* IT does matter now
In a recent newsletter (2009 trends: Doing more with less) we discussed how we saw IT organizations responding to the current economic challenges. Given the great interest in that topic, we are going to explore it in more detail over the next four newsletters. We’ll begin by putting the current economic situation into perspective, as this is not the first time that we have experienced a relatively quick shift from a supportive to a challenging economic condition.
For example, during the dot-com era, most companies believed that their IT organization would help transform their business models. One of the most common beliefs was that companies would leverage the Internet to become a fast moving e-business and migrate away from being a stogy, bricks and mortar company. That belief enabled IT budgets during the dot-com era to grow at a very healthy rate.
The demise of the dot-com era roughly coincided with the economic malaise that followed the terrorist attacks on Sept. 11, 2001. Nicholas Carr’s much-discussed “IT doesn’t Matter” article in the Harvard Business Review characterized how IT was viewed during that time. Based on that view, in the years immediately following the dot-com implosion many IT organizations endured budget cuts. Our belief is that too many enterprises got caught up in the economic malaise and made cuts to their IT budgets that were both extreme and not well thought out. We do not believe that will happen as often in the current environment.
In the last few years, IT has again gained in importance and IT budgets have grown accordingly. We believe that one of the primary reasons for that is that on an ever-increasing basis companies are re-engineering their critical business functions and looking to the IT organization to enable these functions. For example, Jim recently talked to the CIO of a large insurance company who explained why IT has been growing in importance at his company. According to the CIO, as recently as a few years ago the majority of the interaction between the company and its customers went through a large network of agents. Today the majority of the customer interaction is accomplished via applications that run over the Internet and their enterprise WAN.
The next newsletter will discuss some of the areas of IT that we believe will grow in importance in 2009. We also want to hear from you. How is your IT organization responding to the challenging economic conditions? What initiatives are rising in importance? Which are declining in importance? In the meantime, more information on the topic can be found here.
