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(October 2003)
Paper's Table of Contents:
Overview
This brief paper has a simple postulate: Every major historical force in business, technology and society is rapidly pushing towards the disappearance of the traditional Information Systems function, IS university curriculum, IS industry structure and IS labor markets. This is not intended as a provocative claim but a simple statement of commonsense; the trends are so clear and so fast moving that the only issue is when not if these trends reach critical mass – if they have not already done so in many areas. IS is now locked into a mature IT industry, with the action moving elsewhere.
Of course IT will continue to innovate, but more and more of its innovations will move into business and organizational usage without IS playing a major role in the process. Advanced development will be handled by a combination of business unit leadership, a new generation of design and rapid implementation specialists and vendors backed up by their systems integration and consulting arms. The IT, back office and even data management operations that house these innovations will be outsourced across the world; what will be left behind are yet more “legacy” systems – this case, legacy administration, legacy back offices and legacy IT operations. Legacy innovation is an oxymoron in this context. While today only a fraction of total IT activities in Fortune 1000 companies and their government agency equivalents are at this stage in a long-term process, at the margin just about all of them are moving in this direction – and there is not a single countertrend pushing to enhance the traditional IS roles in planning, development, implementation, and operations.
The main aim of this discussion paper is to stimulate thinking about what this means for the near future in terms of where does innovative IS move? Some personal thoughts about how to mobilize a new style of IS profession and professionals are provided at the end of the paper. In passing, this is not a diatribe from someone outside the field. Next year will be my fortieth in IS, starting as a COBOL programmer and moving through just about every area of IS, from development to strategy to linking business and IT. I even designed, built and marketed software for the Apple II and IBM PC/XT. I’ve been a professor in IS departments, an owner of a software development company, an IS consultant, and an IS researcher – meaning my job title or work had that specific label. So, in no way am I anti-IS. I just think the days of traditional IS are over and it is essential to radically and immediately move the field forward to new skills, targets and contributions to organizations.
Here is a summary why such change is now essential and why IS is becoming more and more marginalized:
- Rapid commoditization of IS skills in standard systems development, operations and support
- The inevitability of outsourcing of standard IT, back offices and business processes as the global norm
- Economic demands on IT that cannot be finessed by ROI “models”
- Foundational Web services as basis for fully modular architectures and “venture” development
- The design imperative
Rapid commoditization of IS skills in standard systems development, operations and support
In 1998, anyone who could write HTML code for Web sites was a “Webmaster” and earned around $600 a day. Now, HTML is “Save As” in Microsoft Word. Today, XML skills are at a premium. Microsoft has announced that XML, too, will soon be a “Save As” option in Word. In 2000, no company could find enough Java programmers. Now, quite literally, it’s hard to give them away, as systems development firms are discovering; they discount their services at cost in order to retain this expensively acquired talent but the market for large-scale development is at a standstill among most of their customer base. More importantly, most of those customers do not intend to go back to buying traditional development services – or adding to the size of their IS development staff. More and more “development” activities, are being handled not just outside IS but by teams of business people supported by a small number of IT specialists, mainly in the areas of data quality assurance (including security), integration and architecture – these are IS skills which will not rapidly commoditize. These teams deliver results in 90-180 day “ventures” rather than the large-scale, long schedule standard IS projects. Examples are business process management (not at all the same thing as reengineering but with the same target, carried out more cautiously, in smaller increments, and with better process mapping and implementation tools), data mining, new generation e-commerce and Web-based services, and multi-media systems.
Mid-range IS support skills are more and more being sourced globally; when you phone AOL for technical assistance, you get through to Makati, in the Philippines. That’s where the Love Bug virus came from – his fellows describe the student responsible for it as pretty average compared to the rest of his class. The first wave of ASPs, hosting firms and other IT service providers lacked the credentials for CIOs to entrust their IS operations to them; they worried about their financial strengths and staying power, security and reliability. Now, they have many sources of service providers, ranging from the big names in consulting and systems integration, such as Accenture and CSC, and the power vendors such as IBM and HP – backed up by their consulting arms, and many global niche players that they can link to via data networks and call center services. PC procurement, support and configuration, LANs and low-end servers, storage farms, and any activity which requires Microsoft or Cisco certification do not need IS staff to handle when there are plenty of overhead-free, administration light, contract-based relationships available across the world.
