Gartner ITxpo: IT advances to drive job cuts

IT-enabled efficiency gains will drive mass layoffs in companies that are successful and growing over the next few years,...

IT-enabled efficiency gains will drive mass layoffs in companies that are successful and growing over the next few years, according to analyst group Gartner.

Unveiling Gartner's 10 key predictions at this week's Gartner Symposium in Orlando, Florida, director of research Carl Claunch said that the relentless improvement in efficiency delivered by IT would result in e-enabled firms employing 10% fewer workers by 2007. He added that the drop in staffing would reach 30% by 2010.

Claunch said that up until now the increases in efficiency delivered by IT have been masked by businesses finding new things to do with their IT systems, which has created extra work.

In a break with previous experience, firms that were enjoying significant increases in turnover and profits would in future be making significant numbers of employees redundant, Claunch predicted. He said this would be highly disruptive, comparing the impact to the dramatic shift of employment out of agriculture in the 19th and early 20th century.

Claunch also predicted that businesses would in future focus on building inter-enterprise applications, involving collaboration with outside organisations, rather than internal applications. These applications will deliver clear, demonstrable business benefits, he said, helping to raise the reputation of IT in many businesses.

The regular IT fashion cycle between central control of IT and distributed control in the hands of business units will shift firmly back in favour of decentralised IT, Claunch predicted. He said the shift would occur by 2004, "just when many current investments to centralise are due to pay back". He urged IT leaders to try to work current IT projects in a way that will minimise the disruption caused by the shift to decentralisation when it comes.

IT investments will also enable firms to decentralise decision-making, Claunch predicted, by giving customer-facing employees access to information about the business that enables them to make informed decisions. For example, sales staff with access to up-to-date information on the real costs of doing business would be empowered to make on-the-spot decisions on price reductions.

Gartner predicts:

1. Bandwidth will become more cost-effective than computing, driving thin clients and applications distributed across many small servers

2. Most major new application systems will be inter-enterprise

3. Economists will gather clear evidence to show that inter-enterprise applications deliver value to businesses

4. Successful firms in a strong economy will lay off millions of people

5. Consolidation of vendors will continue in many market segments

6. Moore's Law will hold true at least until the end of the decade

7. Banks will become primary providers of "presence" services by 2007

8. Business Activity Monitoring will become mainstream by 2007

9. Business units, not IT, will make most applications decisions

10. The pendulum will swing back from centralised to decentralised IT by 2004

Read more on IT risk management