Whether it's taking the lead in regulatory compliance, becoming more involved with business units or rolling out key technologies like VoIP, IT is taking on a higher profile in most companies.
Plus, the IT organisation is evolving to reflect this new reality; restructuring is occurring, and new positions are being created.
"The big monolithic shared service organisation is dead," says Trevor Gee, principal at Deloitte Consulting in New York. "The new trend is to align IT teams with a company's businesses so they can make smarter decisions."
Under Gee's scenario, planning, analysis and design, application development, maintenance, technical support, outsourcing and desktop infrastructure might fall under an individual line of business.
On the other hand, core infrastructure such as networks and data centres, security and controls, core vendor management, and company-wide infrastructure standards would all remain centralised.
Olin College in Massachusetts is an example of an IT department evolving to take on a more strategic role. In 2002, when the school was founded, CIO Joanne Kossuth divided her department into two main groups: network and technical services, which includes the help desk and operating system support, and IT, which focuses on applications development and ERP systems.
Then she created the position of customer service manager to work on improving relationships with the college's students, faculty and staff.
Kossuth rolled out a VoIP system and employs Web services so that her staff doesn't have to waste time on mundane tasks such as adds, moves and changes. She uses automation tools to add and remove servers as needed. "It's no longer 'Is my server up and running?' now the focus is on 'Do my clients have access and are they up and running?'" she says.
Kossuth says her IT organisation is set up to take on a leadership role at the college. In the past, she says, "IT was seen as reactive. People would hand you the software and say, 'Install it.'''
Today, she encourages her team to be proactive. "We do our homework, we monitor networks, we are involved in all the decisions," she says. "We've matured as a profession."
One side benefit to deploying VoIP has been the ability to apply the customer service skills of former telecom managers. Kossuth says they are great at explaining feature sets of the VoIP system to users, spending time helping problem users come to a resolution and updating help desk manuals.
Kossuth also requires her team to hone their presentation, interpersonal and management skills. "It's not just about knowing the latest programs. You have to understand the business and its needs," Kossuth says.
New jobs emerge
As IT aligns more with business, project management skills become vital.
Rebecca Segal, vice president of worldwide services research at IDC, says, "IT is no longer just a support function. It's about, 'Can you understand the technology and help people use it?' Companies want people (in IT) who are very interested in helping the company grow and be more profitable."
She says with the upturn in offshoring, having business skills, specifically project management, will be critical.
Johna Till Johnson, founder of Nemertes Research Llc and a Network World columnist, agrees. "The biggest trend in IT is that there's much more of an emphasis on project management and delivering services than on understanding and rolling out technology. People need to better understand the lines of business, understand customers, better manage suppliers. These are all business functions."
For this reason, Johnson says that a new IT position is emerging - the project management officer (PMO). She says the CTO of an organisation focuses on new technology, and the PMO figures out how to integrate that technology into the organisation. The PMO also could provide a home for compliance and regulatory oversight, a burden that weighs heavy on most IT organisations.
"They will need to know about process and people management," she says. "These aren't skills your IT manager has traditionally had."
Bob Muckenhoupt, an IT industry veteran, is seeing this trend first-hand. His company's Project Management Office, which reports to a level below the CIO, has gained prominence in the organisation over the past year. "It's being strengthened; it's enforcing new processes," he says. One goal of the PMO is to adhere to company and regulatory standards.
Project managers, he says, are responsible for ensuring that the technology side of mergers and acquisitions goes smoothly and that all other changes or enhancements to corporate systems are carried out according to company specifications.
"Our job is to make sure that if an audit team came in, they would see we've fulfilled the mandates of the corporation and that we are compliant worldwide," he says.
Muckenhoupt leads virtual teams of business analysts, systems analysts, developers, technical specifications experts, integrated systems professionals and implementation gurus to carry out each project. He acts as a liaison between the team and the business unit. It's his job to communicate the needs of the business unit and make sure they are carried out.
"Back in the day, we didn't need project managers for anything," says Tom Gonzales, senior network administrator at Colorado State Employees Credit Union. "Now we can't do anything without them."
But instead of assigning a specific project management officer, his entire IT team went through project management training. Gonzales says this has been critical as the company has outsourced some applications, and his whole group oversees those contracts.
James Tate, associate director of utilities and telecommunications at Presidio Trust in San Francisco, also requires his team to seek project management skills. "There is a need for project management at every level," he says. "It's the only way of organising and controlling IT projects." Otherwise, he says, objectives aren't met and other people can have too much influence over the success of an initiative.
Getting your finances in order
IT groups are under the gun to show ROI, yet often they are missing a critical post in making this happen - a financial expert on their management team.
"This position has very little to do with technology," says Corey Ferengul, senior vice president at Meta Group. "Instead it deals with doing a financial analysis of IT. 'Do we really understand what we're spending and why?'"
Ferengul says adding a financial guru to the IT organisation could change the way technology teams operate. "They need to get a grip on finances and in most cases they've already done cost-cutting."
The financial manager would take charge of metrics for the group. Analysis tools for application and network performance and aggregated information would flow through this person. "He could provide meaningful metrics for people outside of technology roles (like the executive team) and put those metrics into context (to justify investments)."
Some IT groups already have a financial guru in their midst, in the CFO. But Nemertes' Johnson says IT groups should be doing their own financial vetting before information hits the CFO's desk. "Strategic investments can be compromised if the CFO gets involved in the IT decision-making," she says. "Their job is to keep costs down. IT needs to be treated like a business within a business. You need your own accounting unit."
Experts say that IT organisations should add a compliance manager to their ranks because most companies fall under regulations or government mandates. In the US these include the Health Insurance Portability and Accountability Act, Gramm-Leach-Bliley Act, and Sarbanes-Oxley Act.
Andy Avila, IT and security manager at Cooley Goddard, a law firm in San Francisco, has a lawyer on his IT team to handle compliance questions. He also turns to a firm-wide risk management committee. "We draw on their expertise for help with these issues," he says.
Some experts argue that the security officer - another new title in IT groups - should handle compliance.
For industry analysts, the list goes on about who should be part of the IT department.
Ferengul says an important area that needs representation is asset control. "IT organisations need to know what they have and where it's at," he says. He considers this role more than just inventory control. "It's the life-cycle management, maintenance contract upkeep and more."
Johnson says she'd like to see a messaging guru who would tackle not only e-mail but also issues surrounding real-time collaboration and presence.
They agree that a storage officer will come about soon - someone to deal with privacy, redundancy and disaster recovery on more than a technical level.
MBAs all round?
As more positions that involve business sense are added to the corporate IT ladder, IT managers are noticing the change.
Ferengul adds, "IT's growing up and there's nothing wrong with that. In the past, it's been a service bureau of technologists following the lead of whomever is directing them. Now it needs to be more mature and run like a business unit with all the analysis and all the managerial skill and all the vision expected of any other business unit."
"Do I think IT folks need business degrees? No. I don't want to see a bunch of MBAs running routers. But they do need to understand beyond the speeds and feeds. They need to know how it's going to affect the business," he says.
Johnson sees the opportunity for IT a bit differently. "It's not about IT getting smarter about business," he says. "It's about IT educating users about how to get more out of the business. IT has to take on a sales role and convince folks to buy into their ideas."
Gonzales adds a reality check. "I hear a lot about how IT folks need to know the business, but all we have time for is day-to-day tasks. After all, with security, we want to keep the bad guys out and keep everyone patched. That task won't change with a better understanding of business management."