This year represents the beginning of the third age of IT. Analyst firm Gartner urges CIOs to embrace new working practices to avoid being left behind.
If pre-millennium IT was considered the domain of geeks and propeller heads, and the noughties was the era of the customer-centric IT department, IT is now entering a third age – that driven by the needs of digitisation, according to Gartner.
IT organisations have been warned for some time that change is coming, but this year there is a perfect storm, said Dave Aron, vice-president and Gartner fellow.
The third era of technological and societal trends in enterprise IT – driven by social media, cloud computing, analytics and mobile enablement, along with the internet of things (IoT) – will change the make-up of IT.
Gartner believes these trends will allow businesses to become faster, cheaper and more scalable. But IT needs to adapt.
The rise of digital may undermine the CIO
A lot of companies do not have digital leadership, with Gartner research revealing that only 7% of organisations have a chief digital officer (CDO). Dave Aron, vice-president and Gartner fellow, expects this figure to triple within three years.
Gartner found that around half the people with the job title CDO came from marketing. “The vast majority are not CIOs. The CDO job function is more an extension of head of strategy. Less than a fifth are from a CIO background,” said Aron.
He recommended that CIOs who want to become strategic partners should see if their business needs a CDO. The skills required for a CDO include digital design, data science, digital anthropology, the ability to work with startups and small to medium-sized enterprise (SMEs), and agile development.
When asked how a CIO should work with an SME, Aron pointed to how TV stations operate: “Learn from TV commissioning, where [producers] deal with smaller companies. A lot of SMEs can’t afford to fund liability, so you need to work out how to help them succeed. This means keeping legal light and focusing on IP, with light-touch management, guidelines and light procurement [processes].”
Around 50% of the CIOs Gartner surveyed said they were pursuing agile methodologies. But Aron warned that agile represented a big cultural shift for IT. “We found that 39% said they needed to radically overhaul their IT organisations,” he added.
More than half of the people interviewed as part of Gartner’s Executive Programme survey of 2,339 CIOs admitted they were swamped by a torrent of digital requests.
Mixed approach to IT projects
“2014 will be a year of dual goals: responding to ongoing needs for efficiency and growth, but also shifting to exploit a fundamentally different, digital paradigm. Ignoring either of these is not an option,” said Aron.
Most companies try to use the same approach to IT for everything. To thrive, Gartner recommends businesses take two separate approaches to running IT projects.
"We believe the most successful organisations do not end up with 'fit for no one' IT. They have traditional IT using traditional waterfall [methodology] and traditional vendors, and also have non-linear IT, with lightweight governance, using agile methodology," said Aron.
He advised CIOs to use "non-linear IT" – where projects tend to be agile in nature, without formal specifications – when there is a need for collaboration and outcomes are not predictable. According to Aron, such an approach fits into a highly digital world where there are multiple ways of doing things, which means they cannot easily be listed in a requirements document.
Instead the IT project uses iterative development with multi-disciplinary teams, he said. This team may not necessarily be within IT, but it would be a tightly bound team.
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"There is still a need for traditional IT, and IT departments need to migrate between non-linear IT for innovating and traditional IT for a stable environment," he said.
It is possible for an IT project to flip between these two approaches to running IT. Aron gave the example of one retailer, which had outsourced its point of sale system because it seemed like a commodity item: "The point of sale offered an opportunity for customer service, so the retailer brought it back in-house and moved to non-linear IT because outsourcing was getting in the way [of innovation]."
Gartner's Executive Programme study found that more than 70% of CIOs would change their sourcing relationships.
Aron said CIOs were excited to work with SMEs and startups because they felt traditional IT suppliers had not been particularly innovative in recent years.