These factors are the emerging new mainstream of IT application. They can only increase, not decrease and, correspondingly, traditional IS systems development applications can only decrease. I recently studied eight companies’ successes in transforming cycle time in key business processes and offer this a concrete example of the general trend that I am seeing everywhere: business teams delivering services in 90-180 modules within a tight architecture – increasingly Web services-focused – or via front-end tools that link to such infrastructures as ERP and CRM platforms. IT skills are needed here, mainly for information assurance (end-to-end security, audit trails, and privacy compliance), enterprise architecture and integration planning. Note, these are premium IT skills that may or may not be available in IS but that can be obtained from a range of sources. (If the university IS curriculum of today does not include them in its core courses, then it will be adding to the erosion of IS value and identity as a field.)
Inevitability of outsourcing as the norm
We have entered an era of the global outsourcing economy: outsourcing of business processes, services, and, of course, IT operations. That puts IS on the sidelines. Here are a few instances that could be multiplied by the hundreds:
- Megadeals are everywhere: recent ones are J.P. Morgan Chase, $5 billion, 10 years with IBM; Bank of America $4.5 billion, 10 years, EDS; CIBC, $2 billion, HP; Consignia, $2.3 billion, CSC; etc., etc. The same names keep cropping up: EDS, CSC, IBM, Accenture – the new equivalents of the electrical utilities. A study in 2001 identified seven Fortune 500 companies outsourcing HR administrative functions; the typical contract price is half a billion dollars over a seven year time span.
- A recent Gartner survey shows that half of large companies are actively looking to outsource back offices and standard processes and functions (HR admin, accounting, etc.).
- India is becoming the call center customer service hub for Amazon, GE, Oracle, British Airways, DirecTV, with 25-30% cost savings reported. Turnover is 14% versus U.S. average of 100% or more. They provide high quality work: “Companies start out for cost, stay for quality, and then realize that they get a lot of managerial initiative.” (Extract from an analysis made by a Wharton researcher.) That last phrase ought to jolt the readers of one of the main IS periodicals, Computerworld, instead of putting them on the defensive and the dismissive. When it published a story predicting that 35% to 45% of existing IT jobs in the U.S. and Canada will be outsourced, shifted to contractors or moved offshore within the next two years, the editor described the reaction as “swift and scornful.” Guys, the business doesn’t care what IS thinks of this. Cost, quality, and new managerial options, not IS, are driving the application of IT now.
- India is also expanding its IT offerings: The World Bank reports that its data mining costs have been cut by 15% through its outsourcing of what used to be an IS-specific, high-end skill to India. India has built a rapidly growing call center and business process outsourcing industry; Hong Kong Shanghai Bank has 1,000 IT workers in India. In general, the stereotype of India in the IT field has been that it was in the business of routine coding and reliance on low wages as its competitive differentiation. That makes it easy for IS professionals to view its position in the global outsourcing markets as at the low end. This overlooks the extent to which it has moved up the value chain. Here are comments from The Economist (February 2003) on India’s Wipro company: Despite the [U.S.] IT slump its CEO has presided over the three years of over 70% annual growth in profits. It is “a global back-office for hire” and its business is “brain arbitrage.” Wipro has changed from “being a company of “coders” into one of project managers. Now… for the next big transformation: into “architects and consultants.” IT service firms – of which IS units are the in-house equivalent – are the “neighborhood forge shops” of the age – If you want something made you pay them a visit. Like forges, they will over time give way to bigger international producers offering economies of scale.”
- Document processing is another growth area that is globally-distributed. GE’s Mexico facility handles 3.5 million documents a day, with 10-minute turnaround. American Airlines for decades has offshored data entry and document handling to Jamaica.
- The U.S. Federal Government has a mandated commitment to raise the fraction of the budget spent on outsourced services and functions to 15 percent. The trend line for Federal IT outsourcing in 2007 is 130 percent of 2002, up from $6 to $15 billion. (Note; this trend line is not a dot com era “B2B will be a $1.237 trillion by 2002” off the wall forecast; it merely continues current growth of outsourcing in the context of no other choice in the era of budget crunches across government.) Given that most reports show that government spending on IT – with outsourcing by far the largest investment – accounts for around 120% of the increase in total IT expenditures – this means that the private sector contracted. The only growth area is and will continue to be driven by outsourcing. Managing contracting and co-sourcing relationships is a skill that many agencies lack, as the notorious California Oracle database contract illustrates but the way of the future is equally exemplified by San Diego County’s seven-year, $644 million contract with an alliance of vendors. Here is the explanation: “The county wanted world-class IT for all its departments. ‘There is no way we could have done that internally.’” (How many IS curricula include core courses on contracting and alliance management?)
