Time To Get Cracking

Midsize companies need to change their IT philosophy and modernize their technology infrastructure, even if that requires a significant overhaul in corporate thinking, according to an analyst at Gartner Inc., Stamford, Conn.

"What you want to do now is different than the way you built IT. All kinds of things that have happened in the last 20 years have started to change the way we do business and [the old] IT doesn't fit anymore," said Dale Vecchio, research vice president at Gartner, speaking at Vision Events' Midsize Enterprise Summit in Orlando, Fla., earlier this month. "New things happen: outsourcing, global competition have changed the way we interact with customers. Is it bad? No. Is it wrong? No."

Vecchio told the audience of midsize CIOs and IT directors that the ability to understand an organization's IT needs is not an IT decision anymore—it's a business decision. "And it's a hard thing for many organizations to accept," he said. "But you need to accept it because it's a better way than things have been done in the past."

Vecchio cited Gartner research that said CIOs find corporate culture too difficult to change as the top perceived barrier to change. Fifty-two percent of respondents chose it as a top three barrier to change. Other barriers cited include: too many conflicting priorities (45 percent), organizational politics (41 percent), lack of funding (28 percent) and lack of skills/competencies (27 percent).

Meanwhile, there are several recognizable drivers for modernization in the midmarket, he said. Those include social networking, consumerization, business intelligence, green business practices and customer retention, he said.

"Green is everything now. You have no idea how many companies are concerned about not just green as it relates to IT, but to business. The amount of power consumed to run computers is unbelievable," Vecchio explained.

Gartner recently held a data center conference that included a session on heating and cooling solutions, and 600 people showed up just for that session, he said. "Six hundred people showed up because data consuming too much power is a problem," he said.

Midsize companies need to better understand that managing IT is part of a larger process that can have a dramatic impact across the organization, Vecchio said.

"It's easy to say 'we don't need to do that, we'll just jockey the technology,' but you need to understand that you have to get into a process or you'll have the same problem the big guys have. Otherwise, you'll have a lot of stuff that will cost you a whole lot of money that doesn't do what you want to do," he explained.

Another issue midsize companies will face in the next few years is an increasing shortage of skilled IT workers, Vecchio said.

He said 70 percent of the IT workforce across federal government agencies is scheduled to retire in the next three years and 60 percent of IT workers at the state government level are on the same retirement schedule.

"That's such a significant portion of the workforce and someone will have to fill it. The market will get a lot more competitive for those skills for you," Vecchio noted. "That is also driving [a] tremendous amount of IT modernization from [enterprises]. They're moving to modern technology, and this is a big driver. We always talked about the retirement of Baby Boomers and the impact on Social Security, but nobody has ever said what's going to be the change in the workforce makeup."

Baby Boomers now account for 41.5 percent of the non-institutional workforce, according to New Haven, Conn.-based research company, RainmakerThinking Inc. That's a significant number when compared to Generation X (29.5 percent) and Generation Y (22.5 percent).

"This is first time in the history of IT that there is such a huge shift that you can't control and you can't change at the moment," Vecchio said.

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