Numerous Opinions—Which Will Happen? 

 
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Get 20 experts in a room and ask them to prognosticate, and you will get 30 opinions. This seems to be the case with this year’s group of IT trend spotters. While there is a difference of opinion in some areas (e.g., IT spending), there are a few topics that seem to be widely accepted as taking center stage in 2010.

The following sections summarize the findings of a number of the major IT trend spotters.

IT Employment Predictions for 2010

Foote Partners1 offers the following IT employment predictions for 2010:

  1. IT unemployment overall has stabilized and steady momentum in services sector job gains has been offset by continued volatility elsewhere. Five IT bellwether job segments reported in the US Department of Labor statistics lost 7,300 jobs in September, October and November 2009 but added 18,500 jobs for a net gain of 11,200 jobs. By contrast, for the first eight months of 2009, the same five IT job segments experienced a net loss of nearly 31,000 jobs.

    The most robust job segment, Management and Technical Consulting Services, gained a net 13,600 jobs in the first 11 months of 2009. A second segment in the same job category, Computer Systems Design and Related Services, posted a net loss of 7,800 jobs in the same 11-month period, but a gain of 5,500 jobs in October and November. Not so lucky in 2009 were services jobs, as the Data Processing, Hosting, and Related Services segment showed a net loss of 6,700 jobs since the start of 2009.
  2. Slim to no chance for meaningful IT jobs recovery in 2010. IT hiring overall will not pick up noticeably until late in 2010, and more likely 2011. Volatility will continue to punctuate staffing and pay levels throughout 2010, with human capital investments focused on specific IT skill specializations as employers struggle to recalibrate their IT workforces by striking the right balance among costs, agility and intense competitive market pressures.
  3. Investments focus more on skills than jobs in 2010. As throughout 2009, the emphasis is less on jobs and hiring and much more on filling critical skills needs…acquired from the inside (hiring, training), from the outside (contractors, consultants), “rented” via outsourcing and offshoring, or “given over” by purchasing any number of managed services. Hiring restrictions, combined with business leaders demanding quicker, highimpact, predictable, cost-effective execution, will continue in 2010 to refocus employers on skills, not jobs. …The biggest downside of this skills focus and accelerated process: Quick decisions to cast off anybody and anything that is a drag on finite resources often result in unfortunate consequences post-recession when unique experience and skills held by certain cast-offs are desired once again.
  4. IT services employment sector is first to recover, but differently for small vs. large vendors. The search will be even more frantic next year for right-skilled IT contractors, consultants and even managed services that can be depended on to perform critical work—a boon for the IT services sector. Boutique small and medium-sized business (SMB) consulting firms in hot segments such as security will continue to experience acute talent shortages against a steady drumbeat of demand for their specialized services, which are generally regarded very highly for their quality, reliability, relationship management and competitive pricing (vs. their much larger competition).
  5. For short- (and long-) range IT job security, the smartest place to be in 2010 is IT security. Unlike other technology job segments, pay and demand for security skills have risen steadily since 2007, and neither budget nor headcount has diminished in economic hard times. Driving continued momentum for steady jobs investment and career safety are more regulation; constant fear of increasing threats; greater customer expectations and demands aimed at vendors; and the splitting of business/strategic risk and operational security activities, which has been accelerated by market forces. Also in demand: SAP professionals; IT specialists who can engage audiences in their company’s messages, products and services via social media; web development; e-commerce applications and systems; and business intelligence skills and competencies.
  6. The X factor: managed services adoption. Impressive growth projections for the next three years—compound annual revenue growth estimates in the 10 percent to 39 percent range are common for several service segments— portend the beginning in 2010 of widespread IT workforce reconstitution, allowing employers to start to properly synchronize on-board skill sets with rapid-change business requirements. The goal is lean, nimble, reactive and predictable human capital deployment with less waste.

IT Spending in 2010

Gartner concluded that the economic crisis has irrevocably changed the business oversight of IT investments. The tighter linkage established during 2009 between IT spending and business performance metrics is here to stay.2

According to a Forrester survey3 of more than 900 IT executives and technology decision makers in Canada, France, Germany, the UK and the US, IT contractors and consultants will see the deepest decreases in spending for their services, while systems integration and outsourcing services will have the greatest increases. Unlike the last recession from 2001 to 2002 when outsourcing and offshoring experienced growth from firms seeking to reduce internal IT costs, the spending picture for IT services this time around is much more mixed.

When asked about changes they expect to see in their organization’s total spending on IT services:

  • 30 percent said they plan to increase spending on systems integration and project work
  • 26 percent plan increases in applications outsourcing
  • 25 percent expect to increase spending on infrastructure outsourcing
  • 41 percent expect to reduce spending on contractors
  • 34 percent foresee lower spending on IT consulting

In a poll of 594 IT leaders, the annual 2010 State of the CIO Survey4 found that about two-thirds of CIOs, or 62 percent, have canceled or postponed projects during the past year as a result of unfavorable economic conditions. The projects on which they have focused are those that can enhance their company’s products and spur sales.

