The outlook for IT organizations and service providers is for accelerating change in most aspects of their roles and structures and for a major increase in complexity. In a preview into this year's Gartner Symposium/ITxpo, Gartner underlined how, in the coming years, business partnerships and integration of services will become critical centers of IT value, while multi-sourcing will be the standard delivery model. This will drive new styles of IT organizations, new roles for IT services businesses and new challenges for CIOs.
Many companies have experienced significant improvement in their markets throughout 2004, and Gartner said IT leadership teams must change from a cost-containment orientation to revenue enhancement and growth. The next three years will differ dramatically from the previous four for most IT management teams. According to Gartner, five key trends will drive change for IT organizations and service providers:
- The use of external service providers will continue to grow; strategic sourcing and supply/demand alignment will become critical processes.
- Enterprise partnerships will become a critical focus of IT value.
- The growing business focus of IT value and business transformation requires new leadership styles.
- The scope and importance of IT continue to grow in all industries and geographies, despite threats to its credibility.
- Business pressures for consolidation and federalisation increase IT technical and relationship complexity. Application integration and architecture are vital inside and outside the enterprise.
Effective fusion of business, technology and business relationships will be critical. Gartner predicts that businesses that understand how to generate real business advantage from fusing technology, business process design and business relationships will outperform those that do not by at least 15 percent per year.
Organisational and business models will need to change significantly to accommodate and profit from this shift. Gartner forecasts that at least one-third of 2004 CIO roles will transform or disappear by 2009. One of the most fundamental modifications Gartner foresees is the division of IT leadership and organisation roles. A new business transformation role is emerging that will cause the strategic IT leadership role to split into business technology and business network leaders.
All-in-all, turbulent and challenging times are predicted for IT organizations and IT service providers alike. However, CIOs are advised to build IT organization capabilities in 10 key disciplines of IT Management. The capability requirements for each discipline will vary from organisation to organisation, however, it will engender an environment where technology, business process design and business relationships can be successfully fused to deliver real business advantage. Gartner points to four key recommendations for IT leaders to follow:
- Build capabilities in business process design, delivery and transformation
- Blend capabilities in business and technology throughout the organisation
- Deliver business outcomes, not technology outputs, and use a service-oriented organisation
- Exploit and business connectedness internally and externally
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