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During the initial case-study interviews, participating CIOs observed that the real challenge is not about the technologies, but about process and information integration. The benefits will come from delivering real-time integrated information to enable better decisions and optimize business performance.
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Numerous diverse technologies are increasingly embedded in business processes, in personal devices, in products and services, permeating both the enterprise and its ecosystem. Many of these developments are occurring outside traditional IT organizations, and many new stakeholders and roles are entering the picture. These trends are creating serious business risks from disconnected information and processes and from inconsistent standards for technology integration.

This research is intended to help CIOs to ensure that their enterprises make the best use of digital technologies – enabled by sound polices and organizational strategies – and clarifies their future role. It will answer the question, “What roles will the CIO and the IT organization play as enterprises adapt to an ever-increasing amount of digital technologies?”

There are many different models for managing the expanding universe of digital technologies, depending on the industry and the structure and culture of the enterprise. The current fragmentation of information, processes and assets means that many enterprises have significant opportunity for cost and risk reductions and enhanced performance.

For example, in the electric utility and telecommunications industries, there are supervisory monitoring and control systems to manage the networks, under the domain of operations, while traditional IT systems are managed separately and are only accessible through different channels. Similar fragmentation occurs in industries such as airlines, defense, healthcare, media, mining and manufacturing.

A technology model framework will assist CIOs in making decisions about the effective exploitation of digital technologies across the enterprise by focusing on technology, process and information architectures.

CIO CALL TO ACTION
Successful CIOs will play a leading role in developing enterprise solutions that integrate technologies to support process and information integration. We recommend that CIOs take the following steps:
• Create a road map that helps your enterprise integrate the planning and implementation of all IT and other digital technology initiatives, engaging key stakeholders across all impacted business units.
• Ensure that the enterprise understands the business opportunities and risks associated with evolving IT and other digital systems.
• Focus on the areas where the information from diverse systems contributes to real-time critical business process optimization and where IT has the right skills and capabilities.
• Assign IT staff to key technology projects outside IT to build expertise, understanding and trust.

BOTTOM LINE
One of our early findings is that CIOs are less concerned about managing the technologies and far more focused on driving process and information integration.

Business Impact:
The expanding universe of digital technologies provides greater opportunities to streamline processes and deliver the right information to the right people so they can make the best possible decisions and improve enterprise efficiency and effectiveness. The relentless drive for improved enterprise performance now requires the bridging of the architecture and governance gap between IT systems and other digital technology systems.

We invite your comments and suggestions, and encourage your participation in the research process for this topic. Our interview questions include:
1. How have the role of IT in your enterprise, and the role and boundaries of the IT organization, changed over the last five years as the use of digital technologies has expanded?
2. What are the key functions the CIO and IT organization perform today?
3. What digital technology functions and roles are performed outside IT today?
4. How do you see digital and operational technologies outside traditional IT growing and evolving over the next five years? How will they be managed? Should CIOs strive to manage all digital technologies? Are you concerned that IT may be bypassed?
5. Do you see the functions and roles of the IT organization increasing or decreasing in the next five years as a result of the continued expansion of digital technologies? In which areas? What will drive those changes?
6. Are there benefits in changing the management and operations of IT and non-IT technologies? What will change that mix?
7. What skills does the IT organization need to manage new digital technologies and the associated process and information integration, and how will you acquire them?
8. What have you found are the critical success factors in changing the roles and functions of the IT organization and of your CIO position?
9. Which changes in the role of the IT organization are you proudest of?
10. What advice would you give to other CIOs preparing for changes in the roles and functions of the IT organization and of the CIO, to cope with the expanding use of digital technologies?