- Parallel and interrelated growth in business process outsourcing (BPO) and IT outsourcing is everywhere and it’s a global industry. Slovenia, Mexico, Jamaica, Indonesia – any region and country now offers back office, document management and IT skills. Where does traditional IS fit here? Certainly not in application development and IT operations – those are gone with the BPO.
- The competitive currency of outsourcing payoffs is well-established across the global outsourcing supply space: cost, language, and time zones: “We went to Belfast [to set up its own offshore outsourcing operation] and found the cost structure, language accessibility, and time zones extremely advantageous.” (A finance executive in Allstate Insurance.) Costs have been reduced by half after three years of operation….
These trends are not casual ad hoc exceptions to the norm – they are becoming the norm. Apart from being big in financial terms, they are a major organizational shift. They are a recognition that there is no reason to retain in-house the many routine functions that can be both better and more cheaply handled via the transportability of business processes and either their technology base or access to it via telecommunications links. They are a more implicit recognition that there is no reason to retain in-house IS resources that can be both better and more cheaply handled by specialist firms abroad. The main message from just about every study of back-office and business process outsourcing is that skilled labor is available in many regions of the world – including those of traditional IS.
The degree to which outsourcing is no longer confined to commodity skills and routine functions is illustrated by General Motors’ announcement in March 2003 that it has opened an engineering and R&D center – again in India – where 260 national staff collaborate with other centers in North America, China and Australia. The center will run two shifts, allowing GM to carry out high-level engineering work 24 hours a day.
Economic demands on IT
The IS financial line of credit has run out, and now that there are real markets for companies instead of in-house monopolies and vendor lock-in, the painfully educated CFO will not submit to the old situation of IS as a protected line item in the budget, and an upfront, high risk capital cost. Everything related to standard IT is moving towards making it a variable pay-as-you-go expense: outsourcing is an obvious vehicle for this.
The past decade has been the education of the CFO: first came the ERP typical overruns on costs and time of a factor of 3-4, followed by the Y2K poll tax on the rest of the business, and then the loss of all financial discipline in the dot com and e-commerce frenzy. CRM looks like being the last of the edifice complex innovation of IS and its suppliers. Note that vendors such as SAP, Siebel and Oracle who were happily accustomed to getting their money upfront and in big chunks are at last being forced to earn their pay on the basis of incremental volume-based pricing.
The constant reappearance of the search for ROI in the IS field is an indicator that it has never produced a convincing economic model. ROI was the hot topic in academic and professional IS circles in 1973, 1983, 1993 and 2003. It won’t be in 2013. By then, IT will be handled as part of everyday business costs and on the same basis.
Foundational Web services as basis for fully modular architectures and “venture” development
Web services have a long, long way to go before they provide the full standardization and component standards of, say, home remodeling (Home Depot) or of on demand service access (the electrical utility and POTS – plain online telephone service), but already “Foundational” Web services – those that are fully published, stable, and with a wide experience base, are transforming systems development (SOAP, http, XML plus C++ and Java and its progeny.) What I term “Transitional” Web services are those that like UDDI or WSDL, are clearly going to be an integral part of the standard architecture of both providers and users but are not Ready for Prime Time. There are many, many “Emergent” Web service standards and tools and they will go through the same hype and hope, chaos and clutter stages of most major IT innovations before becoming the new business mainstream. But Foundational Web services are in place and are indeed fueling many of the trends already described in this discussion paper: outsourcing and building modular services rather than developing “systems.”
This means that the overall path of IT maturation is paralleling that of electricity. In the 1920s, Ford Motor Company had a Senior Vice President in charge of “electrification” just as companies now have a CIO in charge of information “technologification.” Now, there is an industry of electricity supply and use that is the embodiment of IBM’s “on demand” computing strategy. The megaplayers in IT and business process outsourcing are positioning to become the utilities of tomorrow. The ASPs and Web hosting firms that were the first move in this direction largely failed because they lacked proven brands, scale, and operational reliability. The IBMs, CSCs and EDSs of the world have these.
