Leadership

CIOs split on future destiny of the IT department

Is IT waxing or waning in today's organizations? TechRepublic has taken up the topic with its CIO Jury, and the IT executives had plenty to say about it.

Is the influence of the IT department waxing or waning in today's organizations? Or is it transforming? Or, will cloud computing make IT almost completely obsolete? These are the kinds of questions that are bouncing around the IT space in 2010.

TechRepublic has taken up the topic with its CIO Jury to ask the leaders of IT where they stand. See how the jury ruled and then read our selection of comments from the IT executives. And, see how CIOs in the UK and Germany voted, as this special edition of the CIO Jury was coordinated with our international counterpoints.

The jury vote

TechRepublic polled its 100-member panel of U.S. IT executives on August 31 and asked, "Will the average in-house IT department of 2015 be much smaller than it is now?" The jury, made up of the first 12 respondents, were split exactly down the middle with six "Yes" votes and six "No" votes.

The jury for this topic was:

  1. Matthew Metcalfe, Director of IS, Northwest Exterminating
  2. Michael Knibbs, CIO of CompWest Insurance Company
  3. Joel Robertson, CIO of King College
  4. Laurie Dale, Director of IT, Ability Beyond Disabilty
  5. Kevin Quealy, Director of IS, Southern Baptist Conservatives of Virginia
  6. Lance Taylor-Warren, CIO, H.A.W.C. Community Health Centers
  7. Mitchell Herbert, Director of IT, McCormick Barstow
  8. Michael Hanken, VP of IT for Multiquip Inc.
  9. Chris Ricciuti, CIO, Needham and Company, LLC
  10. Randy Krzyston, Director IT, Thomas Jefferson School of Law
  11. Michael Foerst, CIO, Missouri Employers Mutual Insurance
  12. Robert Culpon, Director of Information Systems for Anderson ZurMuehlen

TechRepublic's CIO Jury is based on the original CIO Jury concept developed by Silicon.com, where you can find lively opinions from IT leaders based in the UK.

The changing role of internal IT

Lou Hablas (Director of IT for RZIM): "Cloud computing will undoubtedly reduce the need for staff at the organizational-level, but likely increase the need for staff at the cloud-level and the outsourcing-level. I think the rise of locally-based consulting and tech support companies - many with ties to the cloud as well - is evidence of this accelerating trend." Mike Wagner (CIO for Stone & Youngberg): "The tendency to outsource the pure technology function to managed service providers will continue to increase, and resources with a purely technical skill set will work for service providers rather than internal IT Departments. In other words, the generic and commoditized aspects of IT that do not provide competitive advantage will be outsourced to service and cloud providers. However, IT functions that provide competitive advantage and cost savings via process optimization and decision support (i.e., business analysts, IT architects, BI and statistical analysts) will continue to grow and slightly offset the headcount loss associated with the outsourcing of commoditized functions to managed services and cloud providers." Chris Riccuiti (CIO of Needham and Company, LLC): "While it's true that infrastructure jobs will shift to vendor data centers, those jobs will be replaced with more 'business-centric' IT folks that will still reside in-house." Jeff Relkin (Director of IT for Quadel): "As technology becomes ever more commoditized and as the availability of objects for application construction without traditional development continues to expand, the need for in-house IT resources will dwindle. The overall organization of IT will also change, along with the skill sets required. IT professionals will need to become more mainstream business resources than ever before, with more emphasis on contributing to revenue generation rather than expense reduction." Delano Gordon (CIO of Roofing Supply Group, LLC): "Smaller but not eliminated. Cloud computing affords some reduction in staff positions but will not eliminate the need to have SMEs [subject matter experts] on staff." Michael Foerst (CIO of Missouri Employers Mutual Insurance): "Yes, on average it will be smaller but not because it is all outsourced. IT departments will leverage the capabilities of the cloud in order to allow their internal resources to become more familiar with the business and deploy technology solutions that will help differentiate their organizations in the market." Ren Johnson (IT Director of Professional Dynamics, Inc.): "IT departments and skill sets for what is required is changing due to cloud computing. We are looking at an industry on the verge of reliable cloud computing that will solve IT's maintenance and disaster recovery issues. The role of IT will be reduced to helpdesk/desktop support and IT leaders who manage vendors to maintain key critical applications and systems. The only vertical markets I see building internal cloud computing supported by their own IT departments would be regulated sectors such as financial and healthcare, although there could be some strides made into making these effective on the cloud as well."

