Brace yourself for a renewed boardroom backlash against IT

IT directors should prepare for a major board-level backlash against IT, leading to another round of outsourcing.

IT directors should prepare for a major board-level backlash against IT, leading to another round of outsourcing.

That was the warning from the global chief information officer of Dresdner Kleinwort Wasserstein, JP Rangaswami, speaking last week at the Economist CIO Summit in London about a recent Harvard Business Review article entitled “IT doesn’t matter”.

“We haven’t yet seen the impact of this on CEOs but it will be severe because there are a lot of people wanting to believe that IT doesn’t matter, so there will be a backlash,” he warned. “It’s not what Carr says, but the headlines he has generated.

“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. People will say that IT doesn’t matter and we will see more large-scale outsourcing,” he said.

Rangaswami urged IT directors to prepare their counterarguments now. He said that Carr’s argument falls down because of the lack of standards in IT today. “IT is not like other consolidations, such as rail or electricity, because when the technology had matured they had also reached some level of consolidation, such as a common rail gauge, or electricity delivery system.”

“However, 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.

Bringing in standards is not easy but that the IT industry needs XML-type customer focused data standards, and also a secure technical infrastructure Rangaswami insisted. “The back room must be failsafe too – the tolerance of failure is much lower, so six-sigma reliability is needed.”

One problem for IT managers is that IT still cloaks itself in a level of mystique that separates it from business partners. “We must take away the smoke and mirrors and be more open about how technology works,” said  Rangaswami.

Only by making IT and, especially, its costs transparent can IT directors can take advantage of the slowdown to work more closely with the business.

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