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Since the bursting of the dot-com bubble, IT has been in a crisis of confidence. But IT isn't dead -- just suffering a midlife crisis.
The flexibility provided by service-oriented architecture (SOA) enables the continuous optimization of business processes. But the traditional IT organization, which is oriented toward discrete business units and supported by vertically integrated applications, constrains this optimization rather than helps.
CIOs rationalize IT spending to their bosses and business exec peers by comparing their own spend with industry averages. But, as many CIOs admit, this comparison makes the most sense within the context surrounding IT and the degree to which the firm's IT practices have matured. The IT Spending Context and the IT Maturity Index together predict whether IT spend will be above or below industry averages and will deliver value.
IT's historically homegrown process methodologies are beginning to give way to broadly used approaches like ITIL and Six Sigma. By mapping IT activities against the emerging standards for these methodologies, CIOs can develop a plan for the incremental movement toward results.
To broaden the focus from information security to information risk management, there are four structural models that reflect the broader business organizational structure and company culture that an information risk management program is built around.
Economic Value Added (EVA) is gaining traction in IT as a more accurate method than traditional analysis tools for analyzing the cost of potential IT investments. As IT continues to transform itself into a solutions broker, EVA will be required as one way to examine the return on IT investments.
The conjunction of the acceleration of retirement rates with a significant decline in the number of European students graduating from IT-related courses leads many firms to fear an IT skills shortage beginning in 2006. The reality is more complex.
CIOs remain positive about the current health of their industry: Seventy percent report strong or very strong business conditions, and 77% have increased IT spending over 2004. Despite these positive views about the present, doubt about the future is beginning to show.
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Dear colleague,
Many of you are in IT management jobs. You might be the CIO or a direct report, work in IT organizations, or have a strong interest in the role that IT plays in and across the enterprise. I am pleased to introduce a quarterly First Look, a newsletter dedicated to the work over the past quarter of Forrester's IT Management team as well as selected IT management coverage from Forrester's many other teams.
Those of you who want to track IT management trends and best practices will need to know Forrester's latest thinking about IT governance and strategy, IT organizational issues, best practices for getting the most out of IT's contribution to business results, and many other topics that are top of mind in and around the world of IT.
If you would like to continue receiving this newsletter on a quarterly basis,
you must either reply to this email using "Subscribe" as your subject line or visit our Email Subscriptions page. If there are other people in your organization who should receive it, they can subscribe via the link to our email subscriptions page below. First Look is free of charge, and you can opt not to receive it at any time.
I look forward to hearing from you!
Laurie M. Orlov
Vice President, Research Director
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Memo To CEOs And CIOs: IT Innovation Capacity -- Not IT Spend -- Is What Matters
The economics of IT are rooted in a firm's ability to match finite IT resources to business needs and requirements. CEOs should view the company's IT spend as a percentage of revenue as being merely the first step in determining what is an appropriate level and mix of IT spending for achieving their strategic goals. To understand IT's ability to deliver business value to the enterprise, CEOs should focus on what Forrester describes as innovation capacity: the potential for the IT function to support new products, processes, and opportunities. Successful companies will grow their IT innovation capacity by focusing on how IT is sponsored, operated, and governed.
Upcoming Forrester Teleconferences On IT Management
Forrester Teleconferences are live, interactive, hourlong teleconferences incorporating a simultaneous WebEx slide presentation by a Forrester analyst, followed by an open forum for questions and discussion.
Risk Enlightened Enterprise -- The Role Of IT In Enterprise Risk Management
Michael Rasmussen
September 19, 2005, 1-2 p.m. Eastern time
Optimizing The IT Portfolio
Craig Symons
September 21, 2005, 11 a.m.-12 p.m. Eastern time
Which Consultants Can Do Enterprise Risk Management Consulting?
Christine Ferrusi Ross and Michael Rasmussen
October 6, 2005, 1-2 p.m. Eastern time
Miss A Forrester Teleconference?
Recordings of past Forrester Teleconferences are now available for download on Forrester.com. To access them, go to the ForrTel Archive from the Events page.
Upcoming IT Management Boot Camps
Forrester's Boot Camp training sessions equip you with a skill set that will help you meet your job challenges. These one- or two-day Events are developed and led by Forrester analysts and draw on their research to bring you best practices and analytical insights to help you succeed.
The IT Balanced Scorecard: A Tool For Strategic Alignment
Cambridge, Mass.
September 27, 2005
Metrics For Boosting EA Effectiveness
Cambridge, Mass.
November 1, 2005
Optimize Your IT-Based Innovation Capacity
Cambridge, Mass.
November 3, 2005
The IT Balanced Scorecard: A Tool For Strategic Alignment
Belmont, Calif.
January 10, 2006
Upcoming IT Management Research
The IT Management team will be publishing a great deal of research over the next few weeks. Here is what we're most excited about:
- Simplifying Information Architecture -- Alex Cullen
- Market Overview Of Risk And Compliance Management Software -- Michael Rasmussen
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