Smaller? No, IT will grow

Kurt Schmidt (IT Director of Capital Credit Union): "With the ever-increasing usage of technology, the need for technicians to support it will only increase." Michael Woodford (Executive Director of IT, USANA Health Sciences, Inc.): "I don't believe that cloud computing will have as dramatic effect as everyone thinks it will. There may be portions of an IT shop that could be outsourced, but with an ever growing reliance on IT as a corporate resource IT shops should expect to have concurrent growth." Martin Szalay (Director of IT, FWE Co.): "I, and others, have come to find that outsourcing is a not always as cost effective, agile or as wise a decision as others would have us believe. The threat of IT downsizing has loomed over me for over 20 years now; with the evolution of newer technology, IT automation, or cutting edge business processes. Yet, we need more developers and admins than we've ever had before." Kevin Leypoldt (IS Director for Structural Integrity Associates): "While I do see (and forecast) dramatic changes in the way that IT functions, I believe that the department numbers will remain relatively stable. However the roles that make up the department will change in relationship to these shifts in technology. [For example], the pending shift to cloud computing will likely see a shift in resources to networking and security from server and desktop support."

Booming IT in health care and finance?

Brian Wells (CTO of Penn Medicine): "Not in the healthcare sector. The systems are only getting more complex and automation is spreading to more and more of the enterprise requiring more and more diverse expertise and support." Lance Taylor-Warren (CIO of H.A.W.C. Community Health Centers): "Cloud computing is just one of many options that a company has to look at moving forward. No one knows what the next big thing will be. IT departments may shrink in certain markets, but health care IT is on the cusp of a huge growth phase due to health care reform and the requirements being forced on the industry by the federal government. Outsourcing can't address the hands-on need." John Gracyalny (Director of IT, SafeAmerica Credit Union): "No, it will be larger. At least in the Finance industry, primarily due to increasing regulation." Jeff Cannon (CIO, Fire and Life Safety America): "No. Proportional to the rest of the business, the in-house IT department will be roughly the same for best-in-class companies. Roles may shift. An IT department that is very tactical today - systems maintenance, security, backup, archiving, user support, etc - may see its focus shift towards strategic planning, partner/vendor management, audit and compliance tasks. Whether it's private cloud, public cloud, non-cloud or some future permutation we have yet to see, there is still risk to manage."

CIOs in UK and Germany disagree

This special edition of the CIO Jury was coordinated with our sister sites, Silicon.com in the UK and Silicon.de in Germany. We all posed the same question to our IT executive panels. Interestingly, the UK and Germany posted divergent results. UK IT chiefs voted "Yes" by a margin of 10-2 that future IT departments would shrink. Meanwhile, German IT leaders were far more optimistic, voting "No" by a unanimous 12-0.

Would you like to be part of TechRepublic's CIO Jury and have your say in the hottest issues facing today's IT departments? See if you meet the requirements to participate and then drop us a line.

About

Jason Hiner is Editor in Chief of TechRepublic and Long Form Editor of ZDNet. He writes about the people, products, and ideas changing how we live and work in the 21st century. He's co-author of the upcoming book, Follow the Geeks (bit.ly/ftgeeks).

26 comments
Lazarus439
Lazarus439

Are these the "paperless office" guys? We know how well that's worked out....

BobP64
BobP64

We've all heard about "cloud computing" for quite some time now. With companies like TJ Max and others unable to even keep credit cards safe when they are on their OWN system, putting sensitive information into the "cloud" is like opening the door to the companies jewels and saying "here, have a look". Cloud computing MAY grow, but, once a HUGE release of company private data occurs, and make NO mistake about it, this is not "if", but "when", MANY companies will reconsider their stances. Companies that have CIO's that are sharper than a tennis ball will have gained some incite into these problems ahead of time and, while perhaps embracing "cloud" computing verbally, will actually eschew it in terms of their critical data and technology.

Jay Rollins
Jay Rollins

Ever since CIO's were needed, there was a shift toward strategic roles for IT. The problem is, the commodity, break-fix comes along with it. This creates a conflict in the IT department where half the department is focused on reacting to issues and the other half is focused on moving the company strategies forward. The technology is there to outsource the break fix today and give it over to someone with deeper experience in IT operations than internal resources who are pulled in many directions (despite what the job title is). ITIL, Cobit, remote tools, virtual appliances... It's all there. My prediction: Helpdesk, systems administrators, network administrators, database administrators, even 3rd-party application support will all be outsourced. Even some security aspects will be outsourced. What the IT department will look like is Systems and Data Architects, business analysts, project managers and some senior software developers and report writers. This shift will turn internal IT departments into truly strategic organizations that won't have the distractions of dealing with IT operations.

aharryh
aharryh

IT Shops are huge and getting bigger. Everyone is an IT expert brings in and plugs in their own software, servers and software. Just like they do at home. And when it doesn't work, crashes the corporate system or introduces malware they blame IT for crap service and expect IT to be the experts in the technology and get it fixed and keep it running.

