Digital IT Function Transformation for Getting Back to Business
MAY 16, 2021
Before Covid-19, most of the discussions we were having with business leaders centred around digital disruption and how technology adoption was increasing year on year as depicted in the diagram below:
Image Source: Innovative Quality Solutions, 2020
Digital Business transformation:
Technology is changing very rapidly, and those changes seem to be accelerated due to the impact of CovId-19.
Behavioural transformation:
Organisations absorb these changes at a much slower pace.
It takes time for people to alter their thinking, ways of working and unlearning to adopt new behaviours. With groups of people, where there are existing structures, processes, incentives, and cultural momentum, it takes even more effort to turn the ship. The larger the group, the higher the institutional cultural change required.
While digital business transformation is the process of re-inventing your business model, it must be enabled by technology innovation to differentiate product/service offerings in the post-COVID-era. Organisations should look to reset that gap between technological change and organisational change.
Our experience working with clients across sectors has shown us that cultivating a high performing agile organisation requires 6 key elements:
1. Organisational Design
2. Organisational Culture
3. People Engagement
4. Ways of Working
5. Management & Leadership
6. Governance & Funding
It is key to get the organisational design, culture, vision, strategy, and structure right, and to ensure that management and leadership are passionate about this. Then we need to get the people engagement right to bring about the changes. The ways of working, from agile to DevOps, to product backlog management, ensures products and services are delivered in a lean, agile way. There will then need to be some level of governance and funding to support this.
These conversations will continue, but we also now need to be thinking about how we are going to realign our business models.
Image Source: Innovative Quality Solutions 2020
Digital is about re-inventing your business model; thinking about what your strategy and vision are, and then thinking about the future competencies and capabilities that will allow you to achieve your goals.
Covid-19 has accelerated the pace of change on top of the digital disruption that we were already seeing. In the events industry, we have seen a move to hybrid events, where marketing and sales staff are creating digital content at a faster pace to service online streaming events. We have also seen IT departments rapidly transform to allow staff to work remotely.
“The battleground has become about how you can re-invent your business model to enhance customer experience and/or aid efficiency – Technology can act as a source of competitive advantage/differentiation for organisations and institutions.”
Image Source: Innovative Quality Solutions, 2020
All of these digital/technology trends have an impact on and put pressure on your business, so we need to make sure IT functions are fit for purpose to meet the business strategy and enable customer experience.
Image Source: Innovative Quality Solutions, 2020
As we transform our IT departments, so they align with the digital and business strategy, we need to understand the technology trends that are now here or emerging. There will be pressures around budget shortfalls, so we need to invest wisely in the right technology in an innovative and agile way.
IT Maturity Model (ITMM) & 4 Pillars for Transformation
This is a framework that we have developed over the years that looks at a number of dimensions of strategy, structure, process, people, capabilities, and technology (applications and infrastructure) and data. There are a number of levels of maturity from being IT-centric to being operationally focused, to being an integrated business driver providing IT and business excellence.
Image Source: Innovative Quality Solutions, 2020
We have used this model with several organisations allowing us to understand where the organisation is and where they want to get to in the future, and the journey from the current state to the future state. This can be used to develop a roadmap and strategy for transforming the IT department, which requires some level of consolidation, rationalisation, and optimisation, as well as becoming agile. A framework for post-Covid-19 recovery has been developed to aid organisations to understand the key facets of IT Transformation covering customers, competition, technology platforms, operations, and value creation.
Image Source: Innovative Quality Solutions, 2020
The ITMM Technology Insights Across the 4 Pillars are:
There are four pillars that underpin the Maturity Model for IT transformation as shown below:
Image Source: Innovative Quality Solutions, 2020
1. Manage out complexity
Getting rid of legacy IT and technical debt, and moving to a Cloud environment, decoupling it, and putting in open API’s typically involves the following:
Image Source: Innovative Quality Solutions, 2020
- Application and Infrastructure Rationalisation
- Cloud Adoption (ensure there are open API’s between various cloud providers so that data can be captured and mastered to extract intelligence and insights)
- Organisational Design – Breaking down hierarchical silos – move to value stream based outcomes
Mastering an increasingly complex cloudscape to achieve a solid data management strategy will enable critical insights and drive the business forward.
Digital product engineering is now really important. Products and services are now built on platforms, and we need to be thinking about shorter, more agile, capability development of life cycles, using design thinking and building functions and features in a stable and secure way with constant feedback, in complete alignment with customer needs.
