Surviving Digital Disruption

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Continuous and escalating demands have put terrific pressure on IT to answer ongoing business demand and also evolve in an era of digital disruption, said a panel of senior analysts at an Orlando conference held by Forrester Research last week. 

As a result, “20 to 40 percent of businesses at this conference won’t be here in five to 10 years,” said Forrester Research VP and Principal Analyst Bobby Cameron. “The ones that disappear are the ones not able to stabilize back office activities that don’t differentiate them competitively.”

As technology practices struggle to align with changing competitive business practices, they must also incorporate the arrival of big data, analytics, social, mobile and cloud technologies in their processes and architecture.

Whether through planning or as a result of the evolution, captive enterprise IT skills are migrating from blue collar to white collar. A centerpiece of the panel, which included Cameron and VPs Margo Visitacion, John McCarthy and Rob Koplowitz, was a single slide produced by Forrester depicting the migration of IT skills between 2010 and 2015. 

In that five-year span, the “blue collar” skills of infrastructure managers and programmers shrinks from nearly 60 percent to just 20 percent, while project and vendor management, business analysts and architects increase from just over 40 to more than 70 percent.

Cameron said the “blind side” threat to business is that demands to deliver value from legacy systems have effectively consumed the resources needed for new solutions. “[When] I have my best people working day and night joining together five SAP versions, I can’t get them to focus on new stuff.”

McCarthy said he’s talking to CIOs who are seeking to become more agile, but turning to aging and burdened managers “who have been working on the same legacy system for 30 years” or more. “Now they are thinking, ‘I need somebody who also minors in business process and another technology.’”

Mobile or analytic understanding still isn’t enough to effectively augment legacy IT skills, he added. “It’s the intersection of mobile and other things and the ability to manage a broader portfolio of suppliers. [The person] who is doing testing and developing is not the person who’s going to manage my trusted provider, so that whole a new skills set has to be brought in.”

The analysts cited Forrester studies finding that 26 percent of American businesspeople think they are the ones in charge of going out and selecting vendors; 50 percent of them are spending their own money on mobile devices; 40 percent are spending their own money on mobile apps; and 20 percent say they’re hiring technology providers who report to the business and don’t report to IT.

Asked if “shadow IT” is the new normal, Visitacion said it’s already the case and won’t be undone by a controlling IT attitude. “For most sectors you’re talking less about ‘build’ and more about ‘deploy.’ It’s not just going to a vendor and thinking about [a proposal]. It’s thinking about how to supervise all these activities, the skills, resource types and sourcing models that can work together.”

At the same time, Cameron insisted, IT needs to get 80 percent or more of its work into a single stack of technology with a single vendor and operating system. “You’ve got to nail that and get rid of the notion you’ll differentiate with a bunch of UNIX guys.” If it can restructure aggressively, focus on business value by demonstrating credibility and utility with systems and tools running well, IT can start to drive benefits and savings with automated software release and configuration.

It also lets IT turn to more white collar roles managing projects and vendors, Cameron said. “When we looked for the changes occurring as a result of pure systems as a service, we found that companies are intentionally up-skilling because they know it slows them down to have to do the low-level stuff.” 

When it comes to back office activities that don’t create differentiation, “get that stuff boxed away,” Cameron said. “In 1997, Wells Fargo wrapped their checking account system in a CORBA-compliant wrapper that allowed them to offer Internet home banking in six months. As far as I know, it still runs with all its ugly code behind it, but works like a charm. To start over they estimated it would cost $40 to $60 million to replace with no promise it would work. Why mess with it? It still has name and address with all this other stuff wrapped around it, but it is ‘book,’ and it works very well.”

An IT purist would be bothered by such an approach, but the business is thinking otherwise. Not enough differentiating skills exist today in IT, which needs to get out into the business and secure its place.

“It’s all about skills,” said Visitacion. “In app development you have computer science; you need social science also. Your testers have to be scenario folks, your business analysts have to have solutioning skills. Look at the work in the queue today, your portfolio and your skills.”

“I don’t think IT is being asked to drive a vision, I think IT is being asked to support a vision,” said McCarthy. “You can’t run your SAP implementation better than the next guy and differentiate. You can only screw it up.”

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