Tony Hopkinson
Tony Hopkinson

LMAO Anyone who thinks outsourcing, or cloud or any other technology will reduce IT was well to the back of the class when brains were being handed out. Present Destiny, no... This is IT, change is a given. More IT, is was and never will be a question?

jmarkovic32
jmarkovic32

If you already have a server room or data center, it makes no sense to go to the cloud. It would be cheaper to get rid of the data center completely--especially when companies like Rackspace charge you for utility costs as well.

drew.mcbee
drew.mcbee

...in their response should be given 30 lashes out behind the IT woodshed. They have absolutely no idea what they are talking about. They are the same people who thought thin clients would rock the world, as "delphi" pointed out above. Cloud Computing. The very idea.

delphi9_1971
delphi9_1971

Told us Thin clients would reduce the need for IT staff when asked back in the 90's?

jeff
jeff

I tend to be in the "smaller" camp. Their thoughts all echo my own. Small and medium sized businesses, which make up the majority of the American corporate landscape, have no need to or expertise in managing IT. Why should they? They should focus on providing accounting services or fixing cars or whatever they do. Their IT should be as seamless to them as their security or their telephone or their air conditioning or electricity. More complicated, but if a third party can provide that kind of service (and they SHOULD), the business will be well served to take advantage, rather than do it in house. Large enterprises will likely always have internal IT staff, because they will have the expertise to run what amounts to an entire IT enterprise itself.

Tony Hopkinson
Tony Hopkinson

they are also the thin client guys, the case tool guys, the UML is the only way to go guys, the rich web client guys, the RAD guys, teh agile guys, the SaaS guys, the OODBMS guys... Eternal seekers of the silver hammer.

yattwood
yattwood

Greetings, Mr. Rollins, I am currently living the wonderful (in the viewpoint of management) scenario you have described) GUESS WHAT - _I_ have to CONSTANTLY supervise what the "wonderful" India-based outsourcer people do - I STILL have to retain my Oracle, UNIX, SQL Server, DB2, Network Appliance, etc, etc, skills BECAUSE (1) My users DO NOT WANT TO TALK TO THESE PEOPLE BECAUSE THEY _CANNOT_ UNDERSTAND THEM (2) My users want to have SOMEONE IN THE _SAME_ BUILDING to approach for help (3) The "wonderful" India outsource people have ALREADY caused ONE MAJOR outage in production; one of the LPARS with an Oracle database server KEEPS COMING DOWN (and _I_ had to inform _THEM_ about it (and the fact that the Listener wasn't running)! I have to keep track of what changes they want to make because, mirable dictu, my users would like the PRODUCTION SYSTEM TO STAY UP!!! Also, the dirty little secret about many an IT shop is that MANY systems aren't the gleaming, "best-practice", latest buzzword - MANY systems have UNSUPPORTED versions of software that the IT staff have to keep running because the _USERS_ don't want to PAY for UPGRADES. And this throws the "wonderful" India oursourcer for a loop - they can't apply all their precious "best practices" and buzzwords to systems running obsolete versions of SQL Server, Oracle, COBOL, PeopleSoft, DB2, Solaris or what have you - you have to POUND on them to SUPPORT THE SYSTEM THE WAY IT _IS_, NOT THE WAY _YOU_ THINK IT SHOULD BE!!!!! "Not dealing with the distraction of IT operations" Hah! Tell that to the CFO who wants to know why PeopleSoft Financials isn't running because the OUTSOURCER decided to change things!!!!!!!!!!!!!!!!!!!!!! Really, it is to laugh.......

jasonhiner
jasonhiner

Up until the end of 2009, most IT pros would scoff anytime "cloud computing" was mentioned. But, opinion seems to have shifted by the beginning of 2010. Lots of IT executives have put cloud computing and virtualization (its enabler) among the top IT priorities in surveys. You also have companies like EMC, VMware, Microsoft, and HP running around talking about the "Private Cloud." Like or not, cloud computing is now part of the standard language in IT, and it used to refer to a lot of different things: SaaS, SOA, Web-hosted apps, and even private farms of virtual machines (that's where "private cloud" comes in, even though it's little more than VM's running on traditional servers in many cases).

mcswan454
mcswan454

Yes, sounds like the Mainframe has made a triumphant return. Everything stored on a central "big box" and we use SaaS. I'm glad I lived long enough to see it. M.

