Gartner predicts that by 2010, the number of IT staff in the profession will shrink by 15 percent
Barcelona, Spain, 24 May 2005 — Gartner today advised leaders of information systems (IS) departments to decide by the end of this year whether the long-term future of their departments lies in delivering information technology (IT) services to individual business units or in offering strategic value to the wider business. The choice is being forced upon IS leaders by the accelerating capabilities of external service providers and the increasing need for IT services.
Gartner warned IS leaders to act now to safeguard the value that business technology contributes and predicts that by 2010, the number of IT staff in the profession will shrink by 15 percent.
Gartner presented its views on the future of the IS organisation today at its Symposium/ITxpo at Palau de Congressos de Catalunya in Barcelona.
John Mahoney, worldwide chief of research for IT services and management at Gartner commented, "The IS organisation will need to either reinvent itself to create and manage assets of business processes and relationships, or it must choose to focus on the sourcing and execution of IT services. Our advice to IS leaders is that although they have some very difficult decisions to make over the fate of their department, they need to act now as the transition will take a number of years."
Mr Mahoney pointed to the competitive pressures from external service providers who will be able to offer standards of professionalism and price that internal IS organisations may find difficult to match as a further factor.
Gartner said that as IT becomes a more integral part of every business function, there will be increasing numbers of people outside the IS organisation whose work involves IT, and as IT skills become a more important component of business professionalism, in-house IS staff will be displaced.
Gartner predicts that by 2010, six out of ten people affiliated with the IS organisation will assume business-facing roles around information, process and relationships. As a result, Gartner predicts that the size of the IS organisation will decrease, and that by 2010 IT departments in midsize and large companies will be at least one-third smaller than they were in 2000.
David Flint, research vice president at Gartner, said, "As we see departments within businesses taking on the traditional functions of IT, so IS professionals and leaders will have to choose between careers as technologists, technical managers and business professionals. To ensure the quality of their work, organisations will need to establish 'profession management' for selected roles across the whole business. The end result will see many former IS employees in professions in which their manager or head of profession does not sit within IS."
The Changing IS Organisation Structure
At Symposium/ITxpo, Gartner analysts presented IS leaders with a choice of three potential routes, one of which they must follow in order to define the future role for their department:
1. Business Change Agent
By adopting a Business Change Agent approach, the IS department will align itself with the business and support strategic initiatives. The unit will typically be small in size and will have the skills and credibility to offer tangible value to the business. Gartner predicts that organisations that fuse technology, business process design and business relationships will outperform those that don't by at least 15 percent per year until 2010 at the earliest. However, when assessing whether to make a transition to become a Business Change Agent, Gartner advised IS leaders to seriously consider their current standing and credibility within the organisation. The IS organisation can only take on this role if it has a high level of credibility and employs staff with the necessary skills. Otherwise, IS leaders should look at a different and more easily attainable option.
2. IT Services Broker
The IT Services Broker will be a very small unit with specialist contract and negotiation skills. This is because the business will have outsourced all of its IT products and services to external service providers. The entity will play an important role in sourcing and managing outsourced IT and business process services but will have little or no strategic value to the business.
3. IT Utility
Gartner advised that although the IT Utility value proposition is the most straightforward for IS departments to adopt, it generally lacks any significant value for the business. The unit will be required to provide IT-based services and operate them with competitive efficiency. It will also have a fundamental role in the acquisition and delivery of IT products needed to support the business. Gartner warned IS leaders that the failure of a department to succeed in the longer term will come not from a lack of performance, but from external service providers offering standards of professionalism and price that the internal IS organisation will have great difficulty matching. Gartner predicts that through 2007 IS organisations that do not adopt process-based delivery models will have their service portfolios outsourced at a rate of 25 percent per year.
Mr Flint added, "Whilst continuing with elements of each of these options might seem an attractive alternative to IS leaders, the three are not compatible in the long term. IS leaders must consider which model will best drive the types of benefits the business expects and values as well as the degree of credibility they have within their organisation and their management team at present."
He concluded by saying that these factors will determine which path IS organisations should follow and whether their credibility is too low to enable them to adopt the preferred Business Change Agent approach.
"The complexity and magnitude of their decision should not be underestimated and cannot be delayed — IS leaders need to act now to safeguard the future of their departments," said Mr Flint.
About Gartner Symposium/ITxpo
Gartner Symposium/ITxpo is the IT industry's largest and most strategic conference, providing business leaders with a look at the future of IT. For more than 10,000 IT professionals from the world's leading enterprises, Gartner's annual Symposium/ITxpo events are key components of their annual planning efforts. Attendees are responsible for more than $35 billion in IT spending for their respective companies, and rely on Gartner Symposium/ITxpo to gain insight into how their organisations can use technology to address business challenges and improve operational efficiency. For more information on the Barcelona event, please www.gartner.com/eu/symposium
About Gartner:
Gartner, Inc. is the leading provider of research and analysis on the global information technology industry. Gartner serves more than 10,000 clients, including chief information officers and other senior IT executives in corporations and government agencies, as well as technology companies and the investment community. The Company focuses on delivering objective, in-depth analysis and actionable advice to enable clients to make more informed business and technology decisions. The Company's businesses consist of Research and Events for IT professionals; Gartner Executive Programs, membership programs and peer networking services; and Gartner Consulting, customized engagements with a specific emphasis on outsourcing and IT management. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and has over 3,900 associates, including more than 1,100 research analysts and consultants, in more than 75 locations worldwide. For more information,
visit www.gartner.com.
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