Gartner Talks Future IT Scenarios

This week, Gartner held its Symposium/ITxpo in Barcelona, Spain. 

Given that -- here in New England -- we were treated to three inches of fresh snow and howling winds, I certainly felt a pang of regret that I hadn't planned my calendar a bit better.

One of the interesting thoughts Gartner shared was a 2x2 "grid" representing future IT scenarios.

While the Garter work is reasonable at face value, I quickly realized that they perhaps didn't go far enough, so I thought I'd comment, in a hope to build a bit on their efforts.

The goal -- as I see it?

Create a better conceptual model for how IT evolves from cost center to value generator.

The Gartner Model

Truth be known, I tend to be somewhat critical of most work I see from larger analyst firms. 

Their collective view of the world doesn't often correlate with my own, which is in turn a product of the many discussions I have with customers and partners.  Most often, I observe a serious lag (sometimes measured in years) between the discussion they're having with their clients, and the discussions I'm having with mine.

But I do have to applaud Gartner for getting out there with a reasonable point-of-view on strategic scenarios for IT.  It's a thorny issue so many leaders (both inside and outside of IT) appear to be wrestling with right now, and any useful advice is better than no advice.

In classic analyst fashion, Gartner has reduced the strategy discussion to a stark four-square grid.

The vertical axis is focus: from internal to external.

The horizontal axis is represented as "operational" evolving to "transformational".

The four regions are described fairly well.

Internally focused, operational:  IT is "broker and engineer" -- the analogy is the engine room.

In Gartner's words:

"In this scenario, IT capabilities are delivered rapidly at market-competitive prices. The IT organization succeeds by monitoring technology and market developments, and building expertise in IT asset optimization, sourcing and vendor management, and IT financial management. It delivers ongoing cost improvements, looks for new ways to deliver the same IT capabilities for less, and is highly responsive to changing business needs."

Yep, I've met plenty of IT organizations who fit that description.

Externally focused, operational: IT is "integrator and optimizer", a "global service provider".

In Gartner's words:

"In this scenario, the IT organization is an expanded and integrated shared-service unit that runs like a business, delivering IT services and enterprise business processes. It is virtually or fully centralized, focuses on business areas and business value, adopts a marketing perspective, capitalizes on its internal position and delivers competitive services"

Internally focused, transformational: dubbed "everyone's IT" and IT as "enabler and conductor".

In Gartner's words:

"In this scenario, business leaders and individual contributors use information and technology aggressively to break through traditional business perimeters and drive ambitious collaboration. The focus is on information, rather than technology. Highly mature businesses embrace this divergent model for its collaborative and innovative potential. While traditionalists may see anarchy in this type of approach, others see liberated creativity. For this reason, this model works in non-traditional situations such as dynamic businesses, startups and R&D/entrepreneurial/community ventures."

Externally focused, transformational: "IT is the business"

In Gartner's words:

"In this scenario, information is the business's explicit product or at least is inseparable from its product. The business is structured around information flow (not process or function) and the IT organization innovates within the value chain, rather than just enabling the supporting services found in every business."

Not too bad, I'd offer.

But there's definitely room for improvement.

Pathways Are Better Than Squares

One of the inherent limitations of these grids is, of course, their black-and-white, grid-like nature.  The temptation is to see yourself clearly in one box or another.  Indeed, Gartner describes their model as "four dominant futures".

I beg to disagree.

A more progressive view might be evolutionary -- IT organizations moving from one state to another, building on the competencies in one phase to move to the next.

So, resisting the temptation to quibble with how Gartner has labelled things, what might an interesting evolutionary sequence look like? 

Let's begin with an obvious starting point.

1) -- Focus on getting the IT factory in shape -- delivering core IT services that meet the need of the business, and are competitively priced as compared to alternatives.  That's blocking and tackling. 

But I found myself wanting more to be said around "highly responsive to business needs".  I see that thought as inconsistent with the "internally focused, operational" quadrant they've created here.  What's needed to do so doesn't fit in this quadrant.

• adopting a service-centric mindset: from the point of view of the consumer, and not IT
• inherent agility and responsiveness to new and/or unmet requirements across all levels of the business
• investments in ease-of-consumption and transparency
• deeper rationalization of internally produced vs. externally produced options, the classic "build vs. broker" discussion

But -- once again -- this isn't an attempt to invalidate what they're saying here, just go a bit further :)

2) -- Become the internal IT service provider of choice -- the quintessential "run IT like a business". 

Businesses know how to sell themselves to their (internal) customers, and we only get a brief mention of "adopts a marketing perspective".

Guys, that's a huge pivot for 95% of the IT organizations I deal with.

Behind this simple thought are some very deep and important issues:

• the need to change the measurement system for IT from "reduce IT spending" to "drive IT consumption".
• a thorough re-working of the financial model to build variable services ahead of demand
• the need for new skills and processes to build and market what business users want, vs. what IT wants to build.

I find myself feeling very shortchanged at this juncture :)

Back to our "evolutionary path" thought, if we take this expanded view the focus clearly becomes driving consumption and optimized production of business-demanded IT services, either built or brokered in the previous phase.

3) -- Fully engage with knowledge workers and their unique needs -- not a new thought, but certainly new to many IT traditionalists.