IBM’s announcement of “on-demand” computing as its new core business initiative points to the inevitability of IT moving rapidly towards utilities. Already, 25% of HP’s $2 billion in consulting revenues come from server consolidation. Philips Electronics claims to have cut 20% of its IT infrastructure operations costs by moving 400 servers to on-demand service provided by HP. Mobil Travel Guide is paying IBM on a pay-for-use basis for its Web access and printing operations and quotes the same range of savings; on-demand service means it can scale up quickly in summer months without having to carry excess capacity for the slow winter period. J.P. Chase Morgan has contracted with IBM for a seven-year outsourcing deal that includes transferring 4,000 employees to IBM. Sun Microsystems similarly is offering services that Forbes describes as those of a “general contractor” for network management. The utility model for IT services is thus not just a mini-niche as hosting and ASPs were but the emerging business blueprint of the very companies that sold hardware and software to large companies to run their own operations.
We take electricity for granted in most areas of the world. But electricity is the absolute foundation of modern society and business – including of IT itself. Information technology over time will be taken for granted in the same way and will remain a foundation of everything. But will it need IS as integral to its standard everyday application and uses? Look at the do-it-yourself, take-the-technology-for-granted developments of just the past five years: photo editing on PCs, basic Web sites, PDAs, wi-fi, home banking, e-mail and its many extensions, Quickbooks and Quicken, PC-based videoconferencing, etc. IS was the essential pacer of the effective use of IT so long as this required new infrastructures, such as data networks, DBMS platforms, ERP and CRM. Skilled technical specialists will always be needed in areas of new technology development but not in the routine applications and operations era of Web services as the equivalent of the electricity architecture, set of standards for use of electricity, and utility industry.
The design imperative
IS was built on systems development and programming, not design. This perhaps is its greatest single weakness. In an era when design really matters, the products of IS have fallen way below the acceptable standards of other areas of innovation. Companies’ Web sites are by and large mediocre. Compared to, say, the design of a Motorola phone or the design and corresponding manufacturing of a car, and computer games, too many of the systems that most IS shops put out are the artifacts of technical people – “systems” – that lack elegance, simplicity of use, self-explanatory features and convenience. The complaint of a Washington Post journalist could be echoed in organization after organization. He describes how
“for the fifth time in my career, everyone at the paper has been summoned to hour upon hour of classes on yet another new computer system…… Computer training has become the living hell of the American company, a loathsome ritual that highlights the mounting battle between the computer cognoscenti and us mere mortals……. Each new system is more confounding than the last, and each new product strips away many of the advantage of the previous system…..it takes much longer to turn on your machine in the morning now than it did 20 years ago…… hostility saturated the
room.” He adds plenty more and quotes a recent academic study of the
“dysfunctional relations between the Techie and the Clueless” that only 16% of 8,000 new projects were deemed
successes.”
We – IS – have heard all this before. I’ve been hearing it for forty years. So why after a trillion dollars or so of systems building is the Post journalist’s experience still typical. Why is IS weak at design – academics in the field sagely bow to Donald Norman’s book,
The Design of Everyday Things, as a model but how much of the IS curriculum is about effective industrial design – the business IS is in? Why are computer games easy to learn and use? Why does Nokia so superbly package a complex combination of software, software (including an operating system) and communications that is a joy to hold and use? Why did the Palm take off so quickly? The answer is commonsense. This is a design economy and the makers and marketers of these tools view design as the premium feature that gives value to function. IS largely ignored design as a core skill. There are the routine bows and curtsies to “user-friendliness” and human-computer interaction, but it is in the areas of games, multi-media and entertainment that these are more than clichés.
Why does this matter for IS? Because in the design economy, buyers have choices and they make them. You can easily test this by considering your own choices in buying, say, your car, mobile phone, PDA, digital camera and music system. These are all commodities – if any of them have some proprietary new feature, this will soon be commoditized by competition and licensing. The options you looked at within your preferred price range and list of required features have to meet a functionality test but the differentiator is always design-centered. Indeed, the more the purchase is a commodity, the more attention people generally pay to design. An example here is the iPaq among PDAs. It took off because it literally looked good and felt good and had all the standard functionality of any CE-based PDA.
As long as companies and “users” had minimal choices – if any at all – design was a subordinate issue for IS. Now, IS has competitors everywhere. IT is a real market. If IS does not provide the services, quality and pricing that its customers insist on, then the forces of commoditization listed here will work to create or locate providers that will.
