Information technology (IT) departments are increasingly facing a challenge to prove their value to the business they support. In some cases, the decision on who provides and supports IT infrastructure is weighed equally between internal IT departments and external service providers. As Web services technologies such as XML mature, they'll change the way many companies do business. Reduced transaction costs will encourage the outsourcing of non-core functions through electronic links with key partners in the extended enterprise. The influence of corporate IT departments may shrink, and the shape and form of future existence will depend on how well they succeed in transforming from their traditional roles to keeping pace with eBusiness and IT-driven business models—models many organizations rely on to gain market share and to increase customer loyalty. What are the new demands enterprise IT must fulfill to remain competitive? First, IT departments have to operate with the business disciplines of independent service providers they're being asked to compete against. For example, IT departments need to manage service relationships with multiple providers, operate as an internal provider with cost center or charge back responsibilities, have a laser focus on delivering a business value, and market and present the value of IT services to key users and departments. In other words, IT must acquire the skills necessary to provide services at quality and cost levels that are comparable to what external providers offer, but within an increasingly tight budgetary constraint.