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4 Ways IT's Role Changing Faster Than Expected

Analysts at the Corporate Executive Board say you'd better update your five-year plan, because a series of radical shifts around IT's value, ownership, and role are happening sooner than envisioned.
By Shvetank Shah, InformationWeek April 16, 2012 URL: http://www.informationweek.com/global-cio/interviews/4-ways-its-role-changing-faster-than-exp/232900318

In late 2009, Corporate Executive Board (CEB) published a five-year outlook for corporate IT, "The Future of Corporate IT," predicting a series of radical shifts around IT's value, ownership, and role. We predicted IT would focus more on data analysis and less on process improvement, push rapidly into the cloud, cede more ownership of technology investments to business units, and transition to a services model. The services model would in many cases lead to the IT organization becoming part of a corporate core that includes HR, finance, and other functions. Just over two years after these predictions, we think the transformations are occurring even faster than expected, and that holds implications for IT pros looking at their skills and careers. Let's look at four areas, and the key actions IT leaders should take this year to be prepared. 1. Information Over Process The competitive advantage from IT is increasingly coming from better customer experience and data analytics, and helping knowledge workers make better decisions. That's why we predict information management skills will rise in importance over those for designing and refining business processes. Our latest budget benchmark survey shows this shift is well underway. In 2011, investments in process-based projects fell to 33% of the new project budget, while investments in "information"-based projects rose to 36%. Yet while investments in information-related projects continue, our research shows that fewer than 40% of employees have the training, skills, and processes to tease insight from data. Simply continuing to invest in new business intelligence and analytics platforms makes no business sense if employees aren't adept at using them. Key actions for this year: Give executives practical guidance on how to help employees make better decisions. To avoid the perils of blind reliance on analysis, information management initiatives must cultivate what we call "informed skepticism" by providing context, the assumptions behind data, and the strategic relevance of information. When developing analytical tools, IT can't just ask employees for their requirements; they need to use "anthropological" techniques by watching knowledge workers and letting them experiment with new tools. Lastly, let knowledge workers choose the devices and software they find easiest to use, which will improve their ability to make use of information. 2. The Cloud More companies are turning to cloud resources and other outsourcers for the "factory" side of running IT. CEB research shows 20% of IT organizations are in the cloud in substantial ways, and we expect that rate to grow dramatically through 2013. [ Want more on analysis from Shah? Read Why Big Data Doesn't

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Always Equal Big Insight. ] When considering cloud services--private and public--IT leaders need to start with the end in mind. Features such as faster provisioning, usage-based billing, and assurances of security and compliance matter more to your business-unit colleagues than the technical architecture.

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Key actions for this year: To migrate systems to the cloud, you'll need to convince the application owners in business units that it's a good idea. Generate buzz for the private cloud by focusing on its features and avoiding discussion of unnecessary detail on its underlying technologies. Plan upfront for a hybrid cloud approach that blends in-house and public resources. Be wary of requests to build more internal data center capacity, since combining private and public clouds should allow you to use less space going forward. While the internal, on-premises cloud shows greater immediate potential, the public cloud is already viable for use cases such as development and some production applications. IT organizations that play it safe with a private cloud and expand their data center significantly risk overbuilding. Experiment with the public cloud now. It no doubt has flaws, including ones related to data privacy, security, service quality, and cost. The five areas where IT leaders' contribution is most needed to accelerate public cloud readiness are in addressing service-level agreements, security governance, performance, billing models, and legal issues. 3. Business Partners Take Over As consumerization and software-as-a-service (SaaS) have made inroads, business units are taking over the operations of larger segments of technology--at least in areas where there isn't a high need for integration with existing IT systems. Seventy-five percent of business executives we surveyed indicated that they have prior experience as project sponsors or subject matter experts or other significant experience stewarding an IT project. In this new environment, IT can't stick with its traditional "govern and build" approach to IT. That approach is too slow for businesses reacting to forces of global demand and the fast-changing pace of mobile computing. Key actions for this year: You can't just lock down a business-unit leader who's gung-ho to implement a SaaS system. Instead, you need to engage that person, by talking about the risks and benefits of a project and being open to letting that leader manage it. IT can act as an intermediary between business leaders and vendors, acting like a buyer's agent. In that role, IT can make sure business leaders know the risks, but without taking over responsibility for their investments. Design alternative delivery tracks that let a business unit take primary responsibility for important local projects that central IT puts a lower priority on. In terms of integration, focus on what data employees really need, in order to understand where integration with existing systems could have a big impact. 4. IT Gets Embedded In Business Services Only 11% of large companies have what we call a "multifunctional shared services model"--joining HR, finance, procurement, IT, and other central functions under one roof. As companies look to cut costs, look for this to become more common for IT, especially in the retail, consumer packaged goods, and manufacturing sectors. Part of this change will involve IT offering what we call "end-to-end IT service packages"-- putting together all the IT resources, technologies, and processes required to enable a specific business outcome. The model streamlines decision making within IT, and changes the conversation with the rest of the business from technologies to outcomes. Fifty-four percent of large organizations will offer at least some end-to-end IT services by 2012, our research predicts. In contrast, in 2009 almost one-third of organizations had no services, and instead these IT groups followed the traditional model of defining their offerings in terms of infrastructure. A similar number offered services that were confined to applications or infrastructure, as opposed to the business outcome-aligned end-to-end services we expect to become more common. The key point of chance here is that IT service management was once used just to improve IT infrastructure

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processes; now it's reshaping how the entire IT organization operates and the services it offers. End-to-end IT services package all the supporting people, processes, and technologies for a related set of business processes, user activities, or customer processes. That leads to faster, more streamlined decision making in IT and deeper business leader understanding of how technology enables the business. Key actions for this year: Use end-to-end service packages to show business partners the full cost and value of the IT needed to make a specific business activity possible. The benefit is that the business units spend more wisely on IT. But don't expect that seeing the full costs will lead to lower demand for IT. The clarity of end-to-end IT services--having the costs and benefits laid out-- may even increase demand for IT. Some companies are exploring how the IT services model can serve as a blueprint for other shared services. Are IT Pros Ready For This Future? Most IT organizations are unaware and unprepared for the degree of change coming. Sixty-one percent haven't done a comprehensive forecast of the skills they'll need, and up to 80% don't provide training or coaching in critical skills. IT leaders must do annual workforce planning to spot skills gaps, target recruitment at new roles, and train emerging leaders. If the IT organization of 2015 will look different, so will average IT employees. They are more likely to have skills related to project management, risk management, or usability design than in server administration or coding, and many will find themselves in roles that are unknown today, such as collaboration evangelist or service architect. Up to 30% of today's roles will move to a shared services group or to business units. Shvetank Shah is executive director of the Corporate Executive Board. More from CEB is at www.executiveboard.com. Security information and event monitoring technology has been available for years, but the information can be hard to mine. In our SIEM Success report, we provide a step-by-step guide to make the most of your SIEM system. (Free registration required.)

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