To summarize:
- Standard IT skills are and will continue to be commoditized
- Outsourcing is moving to the business mainstream
- Business executives want to and increasingly can change the funding base and cost structures of IT and doing so rarely leads them to strengthen their reliance on IS
- Web services points towards IT as a variable cost utility
- Design is the differentiator.
Traditional IS retains no advantages in any of these areas.
A profile of the new CIO agenda
An article in The Wall Street Journal illustrates the degree to which traditional IS in a very large organization is on its way out. (William M. Bulkeley,
For Clues to Why the Tech Sector Is Still Down, See Mr. Kheradpir, March 11, 2003). The fact that the Journal profiles the CIO (of Verizon, the giant phone company) on its front page shows that what he is doing is newsworthy and that neither he nor his company represents the mainstream – as yet. That said, he is illustrative of a
“widespread attitude not expected to change soon.” Here are highlights from his review of Verizon’s technology budget for 2003 and actions he has already taken, with the WSJ’s comments:
- The CIO’s staff told him that $50 million would be saved by firing consultants.
“Not enough. We saved $100mn last year.” (Verizon’s IT budget is around $2 billion.)
- “Corporate computers are becoming more like commodities. With wider adoption of software standards, the machines are more interchangeable………. Foreign technology has improved, so that Verizon can hire Indian programmers, for one-third the
cost….”
- “He has cut Verizon’s information-technology staff by 20% since 2000."
- “Last year, Verizon saved $14 million from “global sourcing.” This year. we’ll get $50
million.”
- A running theme throughout the article is commoditization of technology that leaves Verizon’s vendors with no choice but to cut prices by around 25%. It is very clear that the CIO sees IT now as a service to be contracted for in an environment where the buyer holds all the cards. There is no mention anywhere about the need for in-house IS skills.
Mobilizing IS for a new future
If even half of the analysis in this paper is accurate, then traditional IS faces an eroding future. Certain IT technical skills and specialties will always be at a premium and new ones will emerge, but the core of the IS professional and organizational base will erode (just as the executive administrative assistant of today is a skilled and key role even though the secretarial typing pools of the 1920s through 1980s have entirely disappeared). It may take two years for today’s trends to really bite but in my view there is absolutely no plausible scenario for the five year thinking and planning horizon that does not justify my assertion that traditional IS is dead.
That assertion about the IS problem demands an equal contribution to identifying the solution. My goal for this paper is that it stimulates discussion about that solution in the three main areas of my personal interest and professional work. The first area is the university, the second the IS organization, and the third public policy and economic development. I end the paper by sketching out what I see as the agenda in each of these areas. These are preliminary ideas only; it is the broader discussion not of
“Is traditional IS dead?” but of “Given that traditional IS is dead, what
next?”
The university is where most of the next generation of IS professionals will be trained, in the IS departments of business schools but also in the applied engineering and computer science curricula. It would be irresponsible knowingly to train them for a world that will not exist when they graduate. As both an IS teacher, writer of textbooks and designer and deliverer of executive education programs, I have for years felt that the IS curriculum needs refocusing and the thinking that led to this paper makes me sure it is.
My solution to this problem links IS research and teaching to regional economic development. That may sound a stretch but the research and practical support for my view is substantial. Hints of this are in the examples I gave of outsourcing of business processes, back offices and IT to India, of the Philippines as a center of technical knowledge for AOL, the dominance of four small countries in Scandinavia in Internet usage, mobile technology and its uses, and e-banking – the wireless era might be summarized as Think Finland. Ireland rescued its economy by becoming the call center of the world. The 2003 program for the Bled, Slovenia, 16th annual conference on e-commerce – the world’s longest established one on e-commerce – includes a session on “small eBig countries.” Its theme is how small nations can be players in the e-commerce arena – “how” not “if.” In the United States, the small eBig leaders are states and metropolitan clusters. IT is increasingly localized in terms of its centers of excellence, opportunity and growth. Of course, this is not new. In the 1960s, IT meant Route 128, Massachusetts, and in the 1990s Silicon Valley. Both of these clusters were decidedly high tech. The new clusters will be high application and high service. Ireland transformed itself not through technology development but IT-enabled services to businesses in the U.S. and Europe.
