When asked to look forward and consider which technologies will change the way we do business over the coming 10 years, it is important to firstly look back. Where were we 10 years ago – and what has changed since then? Ten years ago - in 1997 - we were in the midst of the biggest automation project that IT had seen – and probably the biggest it will ever see.
• We deployed enterprise applications – and since then we have upgraded, fine tuned and aligned these systems to our new and existing business processes.
• We embraced a client-server architecture for many systems.
• Our employees used PCs running Windows (3.1x or 95) and they accessed applications using clients running on the desktop.
• We were in the process of moving our networks to IP-based systems.
• The privileged few were using mobile phones for voice services only.
• Many organisations had recently discovered the internet. The default browser of choice was Netscape Navigator, and would be for another two years.
• Java was emerging as an important programming language.
• The fear of Y2K was beginning to suck up IT budgets as COBOL programmers started making more than the CIO…
• IT was an operational department – it was seen as very different from the rest of the business – which drove many large organisations to outsource their IT function completely.
What has changed since then? Not much, and a lot – all at the same time. We still use PCs and still have major enterprise applications – often just upgraded versions of the same systems being installed in 1997. However, for the most part, we now access these applications through web browsers. The PC runs our productivity suites and other “personal” applications – but for many people, the most commonly used application is the browser. We are now all IP, and some enterprises have embraced IP for both their data and voice systems, sidelining many telecommunications carriers to be little more than bandwidth providers. Wireless networks now abound, although the promise of “seamless access” is yet to be delivered upon. We all have mobile phones, and some staff members use these to access e-mail and other business applications.
But probably the biggest changes for IT over the past 10 years have actually been the cultural ones. The rise of the internet and the potential threat posed by the millennium bug thrust IT to the forefront of the business making the CIO one of the most influential managers in relation to the success of the business. After the dotcom then telecoms bubbles burst, IT was back in the doghouse, but the past few years have seen IT emerge as one of the major differentiators for many businesses.
The average IT department today looks nothing like it did 10 years ago. We are now distributed throughout the business, helping align specific business processes in other departments to the outcomes of IT implementations.
The coming 10 years
As we move into an era of global competition, enterprises are looking to extract as much revenue and profit as possible from their ventures, while at the same time, encouraging further innovation. Good IT systems are crucial to not only meeting these goals but measuring our progress against them too.
The big challenge for the next 10 years will be dealing with the “IT hangover” from the activity of the past 10 years – i.e. how do we maintain the existing applications in a cost effective manner, while at the same time continue to develop and/or implement the new applications and services required by the business. To successfully meet business requirements, continued cultural, architectural, environmental and technological change will be necessary.
• Automate IT: While we have all been busy installing enterprise applications for sales, marketing, manufacturing, customer service and the rest, we have forgotten to clean up our own shop. Enterprise applications, in their simplest form, are little more than process automation tools – they take many man hours out of business processes and ensure a consistent approach to a business process. IT has many processes crying out to be automated, but there has been no time, incentive or budget to make this happen. IT automation will be a major project for many IT shops as they look to cost effectively allocate the right resources to the right projects at the right time. This cannot be achieved, however, without the support of the business.
• Automate decisions: BI and business performance management systems have emerged over the past few years due to the need to extract actionable information from the huge amounts of data being generated by our IT systems. These tools have, for the most part, achieved these goals. The next step will be to automate the analytic functions and embed these functions into the applications themselves, negating the requirement to extract data from systems in order to conduct analysis. The applications themselves will take on a greater level of intelligence.
• Add 3D capabilities: The eventual emergence of very high power desktop computers will allow desktop environments to display graphics currently capable only on games consoles. While the applications for 3D graphics do not exist, there are certainly many different ways this type of capability could be used in a business environment. It may be to display and explore data in a different manner, view the 3D web (currently in development) or visualise applications in a more user friendly manner.
• Complete integration of IT and telecommunications: Ten years from now, the telecoms and IT networks will, for the most part, be completely integrated. We will have seamless access to voice and application services from multiple devices and intelligent information will help us manage our communication and make us more effective information workers.
The major change to business processes over the coming 10 years is that we will begin to outsource many of the functions that are not key to our businesses success. To a large extent we already do this. We do not buy our own planes, hire our own mail delivery teams, or build our own buildings. The coming level of business process outsourcing will, in many ways, reflect our current business process outsourcing. Some vendors call it business process transformation – alluding to the fact that not only will they take the process off your hands, but they will also improve this process. The next 10 years will see us take some more non-core services – ones that heavily involve IT systems – and hand them over to partners to improve and transform. The shift to BPO for many organisation will be a necessity, driven by the ageing workforce and the difficulty in hiring appropriate skills in many areas of the business.
