10 Questions to Prep IT for the Future

Imagine you could pick one business function to rebuild completely from scratch. Which would it be? We posed this provocative question to 152 IT executives and 164 other executives in four countries. The top pick by far, especially among IT executives, was the IT organization. Half of the respondents to our survey also said they are or soon will be revamping enterprise IT.

Executives are eager to overhaul their IT departments. But what will tomorrows IT organizations look like after they are overhauled? What will be its roles, responsibilities and priorities? Most executives are still scratching their heads. Sixty-eight percent dont have a clear vision of what the IT function will look like by 2016. Even more lack a clear vision of the future CIO role.

Who could blame them? There are plenty of questions about how cloud computing, mobile and consumer technologies will affect IT organizations.

The uncertainties extend beyond technology. IT organizations are affected by the same mercurial social, political and economic forces that shape the business world. Planning for a flat, connected and tech-enabled future, without considering what businesses will require from IT as a result of shifting social, economic and political forces, is at best nave and at worst dangerously myopic.

Global integration and economic cooperation isnt a given. We hope it continues. But we may not be so lucky if todays economic crises and geopolitical tensions intensify and lead to a more fragmented world. That could force companies to cut back on foreign IT labour and vendors, and cause executives to restructure business and IT operations.

Take consumer technology. It could continue to transform everyday life and IT expectations. Or, data security and privacy worries could make people and companies wary of the Internet. Its difficult to imagine a world without the Internet, but some executives are trying. Twenty-seven percent of the executives we surveyed expect companies will start seeking alternatives to the Internet by 2016.

Another uncertainty: How competition from multinationals based in the developing world will challenge established companies and the way they manage IT. Forty-two percent of the IT executives we polled think global multinationals are likely to radically lower their IT costs. That will catch the eye of your CFO.

No wonder its so hard to envision the future of the IT organization and the CIO. There are many possible futures. Each could affect IT priorities and operations.

How can your IT leadership team start planning their future IT organization? Work with other executives to envision the possible future business environments. Then think about the pressures each will place on your IT organization, and the different decisions they will compel the IT leadership to make.

The following ten questions will help executives start making connections between future visions and basic IT decisions about organizational structure, IT investments, skills, and technologies such as cloud computing. Some questions focus on the fundamentals of how IT creates value. Others are more timely questions for running tomorrows IT organization. Together, they can help you envision your revamped IT organization, anticipate possible changes, and design a more agile IT function.

Question 1: Why will IT matter to my company?
Companies can do more with IT than ever before, but are becoming less reliant on their IT organization to provide and decide on IT. Clarifying the purpose of the IT organization will focus the redesign effort. If the future is globally connected and extremely competitive, IT organizations will help industry leaders stay on top through innovation and analytics. Back office IT will become a globally managed commodity. But if the world becomes fractured, disconnected and more insecure, IT can still earn its keep: by helping companies restructure, reduce their business costs and keep operating through the transition.

Question 2: What would our IT organization look like if we could rebuild it from scratch?
Would any company design their IT organization and systems to look just as it does now? Probably not. So what would IT look like if the CEO and CIO could do it over, without any constraints? Think of the best fitting organizational structure for the futures you are exploring. Depending on the legal, political and technical environment, it may be a streamlined global IT organization supervising a cloud-and-outsourcing services model, or a decentralized IT department with powerful local IT units. The security function might need a more controlling hand if crippling cyber-attacks are a threat.

Question 3: How will our IT executives and other executives share and approve IT decisions?
The IT chain of command is getting crowded. Social media and analytics are pulling CMOs into more IT decisions. Companies are hiring chief innovation and chief digital officers. Employees are comfortable making IT decisions for themselves. Executives need to focus on governance, not fight for power. This question helps envision which IT decisions need to be made on global or country level, and which technology decisions are best made by employees and line managers instead of the IT function. It also helps answer questions about the CIOs role, and who whether IT needs to be overseen by a particular executive, such as the chief strategy officer or a chief risk officer.

