We recently published the results of our annual Cutter Benchmark Review survey on trends and technologies for the coming year. This is the third yearly issue of CBR where we ask our contributors to look forward to the coming year and see what technologies and IT trends we can expect to endure, which ones are emerging, and which ones seem to be losing steam. Our ability to do trending and year-over-year comparisons is strengthening with every survey and the cumulating of results. We have been very careful in keeping some of the questions consistent so that we can comment on changes over time. The trends issues are particularly important in my opinion as they give us more than a spot evaluation of what is going on and instead enable us to take a more long-term view.
Our contributors, Dennis Adams, Chair of the Department of Decision and Information Sciences in the C.T. Bauer College of Business at the University of Houston, and Cutter Senior Consultant Jeroen van Tyn, offered some interesting food for thought and insight based on the data. Below I’ve copied some highlights:
- Virtualization: 61% of respondents indicate their companies are currently using virtualization tools, a 9% increase over last year’s results. The greatest use of virtualization tools is for application testing and development (42%), followed by system patches and update testing (25%), and production (25%).
Jeroen expects that the continuing maturation of virtualization will support the upward trend in application of this technology across the board and that larger companies will continue to lead the way, as they have the greatest interest in keeping down the number of physical servers they have to manage.
- Security: The number of companies concerned with intrusion detection has jumped 24% from 2006 to 2008. All of that gain has gone toward networked-based systems, which are more than twice as likely to be employed as host-based or target-specific technologies.
According to Dennis, this continuing trend to defend computing resources at the network level provides an insight into where managers believe intrusions are most likely to occur and, more importantly, allows more flexibility in the design of the system architecture.
- Data Storage: About 75% of respondents indicate that they expect their data storage needs to increase significantly in the near future.
Dennis believes some of this can be attributed to the heightened attention paid to e-discovery. And Jeroen’s take is that we’re seeing a definite upward trend in concern over data management in support of regulatory compliance: Ensuring that the rules are followed is part and parcel of protecting a firm’s ability to survive.
- Open Source: As many as 65% of respondents say their organization has deployed open source systems — a 16% increase over the last two years.
Why are the remaining 35% not deploying open source applications? There have been significant decreases in the number of respondents citing no business need or no relevant applications as the reason, and at the same time, the number citing lack of a business sponsor has nearly doubled. Jeroen took a close look at the data and found that of the respondents lacking a business sponsor, only 17% also lacked business need and/or relevant applications. So 83% could not find a sponsor for apparently needed applications.
- Outsourcing: Cutter’s 2008 survey shows that 55% of respondents have or are planning to outsource work — a 7% increase since 2007. The types of work being outsourced include development work (78%), maintenance work (64%), and help desk support (49%). In 2007, only 38% of respondents outsourced the help desk. That number has jumped to 49% in 2008.
Dennis’s perspective is that “outsourcing the help desk will continue to draw managerial attention. In one sense, it is the outsourcing of low-hanging fruit because of the way most organizations have implemented the help desk as a non-value-adding process. As far as the help desk is concerned, the only thing there really is to do with it is to outsource in order to cut costs.”
- Backsourcing: The number of respondents who are considering backsourcing is down 10% from 2007. A total of 39% of respondents indicate that their organization is considering backsourcing in 2008.
Dennis suggests that this trend will continue; that once the kinks have been worked out of the outsourcing arrangement, there seems to be very few business reasons to bring work back inhouse. In short, once the quality-control issues have been addressed, then what gets outsourced stays outsourced.
- IT Staffing Plans: Despite the recent economic turmoil, 55% of respondents expect to be hiring IT staff in 2008. While another 36% of respondents expect no changes in their IT staffing plans, the remaining 9% expect to be downsizing.
- Service-Oriented Architecture: 57% of respondents say their organization has implemented an SOA initiative or program, a 6% increase over 2007. The primary drivers behind today’s SOA initiatives are: to increase IT’s responsiveness to business demand (73%), to reduce cost of IT operations (58%), to exploit strategic competitive opportunities (51%), and to retire legacy technology (33%). The highest-level champion of SOA initiatives is the CIO at 35%; followed by the EVP, SVP, and VP at 19%; and then the CEO at 17%. There are significant impediments to the adoption/expansion of SOA in the organization, according to 61% of respondents. The reasons cited include a lack of visible ROI (31%), a lack of alignment with business strategies (25%), a lack of business buy-in (23%), and insufficient sponsorship (23%).
Jeroen’s prediction? The stock-in-trade approach of CIOs peddling SOA from a technology perspective is bound to run into trouble, and that, while a bottom-up perspective is an important aspect of successful SOA, there is no substitute for sound business analysis.
- Enterprise Architecture: 61% of surveyed individuals indicate their organization has an EA initiative underway, an increase of 6% since 2007. The most common driver for EA requirements is the imperative to reduce cost (51%), followed by alignment to a defined enterprise business architecture (47%), and a formal development of enterprise business requirements (37%). Central IT groups have taken a 22% jump to be the most common owner of requirements for EA (39%), followed by IT director or executive (16%). Only 12% of enterprise-level business groups and 7% of business units are responsible for EA requirements.
To this Jeroen said, “If IT is to ever get out of the ethos of cost containment and graduate to a culture of value creation, there’s going to have to be a serious realignment of responsibilities between IT and its business brethren.”
- Enterprise 2.0: 8% of respondents indicate their organization has already launched an Enterprise 2.0 initiative, while 7% are in the implementation planning stage, 18% are doing early experimentation, and 34% are still gathering information. A full 33% of respondents say their organization is not actively pursuing Enterprise 2.0 initiatives at all.
- Web 2.0: Only 5% of respondents say that their organization has already begun using Web 2.0 to interact with customers. Another 12% are in the implementation planning stage, 25% are doing early experimentation, and 31% are still gathering information. 28% of respondents specify that their organization is not currently pursuing using Web 2.0 to interact with customers.
- Mashups: Mashups initiatives have already been launched by just 2% of respondent organizations, while 3% are in the implementation planning stage, 21% are doing early experimentation, 19% are gathering information, and 56% have not actively pursued mashups at all.
- IT’s Role in Business Innovation: The IT organization’s role in business innovation is foremost reactive to business innovation initiatives, according to 38% of respondents. Another 35% of respondents view IT’s role as a key enabler for business innovation. Just 15% of respondents indicate that business innovation is not a role for their IT department — a 6% decline from 2007.
We’re witnessing an improvement over last year’s numbers. The number of people indicating that IT is a roadblock to innovation is holding stable below 5%. The bulk of respondents either fall in the “reactive to business innovation” or the “key enabler” categories. I think these results call for cautious optimism.
What do you think?