How do public policy makers position their clusters – states, cities, business communities, regions, nations – to thrive as a result of the trends that I listed earlier – back office outsourcing, commoditization of skills, the design imperative? How does the IS curriculum link those policies not to the education of students but the development of the needed talent base? Basically, for forty years it did not really matter exactly what we taught and studied in IS, because there were so many basic skills to build: systems development methods, data base management, data communications, and project management. At both the undergraduate and graduate levels, organizations needed all the talent that they could get. IS departments took a needed business and organizational focus in comparison with computer science programs but by and large there were more similarities than differences in IS in one country versus another. Skills were portable and the technology base relatively homogeneous across the world; SAP, Siebel, IBM, Oracle, the Big X consultants (the number keeps shrinking and the names become more eclectic – what exactly is an Accenture and is the other one Tipping Point, Power Point, or Bridge Point?), Sun and others offered the same core products and services everywhere. In my own experience I have found little structural differences in IS issues and organization in Chile, the Netherlands, Canada, Mexico, Germany, Australia, Brazil and elsewhere. There are many situational differences, of course, but the IS curriculum was very general-purpose in focus and targeted to a fairly common IS environment, organization and application base.
IS has become more context-specific. General-purpose IS is commodity IT. The IS curriculum needs refocusing. From my perspective, the starting point is to take a look at the regional labor markets of 2007 that the university contributes to. The second is to look at the industry structure of the IS environment – IT suppliers and users. The third is to define the premium skills required by this intersection of labor markets and industries. In other words, the way forward for IS is to profile the skills that will not commoditize by 2007.
Why begin by focusing on the IS education curriculum? Well, partly because I am a professor, but only partly. For me, the key question for IS is its premium skills profile for 2007. Skills are of premium value only if they are in demand. Otherwise, they end up as the equivalent of “Save As……” in Word. IS skills are not the same as computer science skills either; those will always center on advanced technology while IS is in the business of applying technology. Similarly, they are not the same as general business skills: IS applies technology.
There is plenty of old and new evidence that premium skills are largely regional in terms of their impact. The global outsourcing trend reinforces what is being termed the Creative Economy, one where cities and regions thrive if and only if they attract providers and users of distinctive services. Michael Porter pointed out in the 1970s the extent to which individual regions became the center for ceramic tile design and manufacturing (Italy). Ireland moved from an emigration economy where it had the second highest per capita debt in the world to being the center for U.S. and European call center customer service. Omaha did the same in the United States. Silicon Valley is the most recent case in the computer industry with the Washington-Virginia-Maryland complex almost as distinctive in the good times of telecommunications. Ireland, Omaha and Washington are seeing foreign regions become competitors – India is now the emerging player in call centers, for instance.
The reality for any region now is that commodity jobs in high cost, low education and high turnover regions are gone, going or soon to go. The poet Francois Villon wistfully asked “Where are the snows of yesteryear?” Where are the typing pools of yesteryear? Will mayors and governors soon ask where are the call centers and systems integration firms of yesteryear?
Regional economic positioning to be players in the Creative Economy has to be the public policy agenda. It naturally becomes the IS agenda simply because no region can be a leader in the CE unless it has strong IT-related capabilities. These for me center on a new generation not of advanced technology specialists – those are location- and industry-specific – but of the people who turn advanced technology into tools products, and services. Which comes back to design and designers. In Omaha, this may well mean a new generation of designers in healthcare. In the Washington, DC, area it is likely to mean designers in the area of e-government services. For Costa Rica and the Dominican Republic, the emerging niche is multi-media design. As anyone who as seen the two Lord of the Rings movies appreciates, New Zealand has a world-leading design talent base in several niches. (There is more IT in Lord of the Rings, The Matrix or Harry Potter than in most Fortune 1000 IS operations.)
So, one absolute priority for the IS curriculum, profession and regional development is creating its design talent base. Does that mean dumping standard project management and systems development methods? Yes it does. Does it mean dumping programming courses? Yes – leave those to the real experts in computer science. Data base management? Dump it.
Design is the entry-level skill to what at its best is and must be the IS premium skill: architecting. Integration – or rather the lack of integration – has driven IS politically, organizationally and economically for several decades. Had it been an architectural field, the problem of how to handle legacy systems would have been greatly mitigated. Even today, the discussion of Enterprise Architecture dominates IS planning and problem-solving. Web services as architecture blueprint is the integration path for IS. This means that IS individually and organizationally must move to make Web services its entire focus. The more that IS is the valued integrator/architecture the more relevant it is to the business, technology providers and developers.
