There are a lot of technology developments happening right now for consumers and providers alike, and there are more to come.  Ten years from now, the IT department in all organizations will be fundamentally changed.  The new IT department will be a team that discovers and customizes cloud applications that others have made, instead of managing hardware and software hidden in the “back room.”

It probably won’t even take ten years…

Historically, IT has meant “those guys in the back room” administrating servers, networks, and applications.  They purchased hardware that ran software, which were maintained, configured and updated by IT.  System end users experienced big bursts of stress when a manual update or patch caused an outage or a new software version caused an intense learning curve.  The IT department held the ultimate control of what happened when, and as such, it was usually the most backlogged department in most organizations.

Fast forward a few years…

All you need is the onramp to your centralized applications located in the cloud.  Your interface device (PC, smart phone, etc) is a portal to the application and data which might be stored across the country at a professionally managed datacenter with massive scale, redundancy, and efficiency.  No longer is the internal IT department the key.  End users can now deploy and customize what is needed to run your business in real time.

Cloud Computing: According to an IBM study, by 2011, 25% of software will be deployed across the cloud.  Cloud computing is changing how technology is acquired, used, maintained, and updated.  Popular on-demand solutions like Salesforce and @task offer distinct advantages, and few risks.

No expensive servers, so no maintenance or replacement.  Patches, bug fixes, and updates are applied by the provider in real time, so no holding onto old software, no bulk updates or IT issues that must be managed.

The primary difference and advantage of cloud software is that anyone in an organization can deploy and maintain robust cloud applications.  Instead of the “back room” controlling when you add that new field in the database, the end user, who actually needs it, can log into the cloud system and change what he/she wants.

Their Tool, My Apps & Our Community: A provider builds a system, like Apple’s iPhone, Salesforce’s CRM or Google’s Android and Google Apps.  Third parties create applications that interface with the system.  A community emerges.

For example, Salesforce has an extensive community and hundreds of applications.  Some are truly incredible and highly practical:

• Conga Composer: Automates and outputs custom documents from fields in your Salesforce database.  We use it to convert a 45 minute process into a one-minute click stream.  (And it is very cool.)
• Youcalc or Boomi: Integrates information from Salesforce and other applications, so you can see all of your organization’s performance data and monitoring information in one spot.  Imagine one dashboard that automatically updates and contains key metrics from your core system, MCIF, CRM, NPS, project management system, etc.  In the new reality of the web and cloud computing this sort of integration can be cost-effective and time-efficient.

Try Before You Buy, & Sometimes, Don’t Buy at All: Cloud solutions enable consumers to try a product before they buy, and consumers are increasingly demanding this from all providers of electronic solutions.  Salesforce offers a free trial, considers it the company’s best sales tool, and says it’s essential to have in the “on-demand world.”  If consumers can try before they buy, they are happier and you will sell more online offerings (and sell them more efficiently).

Some companies, like Google, even give away their applications.  In this free economy consumers are using advanced applications that don’t cost them a dime.  Through advertising and other means of revenue generation, companies like Google have built empires based on giving away 95% of the products – talk about a different type of business model!

So why can’t a member try your online banking before they buy it?  There is great potential for those who can break the mold of traditional banking and really harness the technology models that are out there, can anyone say “Mint?”

Merchant Services are Easy: A small venture capital backed company, called Square, recently launched a tool that allows merchants to accept payments anywhere.

It uses a small, square input device that conects to the headphone jack on your iPhone, iPad, or Android.  The customer swipes his credit card past the reader, signs with his finger on the phone, and he is done.  He leaves with his purchase and walks away while receiving the receipt by email or text.  There is no upfront cost for the merchant or the consumer.  No hassle for anyone.

Technology is moving quickly, so quickly in fact, that by the time most CU’s get one technology service implemented for the member / customer it is already out of date.  You can see this in the world of mobile banking.  Many organizations have started to develop and implement iPhone apps (which is great), but now there is the whole new market of Android apps.  In this new technology world you have to move faster and at less cost.

The scale and speed at which technology is changing requires a completely new breed of IT.  It requires people who understand the business in which they work and who can consistently find solutions that can be tailored to its specific needs.  You need to be able to implement solutions that increase efficiency without months of implementation and without having to setup a complex infrastructure of servers, software, and networks.  These solutions must also have a focus around the end user (employee or member / customer).

Does your IT department actively find solutions that fundamentally change your business for the better?  Do you listen when they do?  Are you too caught up in protecting (or putting up with) the status quo?

Now is the time to build a different kind of IT department, one that finds and utilizes innovation and new technology.  We need to hire visionaries who can see how cloud software can be tailored to improve our businesses and propel us forward.