By Jodi Mardesich
IT budgets are constantly shifting with business realities. For this year, at least, spending on technology is up, outsourcing is hitting a plateau, and CIOs are more optimistic about hiring than they have been since 2001. But a projected short-term decline in IT spending over the next two years, along with the changing needs of IT staffing, is making it imperative for CIOs to be very selective about hiring new IT workers.
CIOs are not interested in filling the same slots with the same skill sets that they have for the past decade, but rather in cultivating new skills among IT workers to better suit their organization's needs.
By 2010, six of 10 people affiliated with most IT organizations will assume business-facing roles, involved with information, process, and relationships, according to Diane Morello, vice president of research at the Gartner Group. To succeed in the next wave of IT growth, IT staff must gain skills in relationships, project management, and strategy.
The shift toward new types of job skills is already happening. There is still a need for knowledgeable and flexible IT professionals with on-the-job experience. But the greatest increase in IT jobs will come in the areas of project management, strategy, and business analysis, according to a survey by Forrester Research. The staffing level of program and product managers is expected to rise 70%, strategy jobs will increase by 49%, and business analysts by 43%.
Many different factors in the budget environment have given rise to the popularity of seeking these new specialties among IT workers. According to its annual "The State of the CIO 2006" survey, CIO Magazine found that 55% of IT executives expect to increase their IT staffs in the coming year by an average of 11%. The same survey found that offshore outsourcing is leveling off: more than half of the respondents expected the levels to stay the same for outsourcing jobs to lower-paid workers located outside the U.S. Another survey, by Forrester, projected that outsourcing would decrease as a percentage of the IT budget, from 7% each year until 2008, then dropping to 6% in 2009 and 2010.
Another factor underlying the trend is budget uncertainty. Forrester also expects a new boom in technology spending to start in 2009, with compound annual growth rates of 9%. Until then, however, spending will be unsteady; after an expected rise of 7% this year, the growth in technology spending will dip to 2% in 2007, and bump up to 5% in 2008. Since technology investment drives hiring, this dip in IT spending will impact salary and benefits accordingly.
Along with the shifting hiring climate comes a fluctuating mix of skills needed in IT departments. As IT becomes more focused on alignment with business, fewer workers will be hired for strictly technical tasks.
Face of IT changing
Jobs in the IT sector are shifting as CIOs and IT executives stress the alignment of technology and business goals. By 2010, Morello says IT jobs will split into four domains of expertise: technology, information, process, and relationships.
1. Technology infrastructure and services These skills include knowledge of and experience with architecture, infrastructure, security, enterprise applications, programming, and Web development. Traditionally, workers seek education and certification to further their technology-related skill sets.
2. Information design and management "Through 2010, information design expertise will increasingly separate from technology expertise," Morello says. This change will attract non-technical people who understand how different businesses and groups use, classify, and organize information.
3. Process design and management This area includes businesses processes, such as business analysis and business process modeling, operational processes, such as business continuity, quality, and service, and project management.
4. Relationship and sourcing management Requiring "softer" skills than typically expected in the IT department, relationship and sourcing management deals with relationships -- either within the company, with partners, or customers. Skills like negotiation and social networking aid here. "To prepare for this area, IT professionals should participate in projects, programs, process design, and engagements that demand cooperation among multiple parties with different agendas," Morello says.
IT professionals who expand their expertise beyond technical knowledge will have an advantage over their counterparts with purely technical expertise, Morello says. "IT 'technicians' -- people who pursue only narrowly defined technical skill sets -- will be at high risk," she says. Morello predicts that as many as 10% of IT technicians will lose their jobs annually through 2010.
To function in the new IT world, IT professionals must prove they can understand business realities. For example, they must understand the industry their company is in as well as the company's customers. They should also be aware of the regulatory environment and any regulatory requirements, Morello says. IT professionals should decide if they will remain focused on pure technology or whether they will transform their competencies, developing skills in business processes, alliance building, or information, Morello says.
CIOs should view the revitalization of the IT department as important a goal as meeting project delivery dates, reducing costs, and managing the IT portfolio mix, says Laurie Orlov, an analyst with Forrester.
"By focusing on deliberate crafting of future skill requirements, recruiting plans, skill mix, and entry-level opportunity for college hires, CIOs have an impact on how IT is viewed by their peers -- but also on whether there will be enough IT people around to support business demand in the future."
Jodi Mardesich writes about business and technology. Her writing has appeared in The New York Times, Fortune, San Jose Mercury News, Salon, Slate, and Yoga Journal.