Now What?

Companies that have the most to gain from the information supply chain are retooling right now for the next generation, even when doing so requires significant investments during challenging economic times. Amazon.com, for example, embraced open source in 2002, converting from Sun's proprietary operating system to Linux. The switch is simplifying the process by which freelance retailers known as Amazon associates can build links to Amazon applications into their Web sites, using Amazon's payment, fulfilment and customer service without actually installing So the real question now is not whether but when the next generation will become your computing architecture. More to the point, given some unavoidable uncertainty about how quickly the next generation will arrive, what, if anything, should you do now to prepare for the change and help your company profit from its potential?

From a technology standpoint, the most important technique for managing uncertainty and hedging against the risk of disruptive change is to adopt a portfolio approach to IT investments. The most common mistake companies make during slow periods is to terminate any project that will take more than a few months to pay off - effectively shorting the future. (For more on IT portfolio management, see "Portfolio Management: How to Do It Right", CIO June.)

You must, of course, spend most of your IT dollars on running the business, but you also have to spend to change the business. Divide your budget into short-, medium- and long-term projects, and agree with the rest of your executive team on an appropriate ratio among them (perhaps a percentage allocation of 75-15-10). Then stick to the ratio whether the budget goes up or down.

At the same time, bear in mind that the real obstacles to adopting next-generation architecture, as in previous transitions, will be more organisational than technical. Mastering the seven elements of the next-generation architecture will challenge IT professionals to not only cultivate new technical skills but to also foster a better understanding of their companies' business. Capturing complex processes in code and identifying opportunities for profit from new data sources will work only if the boundaries between IT and users are as permeable as the data that is free-flowing in the information supply chain.

As the next-generation model makes more data available from business partners and consumers, the psychology of privacy and security will take centre stage. Data privacy and security concerns - poorly understood today - can be solved but only with industry leadership and public education. Unfortunately, governments are shooting first and asking questions later, if at all. Laws and regulations that are being adopted in haste today will later prove to have created more problems than they solved. As CIOs, you must educate the industry groups and trade associations you belong to on the long-term benefits of robust data exchange across the supply chain so they in turn can work with consumer groups and regulatory bodies to head off as many regulatory disasters as possible.

Most of all, keep your eyes open. Be ready to jump on early opportunities to profit from any of the seven elements of next-generation architecture as soon as you spot them. As the comedy team The Firesign Theatre likes to say: "Live in the future. It's happening now."