Six out of 10 IT departments will cut staffing levels in half by 2008, according to analyst firm Gartner.
As part of a series of predictions made in the run-up to next month's Gartner Symposium in Cannes, the company said IT departments would shrink as they become more focused on driving business demand internally and brokering services from external providers.
Although staff numbers will decline, there will be a greater need for leadership skills from heads of IT in business, said Gartner.
"The massive shift in role and responsibility that we foresee will fundamentally change the IT organisation as we know it today," said John Mahoney, managing vice-president, IT services and management at Gartner.
"We predict that by 2008, 50% of IT organisations will refocus on brokering services and shaping business demand, rather than on delivering IT services directly.
"Furthermore, within the next five years, design and management of business processes and relationships will supersede management of technology as the leading value contribution for more than 50% of former IT organisations in £500m-plus enterprises and for more than 30% of existing IT services businesses," he said.
The IT leadership role has been in transition ever since it was created and that evolution is accelerating, said Mahoney.
"One of the primary changes is the need for CIOs to play an increasing role external to the organisation. By 2008, CIOs will need to spend more than 50% of their time on relationships outside the enterprise to ensure they deliver the expected business outcomes."
Trends driving change for IT organisations
- The use of external service providers will continue to grow; strategic sourcing and alignment of supply and demand will become critical processes
- Enterprise partnerships will become a critical focus of IT value
- The growing business focus of IT value and business transformation requires new leadership styles
- The scope and importance of IT continue to grow in all industries and geographies, despite threats to its credibility
- Business pressures for consolidation and federalisation increase IT technical and relationship complexity. Application integration and architecture are vital inside and outside the enterprise.