This week the Gartner Symposium stopped in Barcelona to meet with more than 5,000 CIOs and IT executives. The challenges facing European CIOs and IT leaders are real and significant. An earlier post reviewed the situation facing many of the IT leaders attending this year’s Symposium.
One cannot underestimate the economic situation in Europe or its impact politically, financially, socially and the degree to which they will change the nature of IT.
Given that Europe has endured the fiscal crisis longer and more deeply than others, their experience and more importantly their issues provide insight into the potential near term IT. Following four days of discussions, questions and presentations helped brought those issues into clear focus.
The Economy is Reshaping IT
The economy is literally reshaping IT. Continued economic recession and financial pressures is changing the relationships between IT applications, products and operations. The burgeoning economy, growth and profits prior to 2008 supported IT complexity providing the resources for country, business unit and product specific IT.
Since 2008 the economy has drained the resources supporting that complexity. Economic and financial performance can no longer justify these distortions and complexity in the name of growth and revenue.
This creates a significant dilemma and consequences for every organization. In the face of uncertain revenue and earnings, it’s natural for CFO’s seek a better balance between revenue and cost – supporting strategies to cut IT and business costs. Much of these costs are driven by business decisions like supporting different infrastructures, which is the source of the dilemma.
Sales wants greater specialization, not less, in tough economic times as they see growth coming from niche markets that are closer to the customer. The CIO is caught in the middle, facing resource requirements that call for shared services and consolidation while supporting business units demanding greater specialization.
This should represent a tipping point for the use of technology in the enterprise one that moves away from specialization via systems to specialization based on the customer experience. CIOs can use the customer experience as tool for guiding cost and growth decisions. In the past, CIOs have consolidated or outsourced IT in an attempt to find a way to run ‘this mess for less.’ The opportunity to transform infrastructures into platforms and redistribute complexity in the organization is there if we have the leadership to take it on.
Increasing Creativity, Collaboration and Coordination via Social Media
Social media and mass collaboration are back on the CIO agenda as organizations look to increase collaboration, creativity, and co-ordination via these technologies. From public sector CIOs asking about how social media supports developing and deploying government policies to commercial companies looking to get new products into market. This represents a shift in technology as interest in social media was muted last year.
Limited results from social media marketing efforts spark CIO interest in social media as a tool for mass collaboration and creating a Social Organization. Social media is not enough to create value. The organization has seen the power and potential of social media and now CIOs seek powerful purposes for applying the technology.
Social media provides new ways for people and customers to connect that flex to their changing needs, goals and results. In this regard, social media reflects a technology that limits cost while creating capability in ways that are different from traditional IT command and control systems.
The Nature of IT Legacy and Infrastructure Under New Scrutiny
IT legacy and infrastructure and their role in transformation and agility were a common subject for CIOs. The issues ranged from how to meet increasing regulatory and legal requirements to local demands mentioned above to aging systems and technologies. Each presents an apparently intractable challenge as CIOs have neither the time, nor resources and skills to transform IT in traditional ways.
CIOs need a new way of thinking that leverages the legacy and infrastructure as a bundled platform rather than a bag of systems, software and hardware. Much of that change comes from restructuring the rational, organization and management of these resources. Each represents an area of further discussion and exploration but in summary:
The rational for IT systems needs to evolve from a focus on business process and business transactions toward information consumption. We have to recognize that not every change requires a process change or core system change. Particularly given that most of the demand we face is related to consuming rather than creating information.
It is time to recognize that applying the same approaches for building new systems to managing legacy and infrastructure is creating the problem rather than resolving it. Using the SDLC on Legacy and Infrastructure projects creates a short-term ‘kitchen’ mentality where these resources sit in the back and wait to get change orders that they respond to one at a time. We need to manage these resources based on their nature – more as a platform rather than their genesis – a set of IT systems.
Existing IT Management Practices Require Revision
Economic, technological, management, market and customer changes have transformed the context for technology and IT. As I mentioned in the lessons learned from Orlando Symposium, 2012 feels a lot like 1997 in terms of the current focus of IT and the coming wave of digital technology change.
Meeting the challenge and creating the opportunities associated with the Nexus of forces, the wave of digital technology requires revising and revolutionizing IT management practices. The need for this transformation arose as CIOs asked questions about the following topics with links to related blog posts:
- The Business Value of IT
- The right set of metrics to prove the business value of IT
- The need for a new form of IT strategy
- The need for new forms of alignment and managing demand
These and other IT management issues are the subject of future blog posts, but its clear from talking with CIOs that it will be difficult, if not impossible to answer new questions related to agility, cost, creativity, adaptability, time to market, etc. with old answers whose success relies on just doing more or better with less.
Europe in 2012
In summary, the four days in Barcelona this year were terrific. The exchange of information, issues and ideas was among the best I have experienced in a long time. While many of these issues remain from last year, their persistence requires CIOs and business executives to look deeper at the changes required to create value in a tough world.
CIOs and Executives around the world need to pay attention to how European organizations lead and transform themselves in the face of these pressures and changes. European firms are facing the hard reality to transform themselves in the face of a new reality. Successful transformation will make European firms more competitive, creative and competent than others who simply seek to muddle through from crisis to crisis.
These are my thoughts based on the discussions I had with CIOs and IT leaders. But I am just a single person, a most american looking man, and there were more than 5,000 IT professionals in Barcelona this year — what did you see? What is your opinion and ideas for moving forward?
Please join the discussion by providing a comment below.