With apologies to Ed Yourdon for my plagiarism of his original the book title, published back in 1993, “The Decline and Fall of the American Programmer“. (Though I don’t recall if Ed gave apologies to Gibbon for first using this line!)
For a blog entitled “IT Organization 2017” and for a management consultant who has had a very satisfying professional career consulting to IT organizations, the title of this post may seem both extreme and inappropriate. However, I use the title not just as a controversial ‘hook’ to attract readership, but as a sincere expression of what I think is happening today – and will continue to do so. The traditional role of the IT organization is on the decline and will never return to the importance and business value impact it had over the last 50 years. The good news is, there is a crucial new role emerging – and for IT leaders that can envision and lead the new possibilities, I believe there’s a bright new future – perhaps brighter than the traditional IT leadership role.
So, Who Screwed Up the IT Organization?
I’m not sure this is anyone’s ‘fault’ per se, or could have been avoided. Rather it is a natural by product of technological evolution. Back in the late 1800’s, many corporations employed Chief Electrical Officers. Nick Carr gets into this nicely in his aptly named book, “The Big Switch.”
A hundred years ago, companies stopped generating their own power with steam engines and dynamos and plugged into the newly built electric grid. The cheap power pumped out by electric utilities didn’t just change how businesses operate. It set off a chain reaction of economic and social transformations that brought the modern world into existence. Today, a similar revolution is under way. Hooked up to the Internet’s global computing grid, massive information-processing plants have begun pumping data and software code into our homes and businesses. This time, it’s computing that’s turning into a utility.”
The shift from electricity as a highly specialized resource to commodity took about a decade as standards such as voltage, alternating current, plug and socket configurations, and so on were settled. Once the standards existed, businesses could simply plug into a grid – electricity became a commodity, and the Chief Electrical Officers become extinct as the Dodo.
An Historical Perspective
The first commercial mainframe computers, the LEO were created in 1951 by J. Lyons and Company, a British catering and food manufacturing firm. The idea of a food and catering company today designing and building it’s own computer is unthinkable! I remember in the late 1960’s, businesses such as Massachusetts General Hospital were creating their own programming languages, data base software and teleprocessing monitors – activities that would be considered wholly irresponsible today. I wonder if 15 years from now we will look back at the turn of this century and be bemused by the fact that typical companies of any size at all maintained IT organizations – in some cases, thousands of IT professionals – writing programs, tending help desks, and so forth.
So, What’s Happening to the IT Organization?
For many years the annual surveys of top CIO issues list business-IT alignment. It’s a noble and challenging goal – and it’s no longer the right goal! A combination of technology advances, advances in standards and architectures (mostly prompted by the Internet revolution) and the increasing IT literacy across the business means that the challenge has moved beyond Business-IT Alignment to Business-IT Convergence.
From Business-IT Alignment to Convergence
Let’s drill further into this convergence phenomenon. Today, many IT activities, including project management, information analysis, application configuration are devolving into Business Units while others are consolidating with support functions such as HR, Finance, etc. Helping to drive this is the rapid consumerization of IT devices and services, with iPhone’s, iPads, Android devices and the like becoming an important window into business systems and information. Further driving this is the increasing ‘IT Savvy’ and confidence with IT that business executives, line managers and workers (especially, knowledge workers) increasingly feel. This is in part generational – people entering the workforce with high IT literacy, and in part a byproduct of people’s engagement through social media, e-commerce and so on.
From Owning to Sourcing IT Capabilities
The last decade or so has seen a shift from owning all needed IT capabilities (data centers, server farms, software teams, application development groups, desktop support, etc.) to sourcing these capabilities externally. Today, traditional functional outsourcing is being continuously expanded, and now often includes Business Process outsourcing as well as the outsourcing of compute power, data storage, IT infrastructure, applications and platforms through the rapid rise of Cloud Computing.
Information is Becoming both Strategic and Implicit
Information is becoming an increasingly strategic asset. There is compelling research data showing how companies are successfully embracing and competing on business analytics. At the same time, data is also becoming implicit to business management and operations – increasingly representing what the business manages and how it manages. In many respects, the context for IT today is becoming less about IT and more about information – the ability to capture, integrate, interpret, predict, and act is increasingly the holy grail of competitive advantage – and that belongs in the business – not in a separate specialist group.
So, Where Do IT Capabilities Belong?
Now, I’m on dangerous ground, because the answer depends – on the nature of the business, IT savvyness of business managers and knowledge workers, and their vision for how they want to deploy and manage information and IT. But, I’d argue that many IT capabilities belong in business operations. For example:
- Business Process Management
- Business Analytics
- Project Management
- Satisfying Business Unit application needs
Other IT capabilities belong in the governance of the business. This might include, for example:
- Enterprise Architecture
- IT Strategy
- Portfolio and Program Management
And finally, some IT capabilities should be centrally coordinated and shared. Examples here include:
- Common and shared IT Infrastructure
- Enterprise Applications
So, What Are the Implications for IT Leadership and the IT Professional?
I will save that for a follow-up post, but suffice it to say that most companies and their IT organizations are not quite ready for the shift I’m espousing (and, indeed, predicting). And, I think it is the clear responsibility of IT leadership to help lead this revolution – ensuring that it is orderly and safe – ensuring that the business and IT professionals are fully prepared and able to take advantage of business-IT convergence.
Please join me in the next post on this topic – and in the meantime, please weigh in with your perspectives and observations.
Painting by Joseph-Noël Sylvestre: The Sack of Rome by the Barbarians in 410