As organisations begin to prepare for a return to business growth, many are finding themselves at a major crossroads at which they must decide whether to remain on their longstanding current path of performing IT activities or to go in a different direction, according to Gartner, Inc. Organisations that opt for the latter will have an opportunity to challenge all activities as they currently exist, choosing where to stay the course and where a different course of action makes sense.
“We are now within one of the rarest and most fleeting periods in business: nearing the bottom of a recession and before a return to growth,” said Ken McGee, vice president and Gartner fellow. “We urge organisations to exploit this unusual opportunity to question the efficacy of their IT business practices and determine whether those practices warrant change. But they need to act now, by the time business growth returns, they will be far too busy, and it will simply be too late to change.”
Mr McGee presents his outlook for business and IT leaders to prepare for a return to business growth during Gartner Symposium/ITxpo 2009, being held here through 5 November. He reveals 11 IT-based activities that are prime candidates for organisations to review for potential overhaul and advises organisations to consider the extreme approach to each activity, then consider the less extreme options, before finally deciding how to proceed. These recommendations are based on the results of various research findings from hundreds of client interactions.
Decision 1 – How to Modernise IT Infrastructure vis-à-vis Cloud Computing?
Extreme recommendation: Fund infrastructure modernisation only after you decide upon a cloud computing strategy.
Gartner said that by explaining today’s request for infrastructure and operations (I&O) modernisation funding within the context of cloud computing in the future, executives are less likely to feel that they are paying twice for modernisation when cloud computing is officially adopted.
Decision 2 – How to Significantly Improve Budgeting?
Extreme recommendation: Replace existing budget methodologies with zero-based budgeting principles where every project request cites: (1) project name; (2) business unit executive; (3) one-time project implementation cost (operating and capital expenditures); (4) recurring annual cost and (5) business executive’s signature.
Decision 3 – How to Become the CEO of IT?
Extreme recommendation: Hire an IT CFO, formally teach contract negotiation techniques and establish signing and agency authority list for vendors.
For decades, organisations have empowered IT associates to negotiate multimillion-dollar hardware, software and service contracts, even though those associates have never been formally trained in doing so. Gartner has long recommended the hiring of an IT CFO, as well as better training for IT associates involved in contract negotiation and tighter controls to limit unauthorised purchases.
Decision 4 – What IT Information Should You Disclose to Executives?
Extreme recommendation: Implement the procurement department and accounting department challenges immediately.
Those presenting contracts to executives for signing need to ensure that they are being transparent and clear. For example, they should have no qualms about including the following disclaimer on contracts presented for executive sign-off: “Before you sign, please note: The prices, terms and conditions in this contract are not the result of a competitive bidding process.” The executive being asked to sign the contract will then be in a position to decide whether to put his or her name on it, equipped with the knowledge that it has not undergone the rigour of a competitive bidding process, or a comparison of prices prevailing in the marketplace.
Decision 5 – When Should IT Practitioners Leave the IT Organisation?
Extreme recommendation: Announce when key IT staffers with CIO aspirations will leave IT.
Gartner research has found that new CIOs for global 2000 companies must have served as managers or executives of departments or divisions other than IT. IT managers must decide when to encourage aspiring CIOs to leave IT to foster the pursuit of career goals in the wider organisation.
Decision 6 – Should You Support Cost Savings or Business Growth?
Extreme recommendation: Resolve how to simultaneously support cost-cutting efforts and business expansion.
As globalisation levels continue to grow, solving how to simultaneously support positive and negative growth will become one of the most complex never ending IT organisational challenges of the next decade.
Decision 7 – Current CIOs – Which IT Organisation Structures Work Best?
Extreme recommendation: End Tier one, two and three (T-1-2-3) support modules.
Unless abandoned, T-1-2-3 structures will continue to undermine the success of delivering new projects by interrupting developers to solve outages occurring in deployed systems. Instead the automotive industry model should be considered whereby once a product is built by the ‘factory’, a separate group of people becomes responsible for maintenance.
Decision 8 – Should New CIOs Abandon Legacy IT Organisational Structures?
Extreme recommendation: Divest IT operations from IT.
CEOs want to employ new CIOs with extensive business and management backgrounds to help IT keep pace with the business. Before IT project workloads increase as business growth returns, new CIOs should decide whether traditional IT organisational structures can best exploit their business acumen.
Decision 9 – What Type of IT Innovation Will You Lead?
Extreme recommendation: Finalise what type of innovators your IT groups will be.
Leaders need to decide whether they want their IT people to be empowered to be able to unilaterally identify and recommend a business issue, and deliver an innovative IT solution to solve it.
Decision 10 – Where Should You Prioritise Your IT Group’s New Innovation Goals?
Extreme recommendation: Inform executives where you will direct your IT group’s innovation efforts.
CIOs wishing to target a vastly new and favourable impact on business during this period of preparing to return to growth should direct most new funding to the business cycle phases where IT has been and continues to be most silent.
Decision 11 – Can You Solve One Enterprise Information/IT ‘Grand Challenge’ by 2013?
Extreme recommendation: Resolve just one enterprise information/IT ‘grand challenge’.
Gartner recommends that organisations direct R&D funding toward specifically improving or solving just one of the enterprise’s ‘grand challenges’ in order to make maximum impact.