Filed under: Business, Features, Analysis
Three reasons IT departments are shrinking
Outsourcing - Whether it's customer service or application hosting, outsourcing is becoming more and more prevalant in the corporate IT world. Avoiding the financial overhead associated with running certain IT functions internally is often impetus for choosing to outsource. For instance, companies are presented with a choice between running e-mail in-house (pay IT staff salary and benefits, purchase servers and software, and find quality rack space) or outsourcing it to, for example, Google Apps which is free (though ad-supported) and includes popular groupware features like calendars, web pages, document sharing, etc. Similarly, sites like Salesforce.com can offer full customer-relationship management (CRM) software online for a fraction of the respective overhead required to run CRM in a company IT department.
Lack of IT staff
Imagine being a future IT professional deciding what to do after high school. Should you go to a trade school to learn vendor-neutral technologies and theories? Do you go to college to learn about "data structures" and "human factors in information systems" all while reading Shakespeare and learning about World War II? Or do you forgo higher education and go for vendor-specific certifications (MCSE, CCNA, etc.)? Often a decision must be made: depth or breadth.
Should I learn about Windows, *Nix, Mac, mainframes (e.g. AS/400) but only know a little bit about each? Or should I become a hardcore Unix admin and know the ins and outs of Unix but hardly anything about Windows or AS/400?
With so many options, IT professionals are usually either too specialized or have a skill set too broad to help a corporation. Combine that with job-related complaints like "I'm only recognized when something is broken" and "I'm stuck maintaining systems, unable to innovate or enrich the business" and you end up with a lackluster IT field.
Less frequent system-wide changes
In recent years, IT staff have been relegated to maintaining the status quo instead of researching/procuring/implementing new systems.The span of time between operating system upgrades has gradually increased, and a lot of everyday business can be done via the Internet meaning a web browser update can fix lots of issues.
Then, of course, there is the Vista example. Few corporations are shelling out the time and money to upgrade their workstations to Vista. Besides the slew of reported bugs and poor performance of Vista, many businesses simply ask, "Why do we need it?"
There is little compelling reason for companies to upgrade from XP, which leaves IT professionals to maintain OS's they've been managing for years. Bored yet?
As corporate IT departments downsize, IT staff may find safe haven in the large data centers and global networks which will run many of the world's business services. Until then, companies will continue to outsource more technology services while future IT professionals attempt to gain employment at companies who understand the future of those services--like Google.
After spending the better part of an hour on 
Reader Comments (Page 1 of 1)
Nicki said 9:42PM on 1-07-2008
All I can say is ... AMEN!
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Seun Ojo said 2:30AM on 1-08-2008
Hi Todd,
I am particularly impressed about your discuss of the the second reason, "Lack of IT staff".
Its one recurring factor/issue and one that i personally have encountered, and feel more IT Professionals have too.
Another dimension to your example of reading about shakespare & World War II is that, even when the decision is made to study computer science (or its variant) in the college, you find out that school work is not too relevant to what obtains in the industry. I personally would want some form of education in the college wherein after, say the 3rd year, i can temporarily take the position of an IT Professional in a company for some days, without any noticeable itches; but reverse is usually the case.
Another issue is the way things change in IT. If an IT Professional moves to management position, it is often the case that 1 year down the line, he or she begins to loose technical touch.
Security, Control , Real Time Audit and Timeliness remain strong points why many organizations still keep IT Departments. The continued support for and robustness of applications built by vendors tackles these points elegantly; also the wide reach of the web, together with fast internet access and the very powerful PCs and SERVERs in vogue, will fuel this trend for the forseeable future - the shrinking of IT Departments.
Lets keep our fingers crossed!!!
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Todd Ritter said 8:44AM on 1-08-2008
Seun,
Thanks for your insightful comment! You're right that college/university often doesn't provide real-world IT education (I know from experience). Also, your point about IT professionals moving to management can be described as "The Peter Principle" (http://en.wikipedia.org/wiki/Peter_Principle). And your final point is also astute. Maintaining compliance with things like Sarbanes-Oxley and HIPPA (US) is a necessary IT role, but it's often farmed out to large IT conglomerates.
Todd
Peter said 7:50AM on 1-08-2008
IT needs to move beyond technology for its own sake and think of how they can help the business. Can they implement a new system, process or application that provides real value and saves all the other employees' time and money?
Having technical knowledge or certifications is great, but if you don't understand how IT fits into the whole scope of the business then you're not being helpful. No one except IT workers cares about what OS version they're running. Everyone else just cares about getting their work done.
The technology knowledge combined with the internal business knowledge for your specific company is something that can't be easily outsourced or replaced. That is where the real value of IT is today.
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Marshall said 1:00PM on 1-08-2008
I think managers tend to shrink the IT department because they don't want to shrink their own departments. With a few weeks of work, I could automate enough of the routine report-making that we could eliminate 3 of our 6 accounting people (though one could already be eliminated and nobody would notice). I could probably replace 3 or 4 other people in other departments without much scripting effort. I used to work on these efficiency projects, but as soon as they encroached on someone else's job, I would get "talked to." If I do nothing, my time at work is much less stressful and I am (counterintuitively) less likely to get fired. Instead, I will spend a substantial amount of time reading blogs and looking for work elsewhere (I would prefer to do something that requires skills and provides a challenge, rather than just sitting around).
Part of the problem is that the IT department is rarely well represented in the upper management levels. Often stuck as the bastard stepchild of some other department, it is easy for the axe to come down on geeks because there is nobody sticking up for us in board meetings, and when they do, most of the other managers don't know enough about technology to understand pro-IT arguments. When it is time to "get leaner" the people who could do the most good are the first to go.
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Todd Ritter said 1:20PM on 1-08-2008
Marshall,
Thanks for another great point: automating work. Non-IT staff get very worried when they see the potential of having their job replaced by technology, even though they may just be taking up space and salary doing the same task they have done for 20 years, taking the same amount of time to do that task, and remaining at the same constant productivity. Technology doesn't call in sick, make personal phone calls during work, or suffer from fatigue like humans. As you point out though, IT departments rarely have the clout necessary to make a difference.
Dan Mickle said 1:06PM on 1-08-2008
Nice article Todd. You hit many key points on the head. As you know, I have picked up many clients because they do not want to deal with the hassle of running their own IT departments. By the time that you add in cost of benefits, training, time off, etc.. it makes more fiscal sense for companies to outsource.
It use to be that the IT pro's pushed the technology to change and "grow", but now it seems like most are lemmings that would rather wait until they HAD to upgrade or change to make changes. I think this makes a perception of slow IT deparments, hence companies cutting back.
There are some very nice untapped markets in the IT world right night like the sociology aspect of technology (or changing technology) in the work place and legal issues with technolgy (ie big brother watching your e-mails). Some schools now offer courses in both. I belive Penn State offers both under their IST degree.
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Jason said 5:38PM on 1-08-2008
It really depends on if the company sees technology as an enabler or cost center. If technology remains a cost center then you'll always be looking to cut costs. IT groups need to move beyond the thinking of servers and switches into technology as a business strategy.
I think the best point was made when Peter said IT should focus on the business. Technology strategists and enterprise architects are a growing role in companies today because a lot of companies are tired of paying consultants (as was the trend of the late 90's) that don't have an understanding or stake in their business to make recommendations or build a roadmap for them.
The outsourcers are getting too good at their jobs. With virtualization and vast resources of people to pull from, the IBMs and EDSs really can do it cheaper than you can internally. However that being said, those skillsets that can understand and convert business needs into real technology solutions I think will have a future in the next iterations of IT organizations maintained by companies
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