Please e-mail the authors with your comments and suggestions. We also invite you to participate in a case study.
John Roberts: john.roberts@gartner.com
John Mahoney: john.mahoney@gartner.com
Kristian Steenstrup: kristian.steenstrup@gartner.com

Additional Insights:
1. “The Value of IT and OT Integration” (Research)
2. “The Management Implications of IT/OT Convergence” (Research)
3. “The Changing Shape of IT: What We’ve Uncovered, Where You Can Find It” (Research)

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During a recent public sector CIO roundtable presentation and discussion on cloud computing in the public sector, the CIOs focused on the challenges and opportunities of planning, implementing and supporting a cloud computing infrastructure. While the CIOs agreed that there currently is significant hype surrounding cloud concepts, most felt that their agencies will implement a hybrid cloud solution – part private and part public cloud. The CIOs brainstormed and identified key issues, strategies and critical steps that must be adopted to ensure a smooth and successful implementation of cloud computing.
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The CIO of a federal agency discussed managing and providing cloud-based shared services to his own agency and other federal and U.S. Department of Defense (DoD) organizations. He noted that his cloud computing approach and solution “is Internet-based, dynamic, scalable, elastic and efficient.”

The CIO further stated that the “key to the cloud computing strategy is the flexibility of our delivery model. Cloud computing can provide a variety of services, including software as a service (SaaS), platform as a Service (PaaS) and infrastructure as a service (IaaS).”

The presentation concluded with a discussion on the hybrid approach many public sector agencies are seeking for their cloud computing needs – a fusion of private and public cloud architecture (to ensure more privacy and security for mission-critical, highly confidential or top-secret applications and data). The CIOs concluded that “cloud computing offers great promise of more agility and flexibility, and likely some better pricing, but IT leaders should first develop a strategic approach that considers the pitfalls of current cloud implementations.”

During the roundtable, the CIOs brainstormed ideas on how to manage the key issues surrounding a transition to cloud computing. They identified three critical areas of focus:
• Security (including data privacy). The security of the cloud environment is only as good as the defense-in-depth of the provider. One CIO stated, “This is the Achilles heel for cloud computing and is the No. 1 concern, especially with sensitive data hosted in a public cloud environment.”
• Application migration road map. Not all applications are designed to run well on a cloud infrastructure. Several CIOs agreed. One said, “We should not overstate or over-commit on expectations and give the impression that this is a slam-dunk solution for capacity on demand.”
• Stakeholder buy-in. Stakeholders see cloud computing as a way to decrease costs. Early success is crucial to the implementation of a cloud computing strategy. One CIO said that the language of technology and the IT lexicon should be considered when speaking to non-IT professionals, saying, “We need to speak in business-speak and ensure that we use consistent definitions and translate any cloud computing benefits to the business.”

CIO CALL TO ACTION
CIOs developing a cloud computing strategy should do the following:
• Ensure that cloud computing service providers meet defined security requirements. Consider separate staging zones for development, test and production; physically separate data on application and data servers, and logically separate them on mainframes (e.g., LPARS).
• Create an application road map for transition to a (full or hybrid) cloud computing environment. Applications that have been virtualized (or can be virtualized) and that are designed for multi-tenancy (sharing of hardware and software) are the easiest to migrate.
• Begin with low-risk, non-mission-critical pilot projects to prove success and cost-effectiveness. Initial projects to consider include portals (especially public information websites and video hosting), new (especially consumer-facing) application testing and collaboration and small-scale software development (all SaaS). Consider selectively sourcing to a provider that demonstrates core competencies, has a client base you can reference and has solid experience.

BOTTOM LINE
Although cloud computing hype is at the Hype Cycle’s Peak of Inflated Expectations, IT leaders should be actively examining its potential in their environment and developing strategies for exploitation, where appropriate. At a minimum, CIOs should be investigating applications they can test, even if they are risk-averse. Success demands that CIOs address the security and application risks and clearly articulate the strategy to business leaders to garner stakeholder support.

Business Impact:
Cloud computing has the potential to provide more elasticity of resources on demand, operations flexibility, cost-efficiency and an improved and timely response to customer demand services—all of which are critical issues in resource-constrained public sector agencies.

Please e-mail the authors with your comments and suggestions. We also invite you to participate in a case study.
Al Passori: al.passori@gartner.com
Elizabeth Holden: elizabeth.holden@gartner.com

Additional Insights:
• “Cloud Computing in Government: Private, Public, Both or None?” Andrea Di Maio, 30 June 2009 (Research)
• “U.S. Federal Government Budget’s Not-So-Consistent Plans for Centralization, Consolidation and Cloud Computing” Massimiliano Claps and Andrea Di Maio, 25 February 2010 (Research)