In the course of a discussion with a client the other day, he asked me what I thought IT would look like fifteen years from now. Because my time frame is usually closer to five years than fifteen, I had no ready answer, an unusual posture for me. On reflection, I think it is possible to make some useful statements about how things may evolve. (Note that I carefully avoid calling them predictions.)
Over the history of IT in business we have seen three kinds of changes, in addition to some things that seem never to change.
- Cyclical changes, where some characteristic oscillates between two extremes, but never seems to go off in an entirely new direction. These cycles will continue unless some major disruption occurs.
- Secular changes, trends superimposed on the cyclical changes. These trends tend to continue until some external factor intrudes.
- Disruptive changes, things that are not the product of orderly evolution and are therefore almost completely unexpected.
To give my client’s question some bounds, I am assuming that he meant, “What will the IT departments of large organizations look like in 2022?” Here is what I think, and why.
1. 25% to 35% of IT departments will report to finance. The others will report to a COO or within a business unit.
The first significant use of IT in business was financial record keeping. Hence, in the beginning almost all IT departments reported in the finance function. This has been changing very gradually. In 2006, about 50% of IT departments still reported in finance. I think that as IT becomes more deeply enmeshed in business processes, particularly in cross-silo processes, some organizations will have IT report to a COO or to business unit managers.
2. The IT department will be either (1) centralized and about to decentralize, or (2) decentralized and about to centralize.
This is one of the cyclical processes. It is driven by organizational change (which is itself often an oscillation between centralized and decentralized), by changes in the economics of IT as technology changes, and/or by changes in business norms such as the 'work at home' movement, and the demand for inter- and intra-organizational collaboration to achieve business goals.
3. The CIO will be a new kind of person: someone with both deep business skills and deep IT skills.
We have gone through the alternation of business executive replacing technologist, technologist replacing business executive, then repeating the cycle. I think that by 2022 we will have become sophisticated enough to build career paths that will produce the business/technologists that we so sorely need.
4. The IT department will be about the same size as now in relation to the organization it serves, in terms of budgets and number of people, but the focus and skill sets will be radically different, changing from technology focus to business and managerial focus.
We have experienced a long term trend to drive IT capabilities from individual applications to infrastructure. Data management used to be built into each application; now it resides in a DBMS available to all applications. The same is true of telecommunications. IT technologists will move from applications development and operations to infrastructure development and operations. There will be more project managers, particularly those skilled in managing outsourcing.
In addition, some technology jobs have moved to producers of packaged software, others to outsourcing companies. More recently, the advent of software-as-a-service has continued this trend.
However, two classes of technical skills will continue to be housed in company IT departments. One is systems integration; the other is some form of new technology monitoring and development.
Innovation in IT software and hardware will continue well beyond the 15 years we are considering here. IT departments will need to keep track of these innovations and integrate them into existing systems without depending on outsiders.
You might think that all these changes would decrease the headcount in IT departments, but this probably won’t happen. There is, first of all, bureaucratic inertia. But beyond that, IT success will increasingly depend on the business skills of the IT analysts. The easy-to-understand applications that save clerical work have been largely completed in most companies. New gains will be achieved by automating the harder-to-understand parts of the business. And current IT professionals are – as a whole – not very good at this.
Evidence? The rise of a new pseudo-discipline called Business Intelligence, accompanied by a new job title, Business Intelligence Analyst. Business Intelligence is merely a new name for the long-standing goal of using IT to support the goals of the enterprise. The fact that this new name has gained traction in the market place is proof that IT people have not been doing this job as well as they should, and that software companies and consultancies are doing their jobs very well.
Bottom line: additional business analysts will more than fill the slots vacated by displaced and outsourced technologists. By 2022 we may be realistic enough to call them by their proper name.
5. The level of trust and acceptance of the IT department by the rest of the organization will be better than it is now for existing and stable information systems. There will be important novel and disruptive systems under development, which will be viewed even more skeptically than they are today.
This is a secular trend that will continue in most companies until IT makes some particularly egregious mistake, which will not happen very often; we really are getting better at using the technology. More and more members of the user community work with information technology in their jobs, and for the most part they find IT systems useful and reliable. In addition, many of the victims of early IT fiascos are retiring and thus are no longer part of the environment in which IT must function.
6. The key issues on the agenda of the CIO will be about the same as they are now:
Aligning the IT organization with the business organization
Developing IT strategy to support business strategy.
Developing and maintaining good relations between IT and the user community.
Developing and implementing measures of the value of IT that are acceptable to both IT and the rest of the organization.
Developing and maintaining effective communications between the IT community and the user community, and between the IT community and senior management.
Developing an acceptable form of IT governance.
Various academics and consultancies have been surveying CIOs for decades about the issues they face. Typically, the surveyors ask the CIOs to “List the top ten issues you expect to be facing during the next year or two.” The items listed above have appeared on almost every such survey from 1980 into the 21st century. There is nothing on the horizon that seems likely to solve any of these problems: they will continue to vex everyone in the IT profession.
In summary, the IT department of 2022 will look from the outside about the same as it looks now, but inside it will be very different indeed.