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2012 begins a pivotal three years for IT

by Mark P. McDonald  |  January 3, 2012  |  4 Comments

Every year is important and pundits, myself included, contribute to the annual strategy and planning cycle that is based on the premise that the coming year must be the most important year.  That position makes sense when you consider that without a compelling plan for ‘next year’ the CIOs and IT organization will not get the attention, participation and resources to continue and create value.

The 2012 planning cycle will be my ninth with Gartner and working with CIOs in Executive Programs.  During that time, I have observed that change in IT happens not in annual cycles but in three-year waves.   The 2003 planning cycle was my first with Gartner, but I believe as I go back through my notes that there have been three cycles since the turn of the millennium.

  • 2000 – 2003 focused on demonstrating IT’s business relevance as executives scrutinized the business value of IT following the bust and related recession.  CIOs during this period faced the need to prove that IT matters and face of increasing commoditization of technology products and services.  Financial requirements drove the first wave of outsourcing, typified by blockbuster long-term single source providers who would take over and deliver ‘our mess for less’ IT.
  • 2003 – 2006 can be described as the ‘business-ification’ of IT.  This was the period when IT was supposed to run more like a business by defining its business in terms of IT services, service levels and new forms of finance and costing models.  Functions and services that could be provided better, faster and cheaper externally drove the growth of the multi-sourcing marketplace. This was the heyday of models like ISCO and IS Lite both sought to run IT like a business and eventually generating revenues on its own.
  • 2007 – 2011 cycle, the one we are completing now, could be described by the consolidation of IT cost, as economic, technical and operational realities required CIOs and organizations to cut costs in the face of economic and financial realities.

While we can debate the exact dates, themes and timings the broad trends are reflected in the major books of the time, themes of Gartner’s symposia, etc.

2012 is a pivotal year for CIOs and IT because we are completing a wave of consolidation and cost cutting that raises the question what comes next?

A few thoughts on the pieces that are floating around that will play a role in shaping IT over the next three years.

  • Technology becomes important than IT.  Technology is inherently externally facing and that will displace the current crop of IT centric internally facing transaction systems.  Mobility, social media, analytics, new interfaces are all part of an arc of technology that is much broader than IT.
  • Consumer and personal tastes are driving technology and resetting expectations for IT in terms of time to market, complexity and customer experience.  IT has been used to running on its own time and it will have to change to run at the customer’s clock speed.
  • Competition will center around an expanding view of the customer experience touching on channels, ease of doing business, internal complexity, cost, marketing and provisioning.  Organizations that see a next version of the customer experience as CRM on steroids will experience increasing investment and decreasing returns.
  • Increasing IT workforce productivity and throughput will become a requirement with CIOs having to commit, monitor and manage year over year productivity improvements.  This will be critical to the future as right now most firms manage ‘productivity’ from the denominator of cost, they will need to raise the numerator (output) in the future.

Individually none of these issues is a ‘show stopper’ leading some to think that they can be addressed through incremental improvements and responses.  Taken together and considering implementing them in less than three years, it becomes apparent that incremental responses will not be sufficient to enable IT’s role to expand at the same rate as the expanding role of technology in the enterprise.

That is why I believe that we are leaving the world of the consolidation of IT cost and moving into a phase where technology amplifies the enterprise and the position of IT can no longer be assumed.  Why three years? It takes time to re-imagine and re-orient an organization.

Are these pivotal years for IT?  If not then why not?

Category: 2012  leadership  management  strategy  

Tags: 2012-planning  business-leadership  cio-leadership  cio-strategy  strategy  strategy-and-planning  technology-leadership  

Mark P. McDonald
8 years at Gartner
24 years IT industry

Mark McDonald, Ph.D., is a former group vice president and head of research in Gartner Executive Programs. He is the co-author of The Social Organization with Anthony Bradley. Read Full Bio

Thoughts on 2012 begins a pivotal three years for IT

  1. Terrific post and a great summary of what’s happened over the last decade. As your last paragraphs suggest what we’re seeing is an IT-driven amplification of business. It’s interesting; after an organization has been forced to downsize, reorganize or slash costs, the expectation is that they will be more focused, more aggressive and ultimately more successful. That’s where IT departments are today. 2012 and beyond will be the test of whether CIOs have done the groundwork necessary to be those amplifiers of business.

  2. Mark, it would be hard to argue against any of the points you make. While consumerization is certainly raising the bar for enterprise IT, what I find quickly lost in some of these approaches is the focus on the the information aspect of IT, as opposed to the technology. Over these three years, I think the wise CIO, and wiser IT departments will really turn their focus from the commodity services, and more directly to the value producing information leveraging and analysis that the business will undoubtedly need assistance with. Hopefully IT isnt spending this three years trying to compete with these service providers, but rather re-trenching where they are providing their firepower.

    More applications will undoubtedly sprout up in the enterprise. Increasingly the business may be brokering more and more IT centric relationships with service providers. The challenge will become ensuring the single source of truth, or the source of record. I still find places that have dangerously immature MDM efforts relative to their size and scale as an example. The danger of course then is to have the business making decisions based upon incomplete or inaccurate sets of data. IT needs to help here. They need to ensure there is a cohesive strategy to blending the services, and information derived into something greater than they are standalone. I am sure there are a lot of example like this, but this is what I took from your three year trend identification as a direction for IT to focus on moving forward.

  3. […] blogger Mark McDonald posted an item entitled "2012 Begins a Pivotal Three Years for IT," in which he said, "2012 is a pivotal year for CIOs and IT because we are completing a wave of […]

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