Many IT leaders will be entering 2010 with bruises on their budgets from the recessionary battering they took over the past 18 months. But this year promises a cautious return to growth – for some at least.
Any CIOs going into the year simply expecting more of the same may be left behind, according to Martin Atherton, service director at analyst Freeform Dynamics.
“I keep hearing 2010 will be a ‘nothing’ year. Try telling that to every CIO wanting to deliver the best services they can for the best price possible. In the main, IT leaders will sidestep those trumpeting ‘transformation’ and take the opportunities they can to push incremental, positive and sustainable changes to what they do and what they do it with,” he says.
Here are Computer Weekly’s top 10 issues for CIOs in 2010.
Nothing that really matters is going to happen in business or the public sector until Gordon Brown (or anyone who has the ambition to usurp him) calls an election. Political common sense suggests Brown will want to wait, put through a March budget that tries to make voters feel a little better, then go for early May.
Business leaders would probably prefer an early ballot to get the uncertainty out of the way. Public sector IT leaders will be happy to wait, because once the election is over, no matter who wins, government IT spending is set to be slashed. Depending on whom you believe, public sector IT budget cuts of anything from 10% to 40% could be on the way.
For a lot of CIOs, “social networking” suggests users pounding away on Twitter and Facebook and hogging network bandwidth with YouTube and iPlayer video streams. But smart IT managers are realising the concepts that such services embody are central to improving collaboration both within the organisation and with customers and partners beyond.
“As businesses look to become more effective across different departments, functions, and processes, social computing in and around the enterprise will become more widespread,” says Sharyn Leaver, CIO research director at analyst Forrester Research.
“Forrester has identified three social computing trends that CIOs should look out for: the growth of people-centric collaboration platforms; the integration of customer community platforms with business apps; and the common use of telepresence services.”
Alastair Behenna, CIO at recruitment firm Harvey Nash, says that social media technologies are now ready to use in a corporate environment.
“I will be pushing to the brink of, or better still pushing past, the tipping point in my global organisation for the adoption of social media technologies in a monetised, embedded and mature series of technologies that measurably boost bottom line,” he says.
No, not LANs and WANs and Ethernet and all that – but making the most of your personal networks to be a more effective and successful IT leader.
A survey by analyst Pierre Audoin Consultants and the IT Service Management Association in September last year suggested that 68% of IT buyers now turn to their peers as their preferred source of advice on potential IT solutions – nearly double the second most popular route of searching for information on the web.
As US technology blogger and former Gartner analyst Vinnie Mirchandani recently wrote on his Deal Architect blog: “In the 1970s CIOs turned to IBM for advice; in the 1980s to Accenture (Andersen); in the 1990s to Gartner. In this decade they rely on each other – unbiased peer input.”
Recent economic history contains an important lesson for CIOs. Each of the previous three global downturns were marked by the emergence of an innovative, disruptive technology that was overlooked when budgets were under pressure, but took off as recovery set in.
In the early 1980s, it was the PC; in the 1990s, ERP software; in the first years of the 21st century the internet revolutionised business once the dot com crash had abated. So what innovations are lining up as possible successors to these technologies? Social media is perhaps one, but in the corporate world most experts believe cloud computing is best placed to drive such change.
“CIOs need help identifying the key emerging technologies that should impact their planning and investment. They want to institutionalise innovative technologies like cloud and social computing that can drive business innovation”, says Forrester’s Leaver.
Bob Tarzey, director of analyst Quocirca, says so-called “platform as a service” offerings are set for growth.
“Microsoft is launching Azure, Google’s App Engine is coming out of beta and there is the continued growth of Amazon EC2. Add this to already popular ‘software as a service’ (SaaS) offerings such as Google Apps, Salesforce.com and WebEx and the growing use of ‘security as a service’,” he says.
“Any CIO who believes their responsibility is to acquire and deliver IT resources to the business internally is in danger of overlooking many potential opportunities to use cheaper, more flexible capability available on-demand over the internet. Today’s CIO needs to be co-ordinator of the business’s requirement for applications – however they are delivered. Integration and shrewd purchasing are still key elements to the successful use of IT, but it is no longer an internal service. CIOs that ignore this will be bypassed by the business.”
Historically, the single biggest cost for most organisations has been customer acquisition. Yet today we have web-centric businesses such as Facebook or Google who seem to attract new customers and users by the millions at a cost so low as to be unthinkable for the likes of “bricks and mortar” firms such as banks and retailers.
For any business, the internet offers a route to dramatically reducing the cost of customer acquisition, and equally of increasing the loyalty of those clients.
“Businesses will integrate external customer communities with their internal business apps. Businesses are building or connecting with customer communities to gain better insights into customer behaviours and to monitor reactions to business actions,” says Leaver.
