News from the fourth annual chief information officers'
summit
IT directors should prepare for a major board-level backlash
against IT, leading to another round of outsourcing, the chief
information officer of a leading investment bank has warned.
Speaking at the Economist CIO Summit in London earlier this month,
JP Rangaswami, global CIO at Dresdner Kleinwort Wasserstein, said
recent media coverage - in particular, a piece in Harvard Business
Review byNicholas Carr (see box) - questioning the value of IT
investment will fuel board members' appetite for outsourcing.
"We have not yet seen the impact of this on chief executives but it
will be severe because there are a lot of people wanting to believe
that IT doesn't matter. There will be a backlash," he said. "It is
not what Carr said in his article, but the headlines he has
generated. The likely result is that we will see more large-scale
outsourcing.
"People will come screaming at the IT department claiming we spend
money building unproductive toys. This is very dangerous, as IT is
going through a difficult time, and the baby will go out with the
bathwater."
Rangaswami urged IT directors to prepare their counter-arguments
now. He maintained that IT will only reach maturity as a utility
when it has common standards, including XML-type customer-focused
standards.
"In IT we have gone from PCs to networking to customer information
without having fundamentally agreed standards. IT can never reach
maturity without standards," he said.
One problem for IT managers is that IT still cloaks itself in a
level of mystique that separates it from business partners, he
added. "We must take away the smoke and mirrors and be more open
about how technology works.
"Too many organisations cannot put a handle on how much they spend
on IT. This is because there are too many nested costs, and many
hidden subsidies that result from point decisions that don't come
up through the organisation."
Does IT matter? The changing corporate IT
strategy
In an article in May's Harvard Business Review entitled "Does IT
matter?", editor-at-large Nicholas Carr said that IT is evolving
like other "infrastructural technologies" such as railways,
electricity and water.
He said these technologies have a growth period, followed by
many years of consolidation, before becoming a commoditised
utility. "From a strategic standpoint, they become invisible," said
Carr. This demands a rethink of the corporate management of
IT.
"In brief, executives need to shift their attention from IT
opportunities to IT risks - from offence to defence." The July
issue of Harvard Business Review will publish a rebuttal of Carr's
opinions by John Hagel and John Seeley Brown, so this
HBR-stimulated, but influential debate looks set to grow over the
summer.
Read Carr's
article
www.nicholasgcarr.com/articles/matter.html Tell us what you
think about Carr's views. E-mail
computerweekly@rbi.co.uk