When your source of business value is really smart people working together, you need the right kinds of tools to enhance

their productivity: a variety of collaboration and content platforms, in-house social, ubiquitous mobile access in many cases, analytical capabilities, investments in skills so people know how to use the tools effectively, and so on.

I see this style of IT in its purest forms in boutique consulting organizations, investment groups, law firms, and related.  IT's primary focus is empowering the smart people who make all the money for the firm, and they understand what's needed.

It gets more challenging when there are multiple pockets of highly-skilled professionals against a sea of more traditional IT requirements.  It appears hard for these broader groups to get the required focus.

Back to our "evolutionary path" thought, this is one of the most attractive segments to "market IT" towards, based on progressing from the previous phase.  Knowledge workers are increasingly important in so many business models, and almost always have significant unmet needs.  They're also the first to step outside of IT-provided answers if their needs aren't being met. 

Dropbox (err, Syncplicity) anyone?

4) -- The business re-engineers itself with IT -- while I would agree with an end-state of "IT is the business", I'm left rather cold by the "Explore and Pioneer" label on this segment.

At this stage, the focus shifts entirely.  Specifically, it's not really about IT anymore, it's about the business itself.  My familiar big thought: just about every traditional business is moving to what I've dubbed as a "digital business model" a re-envisioning of the fundamental business proposition based on entirely digital constructs.  This is the world of social, content, mobile, analytics, next-gen apps -- all running on cloud-like services.

This model isn't really about IT-led science experiments and incremental process improvement, it's providing the foundational platforms and thought leadership to re-engineer the business for the 21st century. 

Heady stuff, to be sure, but I've met more than enough IT leaders who are either in this quadrant, or moving there very rapidly.

What Say You?

If you've put any thought into end-state IT models, or -- more importantly -- evolutionary sequences that might likely play out -- how do you react to all of this?

Do you agree with Gartner that IT organizations will inevitably settle on one of these quadrants, largely to the exclusion of others?  Or would you tend to agree with my perspective that there's a logical sequence of events at play?

I'd love to hear your thoughts ...

Comments

[Scott Brightwell]

I recognize that Gartner was pointing out the primary role of the CIO as an individual. As I read through this applying it to the IT department as a whole in most of my customers, I'd say that all of these roles are happening in parallel based on the various business units that touch large IT shops.

These groupings fairly well describe different relationships IT has with the business at large or with individual BU's (all at the same time). I can see where a progressive IT shop would have a "lower left" relationship with the legacy app owners and in parallel have an "upper left" relationship new app dev groups. At the same time, they would support "right side" relationships with the Big Data groups and BU's undergoing business model digital transformation.

In smaller shops the role of the CIO and of IT may be boxed into one or the other of these quadrants, but larger environments are more varied in their business unit relationships than Gartner gives them credit for on the surface.

[Scott Brightwell]

Wouldn't you know I just saw in the original Gartner post that these four dominant futures "are not mutually exclusive and may exist in combination." Well that I agree with.

[Chuck Hollis]

Scott -- great thoughts, thanks.

The Gartner disclaimer not withstanding, the material reads as somewhat distinct and isolated approaches driven by the CIO.

But, as you rightly point out, the world is never quite so simple.

[Jason Blyth]

IMHO businesses tend to treat their traditional use of internally focussed IT somewhat like a 'loveless marraige'. Happy to complain yet comfortable to persist with the existing services. These ususally running in the cost-centre rationed supply model. Often the number of variables and dependencies are too great in number to gain enough momentum to adopt a large-scale shift in consumption patterns. That is unless you have a evangelical shoot first type high up in charge.

Agree that within the same business you can have in parallel the emerging 'top-right' quadrant initiatives which are striving to solve major problems, be service-based, fully virtualised/automated/orchestrated etc. But they are viewed as expensive, risky and often fall into trouble if they stay too long in architecture/design/test mode. They become vulnerable to the changing winds and tides of large organisational politics and funding cycles.

There is a lot to be said for 'taking the beach' with a new service based on what Gartner seems to describe as the top-right quadrant. Then getting your hooks into delivering deep value into a pocket of the organisation - like a new project for an influential business application owner.

Just my 5 cents worth.

Disclaimer: These are my personal opinions and not those of my organisation.

[Rodolfo Reyes-Chilpa]

The real CIO´s challenge: common sense, open and receptive mind with true leadership and agility to transform old structures.
Not using case recipes from business schools ....

[Muammara]

As usual, great insight,
My two cents:
I think the model is a smart extract of two major academic school of thoughts in strategy:
"Market based View, MBV" which is a an "external" view and the "Resource Based View, RBV" which is an "internal" view. It is also aligned with Hayes and wheelwright model in operations strategy

Now, filling out the definition and the needed steps to move, is the real art that I enjoy reading through different perspectives.

Thanks again

[Chuck Hollis]

Muammara

Thanks for the different perspective.

In my travels, I inevitably meet people who are visibly constrained by their perceptions of available resources, or -- specifically -- what *could* be available with a bit of effort. Unfortunately, they fall into the trap of "no incremental resources available" so, of course, nothing can be done until that situation gets remediated for them.

Very rarely, do you meet someone who is comfortable with the market-based view.

-- Chuck