Why the New Normal Could Kill IT

IT has survived seismic shifts before, but the global economic slowdown and resulting business demands have rocked the CIO's kingdom on a new scale. You've spent years trying to be too big to fail the business: Are you now too big to succeed?

By Thomas Wailgum
Fri, March 12, 2010
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IT's Life in the New Normal

The new normal makes life even harder for CIOs—and may cost many their jobs.

In the view of McKinsey & Co., the global management consultancy, the new normal is "not merely another turn of the business cycle, but a restructuring of the economic order," wrote McKinsey worldwide managing director Ian Davis in March 2009. He goes on:

For some organizations, near-term survival is the only agenda item. Others are peering through the fog of uncertainty, thinking about how to position themselves once the crisis has passed and things return to normal. The question is, "What will normal look like?" While no one can say how long the crisis will last, what we find on the other side will not look like the normal of recent years. The new normal will be shaped by a confluence of powerful forces—some arising directly from the financial crisis and some that were at work long before it began.

In corporate America's paper of record, The Wall Street Journal, Walt Shill, head of the North American management consulting practice for Accenture, declared that "strategy, as we knew it, is dead." It's now all about operational flexibility and how fast businesses can seize opportunity. If strategies and forecasts have to change daily or weekly, then so be it.

This new world order calls on CIOs to meet its demands in three explicit ways: "They will have to make the IT function dramatically more productive, use IT more effectively to meet larger corporate goals, and embrace disruptive technologies that will shape the new economic terrain," states a fall 2009 McKinsey on Business Technology article. Says Michael Chui, a senior fellow and IT expert at the McKinsey Global Institute: "CIOs are being told: You need to become more productive. But also: We need to get more out of you. It's a real push, and it's absolutely the new normal environment."

Haven't IT leaders heard all this rhetoric before? Sure, Chui says: business-IT alignment, improved productivity, being a catalyst for change, that's all table stakes, he says. But here's the difference. "In the past, a CIO could be successful at being great at one of them or perhaps successful at maybe two," Chui says. "Now, in the new normal, you really have to excel at all three of those categories. The bar is much higher."

Of course, CIOs and IT staffers can't also forget about the "doing more with less" mantra that's still fashionable. But the lasting effects of all this new pressure might, in fact, lead to a power outage for CIOs. If IT's already too big, then having "less of IT" may become de rigueur in the near future. Gartner, for instance, says that by 2012, 20 percent of businesses will own no IT assets at all.

Which would leave those 20 percent of CIOs to do what, exactly?

Complexity Goes From Aggravating to Fatal

Given the aforementioned warning signs, it's easy to speculate that the CIO's role and the department's sovereign power might be slip-sliding away. Certainly, there's a horde of tech trouble at the gates, and users today have as much patience as those stranded in long lines at the DMV.

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