This year presents enormous opportunities for IT leaders with ambition, vision and ability.

After the years of cost-cutting, technology is back on the boardroom agenda as a means to increase competitiveness and improve public services.

We are tentatively entering a new phase in the growth of IT, as the real potential of internet technologies becomes apparent. Budgets will still be tight, but smart chief information officers (CIOs) will understand how to drive IT-enabled change while keeping control of spending.

Computing looks ahead to the big issues that will be hitting the headlines in 2006.

5 Key themes

Reducing complexity

For too many years, IT revelled in its complexity. As long as no one outside the IT department understood the jargon or the technology, all was well and jobs were safe.

But chief executives will no longer tolerate this attitude. Business and government leaders recognise the value of IT but want simplicity and flexibility. Many CIOs are hampered by their IT legacy; responding rapidly to change can be near-impossible with archaic systems – hence the growth of outsourcing. But pressure will grow this year to make IT simpler and more transparent.

Consumerisation of IT

A new breed of internet-aware consumers is leading a change in attitudes to technology. Mobile phones, iPods, broadband and Google are making IT more ubiquitous and changing consumer expectations.

Why does this matter to the CIO? Those consumers expect their office computers to be as easy to use and responsive as the products they use every day. Some firms are contemplating renouncing the corporate PC or mobile phone, and offering staff cash to buy their own systems, subject to appropriate security.

Analyst Gartner predicts that by 2008, 10 per cent of firms will require employee-purchased notebook PCs. Home computing will become a growing influence on business IT.

Diversity

Let’s stop talking about skills shortages and face facts. If the recruitment pool is principally limited to men aged 25-40, any industry is going to suffer.

The number of women in IT is falling rapidly – it has halved since 1999 and stands at 20 per cent of the workforce. Fewer students are taking IT A-levels and degree courses. The number of under-25s recruited into UK IT is falling. And you only need to read Computing’s letters page to see the number of ‘older’ IT experts struggling to find work.

Forward-thinking CIOs will see the recruitment of a diverse workforce as a means of broadening the skills base and enhancing their ability to deliver.

Professionalism

Former head of eGovernment Ian Watmore identified professionalism in public sector IT as a key priority, and vital to ending the stereotype of government computer failures.

He is not alone. Raising standards and formalising qualifications is increasingly seen as a big step towards improving the profile and recognition of IT. If accountants, architects and engineers have done it, so can IT experts.

This year will also see the first institute for IT security to promote professional standards in this specialist field.

Productivity

UK productivity lags behind many of our major rivals, especially the US, where capital investment in IT remains higher.

For the UK to be competitive in a global economy, especially with the emergence of China and India, we must make better use of technology.

We are in a difficult transition period in the use of IT. Basic business processes have already been automated and technology brought in to improve efficiency. But the next phase involves transforming organisations with new web-enabled systems – a major change management challenge.

Only a few leading-edge companies have taken this step, but others must follow if we are to close the productivity gap.

4 Challenges for government

ID cards

If you put aside the political and civil liberty issues about identity cards, this is nothing more than an enormous IT project. Add the controversy, and you have the government’s most challenging technology initiative.

In 2006, the bidding will begin for suppliers to lead the project, against a background of continuing political debate.

The government’s biggest failing on ID cards has been poorly articulating the reasons for the scheme and the benefits to citizens. Is it an anti-terrorism move? Is it designed to prevent benefit fraud, or identity theft?

The government needs to decide on a clear purpose and convince the public, or the IT project will be doomed to failure before it starts.

NHS

Who would be director general of NHS IT? Richard Granger has the impossible job of delivering a radical new approach to health service technology, ahead of any other country in the world, into an organisation that is to cultural change what the iceberg was to Titanic.

There is much speculation that IT will be the easy scapegoat if the project sinks, but Granger is coming out fighting, pointing a finger at policymakers.

He will continue to deliver the technology during 2006, but the priority will be convincing health professionals and hospitals to use it. It is a challenge that must be met – not only for the reputation of the IT industry but for the future of the NHS.

Shared services

Joining Granger on the list of government IT chiefs with plenty on their plate is director of shared services David Myers. His task is central to Chancellor Gordon Brown’s aim to cut £21bn a year from the running costs of government.

Shared services involves running common back-office systems such as human resources and finance across multiple departments, yet Whitehall is notorious for its silo mentality. Myers must not only convince civil servants to work together and share systems, but also deliver the major IT implementations.

Delivering IT strategy

Ian Watmore made such a good impression as head of egovernment that he was promoted to take responsibility for delivering Labour’s key public service reforms. It is good to see an IT man selected for such a vital role in Whitehall, and his legacy is the first public sector IT strategy, published last November.

