Architecture: The future of Corporate IT

External Source: https://cio.executiveboard.com/Members/executivesummary/The_Future_of_Corporate_IT.aspx

How to Prepare for Five Radical Shifts in IT Value, Ownership, and Role

The five-year outlook for corporate IT points to fundamental changes in IT value, ownership, and role. The ability to capture and exploit data will become critical as process automation is commoditized. As activities devolve to business units, consolidate in business services, or move outside, less than 25% of current IT headcount will remain.

Little Progress in Five Years
In 2005, only 24% of business leaders rated their IT function effective at delivering business capabilities. Today the number is the same. IT functions have striven tirelessly to understand demand, set priorities, and capture value, yet the results still disappoint. Business and IT leaders alike feel they should get more—more efficiency, more innovation, more value—from IT.

Strategic Impact of Information Technology Versus the IT Function

clip_image002

Among all the talk of engagement and alignment, one assumption goes unchallenged— as information technology grows in strategic importance, so will the IT function. But what if this is not true? What if a dedicated, standalone IT function is no longer the best option, and its responsibilities were better located elsewhere? To answer these questions we launched an exhaustive enquiry into the five-year outlook for corporate IT. Our work reveals five emerging shifts in IT value, ownership, and role.

Five Radical Shifts in IT Value Ownership, and Role

Current State

 

The Future of Corporate IT

1. Business Process First

clip_image003

Information Over Process–Competitive advantage from information technology will shift toward customer experience, data analytics, and knowledge worker enablement; consequently, information management skills will rise in importance relative to business process design.

2. IT as a Service Provider

clip_image003[1]

IT Embedded in Business Services–Centrally provided applications and infrastructure will be embedded in business services and delivered by a business shared services organization.

3. Right-Sourced IT

clip_image003[2]

Externalized Service Delivery–Delivery will be predominantly externalized as vendors expand service provision and internal resources become brokers not providers.

4. Pressure for Central

clip_image003[3]

Greater Business Partner Responsibility–Business unit leaders and end users will play a greater role in obtaining and managing technology for themselves where differentiation has more value than standardization.

5. Fully Functional IT

clip_image003[4]

Diminished Standalone IT Role–IT roles will embed in business services, evolve into business roles, or be externalized. Remaining IT roles will be housed in a business shared service group. The CIO position will expand to lead this group or shrink to manage IT procurement and integration.

     

The shifts mean that less than 25% of IT current headcount will remain. The rest will move to business units, a business services group, or external partners.

Estimated IT Headcount at Progressive Organizations by 2015
As a Percentage of Total Central IT Headcount in 2010

clip_image005

Organizations that fail to make the shifts will lag behind as they struggle to exploit technology and manage inefficient IT functions and underperforming corporate centers. IT leaders too face a diminished role unless they embrace opportunities in business shared services organizations or newly empowered business units.