Ross Bentley talks to Metagroup boss Dale Kutnick about new
challenges for IT chiefs
IT departments should take advantage of their new found confidence
and increasingly important position within organisations to manage
the expectations of other parts of the business. So says Dale
Kutnick, chief executive of IT research firm Metagroup.
In an interview with Computer Weekly, Kutnick laid out what he sees
as the main challenges facing the IT department of the future.
Expectation management, he says, will become increasingly
important.
"Internal departments always oversell what they intend to do and
undersell the time and cost involved," says Kutnick. "They want to
satisfy their bosses, so if they are told that something must be
done in two months then they say 'OK', however unrealistic that
deadline might be.
"IT departments need to push back on the business more and act more
like an external supplier. This means not turning down work but
being more up-front about the costs and consequences of a
project."
Another theme that Kutnick has identified is the need for
technology to be treated as an asset.
He says, "50% of chief information officers (CIOs), both in the US
and in Europe, now come from the business rather than from a
technology-based background.
"This is because increasingly IT is being seen as an asset and an
investment - these assets can either appreciate or depreciate
depending on how they are looked after. This is why concepts such
as portfolio management are gaining popularity."
Kutnick believes IT costs will continue to increase as a percentage
of the organisational spend. He estimates that over the past 10
years, the average IT spend has increased from 2.5% to 3% of total
spend to about 4% to 5%. This rise will continue but slow
down.
"As spend increases, so IT becomes more important to the company,"
says Kutnick. "In the future, we will find more and more CIOs
addressing boards and shareholders to justify their strategies and
spend. This is because their part in the business is going to
grow.
"IT is nowadays linked to a company's brand. It is IT that enables
the whole business to operate. It is crucial in the delivery of
goods and services.
"We saw how many of the dotcoms were brought down by their
inability to deliver goods or send bills. Now, as companies adopt
electronic supply chains and customer relationship management
strategies, IT becomes increasingly linked to the business."
This means senior IT executives must get some serious finance
training. They must start to talk finance and understand the
ramifications to the business of any IT implementations.
And there are other skills the IT director of the future will have
to hone. "The main job of IT used to be to build systems, now its
biggest function is procurement, whether it be packages or
services. Hardware is also important but these products are easier
to compare - software is far more quirky.
"IT managers need to be clued up in this area because suppliers are
much more sophisticated than they were. Pricing models for services
and software will change and IT managers must be aware of this.
Making sure they have a good lawyer to hand is a start.
"While Microsoft's new licensing model has caused a stir, in the
future the subscription payment model will dominate. But, with the
recession, IT managers are in a good position to negotiate, as
suppliers are desperate to make deals at the moment.
"Eighteen months ago it was a suppliers' market but now there are
some good deals available. I have heard of Ariba discounting sales
of its e-procurement package by up to 60%. Cisco never used to give
discounts, but customers can now make up to a 40% saving.
"EMC now charges half of what it did for a megabyte of storage.
However, buyers have to be careful because it now charges for
software and you cannot run storage without the software."
Kutnick's technologies to watch
- Self-healing software - software that has intelligence built in
and therefore has the ability to self-correct and to learn
- Always-on computing and pervasive computing - systems that will
do things while you sleep
- Web services - applications designed for online businesses
- Natural language, and text to voice software - in less than
five years you will be speaking to your car.