Are we seeing the demise of IT as we know it?

Here is something to ponder. The Corporate Executive Board Company, says five years ago, less than 25% of business leaders rated their IT function’s effective to deliver the capabilities they needed. They go on to say in 2010 the number has not changed.

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IT functions have strived tirelessly to understand demand, set priorities, deliver effectively, and capture value, yet the results still disappoint. Business and IT leaders alike feel they should be getting more—more efficiency, more innovation, and more value—from technology.

In their recently published study of the IT role its findings cover  5 levels of shift.

1. Shift 1: Information Over Process

2. Shift 2: IT Embedded in Business Services

3. Shift 3: Externalized Service Delivery

4. Shift 4: Greater Business Partner Responsibility

5. Shift 5: Diminished Standalone IT Role

At a practical level, in my work in business intelligence and information, I find so many business enabling discussions these days hinge on good information. This invariably leads to a discussion on the capability or lack thereof of IT, as the traditional owners, to deliver it. 

Being in the business end of business intelligence, I also observe the shift in the tasks to set up and coordinate information. As an activity that is now largely falling to the end user business functions like finance, marketing and operations with software vendors and specialist implementers working with them to make it all happen.

Like process applications that have long since been commoditized with highly advanced process packages, management information is now being delivered the same way. In large generalized database applications with configurable end users web tools for both administration and end user use now to deliver the information. There in is the issue for IT as they have become just environment managers with limited skill to be involved in the business strategically.

In many organizations I see significant investments that have occurred on complex systems, are, aside from being in use in the core process, scarcely understood technically by IT. The fact that IT defers the information based deployment task to market system vendors means they also devolve a once hallowed territory of process change management with it. So the argued best placed leaders on joining all the dots of the business processes, being IT, is now scarcely even aware.  

Among all the talk of engagement, alignment, and “being part of the business,” one assumption is never challenged—that for information technology to grow in strategic importance, so must the IT function.

But what if this is not the case?

What if a dedicated, standalone IT function is no longer the best option and the function’s resources and responsibilities were better located elsewhere?

What has occurred is vendors have become de-facto managers of change and are more often than the resident experts in inner workings of their client’s organizations. As cost pressures increase they have also becoming less tolerant and less willing to withstand the continuing conservative commodity based thinking of now quite limited in-house IT functions who try to hold onto power with things like the control of security. For this they are still needed to manage things networking and authentication although even that is changing. There is so much more to IT of course including redundancy standards and communications but the relentless shift continues to vendor services for IT and to cloud based computing for delivery of infrastructure management. With this being cut away from IT it is fast moving the direct control of the business functions who will naturally rely on end to end serviced IT models more and more.

Typically now applications all have their own infrastructures (servers etc.) with communication and hardware to fit the internet generally. And With major vendors are now spending huge sums investing in cloud infrastructure change is now inevitable and one-way from in-house IT. This totally new world of computing in the next few years will also see business knowledge based IT skills move to the  business to work in service based mode. As is the case with most small to medium sized business now who use low cost and even free service based models the big end of town businesses will also be fully outsourced to the service providers as a demand based service.

As to the timing and transition, the huge cloud based investment vendors like Microsoft and others speaks volumes. In the last three years the massive deployment of resources now sees Microsoft, for example, emerging as a high end hosting company. Of the 40,000 or so Microsoft based developers around the world it is estimated that 90% are currently focused on cloud based applications. This rapid move of the Microsoft business too, from traditional mass markets of desktop and database services to an infrastructure provider, will be seen very soon at all virtual levels

“The IT function of 2015 will bear little resemblance to its current state.  Many activities will devolve to business units, be consolidated with other central functions such as HR and Finance, or be externally sourced.  Fewer than 25% of employees currently within IT will remain, while CIOs face the choice of expanding to lead a business shared service group, or seeing their position shrink to managing technology delivery . . . This study argues that the changes will be rapid, permanent, and radical.  We have advocated for a decade that IT leaders become demand shapers, not order takers.  Similarly, we now recommend that IT leaders devote the time, energy, and resources to actively shape the coming transition.”

The quotes are taken from the paper that you can download here, entitled The Future of Corporate IT . Authors are The Corporate Executive Board, a consulting firm. This provides research and analysis to business executives and professionals around the world. In addition on my recommended reading list is a post by   Irving Wladawsky-Berger called IT in the Age of the Cloud In this he makes balanced comment of these issues.

 

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15 thoughts on “Are we seeing the demise of IT as we know it?

  1. Electric Current is one of the most amazing discoveries of all times, we need to learn to look after it to make it last. Energy is unlimited?, we know that we need to be more efficient but we’ll always find ways to generate energy from diferent sources. I wanted to share my story about the use of electricity for getting more alive but I think that will happen another time. cheers for sharing it with us.

  2. Pingback: BizSugar.com
  3. Cloud computing is not new. Most of us are using the cloud already, through services like Gmail, Hotmail, Picsa Flickr, Blogger Facebook and so on.

    It’s business that has been slow in the take-up. but iut now on the increase as security and management sesnitive data issues are being addressed.

    Here is someting I read headed

    The Cloud explained

    Cloud computin in the simplest of terms, is IT-as-a-Service.

    Instead of building your own IT infrastructure to host databases or software, a third party hosts them in its large server farms. Your company has access to its data and software over the internet (which in most IT diagrams is shown as a cloud).

    In other words: information technology becomes a utility, consumed like electricity, water, or even outsourced HR or payroll services,

    Cloud fans claim five key benefits:

    •Cheap: your IT provider will host services for multiple companies; sharing complex infrastructure is cost-efficient and you pay only for what you actually use.

    •Quick: The most basic cloud services work out of the box; for more complex software and database solutions, cloud computing allows you to skip the hardware procurement and capital expenditure phase – it’s perfect for start-ups.

    •Up-to-date: Most providers constantly update their software offering, adding new features as they become available.

    •Scaleable: If your business is growing fast or has seasonal spikes, you can go large quickly because cloud systems are built to cope with sharp increases in workload.

    •Mobile: Cloud services are designed to be used from a distance, so if you have a mobile workforce, your staff will have access to most of your systems on the go.

  4. I lifted this from the CIO magazine.

    Build a Private Azure Cloud with New Microsoft Appliance

    Companies interested in taking advantage of what cloud computing has to offer, but reluctant to trust sensitive information off-site now have a new alternative with Microsoft’s Windows Azure Platform appliance.

    Microsoft has teamed up with strategic hardware partners to develop an appliance-based approach allowing businesses to deploy and control their own cloud.

    http://www.cio.com/article/599366/Build_a_Private_Azure_Cloud_with_New_Microsoft_Appliance?taxonomyId=3024

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