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2008 Will be Ugly for IT. Unless...

 
 
 
 
 
 
 
 

IT spending will get squeezed in 2008, but, perhaps more importantly, CIOs and their business-line colleagues must fix the "broken dialogue" that's plagued their interactions for decades. That's what Rudy Puryear, head of Bain & Company's global IT practice, foresees for 2008.

If the IT-business disconnect continues, then unnecessary complexity, IT governance and even M&A integration could be compromised.

Here are Puryear's (somewhat intertwined) predictions for the coming year:

1. Economic uncertainty will force businesses to make more conservative budgeting decisions

Puryear himself doesn't believe the economy will tank, but he says business executives will scale back in the wake of negative outlooks. He worries, though, that IT will mistakenly cut muscle (spending for innovation and improvements) instead of fat (like redundant systems).

2. Continued miscommunication between IT and business will limit progress

Puryear compiled some daunting figures behind misalignment earlier this year, and he says there's no end in sight. Business needs to have a better understanding of IT, and IT needs to sharpen its business acumen--until then, the two sides will keep talking past each other.

3. Unnecessary IT complexity will drive up costs and response times and limit IT innovationAdding new technologies, failing to finish projects like post-merger integration and a continued breakdown in communication will only make businesses--and their processes--more complex.

4. IT governance will rise to unprecedented levels Especially in times of economic uncertainty, business leaders need to make more informed decisions about where IT spend goes. Making the right decisions, Puryear says, is more crucial than ever.

5. Pre-deal IT due diligence will become front and center

Hidden assets and liabilities often muddy a merger's true value. Companies need to better evaluations and planning before integration.

But Puryear isn't blaming either IT or business for past mistakes: he says these are all business problems around IT, and that each side is equally at fault.

Still, don't expect these problems to go away overnight--alignment has been a combative issue for years, and tackling complexity comes with its own challenges.

That doesn't mean CIOs--and business executives--can't find answers now. Unless, of course, they want to see the same bleak outlook for 2009.

 
 
 
 

4 Comments for "2008 Will be Ugly for IT. Unless..."

  • joeanonymous August 04, 2008 11:11 am

    It is nearly 2009 and it can't get much uglier. I have had exactly three jobs and they were mostly part time, since my former company outsourced and sent our jobs to India... It is NOT going to well in 2009 or 2010. I think greed, inexperience and corruption are going to wreck what's left of our economy.

  • Hane Carlson February 13, 2008 12:53 pm

    When a firm retains IT functionality either internally or from a provider, the most common error is that the firm believes itself an expert in IT including the portion(s) of the business that it will serve. The creation of the "geek," the "nerd," the "techie," and the information officer all point to a major misunderstanding of the relationship between IT and the rest of a firm. From Automobile Dealer to Zax Manager (Slate Roofing Company), the culture has rewarded the technical fire fighting technique in contrast with the discipline of an integrated business management process. A simple example of this is the manner in which an insurance firm will protect its actuarial formulae while letting sales folks have proprietary (to both customer and the business) on a laptop which may be stolen or compromised. IT does not need to improve its business acumen and understanding as it does need to stand up and be accountable for a portion of the business process now defaulting to management views of what IT is, could be, or ought to be.

  • Robert Pogson December 31, 2007 5:05 pm

    I work in education where complexity and cost have been serious problems for many years. If you want to escape complexity and cost, migrate to GNU/Linux (on thin clients, where possible). Complexity, power consumption, hardware costs and maintenance costs go way down. I can roll out twice the hardware for the same cost this way and there is very little maintenance needed afterwards. If current practices paint you into a corner, change what you are doing.

  • David Soley December 28, 2007 2:00 pm

    A number of leading business publications conducting recent surveys with CEOs reported that increased revenue growth, improved market differentiation, and enhanced customer satisfaction / experience were the main concerns /initiatives for the core business in 2008. I am a little confused as to why emphasis on these subject matters was not mentioned in your surveys. The effective utilization of data, technology, and process has significant impact on market performance and revenue development. We are entering a challenging economic period; given that I would think there would be some interest in properly leveraging these resources to accelerate market growth and generate new revenue streams for the core business. A number of the initiatives being considered can be outsourced. By putting more emphasis on outsourcing IT leadership is better positioned to address the revenue side of the business...which creates the opportunity to have larger IT budgets and access to more internal capital. David Soley

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