IT Strategy: Heads up

Predicting the future does not come without its problems. As
history often proves, there are far more people who end up looking like fools
than who end up looking clever and insightful.

History is littered with stories of people making alarmingly inaccurate
forecasts. IBM chairman Thomas Watson’s comment that the world market for
computers could potentially reach as much as five, is right up there. As are the
words of a late nineteenth century US senator who, having been presented with an
early prototype of the telephone was so utterly impressed with its potential he
predicted that one day every town in America would have one.

Clearly, writing about other commentators’ failed attempts at future-gazing
is vastly more attractive than doing it yourself. But despite the less than
generous odds, I’m prepared to take the risk. It is, after all, the time of year
to be making predictions…

BRIC – One technology trend that’s difficult to ignore is
the growing importance and influence of the BRIC economies. There are some quite
startling statistics: 20% of IBM employees now work in India; China’s spending
on R&D has increased by more than 20% each year since 1999; five million
Chinese students graduate every year, of which one million studied computer
science.

Western companies must consider how this will impact on their business, and
it won’t all be positive. India is a case in point. While outsourcing to India
has been a proven and well-trodden strategy over the past few years, how long
can it continue? The Indian population is becoming more sophisticated, with its
middle-classes growing exponentially.

Low-ranking data input or call centre jobs are becoming less attractive. So
much so, that staff turnover in many call centre operations reaches 40%. Wages
(therefore the costs to Western businesses) are increasing while the rewards are
decreasing.

Infosys, a growing Indian software company and consultancy, has already set
its sights firmly on the West. Its chief executive recently told the Financial
Times, “Europe is a priority, business process outsourcing is a priority,
finance and accounting is a priority. Definitely we will be looking for more
opportunities in this space.” In 2008, the BRIC economies will become as much of
a threat as an opportunity to Western businesses. This is especially true in the
IT sector (the UK’s second largest after financial services).

Always on – 2008 will be the year when 3G finally comes of
age. With £22.4bn to recoup between them, the UK’s five 3G licence-holders must
ensure that the technology makes a meaningful impact. The day before writing
this column, T-Mobile and 3 signed a deal to pool their masts to improve
coverage. Orange and Vodafone are rumoured to be in similar talks. Blackberry,
currently the most widely-used always-on mobile device, must give 3G more
attention than it has so far.

The implications for business are two-fold. On the positive side will be an
explosion of opportunities for mobile working. On the negative side will be the
resulting security and compliance implications of hosting hundreds, if not
thousands, of always-on, mobile devices (there is an unlimited supply of planes,
trains and automobiles for devices to be left in, after all).

Compact and bijou – The smaller, in the world of technology,
the better. In October 2007, the two scientists who revolutionised the
nano-technology which makes it possible to cram huge amounts of data on magnetic
disks won the Nobel physics prize. Without them, your iPod wouldn’t exist. The
coming year will see the applications for miniaturisation increase significantly
and RFID chips will become even more ubiquitous than they already are.

The machines will finally take over – The past couple of
years in business software have been characterised by the growth of business
intelligence. But, despite the name, these products contain little intelligence.
They soon will. Rather than provide a view of the current state of corporate
operations, software programmes that also suggest courses of actions to senior
executives will become far more prevalent in 2008.

On demand – Hosted software applications enjoyed huge
success in 2007, and this trend will continue in 2008. The psychological
barriers which have prevented corporates from trusting a third-party to run
their mission-critical applications are no longer there. On the face of it, it’s
a hugely attractive proposition: concentrate on the main focus of the business,
leave the dark art of technology to someone who cares.

Consumer power – It’s happened already, but it’s only going
to become more important. The world wide web is television on steroids. The
power lies not with a handful of operators that can be influenced and worked
with, but with millions of individual consumers using the internet, social
networking sites, blogs and wikis to write and discuss what they wish. It won’t
all be good.

In 2008, businesses must embrace a brave new world of technology and
incorporate it into the psychology of the business.

Good luck.