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BW Businessworld

The Future Of IT

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“If there is one business function you could rebuild completely, which one would it be?” We posed this question to 152 business executives and 162 IT executives in four countries — the US, UK, France and India. The top pick by far — especially among IT executives — was the IT organisation itself. Half of the survey’s respondents further said they are, or will soon be, revamping enterprise IT.

More executives want to rebuild their IT organisation from scratch than any other function.

Who Needs IT?
The role of the IT department is under more intense scrutiny than ever before. Analysts and executives are asking with rising insistence whether we even need IT departments anymore.

There are several reasons for this, including the ever increasing power and utility of consumer technology. Employees are getting their work done using free Web applications as well as their own laptops and smartphones. The increasing penetration of smartphones in India and mobile broadband (3G and 4G) will continue to drive this phenomenon.

In addition, the traditional IT function is being displaced, with executives and even users making many of their own technology decisions.

Future Uncertain
But what will tomorrow’s IT organisation look like? What will its roles, responsibilities and priorities entail? In our research, most respondents (68 per cent) admit to not having a clear vision of what the IT function will look like by 2016. Even more (73 per cent) cannot envision the future role of the CIO.

One can hardly blame them. Many questions remain unanswered about how mega technology trends such as cloud computing, mobile and IT consumerisation will continue to affect IT organisations.

The wave of consumer technology could continue to transform everyday life and IT expectations, or data security and privacy worries could drive people and companies away from its enabling touch.

The uncertainties extend well beyond technology. An oft-ignored truism is that IT organisations are affected by the same mercurial social, political and economic forces that shape the business world. Planning for future IT organisation without considering the role of shifting external influences is at best naïve and at worst dangerously myopic.

Most IT organisations today operate on the assumption of an indefinite continuation of a flat, connected and tech-enabled future, with significant implications for their own future state.

None of these are given. We hope global integration and economic cooperationcontinues, but we may not be so lucky if today’s economic crises and geopolitical tensions intensify, ushering in a more fragmented world. Twenty seven per cent of the executives we surveyed expect companies will start seeking alternatives to the Internet by 2016. Many things could affect the flow of information online, such as data privacy regulations, industry-specific laws, some of the country’s limiting access on the Internet and push to monitor online and mobile communications.

Dilution of transnational bonds would force change on a grand scale, which will include companies having to cut back on foreign IT labour and vendors, even restructuring business and IT operations.

10 Questions Get You There
With so many possible futures, each of which could affect IT priorities and operations, it’s no wonder it’s so hard to visualise the future of the IT organisation and the CIO.

So how can your IT leadership team start planning their future IT organisation? To begin with, they must work with other executives to envision the possible future business environments. Then consideration must be given to the pressures each will place on the IT organisation, and the different decisions they will compel the IT leadership to make.

The following 10 questions will help executives form rational visions of the future and map them to basic IT decisions about organisational structure, IT investments, skills and technologies. Some focus on the fundamentals of how IT creates value. Others are more timely questions for running tomorrow’s IT organisation. Together, they can help you envision a revamped IT organisation, anticipate possible changes, and build for agility.

Question 1: Why will IT matter to my company? Companies can do more with IT than ever before, but are becoming less reliant on their ITorganisation to provide IT direction. Clarifying the purpose of the ITorganisation will focus the redesign effort.

If the future is globally connected and extremely competitive, IT will help industry leaders stay on top through innovation and analytics. There is a high likelihood that multinationals based in the developing world, including Indian multinationals, will challenge established companies and the way they manage IT. Forty-two percent of the IT executives we polled think global multinationals are likely to radically lower their IT costs. In addition, back-office IT will become a globally-managed commodity.

But if the world becomes fractured, disconnected and more embattled, IT can still earn its keep—by helping companies restructure, reducing their business costs and keepingthem operating through their transitions.

Question 2: What would our IT organisation look like if we could rebuild it from scratch? Would any company design their IT organisation and systems to look just as it does now? Probably not, given the amount (and accelerating pace) of change since inception of operating models.

Think of an organisational structure that best fits the possible futures you foresee. Depending on your legal, political and technical dynamics, it may range from a streamlined global IT organisation supervising a cloud-and-outsourcing services model to a decentralised IT department with powerful local IT units in which the security function has a more controlling hand.

Question 3: How will our IT executives and other executives share and approve IT decisions? The IT chain of command is getting crowded. Social media and analytics are pulling chief marketing officers into more IT decisions. Companies are hiring chief innovation and chief digital officers. In addition, employees are comfortable making IT decisions for themselves.

