The Future of Information Technology

By:

Scott Schumacher

&

Miles Poole
Abstract:

The future of IT is like a fog and you can only see about five feet in front of you and

you dare not to go any further than what you can see with your flash light. This

paper is molded around three questions that we felt where the most important ones

to ask and answer. Does Information Technology on its own deliver value? Who is

driving Information Technology strategy? Should companies run their IT

Departments like a separate business? Each one of these are important questions

to have asked, since you can only predict where the future of Information

Technology may go perhaps through cloud or perhaps though another means. Only

time will tell and through this paper we will explore the questions above to really

see if maybe we can see just a little bit further ahead into the future to be better

prepared for what lies ahead.

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 Problems

The future of Information technology is something that is trying to be

predicted. The main problems that this paper embraces are thus:

● Does Information Technology on its own deliver value?

● Who is driving Information Technology strategy?

● Should companies run their IT Departments like a separate business?

These issues are complex in that several answers can be given for each problem,

but it doesn’t necessarily mean that these answers will be the solution or be the

right course of action.

Information technology on its own delivers value to a company, right? Well at

first you might think that is true, but have you considered that perhaps most

companies fail to realize the sheer importance of IT within the company? Even

though this importance is placed on IT, can you place any value to a term that is

undefined within the IT/Business relationship? The problem then occurs that you are

then unable to measure the value.

The value for IT services can doom a company to

failure if value isn’t placed on a company’s IT department.

Now, granted it could also mean that IT is the actual value

of the company, but this is hard to determine if there is no

real value to begin with. Information Technology also has

the problem that without business drivers within IT, IT

could have no value to the business. What I mean here is

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that if the business doesn’t give IT a goal, some kind of project to complete, or the

ability to do these projects to bring more value to the company then there will be

little to no value.

In all reality, the main focus of IT is to support and maintain the system that

users use. This should add value to Information Technology; however, management,

and other users, may not have this perception of IT and the role it plays. This

misperception combined with a lack of understanding what IT does will place an

inaccurate value on IT services provided within the company.

Value is only one problem that faces information technology, the next one I’d

like to address is best summarized in this question: Who is driving Information

Technology strategy? Is it the business customers or even suppliers for the

businesses? It’s hard to determine which it is seeing as how it could even be the

users who could really be driving this strategy.

If we assume that it’s the suppliers that are driving this IT strategy then the

problem we will face is that the suppliers are trying to focus on their sales rather

than the overall goal strategy of IT. This drive is possible due to the lack of

customer service on their end. Not only could these suppliers be causing this but

the business customers within a company could not even know the purpose of IT

strategy. This could be due to the overall failure of not aligning itself with the

overall business strategy of the company. One of the biggest challenges with these

strategies is facing change, not only that, but from there a lack of funding can really

determine where the strategy is going, perhaps just maintaining what you have or

just staying afloat. From this lack of funding the strategy could fail to meet the

needs of the growing number of customer demands, which then becomes the fact

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that the IT department has failed to serve the needs of the business. From there,

blame gets passed around on who should be driving the IT strategy.

Just not even having an IT strategy that aligns with the critical business areas

can cripple a company for it to succeed. Companies need to take into account

though that IT strategies are completely different than a business strategy and can

be difficult to determine who is actually leading them. Customers seem to be the

ones that, in the end, drive the IT strategy within a company. Even though trying to

pin down who is driving IT strategy is a serious problem, I think companies are also

trying to decide whether or not IT departments should be run separately from the

company, as a business within a business.

This problem seems rather difficult to nail down because the questions could

be answered with a simple answer of there is a lack of focus in the company, but

really that doesn’t explain everything else. A company should understand that

whatever IT does, it does affect the main company as a whole. This whole problem

of running IT as a separate entity within a company could even lead to other

departments receiving items that they don’t need due to budget concerns and or

just not listening in general. This process could even make it so that the IT

department within the company is let go and everything is out sourced. The

problem with running the IT department as a separate business though is that it is a

big waste of time, money, and man power from treating IT as a separate business.

The business needs of the IT department could not align with the company itself if it

is separated and from there, if you’re trying to maintain the status-quo, there can

be conflicting desires on priorities.

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 Not only could these problems occur, but an IT department trying to run itself

as a business causes many more problems in that the perception of the IT

department won’t line up with the company it’s under. Not only that, but trying to

manage the business aspects of the IT department could get dangerous along with

there not being a way for the two to effectively run itself as its own business.

