When Business Worlds Collide, the CEO Needs You

Are you a CIO who can help your company find treasure at a time when business worlds are colliding? According to the analysts at IDC, you’d better be. (Note: IDC, also part of International Data Group, is a sister company to CXO Media.) The IT industry is entering a peak period of disruption, IDC says.

Traditional IT spending is growing about 6% between now and 2010, IDC Chief Research Officer John Gantz told attendees at IDC’s Directions conference this week. But the interesting action is in what IDC calls “New IT.” That’s the areas where the IT industry bumps up against the telecom (think BT), content (think Google, Viacom) and traditional business (think Wal-Mart, Hewitt) industries -- and then creative, disruptive new products and services emerge as those industries move into IT’s turf.

 If you want to make lots of money in the next few years, you need to be selling in one of these areas, because spending there will grow by a more appetizing 19%, IDC predicts.

One example: Wal-Mart has partnered with Bharti, an Indian grocery store, to provide all its back office computing needs and logistics. That’s Wal-Mart doing work a traditional services company might have done.

These colliding worlds make me envision a lot of work for CIOs. First off, if you’re a CIO for a technology, telcom, or content company, you’re going to have to support the behind-the-scenes work for several complicated new partnerships. You’d better be an integration and process master. Moreover, can you use your hard-won IT knowledge to help the CEO decide where your company’s best opportunities lie in the first place? It’s not going to be easy to do at a time when services, players, and pricing models are in extreme flux. Yet this is precisely what CEOs repeatedly tell us they want from CIOs -- help generating new business opportunities.

Second, if you’re a CIO buying some of these new services, you’re going to have to convince the business side people that you understand the landscape and that buying services from non-traditional players makes sense. You’re going to have to explain your purchases in business terms, not technology ones. And needless to say, you’re going to have to do serious homework to investigate the big claims that always emerge in such environments.

Make no mistake, IDC says, products and services will continue to be mashed up in new ways, by new partners. “Mashups take us out of our comfort zone, but they’re mandatory,” IDC’s Senior VP, Research, Frank Gens told the conference audience.

Business services procurement is going through big changes. IDC points to companies like Staples making partnerships with HR services providers like ADP, and companies like Intuit making partnerships with the banking industry. Look for Google and Yahoo to go into the service business more, too, IDC says. Customers will choose services based on process, not technology, and will use these new providers if they can mix and match services quickly at reasonable cost.

You can’t envision 2010 yet? That’s reasonable. Still, consider the logic of IDC’s line of thinking. Software as a service has lowered delivery costs for all sorts of companies. Google has already collided in a huge way with the world of client/server software. It’s collided in a big way with newspaper advertising. Who’s next? And can your company benefit? Or will a company like Google, BT, or Wal-Mart deal you a blow you didn’t see coming?