The “Five Infrastructure Trends to Watch for in 2010,” in CIO Update found that enterprise IT organizations will have no options but to reduce their IT spending. 2009-10 will see a significant drop in the IT operations budget. Upgrades, new technology adaptations and new tool implementations will be curtailed, deferred or canceled. Support agreements with product vendors and service providers will be renegotiated and IT will move to efficient “lights on” operations.5

The CIO Update article agreed with the State of the CIO Survey findings, noting that “projects that have short- and medium-term savings potential will gain acceptance.”6

IT Transformation During Economic Recovery

The IDC Predictions team7 predicted that 2010 will be a year of modest recovery for the IT and telecommunications industries. Other industries will come out of the recession with a transformation agenda and will look to IT as an increasingly important lever for these initiatives.

The recovery, according to IDC, will not mean a return to the prerecession status quo, but rather, will result in a radically transforming marketplace, driven by surging demand in emerging markets, growing impact from the cloud services model, an explosion of mobile devices and applications, and the continuing rollout of higher-speed networks. IDC anticipates 3.2 percent growth for 2010, returning the IT industry to 2008 spending levels of about US $1.5 trillion.

The CIO Update article noted the following relevant trends:
  • Processes implementation will increase across IT to improve efficiency and reduce dependence on people. Dependence on people in IT is increasingly affecting productivity and efficiency.
  • Service level agreement (SLA)-based managed services will take over from staff augmentation. Managed services will relieve IT managers from day-to-day management of certain operation tasks. As managed services gain momentum this year, customer and end user satisfaction will come to the forefront as SLAs will be tied to customer satisfaction.
  • SMBs that traditionally resisted outsourcing will increasingly look at offshoring to reduce costs and increase efficiency. With environments becoming increasingly complex, and pressure mounting to reduce costs, the SMB segment is looking to offshore at least some of their IT infrastructure services or IT operations to save money.
  • Remote production support is slowly picking up momentum as remote infrastructure management (RIM) providers are looking beyond infrastructure and have started providing production support and remote application support. The single service desk operations will help increase first call resolution.

Among the key findings of its “Top Predictions for IT Organizations and Users, 2010 and Beyond,” Gartner said that the balance of power in IT continues to shift toward external providers and users. It predicted that by 2012, 20 percent of businesses will own no IT assets.8

Among its trends for 2010, Verizon Business noted that businesses will make decisions in 2010 that will fuel their future growth. IP-based investments, such as unified communications, cloud computing and Software as a Service, will continue to provide the platform to enable successful business practices. In 2009, businesses learned how to do more with less. Applying 20/20 hindsight vision and lessons learned will inspire the 2010 technology decisions that will help businesses work harder and more efficiently for the next decade. In the process, businesses will work better and more effectively together to create a positive impact on the global economy and society.9

2010 Technologies Trends

As noted previously, 2010 will see a continuation of the trend toward a tighter link between IT spending and business performance. Therefore, there were many similarities in the technology trends for 2010:

  • Cloud computing, and all aspects surrounding the cloud (e.g., standards, security)
  • Making the workforce (more) mobile
  • Green IT and issues of sustainability
  • Social networking as a critical facet of the business landscape
  • Growing need/desire for wireless “everything”

References

Endnotes

1 Foote Partners LLC, “Foote Partners 2010 Predictions,” 2009, www.footepartners.com/2010%20Predictions_FootePartners_121009.pdf
2 Gammage, Brian; et al; “Top Predictions for IT Organizations and Users, 2010 and Beyond,” Gartner, 29 December 2009
3 Forrester, “Forrester: Enterprise Spending Plans For IT Services Are Mixed,” Press release, 12 November 2009, USA, www.forrester.com/ER/Press/Release/0,1769,1313,00.html
4 Nash, Kim S.; “2010 State of the CIO: Today’s Focus for IT Departments - Business Opportunities,” CIO Magazine,
17 December 2009, www.cio.com/article/511240/2010_State_of_the_CIO_Today_s_Focus_for_IT_Departments_Business_Opportunities_
5 Mohan, Ram; “5 Infrastructure Trends to Watch for in 2010,” CIO Update, 29 May 2009, www.cioupdate.com/features/article.php/3822671/5-Infrastructure-Trend
6 Ibid.
7 Gens, Frank; “IDC Predictions 2010: Recovery and Transformation,” IDC Predictions Team, IDC, December 2009, www.idc.com/getdoc.jsp?containerId=220987
8 Op cit, Gammage
9 Verizon Business, “Top 10 Hot Technology Trends for 2010,” Press release, 12 November 2009, www.verizonbusiness.com/about/news/displaynews.xml?newsid=25412&mode=vzlong

The trends noted here were compiled at the request of ISACA’s Strategy Advisory Council. After reviewing the document, the council believed that such a compilation would be of value to ISACA members and Journal readers. The compilation was summarized to fit within the pages of the Journal. Please see the references for more details.


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