Masochistic Predictions

Are CIOs and IT departments facing extinction?

A Streak of masochism comes in handy sometimes. It makes life especially fun when standing in front of a large group and telling them something they don't want to hear, or even better, making a prediction that you know they'll vehemently disagree with.

In our wonderfully pluralistic industry of tolerance and understanding, it is never a struggle to find someone with an opinion and at least 20 who will oppose it. Technology executives, IT workers and pundits love to debate. We have spent years calling Microsoft names, defending Planet Redmond against marauding penguins, or arguing about a thousand and one other topics.

Predictions and pontification are the spice of IT life - perhaps a measure of what little fun it is to write a line of code. We love trying to rationalize why Bill Gates cannot sort out his security flaws yet we keep buying his stuff, or pondering the myth-reality balance about whether AMD's chip architecture is actually better than anything Intel can rustle up.

An emerging favourite swirling around the crystal is a world without a CIO and even their IT department. Put that view to a room of 100 journalists - as I did exactly this just a few weeks ago - and a tsunami of indignation comes crashing down over you. Grizzled technology journalists, with more vendor T-shirts and associated freebies than Dame Edna has sequined frocks, cannot believe we can stay on our axis without you, the chief information officer.

Many business executives appear to think differently. And whether we like it or not, we are slowly watching the erosion of the CIO's organizational position and power in favour of bean-counting spreadsheet hacks.

Just as many pundits started to look for successful technology managers who have moved into the CEO's leather chair, it appears the CIO's office is being slowly stripped of authority.

Qantas, one of the country's foremost technology users, has further downgraded the role of the CIO following the departure of Fiona Balfour to Telstra. The former tech chief at WorkCover, Lynn Kincade, recently quit, complaining her role in charge of a $56 million budget was shifting from strategy to lackey, though those are my words, not hers. She actually said, referring to an agency management shake-up, something along the lines of, "the joy of what I've got, which is the strategy side, disappears".

So it is for many who wave the C-level flag from the technology department. But waving is never enough. That's what you do just before you drown.


Why an IT Department?

If any CIO has control of strategy, then they had better be strategic; and that means getting focused on the goals and vision of the organization and the CEO to whom, sometimes very inconveniently, they report.

Those who wallow in the mire of cost-cutting and agonized conversations with the CFO about exciting amortization opportunities (all very important no doubt) will eventually find themselves cut. And not just themselves, but possibly their departments, too. When this was suggested to journalists whose livelihood has been made from informing and entertaining this unique group of professionals, the reception was less than welcoming. Such dramatic change is unconscionable to many of them.

This Gartner prediction did boil the blood of some. Nevertheless, it is very possible that in the next five years, one in 10 IT departments will actually be disbanded, their operations hived off to a myriad of business units throughout their organization. For example, the marketers take over the CRM system, sales wrap their hands around the pipeline and ordering applications, and the supply chain guys get to play with their toys.

This does not mean technology professionals will not exist. Of course they will, but they'll work for different people. This is a scenario - admittedly more an outside bet than a sure thing - that is very possible for a minority of enterprises whose management is already asking why there is an IT department that is independent of their lines of business.

If you ask the vendors, they will tell you this trend is already happening. In the past three years, their points of contact have shifted from predominantly in the technology group to across the enterprise.

The consultants, too, see changes. One colleague from a Big Five lamented recently that his colleagues with accounting backgrounds often intimidated CIOs because they could look at a spreadsheet with the eyes of a CFO - something a chief information officer with a technology heritage often could not do. If true, then this is another anecdote to help explain why some executives are starting to consider a future without a dedicated technology team.

The obvious question arises: who runs the tech show if the CIO does not. That can be done within the finance group, under the auspices of the CEO or even a Chief Operating Officer. They would use guiding principles of their technology architecture to underpin and coordinate purchasing and implementation decisions.

Gartner calls this scenario "embedded", not so dissimilar to the same phrase used for journalists who went to war with the US Army in Iraq and became, at least to their critics, part of the war machine rather than independent observers. In this case, it is a phrase that articulates an organizational attitude in which IT is seen as a commodity for the business to manipulate because it is "part of" the business.

The extinction of an IT department does not mean the lessons of successes and failures past will not be retained. But you are left wondering how many rocks you need in your head to believe you can actually go right down to the end of this road.

There is nothing wrong with the prediction - they serve to stimulate debate and thinking as much as their job is to forecast the future. And this scenario certainly has credibility given the steady drum-beat of management decisions that are shifting the power from those who provide technology to those who use it.

The consumerization of IT certainly is making its influence felt here. Everyone is a bloody expert. But any management team, no matter how sophisticated their organization, that chooses to embrace Gartner's "embedded" vision is courageous.

Indeed, they would have to possess their own streak of masochism. A set of sturdy leather whips would be handy, too.

Mark Hollands is a vice-president at the IT advisory and consulting company Gartner

Copyright © 2006 IDG Communications, Inc.

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