Screaming_Chicken
Screaming_Chicken

....companies pushing simplistic "solutions" for IT costs and clueless executives jump right on board. Our organization just switched to a "cloud" application for help desk software. CIO didn't even bother to get the help desk's opinion before buying into it. Anyone want to guess which direction performance and customer service levels went as a direct result? On the other hand, I'm sure the executive's resume will highlight just how much money his decision "saved" the organization.

cedpm
cedpm

I agree with your sentiment.

MyopicOne
MyopicOne

...although I'm not yet sure that cloud computing will solve the IT maintenance problem (as Mr. Johnson said) as opposed to reducing or moving it. Companies will still be paying for it, just in a different way.

thejendra
thejendra

What if we IT guys decide to put everything on the cloud and it starts a heavy downpour with thunderstorms :-) Tej IT Manager & Author Web Cave - www.thejendra.com

d.j.elliott
d.j.elliott

Back in the day, one of my MBA classes used a utility called LINDO to help figure out the best warehouse/shipping configuration for a company to save $$. In my first case, I put what I thought were the relevant parameters. The result: ship NOTHING. Enthusiasts for 'cloud computing' (makes me feel secure) or 'outsourcing' or downsizing or re-engineering or whatever the IT departments do so without defining or understanding the IT department's baseline function. So, as others noted, reducing or eliminating staff saves dollars, especially if no other budgets or results are considered in the math. Not only does this approach leave your company at the mercy of distant service providers but also will fail to get a good ROI on the computing spend as employees drift around when local, focused IT services (training left the building long ago) are replaced with lukewarm generic service. "Like I care" will be heard more often than "there is an easier way to do that."

jmarkovic32
jmarkovic32

IT service will be like HVAC, electricity and water for most companies, as they pay a monthly bill based on usage. However, with hospitals and financial services whose systems don't make sense in the cloud (imagine running PACS over the Internet), internal IT will continue to grow. Just look at the billions that the government is spending on EHR. I've seen some cloud vendors pop up for EHR systems, but that stuff just doesn't lend well to the cloud. Not only are their compliance concerns, but performance and control concerns. With EHR implementations starting at half a million dollars for even small health centers, they will need bodies to manage that. And even with the move to the cloud, engineers and technicians will be needed to keep the datacenters up and running.

melias
melias

I want to thank you for this post. This singular post from someone with real experience has given me more ammunition than any number of "What if" and "Because of" posts. Not that those posts are not useful and informative. In truth, I had not even thought of the issues you brought to light.

Tony Hopkinson
Tony Hopkinson

you get what you pay for. Outsourcing anything is about cost not quality, so even if you find some top notch indians and you had up to date consistent kit and you'd always followed best practice, some lose well at golf type would replace them with somethng cheaper and get promoted before the wheels came off.

asics447
asics447

The focus of IT will be shifted once again - all the money you will save how much better it is - cloud computing will save the day??? - These will be the latest buzzwords - things will be outsourced and no true IT will be left internally - how much money is saved until- you loose connection to the cloud- until you have to re-write 90% of your code - all after the fact - IMHO - they will praise the cloud - hype it up and make it the best thing since sliced bread and it will not fail - but will wind up costing you more with less service - I cant wait to see the SLA's with cloud computing and see how they preform - regardless it is all about money - CIO's upper food chain - could care less about IT - it all comes down to Money Dont get me wrong the cloud would be good in certain situations but it is not the only solution - Why is the cloud being hyped and pushed??? - So the board can make more money - outsource everything to the cheapest country and workforce

drew.mcbee
drew.mcbee

My biggest problem with "Cloud Computing" is hidden, in part, in what Jason said about it being "part of standard IT language". People use it not because they know what it means, but because it is a new part of the IT vernacular - not because it really means anything. Someone really needs to define what it is. The reason I say those using that term in conversation should be beaten, is because they use it without knowing what it really means - as there is no real definition. They are using it like anything else new - mostly just because of the new and trendy sound about it. As far as many 'execs' considering it. what are they considering exactly? It sounds to me like those considering "The Cloud" are considering outsourcing, or offsite virtualization. "Like or not, cloud computing is now part of the standard language in IT..." Nope, don't like it.

Tony Hopkinson
Tony Hopkinson

have bought a ride on everyother bandwagon in existance as well. Any tech has it strengths, but you have to play to them and to do that you have to kow where the weaknesses are. Those are strangely missing from the literature the lose well at golf mob can understand.... Some of us have been around for a while and know the only cure for a panacea is a barf bag... Keep forgetting to mention tiny details, like oh by the way you'll have to rewrite 95% of your applications from the ground up. Vendor lockin isn't up there in 40pt bold either is it? What's their other favourite, oh yes, don't worry about security and control, just think of all the inhouse staff you can get rid of. Boring, heard it all before, didn't happen... Just another short lived taste of good enough, that never has been.

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