The challenges for his successor will be recognisable to CIOs in any major company – promoting professionalism, managing IT-enabled change and keeping demanding stakeholders happy, while ensuring there are no more computer failures. We hope Watmore and his successor receive the support and backing they need and deserve.

3 Technology trends to watch

Digital convergence

Voice over IP (VoIP) was one of the hottest technologies of 2005, as CIOs realised the cost savings and opportunities from converging voice and data onto a single network.

But VoIP is only part of the digital convergence trend that will see video, audio and broadcasting also merging onto a single communications infrastructure.

The media industry is already preparing – as seen by BSkyB’s purchase of broadband ISP Easynet and talks to merge NTL and Virgin Mobile.

BT is well advanced on its 21st Century Network project to IP-enable its entire operation and deliver next-generation services, and other organisations will increasingly investigate the benefits of convergence.

Mobility

Consumer and business priorities are coming together in mobile technology.

Access to information and communications anytime, anywhere is a selling point in the High Street and a necessity for companies. Notebooks will be the booming area of the PC market, wireless networks will spread further, and mobile operators will try to convince businesses to invest in 3G.

New technologies such as WiMax, for wide area wireless networks, and UltrawideBand, for short-range communications, will soon become serious options. And as regulator Ofcom licenses more of the radio spectrum, new mobile technologies and services will emerge.

Web-enabled applications

A number of trends are bringing a rethink in the way software is developed and delivered.

Google has made advertising-funded ‘free’ applications a mainstream concept that Microsoft is looking to emulate; open source techniques are being applied in the corporate world; the success of software-as-a-service providers such as Salesforce.com is forcing vendors to review their licensing and delivery mechanisms; and services-oriented architecture is emerging as the dominant development approach. Web services will allow software to interact, share information, and reuse components to deliver far greater flexibility for users.

2 Items on every IT budget

Security

The security threat has changed from geeky kids developing viruses to organised crime gangs using the internet for fraudulent financial gain. Identity theft is the fastest-growing cyber crime.

Businesses will increasingly see the quality of their IT security as a way to gain an edge on competitors, such as banks offering personal authentication devices to customers to aid online buying and banking.

Outsourcing

Outsourcing remains near the top of every CIO agenda, but more companies are bringing outsourced services back in-house, moving away from old-style single supplier mega-deals.

The use of third parties will continue, but IT delivery will be a combination of internal resources, multiple specialist service providers, and offshore suppliers. CIOs will need to improve their skills in contract and programme management.

1 Job to go for

Later this year, the IT director for the 2012 Olympic Games in London will be appointed. This high-profile role will require ambition, talent and experience. If you love sport, and love a challenge, this could be the job for you.

What the experts say about 2006

Alistair Baker, managing director, Microsoft UK

Increasingly the IT industry is expected to contribute to the debate on innovation in our sector and how this drives prosperity in the knowledge economy. Government and business will focus on tackling the complexities of developing IT resources that enable people to thrive in today’s flexible working environment.

Josh Claman, vice president and general manager, Dell UK

In 2005 we saw the relationship between the chief information officer and the chief executive grow closer, as the value of IT was brought up to board level. 2006 will see the significance of this partnership increase, with the two roles working in tandem to acquire technology that supports business needs.

Matthew Key, chief executive, O2 UK

In 2006, the UK mobile market will continue to be among the most competitive in the world. The drive towards mobilising corporate networking for data and voice services will continue, and mobile email will reach new levels of penetration. Data-ready mobile devices will become more secure, reliable and affordable.

Graham Kingsmill, managing director, SAP UK

2006 is unlikely to see a dramatic global economic upturn, but the UK remains relatively stable compared with our European peers. Innovation continues to be a key driving force, and the role of technology in that is expanding. As an industry we must continue to simplify our solutions to ensure best value for firms of all sizes.

Tim Miles, chief executive, Vodafone UK

Faster 3G mobile broadband services will allow mobile workers to download larger documents, such as email attachments, more quickly. The increased speeds – initially up to four times current 3G speeds – will help to enhance new services, such as mobile TV, as the idea of truly mobile broadband becomes more familiar.

Trudy Norris-Grey, managing director, Sun Microsystems UK

The internet’s technology impact is being followed by something more important: a social impact of participation. New kinds of business networks will be created. There will also be an economic impact with firms built upon massive communities powering new economic models, such as eBay and Google.

Mark Raskino, Gartner Fellow and research vice president

Those who have worked on structural improvement to IT infrastructures and skills will be positioned to reap the strategic business return. But those who cut IT costs simplistically rather than investing in services-oriented architectures will find themselves trapped by the inflexibility of their legacy systems.

Ian Smith, managing director, Oracle UK

One of the challenges for 2006 is to overturn the perception that IT needs to be complex. It makes more sense to restructure internal processes rather than try to design systems around them. UK firms must also harness new technologies to create the services which will differentiate us from global competition.