May 2012
Enterprise IT leaders would be making a mistake if they constructed a single hypothesis about the future and then built their IT capabilities around it. That sort of planning might be appropriate during more stable times but it makes less sense now, when the road ahead seems so uncertain. Instead, what IT leaders need is to be prepared for multiple potential futures, enabling them to adjust faster to rapidly changing geopolitical, economic, regulatory and technical developments. Envisioning such possible futures and determining how to best meet those requirements can help IT leaders create a more agile and responsive IT function.
Build IT from scratch?
Given the increasing presence of consumer technologies in the workplace and the ability of business unit executives to make many of their own technology decisions, the IT function as a whole is certainly ripe for reinvention. In a recent survey from the Accenture Institute for High Performance, IT was chosen by a wide margin as the function that business executives would most like to build from scratch, and IT executives singled out their own function as a target for reinvention by an even bigger margin. IT, the agent of change, is now the target of change—even by IT’s own leaders (see chart).
But how should enterprise IT transform itself for today’s and tomorrow’s needs? To create a more agile and change-capable enterprise IT function, CIOs and senior business executives should center their efforts on becoming “futures-ready.” The s at the end of “future” isn’t a typo. It’s our primary message.
A futures-ready posture recognizes that it is much better to prepare for radically different ways in which the business and technology environment might change—and then imagine how IT could adapt and respond to those changes.
Our research into the factors influencing business and technology uncovered more than 60 forces that could have an impact on the enterprise IT agenda and the IT function’s own future. Eight large-scale forces in particular will have significant impact.
Force No. 1: The cultural impact of consumer IT. Smartphones, social networks such as Facebook and China’s Renren, and other consumer technologies have already transformed how people work, play, learn, shop, share, talk and organize. These IT devices and platforms are causing big changes in culture, attitudes and workplace norms.
Force No. 2: Global, Internet-based competition. Industry leaders from North America, Europe and Asia are continuing their push into new regions, industries and markets. But companies with Internet-based business models, as well as emerging-market multinationals, are competing more effectively and sometimes overtaking the traditional players.
Force No. 3: Vulnerable technology and information. Individuals, companies and governments are more exposed than ever to online theft and cyber attacks—threats coming from cybercriminals, foreign governments and even business rivals.
Force No. 4: Increasing pressure for quality and efficiency. The pressure to do more with less is intensifying. Companies must improve productivity in the face of global competitors who frequently have cost advantages while still innovating and improving the quality of products and customer service.
Force No. 5: The rise of data-driven decision making. For many companies, new technologies are improving the ability to transform data and information into insights. Smart companies are leveraging sophisticated new analytical techniques and are beginning to embed analytics into their processes and planning.
Force No. 6: New approaches to innovation. Companies are rethinking how they innovate. They are becoming more collaborative—tapping the ideas of customers, suppliers and outsiders. They are also engaging in new techniques such as reverse innovation, which turns low-cost products originally intended for emerging economies into new products for mature markets.
Force No. 7: The impact of geopolitics and state regulation. Geopolitical issues, policies and regulations will have a significant impact on the flow of information, as well as on talent, trade, technology, capital and ideas. Among the current developments with the most potential impact: China’s ascent, the future of the Eurozone and the outcome of the Arab world’s ongoing revolutions.
Force No. 8: The possibility of disruptive disasters. Severe natural and man-made catastrophes, wars and unrest could disrupt the use of information technology for lengthy stretches. These sorts of catastrophes are rare and their timing is unpredictable. If they materialize, however, their impacts—including decreased foreign investment, recession and labor flight—could figure into IT deployment decisions.
Becoming futures-ready
Becoming futures-ready requires specific capabilities and mindsets. In particular, the futures-ready IT organization will:
Open up the process of creating the new enterprise IT. The new enterprise IT organization cannot easily be designed by the old one. The executives who forge the new enterprise IT will make sure the process is inclusive, not insular. It will be led by both top IT and non-IT executives. This leadership team will engage business line managers and users from many geographic regions and cultural backgrounds alongside IT architects and experts in emerging technologies. Planners will seek input from employees, customers and other members of their business ecosystem, and will engage outside experts who can articulate what the forces shaping enterprise IT’s future will demand.
Seize the future that has already arrived. A futures-ready IT organization will take advantage of new technologies that create business possibilities, such as context-based services (cloud services that recognize where you are and what you are doing), social IT (Facebook, LinkedIn and other new communication channels) and platform-as-a-service (cloud capabilities for building or running new business services). They will also apply new management and information-gathering tools such as crowdsourcing. This new kind of IT organization will be eager to explore unproven ideas and willing to test them.
Shatter the boundaries of the possible. Running a four-minute mile once seemed impossible, but now that the mark has been shattered, it no longer seems as formidable. Similarly, IT leaders will accept the challenge of performing at a level once considered out of reach. They will investigate radical ways to reorganize IT to attain radical goals. How would they meet a challenge to create a new IT infrastructure in a week? Or throw out all their legacy systems and rebuild IT from scratch? The futures-ready company will be willing to explore how to do the risky and seemingly impossible.
Make IT roles fit business needs, not technologists’ ambitions. Some companies need strategic, transformational CIOs. But in some futures and with some business strategies, companies may have more modest IT needs and will instead need IT leaders who are more focused on specific goals, such as cost reduction or improved security. These companies will be better served by a CIO who is more of a manager than a strategist—and there is nothing wrong with that.
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Becoming futures-ready is a tough task. It requires imagination to challenge old assumptions and courage to act upon new insights. But it’s a charge that no responsible IT leader can shirk.
Enterprise IT is at a true crossroads. An epoch-making technology transition—the advent of cloud computing as well as the worldwide availability of powerful and simple-to-use computing devices—is intersecting with a moment of geopolitical and macroeconomic uncertainty.
IT leaders have the opportunity to seize today’s business and technology innovations, as long as they prepare for increasing complexity and discontinuous change. Planning for multiple futures can keep IT leaders one step ahead of the competition.
About the authors
Jeanne G. Harris is an executive research fellow and director of research at the Accenture Institute for High Performance.
Allan E. Alter is a research fellow at the Accenture Institute for High Performance.
Iris A. Junglas is a research fellow at the Accenture Institute for High Performance.
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