Question 4: How do you get all available data anywhere its needed?
In the era of smartphones and analytics, people expect all kinds of data to be available everywhere, on any device. It doesnt matter whether its structured transactions or unstructured video, massive databases or a few key insights. ITs job is to figure out how to bridge old and new architectures so useable, secure data can get to where it needs to go, securely and reliably. Those expectations will be scaled back in any future where legal restrictions, security problems, and service disruptions get in the way. Even so, IT will need to find a way, in any future, to come as close to the ideal of ubiquitous data and insight.

Question 5: Are we winning or losing the fight for information security?
ITs future will be greatly affected by the severity of the cyber security problem. Will companies and governments keep cybercrime a manageable problem through technological advances and international cooperation? Then security fades to the background. But what if cybercrime, or even cyber warfare, grows out of control? Then its no longer business as usual for companies, their customers and IT functions. If things get bad enough, companies will cut back or redesign many Internet-dependent activities and processes. IT departments will focus on creating alternatives to todays Internet-based network infrastructure and minimizing the damage.

Question 6: What kinds of cloud services will dominate?
Some futures are friendly or hostile to cloud services. A flat, connected, unregulated world favours public cloud computing and services. Theres nothing to stop companies from using global cloud services anywhere there is high speed broadband. But companies may be forced to use private clouds or local services if tight data regulations, protectionist economic policies, or the establishment of national Internets interfere with using global cloud services. And while large cloud companies can afford to invest in state-of-the-art security and reliability, it wont matter if their customers cant safely transmit their data to a public cloud.

Question 7: How urgently must we accommodate consumer technologies?
Consumer IT is where lifestyle, business and innovation intersect, and that makes it an especially unpredictable phenomenon for IT departments. Its hard to know what social networks and smart phones will be able to do in five years, and even harder to anticipate what new applications employees will want to use. But IT planners can think about whether demand for consumer IT will require organizations to accommodate employees and experiment with new trends. Cost, broadband and mobile network access, access to consumer applications and data from other countries, the pace of innovation, censorship and confidence in IT security will all affect the supply and demand for consumer IT in the workplace and the market.

Question 8: Which IT skills will we need to succeed, and where will we need them?
Ask this question after answering the others. Start by breaking IT activities into leading, managing, designing, building, analyzing and operating. Then ask what needs to be done, and which skills will be needed where. For example, what needs to be managed: service providers? Infrastructure? Where are they managed: globally or locally? Take the design side of IT: what skills will architects and network engineers need to design a cloud-server hybrid or to migrate to a proprietary network? What kinds of backgrounds best prepare a leader for fostering innovation, leading a centralized or decentralized environment, or managing a security crisis?

Question 9: Where will IT talent come from?
Today, businesses assume they can tap into a pool of IT professionals in low-cost locations or easily move IT employees across borders. But what if globalization unravels, new regulations prevent you from tapping foreign talent pools, or long distance collaboration becomes difficult? Or cant find local workers when required for security or cultural reasons? If companies arent permitted to import IT talent or use services, they will need to invest more in training at home or relocating workers. More companies will turn universities, and work with them to produce job-ready graduates.

Question 10: How will our spending priorities change?
At the end, step back and confirm what each future means for your budget. In each future you are exploring, where will you need to invest to achieve business goals, meet operational needs or legal requirements? Will it be in infrastructure, applications, services and the workforce? And where can you reduce spending, either because lower cost options are available or because the need has declined? In some futures, reducing IT expenses, or giving employees and managers direct control of IT-related spending will also become an important priority in its own right.

Dont take for granted that the future will be flat, connected, and technology friendly. Dont assume tomorrows business and IT environment will be a continuation of todays. The world often changes in unpredictable and unlikely ways, and its not just technology that changes. Planning your future IT organization on a single future, without considering others, is a dangerous move.

~ Allan E. Alter is a Boston-based research fellow at the Accenture Institute for High Performance. Jeanne G. Harris is a senior executive research fellow based in Chicago and the co-author of Competing on Analytics and Analytics at Work.

Sneakers