Chief information officers surveyed by Gartner Inc. say their companies aren’t realizing the full potential of technology, and are blaming a lack of enterprise readiness and problems with change management.
But Gartner fellow and group vice-president Mark McDonald is blunt in his assessment.
“That’s a lie,” he told an audience of CIOs at a recent Toronto event unveiling Gartner’s 2013 CIO Agenda report. “If you take a step back, the lie becomes apparent.” New technologies are lightweight and easy to adopt, so users are adopting them without the IT department, hence the “shadow IT” problem, McDonald said. As for enterprise change management, “if you’ve had a reorganization, how can you say there’s a problem?”
(Mark McDonald of Gartner)
In what McDonald called a “quiet crisis” in IT, CIOs surveyed said their organizations realized an average of only 43 per cent of technology’s potential. “Some of you, by your body language, are saying, ‘not too shabby,’” he said. But if that was a supply chain or HR function, it would be inexcusable.
“The IT discipline has been in a real desert since 2002,” McDonald said, with real dollars spent on IT dropping. With no compelling IT innovation, “there’s been no good business reason to put money into IT.” Budgets hand out money to departments that will provide revenue, not IT.
CIOs aren’t helping the cause by resisting structural changes to respond to changes in business strategy. Of the CIOs surveyed, only 11 per cent said a change in business strategy requires changing the IT organization and structure, while another 21 per cent said the organization would change for a significant structural change in the organization.
“That level of undifferentiation defines commoditization,” McDonald said.
McDonald calls that resistance to structural change a “tending” performance profile – working within existing structures and processes, and incrementally improving and optimizing operations. Given the rash of technology innovations over the last 18 months, that profile is not tenable, McDonald said.
McDonald recommends that IT departments move beyond tending behavior to “hunting” behavior – searching for innovations that expand opportunities and focusing on linking across the enterprise to create new revenue sources – and “harvesting” behavior – creating new operations while sustaining performance level while improving business performance.
Also of note:
* According to CIOs surveyed worldwide, technology has reappeared in the top 10 ranking of business strategies for the first time since enabling e-commerce was a strategic imperative, McDonald said. Improving IT applications and infrastructure and Implementing analytics and big data ranked fifth and ninth worldwide as strategic priorities. In Canada, they were ranked third and eighth.
* For CIO’s IT strategic priorities, implementing mobility solutions ranked considerably higher in Canada (second) than it did worldwide (seventh). In fact, North America in general is making mobility a strategic priority. “It’s absolutely shocking how low analysis and mobility (rank) in Europe,” McDonald said.
* CIOs’ IT budgets are going down in Canada and North America, while largely holding the line elsewhere. The weighted average change for Canadian CIOs’ IT budgets will be a drop of slightly more than four per cent. Globally, that number is 0.5 per cent.
* While CIOs were divided over whether their IT organizations had the right skills (33 per cent agreed or strongly agreed, while 38 per cent disagreed or strongly disagreed) and whether the IT labour market is effective (46 per cent versus 25 per cent, respectively), 29 per cent had no opinion on either question. “(That’s) the single most damning piece of information,” McDonald said. It’s a “deep structural issue,” McDonald said. The labour market is broken, and “the part that’s broken is at the bottom” of the hierarchy of jobs.