August 2006 IT Organization Survey: The Wall Between IT and Business is Falling Down

By Allan Alter  |  Posted 08-29-2006

August 2006 IT Organization Survey: The Wall Between IT and Business is Falling Down

The final installment of the August 2006 IT Organization Survey presents two important trends that will shape both the IT organization and IT careers far into the future. It turns out that about half of all IT organizations are still regarded primarily as a support function, not a strategic organization. Whether that's a serious limitation for those companies, a reflection that there are limits to what IT can achieve in many industries, or a sign that Nick Carr is right when he says IT no longer can provide competitive advantage can be debated. But what is less open to debate is that strategic IT organizations have more opportunities. When IT is strategic, the staff is more likely to understand their business and industry, and the career prospects and status of CIOs and their staff are better.

But the other finding is probably even more significant. In the 2005 CIO Role survey, we noted the emergence of the hybrid CIO who possesses both IT and business skills. Now we are seeing the emergence of the hybrid business manager and even staff member who is an active participant in IT-related activities, and is even helping to generate new ways to use IT. This is not a return to rogue "shadow IT" projects, but the inevitable evolution of IT to an ongoing conversation between a "business" side that has been using computers since childhood, and an "IT" side that understands business. That transition won't be easy on IT professionals, as Finding 5 notes. Helping IT staff members adjust will be one of the most important tasks CIOs will need to undertake in the future.

Research Guide:

  • Finding 1: IT organizations are getting larger, not smaller.
  • Finding 2: Large companies are relying on contractors, outsourcers and H1B visa holders.
  • Finding 3: CIOs are looking for business-savvy technologists to build new systems.
  • Finding 4: Most IT executives believe their departments are undergoing more change than ever
  • Finding 5: The IT morale problem has stabilized, but it's still serious, especially at large companies.
  • Finding 6. Only half of IT executives say their companies view IT as strategic.
  • Finding 7. The division between the IT organization and the rest of the business is diminishing.

    Next page: Only half of IT executives say their companies view IT as strategic.

    Only half of IT

    executives say their companies view IT as strategic.">
    Finding 6: Only half of IT executives say their companies view IT as strategic.
    Despite years of talk about the strategic importance of IT, many companies view IT as a support or staff function. Strategic IT organizations are more likely to grow larger, be led by a CIO who reports directly to the CEO, and have IT staff who understand their company's business strategy. But where the IT function is not strategic, the CIO position is more likely to be eliminated within five years.

    Research Guide:

  • Finding 1: IT organizations are getting larger, not smaller.
  • Finding 2: Large companies are relying on contractors, outsourcers and H1B visa holders.
  • Finding 3: CIOs are looking for business-savvy technologists to build new systems.
  • Finding 4: Most IT executives believe their departments are undergoing more change than ever
  • Finding 5: The IT morale problem has stabilized, but it's still serious, especially at large companies.
  • Finding 6. Only half of IT executives say their companies view IT as strategic.
  • Finding 7. The division between the IT organization and the rest of the business is diminishing.

    Next page: The division between the IT organization and the rest of the business is diminishing.

    The division between the

    IT organization and the rest of the business is diminishing.">
    Finding 7: The division between the IT organization and the rest of the business is diminishing.
    Respondents at half of large companies—and a significant percentage of other companies—tell us that business users, not the IT staff, are generating most of the new ideas for using IT. This is a stunning indication of the enormous role users now play in IT. It doesn't matter whether IT is considered strategic or not: The business side now makes decisions, and does work, that previously was done by the IT function alone. These results indicate that a new generation of business users is on the rise who are familiar and comfortable with technology.

    Research Guide:

  • Finding 1: IT organizations are getting larger, not smaller.
  • Finding 2: Large companies are relying on contractors, outsourcers and H1B visa holders.
  • Finding 3: CIOs are looking for business-savvy technologists to build new systems.
  • Finding 4: Most IT executives believe their departments are undergoing more change than ever
  • Finding 5: The IT morale problem has stabilized, but it's still serious, especially at large companies.
  • Finding 6. Only half of IT executives say their companies view IT as strategic.
  • Finding 7. The division between the IT organization and the rest of the business is diminishing.

    For more data and analysis, see CIO Insight 's Research Center blog at go.cioinsight.com/researchcentral

    Read our previous surveys on the IT organization's current state and future:

  • The IT Organization: Why is Morale So Bad? (November 2004)
  • The Future of IT (January 2005)
  • The Future of IT 2004 : What's in Store for Today and Tomorrow? (January 2004)

    Related stories:

  • Review: Does IT Matter? (April 1, 2004)
  • Marianne Broadbent: Don't Just Implement Strategy. Evolve It. (February 2005)
  • Case study: Continental Airline's Tech Strategy Takes Off (July 2006)
  • Case study: Thomson Aims to Cultivate Able Managers (July 2005)
  • Culture Clash – Special Issue on Alignment issue (October 15, 2004)