2. Agility within the Enterprise & IT
Developing new ways of working so that you can bring in more product/service changes in a faster, smaller, more agile and more visible way, so that the business sees incremental value requires adopting an Agile and DevOps culture through the creation of Continuous Integration (CI)/Continuous Development (CD) automated pipelines of software development across horizontal value streams involving business and IT stakeholders:
Image Source: Innovative Quality Solutions, 2020
This is about finding a cultural way of breaking down silos between the Business, Development, Security, and Operations, working horizontally across products and services to reduce toil and waste through automation of the development lifecycle:
Image Source: Innovative Quality Solutions, 2020
Making sure all stakeholders are involved in value stream mapping and automation of your CI/ CD pipeline.
Image Source: Innovative Quality Solutions, 2020
Change is not made to happen in a big bang approach, but rather in incremental steps changing each service and changing the culture surrounding each service. It is a journey. Start small but think big.
3. Manage in Innovation
We are now being asked to do more with less so we need to bring in innovation and realise efficiencies to give the CIO’s and their teams more time to spend on innovation, looking at rapidly emerging new technologies that can be used to enhance products and services for customers.
Image Source: Innovative Quality Solutions, 2020
All the above pillars link together and need to be looked at together holistically. Every company is now talking about innovation, but who is expected to drive it? More often than not, the business expects the IT function to drive innovation. Here we look at a number of technology trends/innovations:
-
RPA (Robotic Process Automation) uses software robots to automate manual human tasks. This is an innovative technique that can give rapid innovation at a fairly low cost. It can be implemented in large volumes, can minimise effort, and allows staff to focus on more high-value activities
-
IoT (Internet of Things) is software sensor technology that collects data/information continuously and is a solution that can be easily and readily deployed across the organisation with tangible benefits without large investments having to be made
-
AI/ML (Artificial Intelligence / Machine Learning) – AI is intelligence demonstrated by machines, unlike the natural intelligence displayed by humans and animals. Whilst ML is the study of computer algorithms that improve automatically through experience. It is seen as a subset of AI. Machine learning algorithms build a mathematical model based on sample data, known as "training data". This is a fast-paced and emerging area with many use cases examples such as getting predictable data insights on company performance and trends. An example AI roadmap is shown below:
Image Source: Innovative Quality Solutions, 2020
4. Prioritise IT Value Management
Value management is all about achieving business outcomes and benefits realisation:
Image Source: Innovative Quality Solutions, 2020
All organisations want value delivery. We can look at opportunities through customer touchpoints and start moving through the journey; then the organisation will start to see value. Outputs deliver the outcomes, which then gives us benefit realisation and the impact on the business.
Image Source: Innovative Quality Solutions, 2020
Look at the graphic from the bottom up with technology as the base, and from there, we work up and create tools and techniques which align with business strategy, including people, processes, and technology. Traditionally IT would create new tools and techniques and then introduce them to the business. This created a lot of failures as the outcomes and the customer journeys were not considered at the start:
Image Source: Innovative Quality Solutions, 2020
This model explains how we need to work outside in. We need to identify touchpoints in each customer persona and journey and then look at how it relates to the technology function and outputs. It’s about identifying the opportunities where technology, innovation, and agility can really deliver value, constantly re-evaluating and realigning.
Benefits of IT Transformation
The benefits of IT transformation can be grouped across the following 4 categories and will depend on your IT maturity:
-
Value/Cost
-
Certainty/Risk
-
Resource Optimisation
-
Agility
Image Source: Innovative Quality Solutions, 2020
A typical IT Transformation roadmap is shown below:
Image Source: Innovative Quality Solutions, 2020
IT Transformation Ownership
IT Leader’s own IT Transformation and set the IT vision, direction and strategy; they need to empower staff with the skills, tools, and initiatives, taking them on the change journey.
Image Source: Innovative Quality Solutions, 2020
In the ‘new normal’ CIO’s and IT leaders will be driving and enabling the corporate/business digital strategy through innovation, analytics, agility, and DevOps cultures to show the business how to valuably optimise IT services and products. They need to be given the room and the authority to bring about this change.
The key takeaways:
-
As we move back to business, IT investments will be scrutinised for business value – effectiveness, efficiency, digital growth, and compliance will be predominant in most business cases
-
The IT Maturity Model (ITMM) aids the IT transformation journey to support digital transformation.
-
The IT Maturity Model also helps support you to develop your technology strategy.
-
4 Pillars of the ITMM include reducing complexity, increasing agility, innovating, and demonstrating
-
There are an array of initiatives IT can undertake to support the digital agenda for business from BizDevSecOps, Cloud, Systems Rationalisation, AI/ML, IoT, RPA etc.
-
Focus on what’s important for the business and not for IT.
-
There is a great opportunity for IT to ‘rise to the occasion’ to enable digital transformation and change, and for the CIO/Senior Technology Leader to drive strategic change.
-
IT function must transform to become a digital business partner/integrator.
This blog was written by Dr Kuldip Sandhu, a Digital / IT Transformation and Change practice development adviser and consultant with 25+ years working in IT. You can find his original blog here.
.png)
.png)
.png)
.png)