Effects of Shrinking Technology Budgets

Why are technology budgets shrinking?  Or more precisely, why can’t the IT department integrate all the “web 2.0 and web 3.0” stuff that seems to be emerging so quickly.  Well that is a complex question but here are some things that I think we must consider before we judge the information technology folks too harshly.

• maintenance costs have increased
• new technology is now accompanied by major process changes
• there is a competition between structured and unstructured data

Starting with the first point, we have seen a historically high increase in operations and maintenance costs for information technology systems.  The cost of software maintenance and hardware system maintenance are chewing up a significant percentage of the operating budgets of large IT shops.  These figures can be as high as 70% to 90% of the IT budget.  That only leaves 10-30% (and the 30% number is generous) for discretionary spending (on new services, technology, etc.)  With so much of the operating budget going toward “keeping the lights on”, we have little room for innovation.  Everything that is being procured is not having a much more rigorous vetting toward the total cost of ownership over 5-10 years.  The “long tail” has come around to tie us up and limit our options.

New technology of the Web 2.0 or Web 3.0 vintage is forcing some major changes within the enterprise.  The technology of wikis, blogs, enterprise tagging, and virtual worlds in Second Life is offering a completely unique framework for enterprise collaboration.  Some may argue that these technologies (and the protocols that govern their efficient use) are tilted toward the emerging workforce.  While those entering the workforce now may have prior experience with these technologies and may also be more comfortable with collaborative work using these technologies, the other members of the workforce can also be effective with these technologies also.  The difficulty seems to be in keeping parallel universes running side-by-side.  It is confusing to the workforce as new systems are introduced while legacy technology and process is put on a slow path to sunset.  The rapid shift can also cause problems.  Consider the disruption in an organization that has used an email system without mailbox quotas as it imposes strict limits on mailbox size.  The migration of content to an “alternative” system (that preserves the knowledge features and content of both attachments and message context) is difficult.  Then the process changes required to use alternative information systems for collaboration have to be “phased-in”.  Some technology suites make this transformation go a bit more smoothly than others.  It it not easy in any example.

The competition between structured an unstructured data is a new battleground within the corporate information space.  Structured data is the stuff that lives inside databases.  These databases are “designed” and maintained.  They have special applications from commercial apps to custom apps that talk to the database.  The information that moves in and out of these databases can only enter through a specific controlled interface (application).  We tend to think this provides for more control, better defined struture, and an architecture that is more easily secured from malicious (or unintentional) damage.  The unstructured data system (examples being things like wikis, blogs, mashups, social networking technology, etc.) are offering an experience that plays well with the built-in or enterprise-level search systems.  If you have a CORPpedia style application (a corporate version of a Wikipedia), and that application starts to take off, what you notice is that lots of good content starts to accumulate there.  Both the content and the presentation of the content are largely defined at the the discression of the content author.  This is good from a stewardship standpoint because the ownership invites passion and purpose in keeping things up-to-date and accurate.  Collaborative authorship also helps here.  And that is probably the major point.  In most structured data systems, the data entry and update protocol does not “invite” others to browse, and easily correct what is there.  So it seems that one of the big advantages in unstructured data systems that typically also have collaborative authorship features is that your peer group helps to keep the quality of your content higher and the discovery of your content is more simply attended by enterprise search or built-in search via a simple browser interface.