Prepare for the Future of IT Organization, or Be Left Behind

Estimated reading time: 7 mins

I’ve just come from the Forrester IT Forum in Lisbon, Portugal, and discovered a number of insights that crystallized some thoughts I’d been having for a while. One of these insights that resonated especially was the future of IT Leadership and the potential fork in the road of the IT career path.

During the last few years, technology that was in the domain of techies has migrated to consumer technology. This includes the growth of mobile technology like the Blackberry, Web 2.0 and the prevalence of social computing, and the commoditization of technologies such as ADSL, web hosting and telecommunications. Classically defined technology is no longer the exclusive domain of technologists. Consumption of technology is across all demographics.

For example, the advent of blogging now means that anyone can publish content to the web without knowing HTML. Drop-shipping created opportunities for anyone to be a product distributor (as I found to my pain when I tried to buy a toy-car for my son’s birthday and every seemingly separate online retailer had run out of stock). Direct book publishing can be done by authors without involving publishing houses. eBay has created a global marketplace where a retail business can be instigated within minutes at low cost. Whole businesses can be created by taking services readily available, off the shelf.

Therefore, the awareness of technology and its application is considerable in ‘business’ functions, and even up at the CEO level. A consequence of this is that the ‘business’ now has the capability and desire to employ a variety of technologies (often integrated, know as ‘mashups’) without the assistance of IT functions. The exoteric nature of some technologies means that the business alone can use them to innovate and achieve time-to-market.

Alongside this trend is the counter-weight; IT departments, particularly those who have embraced ITIL, are pushing to do what they do better, but not at more cost. The problem is though that for many IT leaders, they’ve seen a linear effect on that equation. A step-change is needed by many IT leaders to get to an economy of scale. Economy of scale isn’t the bedfellow of a constantly changing business environment, and hence a constantly changing IT leader partnering with the business.

Is this the end of IT as we know it. I say Yes, but it is no disaster. The IT Organization will reshape around this phenomenon, and it is not a trend or fad. The following changes will occur around two domains:

The ‘Classic’ IT department will re-emerge and prevail

The definition of the traditional IT Ops model will be restated. The maturity of ITIL in its relatively short lifetime so far has enabled core IT to standardize and consolidate its service offering and much of the ‘craft’ has turned to industrial strength. ITIL has created a common language and a common expectation in business customers. The gap between IT Ops and the business will remain and the boundaries will clearer than seen over the last 10 years. The name of the game here is stability and dependability. The nature of the roles will be technical and specialized, e.g. server infrastructure, networks, disaster recovery, etc. Leaders should expect that their budget and resources can be applied to the provision of core services that underpin the whole organization. Leaders in these roles will be remunerated on the performance of technology and care about building industrial strength and sustainability and the avoidance of firefighting. In order to achieve this, leaders shouldn’t be asked to be agile in the sense of reacting to rapid changes in the company’s chosen market. This is a bit of a u-turn from the last 10 years or so, where the agility of IT was expected as a whole.

Business Technology emerges and re-shapes the application of technology

Information Technology will become Business Technology as the application and integration of edge technologies becomes less ‘technical’ and more business focus, as we’ve seen above. Business Technology is really ‘Business’, but it acknowledges that all business now depends on technology. Business Technology is about the art form or science (it will appear as an art form at first but transform into science through maturity) of applying technologies to achieve business goals in the market. Business technology needs to be agile and opportunistic. Leaders in these roles will be remunerated on business performance and care about the impact to business by the integration of services. It is also likely that this will be to flexible standards; failure here will be tolerated due to the entrepreneurial nature of the game, and failure won’t bring down the core. Leaders in Business Technology will have a budget and resources to apply to innovation where some initiatives could be throwaway.

An analogy is helpful in explaining these two new domains of IT.

  • The services provided by the Classic IT Ops are the lego bricks
  • Business Technology is the building of models from the lego bricks
  • The integrity and structure of the lego bricks must be maintained and sustained
  • The model built from those bricks can be reassembled, destroyed, or incorporated into a new model

This new model is really forced upon IT. The evolution of consumer technology has meant that new opportunities are developing for business, and business is ready to receive them – in fact it’s essential they do to remain competitive. Every major brand across all markets, from baked beans to automobiles, is embracing Web 2.0. Look for colleagues on – they’ll be there.

The question is how you will respond to it and if you’ll accept it. Early acceptance means you can do something about it and think about choosing your career path. Although I can’t take credit for an early insight into this new model, I made that decision about five years ago when I decided to focus on the business application of IT and do my MBA as a way of breaking through. If I had to make that decision now it would be the same one, but maybe the emergence of the model means I had the groundswell of market pressure to make it easier.

I’d like to point out some implications of this new model:

  • IT leadership in the new model will no longer carry the dilemma of balancing integrity and stability against business innovation, in terms of where to apply budget and resources. ‘Robbing Peter to pay Paul’ should not be a constant boon for IT Leadership, but will move into the c-level domain, probably with the CIO, CEO or CFO. Therefore the skills in setting budget and resourcing at this macro level will need to migrate
  • IT professionals will need to choose their career path, perhaps much earlier their career than before. Each domain requires a different mindset, approach and language which are skills that must be developed over time
  • The roles in Classic IT Ops are well defined and measurable, and accreditation is prevalent and progressive. The professionalism of Business Technology will emerge, but as yet there doesn’t exist a means of measuring it in the same way. A new paradigm of management and development of people will emerge. Apart from an MBA, Business Technology professionals cannot demonstrate on paper their credentials other than to talk about previous successes. Recruitment of Business Technology professionals will also be a gamble for organizations

The new model will be immature for a while (up to 3 years), so it will be loosely defined now when you look back in five years. Mistakes will be made as organizations embrace it and make changes. But that’s the beauty of accepting the model now and making positive moves towards it. Making mistakes is part of the learning and being part of the learning is being a pioneer. Early adoption of the model, even if it’s in your own head, will give you the basis to steer your career and personal development. Outward acknowledgement of it should position you as a forward thinker and innovator, in time.

I suggest forwarding this onto your boss and colleagues and creating some debate. Discuss the implications to your business and IT organization. Is there a clear line between the two domains? Taking a look at the research agencies will give you a deeper insight, backed up by their data. Be at the forefront of this change, not the victim of it!

(Take a look at this article on computerworld)

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2 thoughts on “Prepare for the Future of IT Organization, or Be Left Behind”

  1. I definitely see this trend in the enterprise. Our IT shop is divided into 2 components: Infrastructure (traditional IT) and Applications (essentially the Business Technology portion).

    Infrastructure gets run as a cost center. The application side gets run more along the lines of innovations and operates under more of an agile premise.

    Being one division of many in a Fortune 500 corporation makes it difficult to compare our progress (or lack thereof) to other divisions because this arena is still emerging. But that’s part of the fun, too.


  2. @Eric – thanks for your comment. There are two (of many) major reasons why the fortune 500 companies are moving this way. 1) they look for synergies across their whole IT capability and consolidate where possible into a shared services model. It is run as a cost-centre as you say and efficiency is a key objective. Outsourcing is driving infrastructure towards a service management model as well. 2) Business Technology is beginning to be funded out of business projects and is therefore separate from infrastructure. The kind of leadership, engagement models and management practices are very different.

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