TECHnalysis Research Blog

October 18, 2016
Can IT Survive?

By Bob O'Donnell

If you’ve ever worked at a business with at least 20 employees, you’ve undoubtedly run into “them”—the oft-dreaded, generally misunderstood, secretly sneered at (though sometimes revered) IT department. The goal of Information Technology (IT) professionals, of course, is to provide companies and their employees with the technical tools they need to not only get their jobs done, but to do so in an increasingly fast, flexible manner.

Frankly, it’s a tough, and often times thankless job. If your computer stops working, the network goes down, or some aspect of the company web site stops functioning, IT gets the brunt of the frustration that inevitably occurs. Beyond these day-to-day issues, however, IT is also tasked with driving changes to the infrastructure that underlie today’s modern businesses.

For that reason, IT has long been considered a strategic asset to most organizations. In fact, this central role has also turned the CIO—who typically runs IT—into a critical member of many business organizational structures.

But the situation for IT (and CIOs) appears to be changing—ironically because of some of the very same factors that led to its rise: most notably, the need for increased agility and flexibility.

The problem is, after several years (or more) of IT driven technological initiatives designed to improve reliability, increase efficiency, and reduce costs for key business processes, a large percentage of these companies have come to realize that the best solution is to have someone else outside the company take over. From more traditional business process outsourcing, through the evolution of nearly everything “as a service,” to the growth of public cloud computing resources, we’re witnessing the trickle of projects leaving the four walls of an organization grow into a fast-moving stream. As a result, IT departments are often doing less of the technical work and more of the management. In the process, though, they’re moving from a strategic asset to a growing cost center.

The implications of this change are profound, not only for IT departments, but to the entire industry of companies who’ve built up businesses designed to cater to IT. All of a sudden, equipment suppliers have to think about very different types of customers, and IT departments have to start thinking about very different types of partners. Arguably, it’s also driving the kinds of consolidations and new partnerships between these suppliers that seem to be on the rise.

The causes for these kinds of changes are many. Fundamentally, the revolution in the technology side of the business computing world has been even more extensive over the last few years than many first realized. To put it another way, though we’ve been hearing about the impact of the cloud seemingly forever, it’s only now that we’re really starting to feel it in the business computing world.

Another cause is an interesting bifurcation in the challenges and complexities of the products and services that have traditionally sat under the watchful eye of the IT department. On the one hand, many previously complex technologies and systems that required specialized IT expertise have become easy enough for non-IT line of business leaders to purchase and successfully deploy. Converged and hyperconverged appliances, for example, have brought datacenter-grade compute, networking and storage capabilities into a single box that even moderately technically people can easily manage through a simple interface.

In addition, managed service providers, hosted data exchanges, public cloud providers and a host of other companies that didn’t even exist just a few years back are offering utility-like computing services that, again, are offering increasingly easy solutions for business departments and other non-technical divisions of a company to quickly and economically put into production. More importantly, they’re doing it at a significantly faster pace than what many overburdened and highly process-driven IT organizations can possibly achieve.

Some IT professionals are dubious (and highly concerned) about these type of rogue shadow IT initiatives, but they don’t appear to be slowing down. In fact, in the case of a hot new area like Enterprise IoT, research has shown that it’s often a branch of a company’s Operations department (sometimes even called OT, or Operations Technology) that’s driving the deployment of devices like smart gateways and other critical new IoT technologies—not the IT department.

At the other technological extreme, many companies are also finding that making the move to more cost-effective and more agile cloud-based solutions is actually proving to be much more technically complex and challenging than first thought. In fact, there’s recently been talk of a slowdown within some companies’ efforts to move more of their compute, software and services offerings to the cloud because of the lack of internal skill sets within IT to handle these new kinds of tasks. In addition, much of the most advanced computing work, in areas such as machine learning, AI and related areas, often requires access to specialized hardware and software that many companies don’t currently have.

The result is that many IT departments are finding themselves in an awkward position in the middle where the now-easier tasks no longer require their help, and the tougher tasks take a larger supply of employees with skill sets or resources they don’t currently have. Ironically, the very technology that started to create new opportunities for IT professionals (and which many feared would take away more traditional jobs) is poised to now start taking back jobs from IT as well. Needless to say, it’s a tough spot to be in.

Despite these concerns, however, there is still clearly an important role for IT in businesses today—it’s just becoming much different than what it used to be. For CIOs and IT to succeed, it’s going to take a different way of thinking. For example, instead of evaluating products, it’s increasingly going to require evaluating and managing partners and services. Instead of sticking with slow, burdensome, “we’ll build it here” types of internal processes, it’s going to require a willingness to explore more external options.

The importance of technology in business will only continue to increase over time. As technological solutions become more ubiquitous, however, the concept of distributed responsibility for these solutions will likely become the new reality.

Here's a link to the column: https://techpinions.com/can-it-survive/47530

Bob O’Donnell is the president and chief analyst of TECHnalysis Research, LLC a market research firm that provides strategic consulting and market research services to the technology industry and professional financial community. You can follow him on Twitter @bobodtech.