By Sebastian McCabe, KPMG Director, CIO Advisory
COVID-19 has fundamentally changed the way organizations operate, what their customers and employees expect, and has created opportunities for business model innovation. Regardless of the sector or region, IT functions are struggling to transition quickly enough with the new reality.
IT executives know they need to enable speed and agility for their business, while at the same time being cost effective, secure, and adaptive. Even in the best of times, these types of changes to the IT operating model are challenging, but making it happen within the context of the current situation is daunting. There are constrained budgets, skillset shortages, legacy processes and organizational structures to manage – not to mention the challenge of working in a COVID-19 environment.
Priorities and Pathways
We see the future of IT focused on a Market Speed operating model. Market speed is the ability to deliver the right technology at the right speed – the speed that delivers on specific business outcomes. This is not merely bi-modal or multi-speed IT, where you pivot between two or three methods of delivery. For this new approach, think “omni-speed”, which is the ability to continuously adapt the IT operating model to enable the business to run at whatever speed, scale, and cost needed to meet a strategic objective.
Digital leaders share a common set of foundational principles to enable the market speed operating model:
- Organize around business portfolios and products as opposed to solutions and projects
- Build the capability for modern delivery utilizing leading methods and technologies such as agile, DevSecOps, CI/CD, and digital-native architecture
- Break away from traditional funding models and enable dynamic investment to fuel winning ideas
- Treat data as a crown jewel asset by re-architecting the data supply chain and opening access via APIs
- Make every service trusted by design, embed assurance into every step of the technology lifecycle
- Get a 360’ view of technology talent and bring the business into the IT ecosystem
These approaches were well-established as critical in a pre-COVID-19 world, and even more so in the evolving new reality. The reality of this prolonged environment has shown that companies must be better prepared, better aligned, and more agile to emerge into the new reality.
Where to begin
First and foremost, understand the most critical business outcomes required in the new reality. Knowing what levers to pull within the IT operating model are completely dependent on what drivers and capabilities both IT and the business need to execute upon. Digital transformation for IT begins with clarity on what portfolios need to run at what pace, with what technology, under what way of working, delivered by whom, and measured by what. While there is no model answer to market speed, our research and experience in the market has shown us seen three paths work well:
1. Enabling business managed IT
Putting technology in the hands of value creators is a good thing, if governed well. The proliferation of easy-to-use, and easy-to-establish, low and no-code platforms and cloud-based services has enabled a broader distribution of technologists across the enterprise. This apparent eroding of power and influence of the central IT organization was not something IT traditionally supported. However, studies show that organizations that actively encourage business-managed IT for specific use-cases, technologies, and portfolios are much more likely to be significantly better than competitors in a whole host of factors, including customer and employee experience and time to market for new products. But moving at market-speed with business managed IT means much stronger governance, architectural and design standards, enhanced focus on security, integration, and monitoring.
2. Developing a greenfield digital capability
Many organizations dedicate considerable resources to legacy systems, and will not be moving away from them anytime soon. The reality is that most organizations will be living in a hybrid multi-cloud model for the foreseeable future. However, for some sectors, disruption and transformation simply can’t move quickly or cost effectively enough in a hybrid setting. Greenfield initiatives, however, operate completely separate from their legacy environment. They allow organizations to design an operating model and technical architecture with a clean slate, digitally native, integrated and lean from the start. This can be an advantage for companies that need to quickly leapfrog their competition and take advantage of an opportunity in the market. In the new reality, this is an increasingly common trend in banking, media, health care, and retail.
3. Transitioning the organization to full-stack portfolios
While not every company needs to be a product company, most leaders recognize the value of behaving like one – namely by building full-stack product teams aligned to strategic value versus IT projects aligned to project requirements. The benefit of this approach avoids boiling the ocean and takes an intentional, programmatic approach to scaling up to market speed by identifying specific high-value portfolios to transform. Often associated with a growth or emerging part of the business, full-stack teams are mobilized under a transformation office to holistically mature a single product or capability. As the organization gains experience and confidence, the scale moves from technology, to business, and eventually enterprise scale.
All organizations are experiencing similar short and long-term macroeconomic conditions created by COVID-19. Each company will move through its own recovery in a different way. However, improving your operating model with a focus on one of these three approaches will help ensure your new reality moves at market speed.
To learn more about achieving IT market speed operations, please click here.
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 Harvey Nash/KPMG CIO Survey 2019