IT Strives to Reinvent Itself Despite Budget Restrictions

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Realign talent

Without talent of the right caliber, transformation and recalibration of the IT value proposition cannot succeed. The best that IT can hope to achieve is incremental efficiency improvement. The Hackett Group's key issues research identified several talent management techniques that IT organizations plan to deploy or enhance in 2014. To address long-term talent issues, many are emphasizing initiatives such as: rethinking job profiles and competencies, strategic workforce planning, and functional succession planning. More tactically oriented techniques such as reward programs and employee performance evaluation are also being prioritized, but at a lower level.

IT leaders are striving to reinvent themselves in 2014, as they struggle to support innovation-based corporate growth efforts with improved information and analytics, according to 2014 IT Key Issues research from The Hackett Group, Inc. At the same time, IT organizations are facing another year of staff cuts and only small budget increases, in the face of moderate revenue growth expectations.

According to The Hackett Group's research, companies are focusing on three IT strategy areas for 2014: redefining IT's value proposition, including developing business relationships necessary to support innovation and adopting metrics to better measure IT value contribution; development of enterprise information architecture and analytics capabilities to help their company support top-line revenue growth; and talent realignment.

The Hackett Group's research showed that IT organizations are being expected to improve efficiency in 2014, as they consistently have since 2008. Budgets are expected to increase by 1.7 percent and staffing is expected to be cut by 2.0 percent. But once the expected enterprise growth rate of 6.7 percent is factored in, the result is a productivity gap of 8.7 percent and an efficiency gap of about five percent for 2014. These gaps will require them to focus on reducing IT costs in traditional IT delivery service areas, and redeploy resources so they can largely self-fund any reinvention and transformation efforts.

"IT organizations have a long history of challenges keeping up with the changing needs of the business. That's truer today than ever before. As companies focus on improving innovation to drive growth, IT must shift towards a true service mentality which enables enterprise strategy and deepens the IT/business partnership. It's no longer enough to be simply a utility to the enterprise, with a strict focus on low cost," said The Hackett Group Global IT Advisory Practice Leader Scott Holland.

"Changes in technology have also undermined the total control that IT used to have over critical assets and services," Mr. Holland explained. "Technology has become pervasive, and there are so many new options available to the business, from the cloud to SaaS to tablets and smart phones. IT needs to up its game and change its mindset. A deeper understanding of the business is required, as is the ability to translate that knowledge into technology solutions that are virtually transparent to the user. Then IT needs to make sure it all hangs together."


Related Topics : A Big Market for Big Data Jobs, Midmarket CIO, IT Management Automation, SharePoint, Technology Markets

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