The AI-Disrupted World of IT

I can feel it. I can feel it in my bones. Change is coming. Disruptive, transformative, bigger than anything we have seen. And yes. This time, it will be due to Artificial Intelligence.

The Hype time is over!

2023 was all about GenAI hype. Insane graphs and charts were built. Management Consulting companies and industry talking heads frothed at their mouths. Even my two cats Apollo and Artemis, and my puppy Odin were having heated conversations about LLM, hardware accelerators, RAG, and hallucination!

We are all taking a deep breath. Reality is sinking in. The insanity of a $4.4 trillion per year addressable market may not be a reality. However, it does not mean that our world has not started the invisible and inevitable shift.

Within ten years, our world will be unrecognizable. Jobs will be redefined, tasks will be automated, and our entire focus as humanity will shift. Businesses will have to go back to the drawing board and redefine their true north.

Let us focus on a few jobs in this discussion.

Hey Chief Information Officers, I feel for you!

The traditional Chief Information Officer role has been under threat for a while. The old school personas of CIO’s managed three things: budget, vendors and people. Some of them have started reading the tea leaves and started leaning towards product management and repositioning themselves as “Chief Digital Officer” or “Chief Technology Officer”.

Sadly, not all CIO’s could transform themselves into the new model. They stayed back in their comfort zone and enjoyed the vendor events with endless lunch, dinner, drinks, sports tickets, while discussing the billing rates for low level offshore software developers!

My prediction is: the traditional CIO roles will be obsolete in 2-3 years. Sorry folks. Hope you have enough savings to be able to retire.

Chief Operating Officers will own all things “operational”

GenAI is already automating tasks at a fast pace. The pace will only gain momentum and within 3 years, the heavily task and ticket-oriented operations world will be unrecognizable. There is no reason to believe that IT operations will not fold under the realm of COO. It only makes sense to automate similar tasks and workflows using GenAI.

IT Operations and Information Security, two heavily task oriented and ticket-oriented worlds of IT fit neatly under the overarching “Operations” umbrella, thus making the traditional CIO role obsolete.

Here comes the new roles of Chief Delivery Officer!

Here is my hypothesis: we will see a not-so-new world where product management, program management and engineering will come under the same umbrella. Call it “Chief Delivery Officer”, “Chief Design Officer” or whatever other name you want to come up with. And, absolutely don’t forget DATA! It will reside in the heart of it all.

Some companies are already moving to this model. This team will be the true innovation and design center of the organization.

Tell me, how many traditional CIO’s do you know who can lead an organization like this? Yep. I rest my case :-)

Outsourcing will be outsourced!

Let’s talk about the world of IT outsourcing.

IT outsourcing business primarily led by India, has been flourishing fundamentally based on an arbitrage model. They got good at two main things: 1) Do what others did not want to do and 2) Do it cheaply.

What do I mean by “what others did not want to do”? Remember the doom of Y2K? There were huge predictions of doomsday on January 1, 2000, when most of the software programs were supposed to fail due to the date issue? Guess what, we barely had any impact, all due to a brilliant new business segment in India. You did not need rocket scientists to change COBOL programs to reflect the new date format. Indian outsourcing companies figured out how to train a large number of fresh college graduates to edit COBOL programs. That was the beginning of the outsourcing model. Companies in rich countries did the “Core vs. Context” analysis and started figuring out what was “context”, the work they did not want to do themselves with their best talent. Perfect candidates for outsourcing!

I still remember my first paycheck as a software engineer in India. If I remember correctly, I got paid around $12,000 a year, which was considered a very good salary in those days!? It doubled by 2000. People were making a huge amount of money as a fresh out of college software engineer …almost $25,000 a year!!!!

Happiness all around, right? Indian college graduates were super happy to make an unprecedented amount of money and companies from richer nations were super happy to get skilled workers at a fraction of the cost. Win-Win-Win!

When you get out-arbitraged!

Sadly, the gravy train is coming to a grinding halt. Have you seen the python codes generated by the free version of ChatGPT? Pretty cool, right?

Sooooo …. If I can get decent quality of software programs written in seconds for NO COST, tell me why I would write a user story, submit it in a queue to be picked up next day by an offshore company, assigned to a junior software developer, who may or may not have clarifying questions, write the code, put it in another queue for QA team to pick up and then after a few days, deliver back to you!

Even with some crazy billing rate of say $25 an hour, you just paid $25 x 8 hours a day x 5 days = $1000 for some simple program.

Hmmm … $1000 vs ZERO, and 5 days vs less than a minute ….

What do you think you will choose?

Here is my audacious prediction. The IT outsourcing market will cease to exist by 2030.

The glorious world of Design!

So, if all this task related work goes away, what will we focus on? One word - Design. Can you imagine the joy we will experience if we did not have to review endless spreadsheets for outsourced vendor management, endless contracts, all the busy work, 10+ meetings a day …

Instead, imagine a world where we focused on design. Designing the new business model, new strategy, new products. Designing the new world.

I am getting goosebumps!