Gartner Says IT Leaders Must Have the Courage to Make Long Term Decisions During Economic Crisis

Analysts Discuss How IT Leaders Can Drive Change during Gartner Symposium/ITxpo 2008, October 12-16, in Orlando

STAMFORD, Conn., With the world’s financial systems teetering on the brink of systemic meltdown, it is easy to be overwhelmed by the scale of events, however IT leaders must find the courage to look beyond the immediate threat towards the future, according to Gartner, Inc.

During the opening keynote today at Gartner Symposium/ITxpo, being held here through October 16, Gartner analysts explained how IT leaders need the courage to make hard decisions that lie ahead.

“A financial era is ending. This age of conspicuous consumption is over, and the age of conspicuous frugality starts now,” said Whit Andrews, vice president and distinguished analyst at Gartner. “The world has changed, and your role, as an IT leader must change as well.”

Gartner analysts said the actions that IT leaders decide now and next will define their future. They highlighted some of the projects IT leaders should address:

* Approach each project as if it had never existed before. Ask what it does, why do you need it, and how many people you’ll need to run it. Then ask if you can do it with less.
* From the freshly drawn inventory make a list of what still matters, and rank it. Not everything on the list will survive in 2009.
* Conserve as much of your budget as you can. Nothing compares to the power of cash on hand as IT leaders seek to aid the business in defending its heart.
* Protect your people. Reassure the people who are most important to you, those who make the greatest contribution.

Users Are Driving Change –They Won’t Wait for the IT Department
Mr. Andrews said IT users are already changing, and they are not waiting for the IT department. Three in four users say they use consumer or Web tools to do their jobs. The feed back from users is that IT departments don’t support those tools, don’t deliver those tools, and then try to stamp the tools out.

“Many users buy software as a service on their own credit cards. They use their own e-mail accounts that they got for free. They catapult critical data into Web-based services IT departments don’t even know exist. They act as if consumer grade is the new industrial strength,” Mr. Andrews said.

Innovation is a Human Activity
By nearly every measure the expectations versus the reality of IT are far apart. IT leaders have to change; they have to innovate to close the expectations gap. If they move slowly, they may miss the opportunity. The time between innovation and when the benefits are realized is shrinking. If IT leaders only focus on technology, they’ll lose credibility within the enterprise.

“Innovation is a human activity, and it’s not always about new technology,” said Kathy Harris, vice president and distinguished analyst at Gartner. “Often, it’s just about delivering faster to get IT leaders into the business. Or it’s about radically restructuring how we spend our IT money. Today IT leaders focus on speeding transactions, maybe they should invest in connecting people to speed decisions.”

In turbulent times IT needs innovators, and these innovators are all around the company. Gartner surveyed more than 400 companies on corporate usage of consumer devices and Web 2.0 technologies. Two out of five users reported using non-company owned devices on company systems and networks. Seven times more end users were using mashups than their IT departments estimated, and one out of three end users were using Google apps, that’s more than three times the IT estimate.

“IT leaders must create a culture of innovation; change the assumptions about how IT is managed; increase participation by users and business customers; eliminate the barriers to technology; and discover the innovators all around you,” Ms. Harris said.

IT Modernization
Too much of today’s IT budget is spent on maintaining applications built long ago for business strategies that have long since expired. IT leaders need a continuous program to understand where today’s applications meet the business needs, and where they do not.

Some state, provincial and federal government CIOs around the world estimate that as many as 50-70 percent of their workforce may retire in the next three years. The recent economic crisis can change this as well. The obsolescence of decades old applications and developers is not just an IT problem, it’s a “modernize the business” problem.

IT leaders should have a continuous program to understand where today’s applications meet the business needs, and where they do not. They can start by deleting applications. Identify applications with low business value, and throw them away. IT leaders should use the cost savings from these deleted applications to fund as much of your modernization efforts as they can.

Next, they must develop a workforce plan which recognizes that demographics is destiny, and manage the decline of today’s skills with the growth of tomorrow’s.

“Your modernization goal is not to replace hundreds of developers and millions of lines of code with a different set of developers delivering millions of different lines of code,” said Dale Vecchio, research vice president at Gartner. “Your goal is to deliver agile business processes to support business outcomes and rapid change.”

Modernize Infrastructure
Some infrastructure components and systems are not as important as they used to be, but infrastructure remains critical to run, grow, and transform the business. When it comes to cutting costs, IT infrastructure renewal is often one of the first areas the CIO targets because assets can be sweated and resources diverted elsewhere. This is true for some areas of the infrastructure, but it’s not true for all.

For example, an organization could postpone its PC upgrades for another year and easily understand future implications of such a decision. However, by not replacing older servers, an organization risks higher power consumption and lower utilization rates than competitors. The performance of the business is already linked to the performance of the infrastructure they use.

Commoditization can deliver cost savings now, but only if IT managers review their portfolio of IT investments to see how and where it applies. The economies of scale will also mean it will be more commoditized elements of IT that can move out to the cloud. For example if everyone has the same capabilities, companies can look to the data center capacity of an external provider who can deliver what they need, when they need it, for a tenth of the cost. The opportunity is for IT managers to not only save, but also to refocus and reprioritize their resources on the IT that really matters.

“IT infrastructure defines the limit of business capabilities and plays a critical role in the performance of your organization,” said Brian Gammage, vice president and Gartner Fellow. “However, your IT infrastructure is not a single element. It is a collection of assets that must be managed as a portfolio of investments. Only by seeing them this way can you distinguish the critical from the important, and the important from the commoditized.”

IT Must Deliver Business Performance Improvements
Some of the decisions IT leaders make this year will put people out of jobs; they will kill worthy projects; and they will eliminate long standing operations. However, these IT leaders will have changed IT to make it more capable, effective, and efficient in ways that matter.

The first difficult decisions business leaders, including IT leaders, have to make right now are about “stop the bleeding”. The next decisions aren’t less important or less difficult, they’re just less urgent. Gartner said this is not about defending IT’s turf or IT’s plans. It’s about business performance and business outcomes.

“IT leaders must plan for what happens if business processes are upgraded, downgraded, or eliminated altogether,” said Richard Hunter, vice president and Gartner Fellow. “Look at every project with the same mindset, starting with the business and working back from there. Ask, ‘Do you have the right team, the right capabilities, and the right technology to deliver?’ Decide what needs to be spent, not just what needs to be cut. That’s how you ‘stop the bleeding’.”

IT organizations have historically delivered technology, not business performance, not change. That is no longer enough.

“Projects must deliver the promised business performance improvements. IT shares the responsibility to make that happen,” Mr. Hunter. “Everyone in the business must understand why change is required and what their role is. From now on, businesses can only afford IT that delivers value in terms of business performance.”

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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. Nearly 6,000 senior business and IT strategists will gather for the insights, tools and solutions they need to ensure their IT initiatives are key contributors to and drivers of their enterprise’s success. Gartner’s annual Symposium/ITxpo events are key components of attendees’ annual planning efforts. They rely on Gartner Symposium/ITxpo to gain insight into how their organizations can use IT to address business challenges and improve operational efficiency. Additional information is available at www.gartner.com/symposium/us.

About Gartner:
Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the indispensable partner to 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,000 associates, including 1,200 research analysts and consultants in 80 countries. For more information, visit www.gartner.com.