Analysts at the Corporate Executive Board say you'd better update your five-year plan, because a series of radical shifts around IT's value, ownership, and role are happening sooner than envisioned.
In late 2009, Corporate Executive Board (CEB) published a five-year outlook for corporate IT, "The Future of Corporate IT," predicting a series of radical shifts around IT's value, ownership, and role. We predicted IT would focus more on data analysis and less on process improvement, push rapidly into the cloud, cede more ownership of technology investments to business units, and transition to a services model. The services model would in many cases lead to the IT organization becoming part of a corporate core that includes HR, finance, and other functions.
Just over two years after these predictions, we think the transformations are occurring even faster than expected, and that holds implications for IT pros looking at their skills and careers. Let's look at four areas, and the key actions IT leaders should take this year to be prepared.
1. Information Over Process
The competitive advantage from IT is increasingly coming from better customer experience and data analytics, and helping knowledge workers make better decisions. That's why we predict information management skills will rise in importance over those for designing and refining business processes.
Our latest budget benchmark survey shows this shift is well underway. In 2011, investments in process-based projects fell to 33% of the new project budget, while investments in "information"-based projects rose to 36%.
Yet while investments in information-related projects continue, our research shows that fewer than 40% of employees have the training, skills, and processes to tease insight from data. Simply continuing to invest in new business intelligence and analytics platforms makes no business sense if employees aren't adept at using them.
Key actions for this year: Give executives practical guidance on how to help employees make better decisions. To avoid the perils of blind reliance on analysis, information management initiatives must cultivate what we call "informed skepticism" by providing context, the assumptions behind data, and the strategic relevance of information. When developing analytical tools, IT can't just ask employees for their requirements; they need to use "anthropological" techniques by watching knowledge workers and letting them experiment with new tools. Lastly, let knowledge workers choose the devices and software they find easiest to use, which will improve their ability to make use of information.
2. The Cloud
More companies are turning to cloud resources and other outsourcers for the "factory" side of running IT. CEB research shows 20% of IT organizations are in the cloud in substantial ways, and we expect that rate to grow dramatically through 2013.
When considering cloud services--private and public--IT leaders need to start with the end in mind. Features such as faster provisioning, usage-based billing, and assurances of security and compliance matter more to your business-unit colleagues than the technical architecture.
Key actions for this year: To migrate systems to the cloud, you'll need to convince the application owners in business units that it's a good idea. Generate buzz for the private cloud by focusing on its features and avoiding discussion of unnecessary detail on its underlying technologies. Plan upfront for a hybrid cloud approach that blends in-house and public resources. Be wary of requests to build more internal data center capacity, since combining private and public clouds should allow you to use less space going forward. While the internal, on-premises cloud shows greater immediate potential, the public cloud is already viable for use cases such as development and some production applications. IT organizations that play it safe with a private cloud and expand their data center significantly risk overbuilding.
Experiment with the public cloud now. It no doubt has flaws, including ones related to data privacy, security, service quality, and cost. The five areas where IT leaders' contribution is most needed to accelerate public cloud readiness are in addressing service-level agreements, security governance, performance, billing models, and legal issues.
3. Business Partners Take Over
As consumerization and software-as-a-service (SaaS) have made inroads, business units are taking over the operations of larger segments of technology--at least in areas where there isn't a high need for integration with existing IT systems.
Seventy-five percent of business executives we surveyed indicated that they have prior experience as project sponsors or subject matter experts or other significant experience stewarding an IT project. In this new environment, IT can't stick with its traditional "govern and build" approach to IT. That approach is too slow for businesses reacting to forces of global demand and the fast-changing pace of mobile computing.
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