Blog post

Dear CEO – a well staffed internal business technology group is still a rational thing

By Mark Raskino | June 11, 2012 | 1 Comment

Strategic CapabilitiesIT GovernanceCEO

In an echo of the offshoring hype of the early 2000s it now seems we are facing a double barrelled threat to the future of the IT department. At the front end there’s consumerisation and ‘BYOD’ and at the back end, the cloud seems to portend a future where large companies no longer need anything but a vestigial group of  people to cover services purchasing and data security policy.

This fallacy too will pass. The need for a smart internal group that helps a business explore, define and exploit technology enabled change opportunities will not disappear.

Last year I spoke with the CEO of a large international company who told me he was having difficulty with IT consulting services providers who tended to takeover the agenda to generate work in their own interests, and did not behave as true partners. The alternative, as he saw it, was not viable. He reasoned he could not afford to have his own team of high capability internal business technology people on the books – because the work comes and goes periodically, and he couldn’t afford to retain such a staff function continuously.  Initially that might sound logical, but the task at hand was a seven year program of business applications transformation.

This year I spoke with the CIO  of a large business that has completed just such a program – over the last 5 or 6 years.  He is facing the ‘problem’ the other guy feared – what to do with the big internal group now the transformation is mostly done. He has many options for redirecting the capability of the team. Perhaps some people will leave if they don’t fit. But if he wants to do more business model innovation, move on to mobile commerce, develop a social organisation, exploit the Internet of things, create a competitive data science capability or move into additive manufacturing in a big way – he can. The proven internal team, with its deep understanding of that particular business, well respected by the rest of the firm, can evolve to the next mission.

I know which problem I’d rather face.

Here’s the way I see it. If you build and maintain a well led, strong culture, direction setting, business consulting-like IT department in your firm, it will have important value creative work to do for at least the next 20 years, as the second half of the information age plays out. The idea that you can give up thinking about technology enabled business change and simply buy it off the shelf is a risky illusion.

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1 Comment

  • I don’t buy into your concept.

    Yes, there is plenty of need for IT knowledge in a company for the next decades. So you could employ many people with IT knowledge.

    But your conclusion is that there is need for people with consulting skills and IT knowledge organized in an IT department. Centralizing know-how in today’s world is outdated. You need to make knowledge accessible to everybody and share it and let everybody contribute to it.

    Another wise step would be to educate business managers to learn more about IT management challenges. Internalizing a market service such as consulting does not sound valuable at all to me.

    It is time to establish enterprise 2.0. And IT is part of it.