What type of blog would this be if I didn’t end the year with my 2010 predictions?
To begin on a positive note, IT budgets will go up in 2010 after a global average 4-5% decrease in 2009. In many respects, however, 2010 will be even more difficult on IT than 2009. How can I say this if budgets are increasing? Doesn’t this mean we will have more money to throw at nagging issues?
In general, most IT organizations have deferred maintenance on many core infrastructure and application items. For example, in the past, several of my peers would automatically refresh laptops at the three-year mark. I know many of them have extended this to five years. Even though the deferred hardware upgrades had a positive net impact on the budget, it was an increase in IT burden to manage old equipment as the “meantime between failures” increases. Now they are looking to upgrade these boxes. This is true for networks, phone systems, servers, applications… (How many of you are running Windows 2000 and need to upgrade?)
Now that you have more money, your customers will expect more, despite the required investment in deferred maintenance. Much of this is invisible to others. They just expect email to work. This is where your savviness in managing expectations comes in. The motto for 2010 is do a lot more with a little more.
I do expect to see M&A activity continue in 2010, although the purchase price of companies’ will increase. The Nov. 30, 2009 Wall Street Journal had an interesting article on becoming vertically integrated and cited Oracle as an example of a company facing significant challenges with its integration of Sun as it uses a 100-year-old strategy in which a company controls its materials, manufacturing and distribution. Still, the challenge remains cost. But, when you are one of the richest companies in the world, cost may not be a barrier to success.
Besides required maintenance, I don’t expect to see spending in large application software such as ERP to pick up. IT organizations are realizing that getting on the latest ERP system has little to no ROI. For example, if I close my books in 5-days with an 8-yr old ERP system, am I better off investing millions on an upgrade or using these funds for a greater value add project? I believe most CIOs will choose the latter.
Now comes the cloud. This year, I sat on three panels on cloud and gave two external presentations. Is the cloud real? Yes. Our IT department leverages 18 different cloud offerings today and I expect that number to grow. The commoditization of infrastructure and applications continues to grow and the cloud is pushing that along. I expect to see a hefty year-over-year increase in cloud adoption.
Now comes my most audacious prediction of all. If you are familiar with my previous blogs, you know I believe organizations are moving to become information-centric. This is the way many organizations believe they can and will compete going forward. It’s investing in projects like MDM or single view of “X”. It’s managing data for better insight, better customer intimacy and better operational excellence. Becoming information-centric is how organizations will beat the competition in 2010 and beyond.. The imperative for these companies is to begin mastery NOW!