Overall having this separation within the company will cause disconnection

between the two “businesses” and from there the company may choose to not keep

the IT department around any longer. Seeing as how the services and support they

offer isn’t matching up with what

the company needs. From there it

would just be a drain on the

resources from the company. The

two would be facing the larger issue

of the goals/ objectives not being

the same. From there, diminishing

returns would occur and eventually

a separation between the IT

department and the main company permanently and well poof no more.

Solutions

We've identified the many issues surrounding the future of IT but haven't

addressed how to resolve them. So how do we show that IT, in fact, does deliver

value to a business? Or provide guidance in regard to who should be driving IT

strategies within a corporation. And finally, lay the foundation to assist in

determining if companies should run their internal IT departments as a separate

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entity. As previously pointed out, the ability of IT to deliver value on its own isn't

always clear to the decision makers within a business. To rectify this, business

leaders and IT leaders need to develop a clear definition of the term value within

their business. Once the definition has been determined it should be communicated

to ensure all departments fully understand what the business as a whole deems to

be valuable and critical to succeed. Mapping internal IT department activities to

business goals will further solidify the importance of the department to the overall

business model (Cameron). Once value has been defined, how do we measure it to

determine if IT is contributing to the business? In short, it's imperative to develop a

set of standards that allow overall contributions from the IT department to be

measured. As with any business unit, costs should be monitored and analyzed to

reduce risk and waste. Organizations must be tightly integrated amongst its

business, finance and IT departments so all executives understand how each help

strengthen the company.

With executive level management support, IT can be part of the company's

overall vision and strategic plan providing the backbone to all business operations.

With this type of support, IT can begin to show that they provide the company a

competitive and generating value by saving time, effort, and money that can be

spent on other aspects of the business such as research and development.

To help define IT’s place in the business model and how it provides value to

the organization, it helps to determine and understand who or what is the driving

factor behind the decisions made in IT. Far too often leadership has a knee jerk

reaction to problems and loses sight of business strategies. This causes the

relationship between business and IT to become out of sync, requiring leadership to

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revisit the relationship between the two organizations to make sure goals are

aligned. If proper communication is in place, any missteps will be quickly resolved

and balance restored.

Aging equipment can take a toll on a business in several ways. As it ages,

hardware can eat up additional resources due to the increased maintenance as

equipment begins failing. Businesses need to be proactive in keeping everything up

to date and functioning as decrepit equipment can affect the bottom line as

customers become frustrated with slow response time due to degraded

performance and downtime. Executives may not be willing to authorize the use of

cash for upgrades so IT needs to provide

detailed analysis requiring any project or

purchase to have a satisfactory ROI or be

proven to fit within their business strategy

(Hebert).

Like business strategies, IT strategies

need to remain flexible with IT management

willing to adapt to an ever changing environment. Values and strategies should be

reviewed frequently to ensure their relevance and if it’s determined that the current

strategy is no longer valid, priorities need to be outlined and new strategy

developed that aligns with business.

Having common objectives requires business leaders and IT leaders to work

together. Treating the IT department as a separate entity or business may introduce

unique barriers that inhibit the flow of communication. To help solidify the

relationship, IT needs to be treated and viewed as an integral branch within the

company. This cohesive relationship will provide the opportunity to implement

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systems at the right time and the right cost while providing accurate cost analysis

for pending future projects. Having the IT team in house and contributing to the

overall business guarantees that goals are aligned and communication barriers that

typically exist between a company and its suppliers does not exist. Roles and

responsibilities are simple to create, modify and implement without the messiness

of dealing with outside companies.

Conclusion

With the speed of technological advancement and course changing

inventions taking root, the future of IT is without a doubt an unpredictable beast.

Companies that are able to remain fluid and adapt their business models will be

successful; those that remain stationary will be left behind to fail. Leadership that

can grasp and understand that IT is a means to an end in the sense that it can be

used as a tool to meet objectives within the business, are all but guaranteed

success within their industry. Aligning with the corporate goals, IT departments can

help keep a company relevant by implementing the technologies that customer’s

demand which will in turn attract more customers, propelling the company forward.

Finally, IT departments should be considered a branch within the company much

like finance or human relations. A company with aligned business units is a

successful company.

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 References

Cameron, Bob. "Finding IT`s Business Value." CIO Insight. Ziff Davis Enterprise, 28

Aug 2009. Web. 6 Jun 2011. http://www.cioinsight.com/c/a/Research/Finding-ITs-

Business-Value-759402/

Hebert, Tim. "Avoid denying true cost of network downtime." IndUS Business

Journal. INE Media, Inc., 12 Nov 2007. Web. 6 Jun 2011.

http://www.indusbusinessjournal.com/ME2/Audiences/dirmod.asp?

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