As you are all undoubtedly aware information technology has come a long way in the past few decades.  Nowhere is this more obvious than in the corporate world. There are a few of my much younger work colleagues who sincerely believe I am winding them up when I recount tales of a bygone era, namely the eighties and early nineties.  When I speak to them of typewriters and telexes I may as well be talking about Tyrannosaurus Rex or the last ice-age.

Seriously though, it’s not that long ago when information was stored in filing rooms, indexes were little cards in a steel box and accounting software was a hardback journal and a pencil. Do you remember when you wanted to get in touch with someone and your choices were to write them a letter or phone their home and leave a message for them to call you?  It all seems quant at this stage with our mobile phones, blackberry’s, laptops, palmtops, desktops, servers, intranets and extranets all interconnected via our always on broadband to satisfy our insatiable appetite for instant communication and gratification.

All this advancement has spawned a million IT departments and today it is virtually impossible to find a company without at least a couple of tech heads in some corner. In the early days of popular computing the accountants were the first group to identify and leverage the benefits of this new technology and PC’s loaded with VisiCalc and later Lotus 123 were selling like hot buns despite their hefty (£5,000 +) price tags. The early PC’s, while in some ways a lot less complex than today’s computers, were definitely not for the faint hearted, after building up a reliance on VisiCalc to match the investment, no self respecting bean counter could afford to see these machines unused because of any technical problems.

Enter Computer-Guy, the very first entrant onto the evolutionary stage that was to become the IT department.  Computer-Guy was typically an electrical engineer who, equipped with his tool belt and truck loads of technical manuals was paid copious amounts of money to drink tea and eat chocolate biscuits while contemplating how to resolve things like hard disk failures. He was usually seen as a guru and unbeknownst to most, was also an avid “Leisure Suit Larry” player.  Back then IT departments didn’t really exist and so the obvious reporting line for Computer-Guy was to the Financial Controller.  Fast forward a couple of years and, the technology became more complex, the requirements for computers to talk to each other became more important, Computer-Guy had progressed from playing “Leisure Suit Larry” to the network version of Doom, he discovered a new hero was called BOFH (Bastard Operator From Hell)  and there was a gradual move towards having specialist and autonomous IT Departments dealing exclusively with technology and communications.

For a number of years IT departments did their thing and didn’t receive much attention from other parts of the company. Most execs saw IT as a little more than a necessary evil and didn’t perceive that there was much strategic value in information technology.  Computer-Guy and his descendents were quietly happy with this arrangement and played their cards close to their chest.  When forced to interact with outsiders’ Computer-Guy became very proficient in the science of bamboozling and developed an entirely new language that was unintelligible to anyone of a different species. This new language had grammatical rules which required every sentence to have at least a couple of TLA’s (Three letter acronyms) in it. Over this period of time the only thing that was developing faster than processing power and storage capacity was geek speak and tech talk.

Enter the internet!

What began as a murmur with the provision of niceties such as electronic mail quickly turned into a full scale roar once the corporate world realised the potential that the World Wide Web had to offer. With broad acceptance of the Internet it suddenly became very cool to work in IT and all the traditional disciplines that operated successfully for decades under the corporate umbrella suddenly became incapable of being without adding an “e” in front of their name, e-sales, e-marketing, e-service, e-care, e-business, etc, etc.  Overnight, Rock Stars and Actors were out and Internet Entrepreneurs, Venture Capitalists, Trekkies and guys who quit their jobs to day trade tech stocks were the new vogue.  Lead web developers got paid more than C.E.O.s, I.P.O.’s happened daily and guys with pony-tails were making their debut around the boardroom table.  Pony-Tail.COM-Boy had arrived, in style, and was one of the most celebrated people in town.

With break-neck speed the rest of the corporate world which hadn’t thus far been directly caught in the middle of the frenzy decided they needed to get in on the act. One of the first obstacles to success was the lack of interpreters who were fluent in both English and Tech-Talk.  Accordingly there was an instant rush of execs, all clamouring to get into MBA programs in order to, amongst other things learn this new language and capitalise on the dotcom phenomena.  While some Bricks & Mortar industries carried on business as usual and left the tidal wave pass them by unhindered, most other companies got in swiftly on the action.  Some invested carefully and wisely in strategic initiatives that would see them leverage this new communication medium to enhance their existing business model, others tried to replicate Pony-Tail.COM-Boy whose mantra was “Get large or get lost”.

Stupendous volumes of money were spent on a whim by some ordinarily sensible business people.  While there are several examples of companies and industries that have prospered as a result of their e-efforts, sadly the reality for the majority of companies who spent their hard earned (or borrowed) cash on the early Internet rush, turned out retrospectively to be a series of very poor investment choices.

All the time this was going on, there was a skeleton in the closet for a good many IT departments that nobody really wanted to talk about. You guessed it Y2K (interestingly another TLA)! There were frantic moves going on, under the cover of darkness by IT departments the world over trying to figure out what this meant. Who will be affected? What systems are going to crash? Can we fix it? Do we need to tell management? Should we stock up on dried & tinned food? Is the world going to meltdown?

Anyway!

