By Andy McCue, 18 May 2005 11:20
NEWS Two-thirds of CIOs believe the corporate IT department will not exist in its current form by 2010.
Earlier this year analyst Gartner warned that outsourcing, offshoring and increasing control of IT being handed to business units will lead to the death of the IT department as we know it today, so we asked silicon.com's CIO Jury user panel if they agreed.
We asked if there will still be an internal corporate IT department in its current form by 2010 and two-thirds of the 12 CIOs said 'no' with the other third saying 'yes'.
Steve Anderson, European IT partner at property consultancy Davis Langdon, said IT will be increasingly handed to large-scale service providers as it becomes commercially and strategically attractive.
"I think that the role of the IT team will be more focused on exploiting technologies for business benefit rather than mainly running them," he said.
JP Rangaswami, global CIO at investment bank Dresdner Kleinwort Wasserstein, agreed. "There will be greater use of partnering and 'open-sourcing', more fusion of shared services, more effective use of collaboration tools and technologies, and a much smaller more focused unit concentrated on differentiation," he said.
Others claim the increasing business benefit focus on IT will lead to a blurring of the boundaries and a hybrid model - but not the death of the IT department.
Ian Cohen, IT director at the Financial Times, said "Comments regarding the impending death of the IT Dept are premature and exaggerated. IT departments must and will evolve into hybrid functions with a mix of commercial and technical expertise. As infrastructures become more stable and scalable, the raison d'etre of the IT Dept will be to become centres of innovation and integration supporting the rapid assembly of new products and services."
Peter Pedersen, CTO at Blue Square, said that while IT departments will become increasingly integrated with the business as part of departments such as marketing and finance, overall IT strategy and back-end infrastructure will remain with tactical teams deployed in various departments.
Mark Lichtenhein, director of IT and new media for the PGA European Tour, said there will be changes and more outsourcing of IT departments but added that companies will need to maintain a minimum internal core competence because data - and its processing, dissemination and protection - is a primary business asset.
Other CIO Jury members pointed to increasing alignment of IT with business functions but said there will still be the fundamental need for an IT department of some description.
Luke Mellors, IT director at the Dorchester, said: "The role of internal technologies will change to drive more to the front line of the business through appropriate value driven systems design. Essentially technology will become more business focused which is where it needs to be to really be a success driver for any business."
Kevin Fitzpatrick, CTO at Manpower, said it is hard to point to any single organisational model for IT departments even today.
"All will change to some degree, some models may disappear, technologies will certainly develop - but information management, delivery processes, integration of suppliers will be needed. The IT department will die when software and hardware and services and suppliers work together first time and every time out of the box," he said.
Today's CIO Jury was...
Steve Anderson, European IT partner, Davis Langdon
Colin Cobain, IT director, Tesco
Ian Cohen, IT director, Financial Times
Kevin Fitzpatrick, CTO, Manpower
John Keeling, director of computer services, John Lewis Partnership
Mark Lichtenhein, director of IT and new media, PGA European Tour
Luke Mellors, IT director, The Dorchester
Crispin O'Connell, head of ICT, Cardiff City Council
Peter Pedersen, CTO, Blue Square
JP Rangaswami, global CIO, Dresdner Kleinwort Wasserstein
Steve Ritchie, CIO, Investcorp
Davesh Shukla, head of IS and telecoms, London City Airport
If you are a CIO, IT director or equivalent at a large or small company in the private or public sector and want to be part of silicon.com's CIO Jury pool, or you know an IT chief who should be, then drop us a line at editorial@silicon.com
Comments
There are 5 comments. Join the discussion
1. Stephan Jones
10 years ago people were predicting that the IT dept would be made redundant by Managed Services - the wholesale outsourcing of IT services to specialised external companies. Offshoring is a variation on the same idea.
Outsourcing isn't always practical, desirable, or even financially worthwhile in all cases. The "laws" of Supply & Demand still apply, even when they're too far away to see. The demand for skilled IT workers in India and similar countries will cause demand for higher salaries, which will in turn nudge prices up and reduce overall cost benefits for the UK/US. In time, the influx of money from other countries may even cause India et al to become stronger economic forces, and further lessen the exploitable divide. Eventually IT services will become, if not in-house, at least increasingly localised again, and India will become the competition.
2. Geoffrey Darnton
Did you ask the wrong question? My professional field is IS - and still the most common mistake is people think IS is primarily about IT which is primarily about computers!
The BIG IT spenders (say, some government departments, financial institutions) may spend 8-10% on IT (and things around it) BUT they may be spending 80% on information work. The key weakness in the way the IS/IT debate is framed is that it may miss 90% of corporate expenditure on information work!
Hence, don't just ask about the need for an IT Department in the next few years - ask about the need to get a grip on costs associated with information work - CKO etc, not CIO - I bet most of the people you asked don;t have a proper handle on this......? there's a challenge for your readership! Most CIOs are concerned primarily with IT - that is a very, very big mistake!
The need for an IT department may go away - the need to manage information work costs will be at the forefront of board-level concerns.
3. anonymous
Doesn't the mainframe heve to die first? I believe that's running about 20 years behind so far.
4. Jony Rosenne
smaller and more professional
Some parts of IT - providing employees with computers and installing software - will be like plumbing and other infrastructure. Some parts will be done by the workers themselves, but the core functions in most companies require special skills and knowledge both in IT and in the business. In the future we could have a smaller IT department, more professional and less important.
5. Chris Baker
If we buy the idea that smart outsourcing, partnering and the like make a sensible business case and actually create shareholder value, then it follows that many of the roles and functions of the IT department will continue to change. The size of the in-house IT department will inevitably shrink as more responsibility is shared or passed to another party. The IT organisation - at least, in enlightened businesses - has already developed significantly in the last 10 years, taking it from a technical support function to something more strategic, commercial and largely about project and service delivery management. But it's been hard work and many have experienced the pitfalls. The constraint to further development is the old one: the ability to make and sustain organisational change. Do I think that somehow in the next 5 years corporations will find the way to drive change at the rate required to eliminate the IT function in that timeframe? No!