This post is coming from Gartner’s Annual Fall Symposium in Orlando where more than 1,500 CIOs and another 5,000 other IT executives are gathering to discuss what is going in IT. I had the privilege to talk with them in a session focusing on the 2010 agenda for CIOs. Here are a few thoughts.
It is October 2009, and I think back to the way the world was in October of 1999 the height of the dot com/Y2k boom in IT. Back then people were talking about how great the world would be when we automated all of our key processes, we integrated and reengineered those processes end-to-end and we drove information from these processes in to operational and management decision making. At each stage the call was, the world will be better when we …
That world has largely happened in the last 10 years. CIOs report 80 – 90% of their major business processes are automated, many are integrated, most are enabled via the Internet and we have business intelligence. What can we say about the accomplishments of the past ten years?
CONGRATULATIONS IT, you have won the war, won the battles that 10 years ago you said needed to be won. But that also raises a question?
Why are we so stressed out? Why is IT under pressure like never before? The answer is simple.
First IT is suffering in the current economic recession – just like every other operating unit inside a company. Everyone is hurting and therefore some of our stress needs to be divided off into general economic stress. If you are pressured by lower IT budgets, head count reductions and consolidations, then you feel the stress from the economy.
Second and most important is the stress we feel outside of what can be attributed to the fact that the effectiveness of what we do in IT, the power of our management solutions and processes is waning. If you seek a new approach to IT strategy, you need new metrics to demonstrate the business value of IT, or your are asking how am I going to get all of this work done, then you are feeling stress related to the fact that …
THE RULES FOR IT HAVE CHANGED
The logic is simple. IT won the last war. We are deeply embedded in the enterprise. They cannot change without changing systems. It is no fun to play the same game over and over again when you know the outcome. That is part of the reason why many no longer play tic-tack-toe, except with young children who have not figured out it is easy to create a stalemate.
When one side wins the war, the others change the rules and want to play a new game. Its only natural, they want to compete, they want to be interested, they want to be engaged and a new game creates all of that.
The rules of the game are changing for IT based on the following important developments:
First, IT has largely built out the ‘information platform’ by automating key processes. This means that there are few green fields to automate and therefore the nature of work shifts from building things to getting a yield on the assets I already have.
Second, the technology model is changing rapidly away from owner operated heavy weight solutions like data centers to light weight technologies like the cloud, SAAS, web 2.0, etc. These technologies have an asymmetric investment pattern, requiring investments in the thousands of dollars to create value in the millions. They also give the business unprecedented levels of choice on how they provision their technologies.
Third, the finance model is playing increased emphasis on variable cost, scalable cost structures and the ability manage resources to match revenues. The financial model for IT has traditionally involved large fixed capital investments, budgets tied up in contractual services and generally low levels of variable costs.
Taken together these and other factors are changing the rules for IT. While the rule changes are complex, and subject for other blog entries, think of it this way.
For 30 years IT was rewarded for building new things. IT has turned vacant lots into apartment buildings. Now that they have built the apartment building, IT needs to get a return on that investment – a yield on its technology platform.
The disciplines I use to build an apartment building are different than the ones I use to run it, get tenants, renew the building etc. This is not about running IT, its about gaining the yield on IT investments across the enterprise. The operation of the whole apartment building not just the actions of the building maintenance staff.
That’s one way to think of the new rules.