Digital trans­for­ma­tion starts with IT

door | 3 oktober 2015

Rising customer expecta­tions fueled by the consu­me­ri­za­tion of IT has led to a digital arms race by companies to put the customer first by devel­o­ping new business models, re-engi­nee­ring business processes, employing social media and using analytics to increase customer enga­ge­ment and roll out perso­na­lized new products and services.
Many of the initial solutions were driven by marketing, often bypassing IT to work directly with solution vendors. This led to reports of the CIO becoming irre­le­vant or super­seded by the Chief Digital Officer (CDO) or Chief Marketing Officer (CMO).
Without a doubt, the CIO and IT will play a pivotal role in trans­for­ming their orga­ni­za­tions into fully digital enter­prises … but not without trans­for­ming the IT function. Digital trans­for­ma­tion is a huge oppor­tu­nity for CIOs but it starts with IT trans­for­ma­tion – and time is running out.

If IT is going to meet the challenge brought on by digital disrup­tion, a new operating model is required that can leverage emerging tech­no­lo­gies and sourcing alter­na­tives to satisfy these new stake­holder expecta­tions.

This operating model is built around new capa­bi­li­ties to help the business rapidly and confi­dently identify and acquire IT-enabled solutions that deliver high quality and optimal business value at compe­ti­tive costs. This next-gene­ra­tion IT operating model encom­passes three new ways to think about the role of the IT function: broker, integrate, and orches­trate.

Broker, integrate, orches­trate

Rather than a builder, IT functions as a broker bringing buyers, e.g., customers and stake­hol­ders, together with sellers, e.g., service providers, to solve a business problem. IT brings its knowledge of the market, tech­no­lo­gies, and vendors together with its deep under­stan­ding of its stake­hol­ders’ needs to help the business select the right solution and to also proac­ti­vely bring IT-enabled inno­va­tion oppor­tu­ni­ties to their attention.

As IT brokers solutions from multiple sources, its focus shifts from building to inte­gra­ting the inter­nally or exter­nally sourced services with each other and with existing data and services to make them usable. Addi­ti­onal points of inte­gra­tion include archi­tec­tural integrity, identity and access mana­ge­ment, security, legal and regu­la­tory compli­ance, disaster recovery, and business conti­nuity compli­ance to name a few.

In a world where services are multi-sourced and the supply chain becomes complex, IT’s respon­si­bi­lity changes from primarily deli­ve­ring services to the end-to-end perfor­mance of services. In its third role IT orches­trates the delivery of services and ensures that perfor­mance, cost, and quality are meeting or exceeding expecta­tions and the business is getting value. IT’s role is to make this complexity invisible to the business.

CIOs have a short window of oppor­tu­nity to take the leader­ship position in this trans­for­ma­tion and maintain influence over tech­no­logy acqui­si­tion, deploy­ment, and spending. Running IT as a business is an essential element for disci­plined execution of the Broker/Integrate/Orchestrate operating model. If IT is not perceived as being a transpa­rent, credible, and reliable provider of services at compe­ti­tive prices, then it is doubtful it will succeed in making the trans­for­ma­tion.

Cloud tech­no­logy has matured to the point where cloud-based alter­na­tives, either public, private, or hybrid, are viable for most situ­a­tions. CIOs need to embrace the cloud and implement a cloud gover­nance framework and defined process for leve­r­a­ging the speed, agility, and cost benefits inherent in cloud tech­no­lo­gies.

The business is looking for IT not just to support inno­va­tion but also to be a source of inno­va­tion. With the consu­me­ri­za­tion of IT, many IT orga­ni­za­tions have found them­selves behind their users in adopting new tech­no­lo­gies. IT needs to invest in research and devel­op­ment capa­bi­li­ties to evaluate emerging tech­no­lo­gies and support joint pilots and POCs with the business. IT needs to get ahead of its customers and lead, not follow when it comes to exploi­ting tech­no­logy.

Digital transformation is a huge opportunity for CIO’s but it starts with IT transformation”

Finally, IT will need to develop core compe­ten­cies around sourcing and vendor mana­ge­ment, marketing, pricing, and customer service to name a few. This will require a coor­di­nated approach to talent acqui­si­tion as well as an invest­ment in training to develop internal candi­dates. Make talent mana­ge­ment a high priority to beat the clock in this race!
Author : Marc Snyder

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