The perfect storm facing IT leaders

  • Posted on May 2, 2016

IT Leaders

In his book, “The Road Ahead,” Bill Gates famously said, “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.” Andrew McAfee, on the book he co-authored with Erik Brynjolfsson called The Second Machine Age argues that we can flip that now; and based on a keynote I saw him give a few months ago, I’m inclined to agree. What particularly interested me was the analogy between Moore’s Law and the Second Half of the Chessboard. If you accept Moore’s Law that computing power doubles every 18 months. The Second Machine Age argues that technology hit the second half of the chessboard in 2006.

I walked out of that keynote thinking it’s pretty unlikely that kids born today will actually get to drive a car on the road. In fact, I think it’s more likely that they’ll grow up amused (and perhaps horrified) by the idea of a teenager behind the wheel of a 2 ton projectile.

Disruptive Technologies Impacting IT Services

You don’t have to subscribe to the chessboard theory to see the pace at which technologies are evolving is accelerating. We are well aware of the disruption the convergence of cloud, mobile, social and big data has had – and they continue to impact IT - but they have grown and morphed to generate new disruptive technologies. Technologies like smart devices, Internet of Things, cognitive agents and more. Every time this new storm of technology disruption hits, IT leaders are expected to make the latest and greatest work smoothly and securely with everything that’s come before.

At the same time, the expectations from digitally savvy board members, executives, staff, partners, customers and other stakeholders across the enterprise (and beyond) is only growing. A big reason for the increased expectation is that, according to Gartner, CEO’s expect their digital revenues to double to 41% by 2019. As a case in point, a survey by Avanade showed 79% of C-Level executives believe they can make technology decisions better and faster than IT. And why not? It’s increasingly easy for business people to simply go out and procure their own solutions.

On the one hand they are expected to manage, maintain, and secure core IT systems better than ever before…and on the other, experiment with new technologies to help grow the business. It’s a tough ask for IT leaders when the conventional IT approaches we’ve used to withstand past storms are rapidly becoming obsolete. Oh, and around the world IT budgets are pretty much flat - so there’s no new money to throw at the problem.

Two Distinct Approaches Required for the Digital World

What’s required for today’s cloud first digital world is two distinct approaches to IT. The ‘predictable’ and the ‘exploratory.’ Think of these approaches as right brain/left brain, or yin and yang. Gartner defines this as Bimodal IT.

  • The predictable approach “optimizes the core” and emphasizes reliability, cost-efficiency, and an IT-centric culture. It’s based on plan-driven and approval-based governance and long cycle times. Here’s where IT finds better-faster-cheaper ways to do the things that keep the business running.
  • The exploratory approach “Innovates the business” and emphasizes agility, revenue, brand, customer and a business-centric culture. It’s based on short cycle times—days instead of months. Here’s where IT has a new freedom to fail—yes, fail—because experimentation is cheaper and faster than ever before, so every failure gets the enterprise closer to a potentially game-changing success.

With these two distinct approaches, IT leaders can repurpose existing resources to create a new vision for IT. Avanade calls this new perspective the New Economics of IT. In the cloud first digital world, the new economics of IT defines the creation of value through new IT approaches used to maximize efficiency, increase agility and give the freedom to innovate.

In my next blog post, I’ll discuss the new economics of IT in more detail, but for more information in the meantime, check out the video below.

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