Over the summer McKinsey published their top 10 trends for the next year or so in Harvard Business Review in July 2009 http://tinyurl.com/l2ooj3
Given McKinsey’s role in the executive suite and influence in setting business dialogues, I would like to offer some commentary on these trends and how they relate to the challenges facing the CIO and IT executives. The list of trends, according to McKinsey and their trending line are below:
- Globalization is under fire (declining)
- Resources feeling the strain (remaining stable)
- Trust in business is running out
- A bigger role for government (on the rise)
- Management as a science (remaining stable)
- Shifting consumption patterns
- Asia rising (remaining stable)
- Industries taking new shape (on the rise)
- Price stability is in question (on the rise)
- Innovation is marching on (remaining stable)
We’ll take a few at a time in this a subsequent blog posts. For starters let’s look at Globalization.
Globalization Under Fire
Globalization, according to McKinsey, is under fire and declining due to decreased support for global trade liberalization in the face of economic challenges. McKinsey sees increased protectionist activities, like the Buy-American clause in the stimulus package, reducing the flow of people, jobs, goods and services. Their advice is to stress test your business models under different scenarios of world trade.
This macro-economic view may be accurate theoretically, but the IT industry has gone global more than 10 years ago and shows few signs of slowing down. Just about every IT organization is global in one respect or another from relying on outsourced/offshore services to technology suppliers with heavy overseas presences.
The global reality of IT does not seem to be trending down; rather at worst it seems to be stabilizing for multiple reasons. The size of the traditional outsourcing market while growing is also becoming saturated as many companies completed their first or second wave of outsourcing between 2000 and 2005. The relative instability in currencies, particularly the swings in the US dollar, has an impact on offshore companies and operations and cost structures. A final thought is that the coming “cloud” and other sourcing models may be causing a ‘freeze’ in some off shoring decisions until the realities of that option resolves themselves.
Those are some thoughts – what do you see going on in terms of globalization in IT?
Is it different than globalization in your business?