As green issues capture boardroom attention and feature as commitments in the annual report, IT execs will play a key role in implementing the new plans. Forrester believes that sourcing policies that work on reducing energy costs and incorporating environmental frameworks into IT sourcing processes will be commonplace by 2012. A green sourcing strategy will:
• Meet customer requirements for environmentally friendly products. Firms with consumer brands will need to incorporate green values into their brands as consumer concern about the environment increases. The result? Firms are beginning to question suppliers about road maps that frame how an individual supplier aims to reduce the environmental impact of a solution.
• Reduce the impact of energy costs and risks on the bottom line. Any price increase in the kilowatt-hour rate has cost implications for large enterprises. The security of energy supplies is a geopolitical issue. When energy costs increase, so will the costs of running IT; therefore IT managers will need to minimise energy usage.
• Minimise energy consumption and environmental impact. The cost of a product or service will be measured in terms of price plus the energy it consumes over its life cycle.
IT architectures are beginning to undergo a major change – both in the infrastructure and applications worlds – shifting from large, complex and tightly coupled IT-centric solutions to smaller, adaptable, loosely coupled business-centric solutions. In the application world, the services oriented architecture (SOA) is driving much of this change. In the infrastructure world, it is being driven by a shift towards low cost, standard-based technologies that can be coupled (or virtualised) to create powerful super-computer-like environments.
Much of the architectural change over the next 10 years will be in relation to these trends that are already underway. However, one major shift that will happen that has not yet emerged is the information workplace. This will be driven by customers, shareholders and employees as they all begin to realise the value of information.
The information workplace will begin to emerge in two years and will evolve radically during the next five to eight years. It includes a wide range of technologies and capabilities not available in today's tools. Internal and external users will be able to access all enterprise information to which they have privileges using a variety of devices. To support this, the information workplace will embody new notions of trust, openness, mobility, and context.
The information workplace will provide a holistic environment that is:
• Seamless: Users get the information they need at the right time with minimal manual effort, using advanced content services like search, linguistic analysis, pattern recognition, expertise location, statistical analysis, and categorisation. Users will access a single interface via multiple devices and contextual commands will perform multiple tasks.
• Contextual: Functionality will be based on what information workers are doing, where they are located, and at which step in a business processes they are at that moment.
• Guided: Just in time, contextual learning and embedded work simulation will be delivered to the user when workers are performing new tasks or running into problems. Embedded learning will guide workers through software, as well as through business activities.
• Visual — and even auditory: Users will get updates on process status and business metrics via visual interfaces.
• Multimodal: Users will access the information workplace via multiple access points, including desktop and laptop computers (through both browser and rich-client access), PDAs, landline and cell phones, tablet PCs, wearable computers, or embedded devices in cars, factory machines, and RFID systems.
• Role-based: Information workers will access content, data, business processes, and tools based on their role in the organisation or role within a specific activity. Every organisation will have its own schema for defining roles, but in general a role will be a factor of job type, job dimension, job level, and competency.
The biggest changes in IT tend to be cultural. This will be particularly evident over the next 10 years or so as IT further embeds itself within the business. The major shifts that are likely to take place are:
• IT will be pervasive. In nearly every major organisation around the world, the business is IT and IT is the business. The two can no longer be extracted from each other. This will have many unforeseen effects on IT. The IT department will be asked to take on responsibilities outside of its expertise – for example, organisational security and business continuity is already being handed to IT, as is corporate regulatory compliance. On top of this, we can expect other processes to be handed to IT.
• The workforce will age: The aging workforce in many western economies will be both an opportunity and a threat. The threat comes from the fact that many people who know about the legacy systems in organisations will be retiring within the next 10 years. Organisations are left with the challenge of replacing these systems (typically very expensive) or upskilling other staff on them (typically very time consuming and risky should those people move on). IT will also be responsible for deploying the HR and workforce systems that will manage the future workforce – one where a considerable proportion of the employees may be semi-retired or part time – and a time where we look to take advantage of whatever skills we can get – whether they are in the same city or country.
The only thing that will not change is the fact there always will be change…
One thing is certain. Despite what I, or anyone else predicts for the future, there will be a number of events that will blindside you and your company over the next 10 years. Over the past 10 years, security and organisational risk were probably the two factors that took us all by surprise, and soaked up a considerable amount of time, money and resources – both within and outside the IT department. The events of 11 September 2001 and subsequent terrorist activity have created a legacy for business continuity. The fraudulent activities of Enron, WorldCom and many other organisations have also increased the regulatory burden on many organisations.
In the future it may be environmental disasters that blindside our businesses and take our focus away from other activities. One factor, however, is certain – we live in an era where there is an increasing probability of a low probability event happening. How your organisation plans for this will ultimately determine its success over the next 10 years.
Tim Sheedy is a senior analyst for Forrester’s Asia Pacific team, providing both global and local perspectives for New Zealand and Australia clients on IT management and infrastructure. Erica Driver is a principal analyst at Forrester, focusing on information and the knowledge management professional. Euan Davis is a senior analyst at Forrester covering topics for sourcing and vendor management professionals.
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