IT architecture is complex in terms of its design, the dialog between business clients and technology implementers, keeping up developments in standards – including sorting out the hype and hope of, say, Web services, mobile data communications, multi-media and what is yet to come, and helping developers address issues of governance (security, finance, organizational standards, information assurance and the like). The link from design to business architecture fundamentally constitutes the discipline of IT. Both of these are rarely taught and inadequately practiced in IS. Note that I have slipped in here the addition of the word “business” in front of “architecture.” In the end, IS has to be centered on business architecture, which includes the standard IT technical architectures. IS is an organizational and business contributor that draws on many technologies and technology contributors. It is not in itself a technology contributor except via its design and architecture skills and professional base. How, though, does it become a business contributor? That question runs through the entire history of IS. In the 1980s, the answer was to build management “awareness” of IT. This was the era of IT-and-competitive-advantage as almost one breathless word. It led to the emergence of new roles and methods in IS including business analysts, CASE tools, and JADS. If you are not familiar with those acronyms, this reflects their relative lack of long-term impact.
There is no need in this paper to go through the many successful, semi-successful and downright disastrous failures to bridge the business-technology gap in culture, language and skills in the 1990s. If you apply the label business process reengineering, CRM, e-commerce or knowledge to this spectrum of triumph to fiasco and what stands out is that IS in and of itself does not seem to have found a business style. That means that it lacks a clear business role and identity. What we in business school IS departments and consulting firms did in this regard – I use the “we” to admit to being an unindited co-conspirator – was to make technical people a little more business aware, mainly through cases and in the instances of reengineering and CRM what were really technology solutions looking for business problems. At our weakest, we encouraged our students to be not very good at technology and not very good at business. Given the massive lack of business interest and knowledge in IS at the time, that sort of made sense.
It really does not now, in my view. First of all, the balance has shifted. We are seeing more and more business people with more technology insight and up to date experience than many IS professionals in specific areas of IT. Part of this is generational. After all, there is not a single teenager alive on the planet today born before the Walkman. In just two years, the same will be true for the Web. What people like myself think of as “technology” this generation sees as another type of consumer electronics. Most of “high tech” has moved to mass manufacturing and assembly. Dell is the obvious firm that anticipated and exploited every trend in this regard. It now sells low-end and mid-range servers and storage, weakening the brands and eroding the prices of companies like EMC and Sun. In PDAs and new generation mobile phones, many of the new brands and product leaders come from the same players who dominate consumer electronics – who would have predicted even five years ago that Kyocera would be a pacesetter and Ericsson would now be Sony-Ericcson?
Whenever there is a discussion of transformations of business or technology, the old label “dinosaurs” is routinely applied to the existing establishments that get left behind in the shifts. I hope that IS is a dinosaur since the evidence now is that the lighter dinosaurs evolved into birds. IS needs to learn to fly.
Regional development seems to me to be the organizing theme for innovative IS. The basic questions were stated earlier:
- What will be the state of labor markets in your region in 2007, in terms of the Creative Economy as the premium and the outsourcing/service trends as the commoditizing force?
- What will be the state of the regional IT industry in terms of suppliers and users?
- What then is the premium skill base the region needs to build now to be positioned for 2007?
- What is the role of the university system, public policy makers, and business leadership in mobilizing to achieve this?
One key IS topic that I have not addressed in this discussion paper is the role of business and organizational education and skills. To its credit, IS has struggled – well, wiggled at least – to include in its curricula the human side of IS, change management, decision processes, collaboration, and other “soft” issues that computer science is largely blind or indifferent to. Many of the most respected and committed researchers in IS have made their contributions here. But, the behavioral component of IS, as with design, has largely been an add-on, not a core element in either IS education or practice. The case I have tried to make in this paper is that there is a need for a new style of IS professional and profession that is focused on design, architecture and economic development – the innovative commerce of IT. The “soft” side of IS has to meet the same 2007 tests as the more technology-oriented side: what does it offer in terms of knowledge, skills and methods that will not become commoditized as organizational sciences, business functions such as marketing, manufacturing and finance, and intellectual disciplines such as public policy and economics lose their still typical view that IT is somehow “different.” Today, IS understands business and organizational processes better than experts in those fields understand technology. That surely will not be the case in 2007.
Traditional IS really is dead. What will innovative IS be and who will lead the metamorposis?
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