Gartner sees 'grim' 2005 for unsavvy IT shops

Businesses are done squeezing cost-cutting measures out of IT, but they do expect process improvements.

Despite renewed technology spending, IT organizations will continue to be held to business-based performance standards begun during the economic downturn. IT shops that have adapted to that model will have a successful 2005, and those that haven't "face a grimmer future," according to a recent study by Gartner Inc.

"IT is taking on more of a business role and actually owning things," said John Bace, vice president and research director for the Stamford, Conn.-based consultancy and co-author of the report on IT management.

IT is taking on more of a business role and actually owning things.


John Bace, Gartner

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"When you come around to things like some of the business processes, anything that has the ability to deal with something like business process outsourcing -- call centers, for example -- the line between IT and the owner of the process continues to blur," Bace said.

Gartner predicts that IT process improvement will replace more traditional cost-cutting measures, and companies will save by making IT departments more efficient. For example, savings can result when everyday IT functions such as server management and desktop support are streamlined.

Strategic portfolio management techniques will help drive IT's managerial credibility, and technology projects will be judged on their business value. Strategic portfolio management techniques, focusing on the business value of technology projects, will influence how projects are chosen.

While those on the CIO level will be challenged to incorporate traditional IT services and business processes, Bace sees mid-level IT managers being unaffected. However, he said, outsourcing will continue to be a source of friction within organizations, including those in IT.

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"What happens in the public policy arena affects all of us," he said. "It's appropriate for … people to say, 'I do this. Here's what's being discussed. Will this have an impact on us?'"

Bace said there were nearly 200 pieces of offshore-related legislation introduced at the state level in the first half of the year, most of which failed to become law, but more proposals will come.

"Some of the legislation is beginning to evolve now and is beginning to address things like data privacy," Bace said. "It's just something that the locals [in IT] need to keep an eye out on."

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