Will IT Still be Around in 2010?

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Will corporate IT exist in five years?

You may think about the difficulties end users have configuring their

PCs, chuckle, and say, ”You bet it will.” So let’s modify the question:

Will corporate IT as we know it exist in 2010? Will developing, testing,

and integrating software applications still play a key role in the

business world?

After all, many of today’s technology trends — outsourcing, utility

computing, procuring software as a service, reducing the number of IT

vendors, and service-oriented architectures (SOA) — are aimed at one of

two goals. The first goal is to integrate IT into the overall business

procurement landscape. Ideally, ordering 100 laptops or a sales-force

management software service should be little different from ordering a

few dozen reams of copier paper, or pushing development, support and

integration outside the walls of IT.

The second goal is to reduce large lump-sum expenses (such as the cost of

a major ERP implementation) in favor of more predictable monthly or

quarterly expense — hence the popularity of the

pay-only-for-what-you-use, pay-as-you-go utility computing model.

Are IT departments that follow these trends setting themselves up for

extinction? Does the IT organization of the future look like a hybrid

between the Purchasing and Facilities departments?

The answer, according to CIOs, analysts, and other industry experts, is

that while the trends noted above will continue and even snowball, IT as

a strategic corporate component isn’t going away anytime soon.

”We’ve outsourced quite a bit of our environment,” says Randy Miller,

CIO at Toshiba America Business Solutions. ”And while you’ll continue to

see a lot of that where mundane stuff like the data center is concerned,

I don’t think the strategic potential of IT is growing any less

important.”

Yes, IT Matters

Credit (or blame) for launching this discussion goes to Nicholas G. Carr.

In 2003, Carr published, in the Harvard Business Review, an article

titled ”IT Doesn’t Matter”. It immediately launched a storm of

controversy, and was later expanded into a book, Does IT Matter?

Information Technology and the Corrosion of Competitive Advantage.

The thrust of Carr’s article was not that technology is unimportant to

business, but rather that it is so important, so baked into business

processes, that enterprises can no longer create any kind of long-lived

competitive advantage via IT. They might as well try to gain an edge on

competitors through superior consumption of electricity, the argument

goes.

Carr began a conversation that’s still as heated as ever. Generally, CIOs

and other experts say that while enterprise IT will by no means go away

by 2010, it will look a lot different.

How?

John Baschab, co-author of The Executive’s Guide to Information

Technology and principal of the Dallas-based consulting firm Impact

Innovations Group, uses a ”hierarchy of IT needs” pyramid based on

psychologist Abraham Maslow’s famous hierarchy of human needs. In the IT

version, the base of the pyramid includes must-haves, like functioning

email and a network that works. Higher-level functions, such as

integrated applications, form the middle of the pyramid, while the top is

reserved for noble (but rare) objectives, such as true alignment with

business objectives.

Commoditization, through outsourcing and utility computing, essentially

makes it easier for IT to check off the lower-level pyramid items,

Baschab says, ”so you are freed to focus on the high-value-add top of

the pyramid.” But far from rendering IT unimportant, he adds, ”IT will

be more relevant than ever because of this commoditization.”

Toshiba America’s e-business group serves as a present-day example of

this top-of-the-pyramid development.

According to Miller, the company’s relatively small e-business group

develops Web-based tools for customer order inquiries, sales force

compensation updates and order status — high-value projects that demand

intimate knowledge of Toshiba business rules and practices. Additionally,

the development team recently released software that lets prospects learn

about the total cost of their printing and copying processes — with an

eye, of course, toward persuading them to switch to Toshiba machines.

”That’s really driving revenue,” Miller says. ”And none of our

competitors have anything like this.”

Where the Pros Will Go

Naturally, IT professionals want to know what the industry employment

picture will look like in five years. Experts predict major changes.

If you are a pure technologist, there will be fewer job opportunities in

corporate IT shops. ”Chances are you’ll work for a vendor or an

outsourcer, or in a specialty boutique,” Baschab says. Enterprise IT

groups will be dominated by business-focused project managers making sure

the company’s needs are met by vendors and outsourcers.

There still is one key question. As the commoditization of IT grows, how

will we sort the winners from the losers?

Kim Perdikou, CIO at Juniper Networks, offers an intriguing way to

measure success. She points out that the sheer pace of business has

shrunken cycles. Where a decade ago a large company might suffer through

three or four ”down” quarters while it addressed problems, it’s more

typical today to see a couple of ”up” quarters followed by a down cycle

of similar length.

In the near future, Perdikou predicts, ”Winners will be [businesses]

that can minimize their down cycles through agile use of technology.”

Judith Hurwitz, president of consulting firm Hurwitz & Associates, adds

another benchmark.

In a continuation of a trend that’s already under way, Hurwitzh says in

2010, cutting-edge IT groups that have automated processes will routinely

sell that capability as a service to competitors. ”So suddenly this IT

stuff, which has always been a cost center, becomes a profit center,”

she notes. In a recent study of 17 enterprises with SOAs, Hurwitz &

Associates found seven that were advanced enough to offer such services.