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The Way Business Is Moving

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Issue Date: November 2005

IT's end

1 November 2005

75% of IT organisations will change their role and 10% of IT organisations will be disbanded by 2011, says Gartner.
IT organisations are in a period of radical change. By 2011 at least 75% of IT organisations will change their role, at least 10% will be disbanded and 10% more will be relegated to commodity status, according to Gartner. The maturation of traditional applications of technology, the growing role of outsourcing and the greater penetration of technology into all aspects of business are driving this change.
"A new organisation type is emerging - one that will take the lead on information and process," said John Mahoney, chief of research for IT Services & Management at Gartner. "While it will grow from an IT base, the primary focus of the new organisation will be business transformation and strategic assets of information and process. When mature, it may no longer be identified as an IT organisation."
As technology becomes more pervasive and more critical to the routine operations and strategic goals of most business, its contribution will come under greater scrutiny, whether it produces good results or bad. Businesses that master technology exploitation will recognise that success, but those that fail will blame technology accordingly. Gartner analysts said that by 2011, IT contribution will be cited in the top three success factors by at least half of the top performing businesses, while IT barriers will be cited in the top three failure factors by at least half of the lowest performers. This trend will have a major influence on the role and organisation of IT and on IT leaders.
Gartner analysts predict that IT organisations in 2011 will have 20% less people, 40% less in-house technology roles and double the number of information, process and business roles compared to 2005. This parallels the evolving role of IT leadership that Gartner has identified, in which the strategic IT leadership role will split into business technology and business network leaders. IT could also be embedded in business as a pervasive commodity that is managed by business executives as part of their regular roles. In this case, IT would typically be sourced as part of a broader business process.
"There remains controversy about the extent to which IT can, should or will take and be trusted with leadership of business processes and information," Mahoney said. "In some cases, those roles will arise from outside the IT organisation and the entity will then be obliged to absorb many of the strategic and architectural roles formerly played by the IT organisation."
However, the evolution is not all in one direction. Some businesses are even starting to disband their IT organisations and to embed IT throughout the business. This approach could cause a disruptive backlash among some business leaders who may resist the rise of process and information architectures.
"Whatever the outcome, IT executives must identify and monitor the key external trends that will affect business technology in their enterprises," Mahoney said.
Consumerisation will be most significant trend
The growing practice of introducing new technologies into consumer markets prior to industrial markets will be the most significant trend affecting information technology (IT) during the next 10 years, according to Gartner. As a result, the majority of new technologies enterprises adopt for their information systems between 2007 and 2012 will have roots in consumer applications.
The large scale, high-volume unit production, and potential profit opportunities available to leaders in consumer markets have convinced many leading IT vendors to focus more resources and innovation on consumer products and services during IT industry's slow recovery from the dotcom collapse. As technology providers increasingly design products for consumers, enterprise IT managers have to learn how to manage these products as employees bring them into varieties of workflows and processes.
"Consumer IT will affect every enterprise," said David Mitchell Smith, vice president and Gartner Fellow. "Attempts by enterprises to deny this are doomed to failure, just as previous attempts to deny Wi-Fi, 'smart' mobile phones, the Internet and even the PC itself failed."
Lower cost, consumer-grade technology represents an unavoidable challenge for the CIO, but it is also an opportunity if savvy choices are made about where and when to enable and support its deployment.
"As perceptive CIOs seek to transform their rigid, legacy-ridden infrastructures into agile, efficient, service-driven delivery mechanisms, they must adopt a pragmatic approach to managing the risk of consumer IT while embracing the benefits," said Steve Prentice, vice president and research director at Gartner. "Otherwise, the CIOs risk being sidelined as the 'enemy' by their constituencies."


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