“Organisations can use customer communities to support market research and product development, accelerate distribution of marketing messages, provide deeper insights about individuals and accounts for sales, and promote customer self-service to drive down support costs.”
Why can’t I use my iPhone?
That process of using technology to improve customer engagement is being mirrored with employees. The so-called “consumerisation” of technology means that we are not far – in some firms we may already be there – from the point at which business users know as much about their technology as the people manning the first-line helpdesk.
As the most IT-literate generation that has ever been enters the workforce and becomes the dominant part of the user base, IT managers who do not anticipate the changes this implies will increasingly find themselves being driven by the expectations of those iPod and web using individuals.
Users will expect the ease of use of an eBay, the flexibility and functionality of an iPhone, and the simplicity of a Google in their business applications and devices. This is already presenting a whole new set of challenges for CIOs.
Let’s not talk about skills shortages anymore – there is no lack of skills available if you are willing to mix and match between using in-house staff, supplier expertise, outsourcers, contractors or increasingly offshore resources.
“[CIOs are] grappling with growing skills, training, compensating, hiring, and terminating IT people – especially as their workforces shift dramatically,” says Leaver.
The challenge for IT leaders is managing the disparate skills base they have across all sources, while also motivating and developing employees that have often been hit financially and emotionally by cutbacks and redundancies among colleagues.
“I need to find ways to motivate and excite my teams in light of pay freezes, headcount reductions and spending constraints,” says Harvey Nash’s Behenna.
“Encouraging them still further to see themselves as an intrinsic and revenue generating entity who will share in the future prosperity of the group.”
IT governance has taken on a new significance in the past couple of years. Once viewed as something of a management overhead, this has rapidly evolved into a core leadership task. In a time of restricted spending, CIOs need the ability to prove they are providing cost-effective services, delivering on the promises for return on investment (ROI), and following best practice.
“Business leadership from the CIO will need to develop over the coming year and beyond,” says Nick Kirkland, chief executive of IT leadership networking group CIO Connect.
“Without radical action, the required rate of change will exceed the ability to deliver, including a clear focus on what is important and the need to drop anything that is not crucial. Clear governance is a necessity in that world – crisp decision making, with delegated authority, and a focus on ROI, is critical. To reach such a point, CIOs will need to demonstrate leadership across the business – and within their own teams.”
Proving the value of IT is essential, says Behenna: “CIOs need to develop the infrastructure and methodology that allows them to measure the true value of IT.”
And benchmarking the quality of IT service delivery will become an increasingly important tool.
“IT budget benchmarks continue to be a hot topic for CIOs, especially in the wake of a recession that has caused companies to cut IT budgets to the bone – or beyond,” says Leaver.
“CIOs need IT budget benchmarks to defend their budget levels, to determine whether more cuts are in order, and/or to build the case for increased IT spending.”
IT and the business
It’s the oldest entry in the CIO’s book of clichés, but bridging the IT-business divide has never been more critical. Chief executives and finance directors are more tech-savvy than ever, and if they cannot see the value that their IT department and its leader are delivering, they know they have plenty of alternatives they can pursue.
The irony is that CIOs have rarely had a better opportunity to demonstrate the critical role of IT in business success, but never have boardrooms been more aware that they have other options for its delivery.
“The role of IT in 2010, if used to its maximum potential, is going to be essential in helping organisations, in the public and private sectors, both compete effectively in a very competitive market and deliver the important cost savings that everyone is looking for in the current economic situation,” says David Clarke, chief executive of the BCS, The Chartered Institute for IT.
“Can you do both? Yes, if you apply IT to its maximum. Will everyone be able to do that? No, not everyone is geared up to do this yet, but nothing will be more important in 2010.”
The future of IT delivery is, without a doubt, in our own hands. Mobile technology is developing so fast that more and more users will demand the ability to leave their desk – and their desktop – behind. Laptops, netbooks, smartphones – and very soon tablets or slates – are the emerging devices for application access and delivery. Apple’s iPhone App Store has revolutionised users’ expectations for finding and deploying software, and IT leaders need to examine how these concepts can help their own strategies – look, for example, to Whitehall, where government CIO John Suffolk is leading the development of a government app store.
Mobile is the new desktop, says Leaver.
“Business leaders will look to expand the use of mobile technologies as a business platform for services and specialist applications for sales and operations,” she says.
“Two technology trends for CIOs to keep in mind when planning their near and long-term technology strategy are: the impact of mobile-enabled applications and business processes; and the development of mobile networks and devices.”
What do you think? What are the key issues for you as an IT leader in 2010? Tell us what you think by posting a comment below.