Bring back IT's R&D privileges

During the past few months, I've talked with several CIOs who are re-establishing formal research and development groups within their IT departments. This anecdotal evidence doesn't prove a trend, or course, but it does hint at what could be a very interesting development for IT organizations.

We have to think back only five years or so to recall that most large IT organizations used to have an internal R&D capability. This group typically consumed around 3 percent of the IT budget and a slightly higher percentage of the IT staff head count. (In some organizations, the investment in IT R&D was substantially higher.)

The charters of IT R&D groups varied, but essentially they called for explorations of the ways emerging technology could affect the corporate IT environment. Those who worked in R&D were often envied by the rest of the IT group because they were "the guys who got paid to play with cool, new stuff".

Generally, R&D was one of the most privileged spots to occupy in IT during the tech boom.

The fortunes of the IT R&D function changed, however, when the IT bubble burst and the economy faltered. During the days of deep IT budget cuts in the early 2000s, IT R&D was often the first area to get the axe.

Realistically, few CIOs could defend an investment in IT R&D during a period when few IT investments of any kind were being made. Indeed, the past five years have been marked by efforts to lower IT costs, rationalize existing software portfolios and explore alternative sourcing models. While it was sad to see IT R&D groups get shut down during the economic doldrums, it was a necessary response to a stagnant economy.

However, some of the people I've talked with lately believe it's time to revive a small department of IT professionals focused on emerging technologies. The organizations that are doing this tell me that what's driving them is the consumerization of IT and their need to understand how "consumer IT" will affect their business.

Ironically, just as IT R&D departments were struggling for survival in the early 2000s, IT was reaching a whole new market of consumers. As corporations were slashing IT budgets, consumers were becoming more immersed in technology.

For instance, mobile and wireless gadgets and high-speed Internet have proliferated in the consumer market during the past few years. As a result, the demand to support emerging technologies is much more likely to come from your customers now than from your business leaders. Moreover, IT R&D is well positioned to play a key role in optimizing existing IT systems and protecting sensitive corporate information.

It's exciting to think about reviving the R&D function in IT, but this is a different world than the one we knew in the late '90s. IT organizations that choose to formalize this function will have to be very specific about the benefits the group will provide.

Here are some tips that might help you keep a resurrected IT R&D group solvent:

n Expand the purview of IT R&D beyond emerging technologies. Involve it in issues such as IT architecture, strategic planning and even IT market research. This helps avoid the stigma (from the business perspective) of IT R&D as "the guys who get paid to play with all the cool, new stuff". n Consider partnering with research institutions such as major universities to supplement the IT R&D capability in your company. Universities are often excellent repositories of great information on how new technologies will affect business. Since they aren't commercial enterprises, they are usually more than happy to join forces with the private sector.

n Realize that IT R&D groups can fail if they lack metrics, deliverables, timetables and specific goals. As with any IT function, it's essential to understand how the business defines success for the group. And make sure there are metrics in place that can be used to measure success. CIOs should have a clear understanding of the value that an IT R&D function will provide, and they should be able to communicate that to stakeholders.

The re-emergence of IT R&D groups could be an exciting development for IT organizations, but it must be implemented with a clear set of business goals.

Barbara Gomolski, a former Computerworld reporter, is a vice president at Gartner, where she focuses on IT financial management

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