Eventually management were told, as were the media and “The End is Nigh, Preachers”. Guess what happened? An IT contracting bonanza!  Between the already spiralling demand for web skills, and every other IT skill required to get projects and maintenance done, then add to the mix a requirement for hundreds of thousands of programmers and data people worldwide to investigate and, where appropriate clean up the mess left by the short-sightedness of abbreviating a year to 2 digits, and what you have is massive skill shortage and wage inflation on an unprecedented scale.  I remember interviewing college graduates for jobs who weren’t a bit shy to ask for salaries that were multiples of my own.  Back to Y2K, personally while I was outwardly confident about the outcome, I did spend new-years 1999/2000 at the office, holding my breath as midnight came and went.

The Tech Wreck Wreaked Havoc!

Once the dust settled on Y2K and the hangover began in the dawn of the new millennium, the antics at the party started to come back to haunt people like flashbacks after a night on the beer.  The worst affected were the dotcom millionaires who didn’t know the party had ended.  For the next two years the Nasdaq would take a steady nosedive as many of the dotcoms went belly up.   Finally a year after September 11th the Nasdaq found its bottom at about 25 % of its former value.  I mention this because many people seem to recall that it was the awful events of September 11th that put us into a recession at that time; the reality is that we were already half way through at that stage.

As far as IT was concerned many execs and industry commentators had grown tired of Computer-Guy.  Pony-Tail.COM-Boy and all his friends had to give back the keys to the Porches & Ferraris, The Bankers started working on Subprime Mortgage Lending and for the time being at least, it was no longer cool to work in IT.  College applications for IT related degrees fell to an almost nonexistent level in the western world, and this very quickly made key IT skills a scarce commodity.  Pony tails are no longer a trendy look in the boardroom and many companies started to leverage the newly globalised IT outsourcing model as a means of cutting cost during an extended recessionary time, 2001 - 2003.  Many parts of IT have as a result now become commoditised.

Coming up to the present day, you can buy PC’s at Tesco with your groceries.  Most home users have access to broadband and are more than capable of setting up their own wireless networks and dealing with a wide array of issues and situations that “Early Computer-Guy” would have quaked in his boots and consumed gallons of tea with boxes of biscuits to contemplate - let alone resolve.  Look at the amount of non tech people who design and run their own website as an example of this.  There are similar situations in workplaces across the land; your average user today is probably more tech-savvy than Computer-Guy was just 15 years ago.  Most middle and upper management are also pretty clever in many areas of technology today; there are a lot of want-to-be IT Managers out there today, they just don’t necessarily want the job title.

So what does this all mean for IT? Is the IT department dead?

The answer is a very straight forward, “IT Depends!”  There are two main points of consideration to be taken into account when dealing with this question;

1.
What type of Company you have?
2.
What type of IT Department you have?

Question 1 - What type of Company you have?  There are only two kinds.

*
Companies who are leaders
*
Companies who are followers

Question 2 - What type of IT Department you have? Again there are really two answers to this question.

*
IT Departments who are leaders
*
IT Departments who are followers

Before I proceed there are two main points I would like to raise out of this, firstly this is one of those situations where opposites definitely don’t attract. If you get this mix wrong you will have endless grief on all fronts. Secondly, there is no automatic assumption that either being a leader or a follower is better or worse - it very much depends on the nature of the company and the industry.

Let’s assume we narrow down the four possible combinations above to the two that match.

Following Company + Following IT Department:

This might not be as bad as it sounds depending on the nature of your business, take for example a company who manufactures generic pharmaceuticals, or a home builder, or an office cleaning company, the business sense and cost of being strategically well ahead of your competitors in an IT terms may not be justifiable for the extra return you can achieve.  You and your business might be very happy, efficient and profitable and prefer to adopt innovation after it has been well tried and tested by others and when the price tag falls.  You may have an excellent IT Department who keep the lights on consistently and don’t spend the earth in doing so, it may not matter that much to you to have every last inch of competitive advantage IT can bring you.

The bad news in this combination for the IT Department is - It’s probably not going to last indefinitely.  With the increasing availability of cheap bandwidth,  S.A.A.S. (Software as a Service) and outsourced support and maintenance at increasingly competitive prices, if this was your business what would you do?

Leading Company + Leading IT Department

This is an interesting situation, not necessarily always the easiest to manage but it certainly has more good days than bad for the people involved.  These combinations can occur, perhaps surprisingly in all ranges from small start-ups to large well established firms.  Typically companies that fit this profile are driven by a hunger to succeed from all levels.

The good news for IT Departments in this situation is - You can’t outsource your genius.  IT Departments in this environment tend to offload mundane tasks and noncore systems in order to concentrate on the important stuff.  The important stuff can vary wildly but often includes the core concepts of integration, innovation and information.

So where does this leave the IT Department of Tomorrow?

In reality, the trend is increasingly moving towards commoditisation of basic IT Services, there are several good providers of these services on the market who can potentially save you and your organisation significant time and money.  These solutions and providers should not be seen as a threat, rather as an opportunity.  Alongside this, the increasing technical competence of regular users means that IT Departments need to be capable of bringing extra value to the organisations which they serve.  Similarly the companies have to want or need the extra value being brought to them by their IT Departments and need to appreciate that their IT Manager probably has much deeper knowledge and skill than all the want-to-be IT Managers in the company combined. IT is after all, an ever more important strategic weapon in the arsenal of any progressive organisation.

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