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28 June 2005

The death of the IT department

By Andrew Clifford

Outsourcing and decentralisation are often predicted as the cause of death of the IT department as we know it. But the real threat, or opportunity, comes from merging IT into general business management and operation.

Over the past weeks we seen how predictions of the future should be based on understanding commercial pressures and the drive to escape the constraints imposed by IT. We have looked at redefining computer literacy and the personal computer, and how this could revolutionise the use of IT in business.

But this questions the need for an IT department.

Most of the debates about IT departments concern whether they should be centralised or decentralised, in-house or outsourced. But these are only perspectives. These debates don't question the need for some type of IT function separate from general business management and operation.

I think we need a different, deeper debate on whether we need any type of IT function at all.

To start the debate, let's examine some of the main reasons for having an IT function:

  • Computer operation. Historically IT has required specialist operators and facilities. The trend is towards commodity computer platforms, leading to grid computing which lends itself to supply as a utility.
  • Economies of scale. Historically IT has been expensive, and use of it had to be optimised. But this is less important as technology gets cheaper. There are diseconomies of scale - large-scale IT works against flexibility.
  • Concentration of expertise. In the past this has been required because of technological complexity, and because we have made IT structures separate from the business organisation. These could be tackled by simplifying and standardising technology, and realigning systems around the business organisation.
  • Application of control. The need for control diminishes as standards evolve. You don't have an electricity department to make sure everyone uses 240v AC.
  • Career structure. In truth, probably the greatest force arguing for a continued and expanding role for the IT department is the career aspirations of the people within it.

All these reasons for the existence of a separate IT function are questionable. True IT literacy and the second PC revolution would enable IT to merge into business management and operation. This would give IT that is truly aligned, and truly flexible.

This doesn't mean the death of the IT industry. There will still be IT suppliers, and there will still be a need for specialists to procure IT. But in most businesses, the central IT function will have a much lower profile, and become a sort of high-tech office services department.

I predict that the following IT departments will die:

  • The "only we understand IT" department.
  • The "only we can buy or build IT solutions" department.
  • The "we know how this business should run" department.
  • The "we use IT to lead business change" department.

And what will happen to all the people from the current IT departments?

Without a significant IT department, IT skills will become more, not less, important in business. Truly IT literate staff will be in great demand. The challenge for those currently in IT departments is not to give up their profession, but to learn to really apply it to bring business value.

Next: Escape from IT skill shortages

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