Apocalypse Soon: 52 Percent of CIOs Plan to Blow Up IT Groups

More than half of CIOs expect to restructure their IT organizations within three years, new Forrester Research data shows. And apps organizations face the first salvo.

The saying goes something like this: "If it ain't broke, don't fix it." The statement is, of course, embraced as dogma by those fearful of change and by automobile owners praying for a reasonable bill of charge while waiting at the mechanic's garage.

But many of today's CIOs must see something broken inside their IT departments. According to a new Forrester Research report, more than half of the 178 IT executives surveyed are hatching plans to upend the status quo and institute a new IT model within three years.

The ultimate goal, these CIOs say, is to improve services, reduce costs and increase consistency of business processes and IT systems. "The appetite for restructuring is obviously high," writes Forrester principal analyst Marc Cecere. The area with greatest priority: the applications organization.

Several New Normal macroeconomic factors—not under the control of CIOs—are driving this desire for change. "The uncertainty caused by a stubborn unemployment rate, the stock market yo-yo-ing, new financial regulations and high government spending provides a push for changing the model of IT," writes Cecere.

Advances in core IT systems and software manager are also inciting change. Cecere adds: "New services and innovative new technologies and techniques provide a pull toward models that can exploit their advantages."

For some IT shops, an upheaval will come much sooner: Nearly one-third of IT chiefs surveyed stated that there was either a "high probability" or "certainty" that they would restructure within one year.

[ See From the CEO: 5 Questions CIOs Need to Answer and Why the New Normal Could Kill IT ]

The most critical need for IT shops is to improve their services: More than three-quarters of respondents said this was a high or highest priority. To Cecere, however, that number should have been higher. "Improving services is such an obvious choice that you have to wonder about the smug bastards who didn't choose this," he writes. "The frustration among senior business leaders that there must be a different way to run IT to get the flexibility and innovation they want while not going back to the pre-recession spending levels is a dilemma that fuels the interest in new models for IT."

According to the survey respondents, the applications group is "most likely to be restructured." Why? Cecere writes:

The importance of cost reduction, increased consistency of processes and systems, and innovation are driving the need to restructure apps groups. They are the most fragmented and have the greatest potential for cost savings through rationalization or outsourcing. Most large shops, in particular, have federated apps organizations, where decisions about systems, tools, and methodologies are made independently from other apps groups. As a result, they've created multiple groups that have little ability to leverage people. In addition, many of the innovations in business analytics, mobile apps and other areas will come from apps groups. These innovations need to scale in terms of numbers of users, security, and reliability. Fragmented apps groups often don't have the capacity, the need or the expertise to scale these innovations past their own business unit.

So just what kinds of new organizational models are CIOs considering? The report highlights (and offers explanations for) several, including: business-process-based, demand-supply (DS), and plan-build-run (PBR). But, Cecere adds, the "verdict is still out" on what models will be deemed most appropriate for individual IT shops.

"Currently, we are only seeing the train's headlight in terms of the impact of these new organizational models," Cecere writes. "Understanding them will require time in order to cut through the fog of hype and the hopefulness from early benefits."

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