Gartner Inc. has predicted that by 2015, the percentage of technology spending by the business -- and outside of the control of IT -- will reach 35%. In the first part of this Q&A, Gartner Research Vice President Brian Prentice explained the drivers behind this business technology spending uptick and where the money is being spent. Here, he lays out how the IT department and the CIO's value proposition stand to change with this shift in IT spending. His prediction is based on a collection of research, not a specific survey of Gartner clients.
As tech spending shifts outside of IT, you recommend that CIOs increase their focus on 'connective tools' that tie business solutions together. What is 'connective' technology?
Brian Prentice: As an example, most IT departments are trying to consolidate their application portfolio, while the mobile trend is saying we need tons and tons of these smaller mobile apps. How do CIOs reconcile that? The way we are starting to see organizations reconcile that is by not feeling that they have to own the actual app, but own the services and the data management -- or what I personally refer to as an 'enterprise SDK' [software development kit). For example, Apple has an iOS so developers can build apps on top of this managed system that Apple provides.
What an IT department can do is provide their own set of services and capabilities that any developer, whether they are inside or outside the IT department, can write to in a consistent way, to have consistent services and consistent data management.
Their primary job is to collect, oversee, coordinate and manage all of this information, so it turns into this real, powerful, commercialize-able asset to the organization.
research vice president, Gartner Inc.
Do you have an example of an enterprise that is doing this?
Prentice: A media company in Europe developed a mobile app for the World Cup in 2010 that linked people into the product they were selling -- the media and advertising around the World Cup. The app also tracked teams, players and the scores. That app had a huge number of downloads, but when the World Cup was over, people didn't need it anymore, so they threw it out. There were a lot of connections [for that app] into the core corporate systems. IT didn't drive the app; it was an outside agency that did the bulk of the work. But what IT did was create APIs [application programming interfaces] that the outside agencies would then use to write that mobile app and connect to the corporate system.
In 2012, this company had the media rights to the Euro Cup and developed a completely different app that was just as disposable. But the people doing the developing could use the same set of APIs that the IT department created for the World Cup app. This is one concept of a 'connective tissue.' This is when we start talking about a service-oriented architecture, because SOA is a great way to achieve this type of outcome.
How can this connective concept be applied to data management in general?
Prentice: The organization needs tools to make sure all of the individual systems that the line-of-business folks are looking for end up being able to work together in an end-to-end way. This is what IT brings as a value proposition. I call it the blessing and the curse of the IT guys. IT guys are blessed with the ability to see all the operation of the business. The curse is they're not empowered to do anything about it. At the same time, decisions are broken up by the line of business -- what's best for sales, marketing, HR, logistics, finance -- oftentimes in isolation. So, what IT can bring to bear are the tools and the data management that allow these things to be stitched together.
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You also believe that enterprise companies need to focus more on turning data into an asset. What is IT's role in that?
Prentice: It was an epiphany for me a couple of years ago that the industry, in particular enterprise IT departments, was losing the information forest through the technology trees. We spend so much time obsessing on the products and technology that we've forgotten that the primary job is to manage information effectively, and the best way to reconnect with that reality is to start drawing a direct line between the concept of information and the concept of an asset.
Organizations understand that money is an asset, so they manage it appropriately. I think the CIO of the future is going to recognize that one of their primary value propositions is not diddling with technology or trying to drive ownership of devices and software applications to the extent they are today. Their primary job is to collect, oversee, coordinate and manage all of this information so it turns into this real, powerful, commercialize-able asset to the organization.
Is the IT department evolving to the point in which they are being asked to generate revenue, given that technology is such an integral part of how a business operates and serves customers?
Prentice: In a past report on that subject, we didn't necessarily see that as a broad trend in which CIOs were by-and-large expected to drive revenue. We are starting to see some cases where that is happening. The bigger issue, however, is that CIOs are able to support top-line revenue growth either directly or have a very strong case that what they're doing is closely correlated to revenue growth. I wouldn't go so far as to say that next year, CIOs are going to be expected to grow top-line revenue growth; but what we can say is that the CIOs who take the lead and are able to do that are in a very strong position in their organization.