core competency. These platforms have started to tip the scale as an increasing amount of talent emerges thanks, in part, to vibrant open source communities in cities across the country, including Monetate’s hometown of Philadelphia.

Provide your staff with the tools that they need and foster the innovation that they crave. Recommend and support their involvement in open source projects within the community, including attending and hosting regular meetups of like-minded people.

While it’s impossible to figure out whether or not open source has been successful because of the individuals or the businesses involved, it certainly has spread rapidly because of the talented people who are creating technology that focuses on being rich, interactive, and fast to market.

But to make any IT initiative work for your business, you need to empower smart people. Said a different way―and how we setup our own teams―look for generalists instead of specialists, people who will gets things done across disciplines.

2. Operations

Hiring great people will help move you towards creating a modern-day technology organization. And with a team of generalists rather than specialists, along with open sources tools mentioned earlier, this new elastic operational model will meet the demands of any size business.

The operational procedures that you put in place start with who and how you hire. For the biggest payoff, take the time and do it right. Don’t just hire the first person who walks in the door because you consider the technology organization purely a cost center. We interview only about 2% of the people who send us resumes.

How you view and run an IT organization will make or break your success with your new infrastructure and staff. I encourage every company to stop thinking about its technology organization as an IT department that is purely a cost center.

View your IT organization as part of research and development, and set an expectation that this group could and should find new ways to make the company money. Do this by shifting the technology organization from being just a budget line, and moving it over to the revenue side of your financials.

3. Infrastructure 

With any significant IT infrastructure project, just throwing money at a large consulting firm won’t make you a modern technology company. The path that modern organizations are on is much different today.

Companies that have at least started to use open source applications and cloud services are no longer incurring significant technology costs when they need to scale to meet the demands of more website traffic and transactions. While the transformation to the cloud will be incremental because there’s too much fixed investment to just walk away, this new elastic operational model allows you to quickly increase the number of servers or hardware to meet demand.

When you look at some of my personal favorite success stories―such as ModCloth, One Kings Lane, and Fab―you can see real proof of how companies can quickly adapt their businesses in areas such as website optimization, big data, and mobile to truly become modern technology organizations. In fact, a lot of these companies also contribute to making open source even better, which is an ongoing objective of the Monetate team.

Despite the move to the cloud by many successful companies, one argument that I hear against this newer approach―and why some people will recommend sticking with proprietary licenses and hardware―is the lack of a demonstrated ability to run at high volumes.

Ever hear of a company called Facebook? The social network uses an open source project called Hadoop, which is also used for Monetate LivePredict. Or how about LinkedIn, which uses site search based on Lucene and has contributed an extension of the software library to the open source community.

By focusing on a combination of smart people, efficient operations, and scalable infrastructure, you too will be on your way to having a modern technology organization as part of your company.

Tom Janofsky is Senior Vice President of Delivery and Engineering at Monetate. A software engineer with 15 years of experience in successfully delivering enterprise and internet software, Tom has designed and developed software as well as led teams that built large-scale, web-facing transactional software for clients that included EMC, FEMA, JBoss, and Pearson.