In this dynamic milieu, executives need to focus on governance, not fight for power. Asking this question will help withpredicting which IT decisions need to be made on global or country level, and which ones are best made by employees and line managers instead of the IT function. It also helps answer questions about the CIO’s role, and whether IT needs to be overseen by a particular executive, such as a chief strategy officer or chief risk officer.

Question 4: How do you get all available data anywhere it’s needed? In the current era of smartphones and analytics, people expect all kinds of data to be available everywhere, on any device. Whether structured transactions or unstructured video, massive databases or a few key insights, IT’s job is to figure out how to bridge old and new architectures,getting useable data where it needs to go, securely and reliably.

Plan for more of the same if the future is anything like today, but where legal restrictions, security problems and service disruptions get in the way, users will have to scale back those expectations.Even so, it is hard to imagine them doing so without a fight, so IT will need to find a way, in any future, to come as close to the ideal of ubiquitous data and insight as possible without flouting the rules.

Question 5: Are we winning or losing the fight for information security? IT’s future will be greatly affected by the severity of the cyber security problem. If companies and governments manage to keep cybercrime a manageable problem through technological advances and international cooperation, security will fade into the background.But what if cybercrime—or even cyber warfare—grows out of control? Then, naturally, it’s no longer business as usual for companies, their customers and IT functions.

As with all things, the outcome may be somewhere in-between. If things get bad enough, companies will cut back or redesign many Internet-dependent activities and processes.Most jarringly, IT departments will have to focus on creating alternatives to today’s Internet-based network infrastructure and minimising the damage.

Question 6: What kinds of cloud services will dominate? While some of the futures imagined above are friendly to cloud services, others are hostile.A flat, connected, unregulated world favours public cloud computing and services.Nothing will stop companies from using global cloud services anywhere high speed broadband is to be found.

But such a scenario is no longer guaranteed. If tight data regulations, protectionist economic policies or the establishment of national Internets interfere with using global cloud services, companies that seek to benefit from the many benefits of cloud will be forced to use private clouds or local services.
Question 7: How urgently must we accommodate consumer technologies? Consumer IT is where lifestyle, business and innovation intersect, and this complexity is what makes it an especially unpredictable phenomenon for IT departments. It’s hard to know what social networks and smart phones will be able to do in five years, and even harder to anticipate what new applications employees will want to use.

But IT planners can think about whether demand for consumer IT will requireorganisations to accommodate employees and experiment with new trends—or not.Cost, broadband and mobile network access, access to consumer applications and data from other countries, the pace of innovation, censorship and confidence in IT security all factor into supply and demand for consumer IT in the workplace and the market.

Question 8: Which IT skills will we need to succeed, and where will we need them? Ask this question after answering the others. Start by breaking IT activities into leading, managing, designing, building, analysing and operating. Then ask what needs to be done, and which skills will be needed where.

For example, what needs to be managed — service providers? Infrastructure? Where are they managed—globally or locally? And with design: what skills will architects and network engineers need to design a cloud-server hybrid or migrate to a proprietary network? Also: what combination of backgrounds best prepares a leader for fostering innovation, leading a centralised or decentralised environment, or managing a security crisis?

Question 9: Where will IT talent come from? Today, businesses assume they can tap into a pool of IT professionals in low-cost locations or easily move IT employees across borders. But what if globalisation unravels, new regulations prevent you from tapping foreign talent pools, or long distance collaboration becomes difficult?What happensif you can’t find local workers when required for security or cultural reasons?

If companies aren’t permitted to import IT talent or use foreign services, they will need to invest more in training at home or relocating workers. More companies will turn to universities and work with them to produce job-ready graduates.

Question 10: How will our spending priorities change? At the end, step back and confirm what each future means for your budget.Where will you need to invest to achieve business goals, meet operational needs or legal requirements? Will it be in infrastructure, applications, services and the workforce? Where can you reduce spending, either because lower cost options are available or because the need has declined?In some futures, reducing IT expenses or giving employees and managers direct control of IT-related spending will become an important priority in its own right.

Don’t assume tomorrow’s business and IT environment will be a continuation of today’s. The world often changes in unpredictable and unlikely ways, and it’s not just technology that changes. Planning your future IT organisation on a single future, without considering others, is a dangerous move.

(The author is Managing Director—Technology, India, Accenture)