IT-as-a-Service model essential in digital transformation

Some issues never seem to go away, including business users’ demands for IT departments delivering against business needs — and doing it quickly to gain or sustain a competitive advantage. Legacy infrastructure and processes make it difficult to achieve. It reminds me of a friend’s dachshund who incurred a slipped disc. The back of a dachshund, of course, is elongated. She could no longer jump or sprint, and when trying to walk straight, the front half of her body went straight forward, but the back half awkwardly took a more roundabout swerve to the left. IT departments still organized in a traditional, function-based construct are like the injured dachshund — unable to move quickly and straight to address business needs and having to swerve and do workarounds for new technologies.

This challenge has a lot of CIOs thinking about implementing digital capabilities. Digital technologies moved from a “one to watch” status in 2012–2013 to automation becoming a disruptive factor in 2014 to evidence in 2015–2016 of dramatic cost and productivity improvement and new competitive advantages. In addition, with anti-offshoring sentiment growing quickly, we’re about to see seismic shifts to digital services to offset the loss of offshoring’s cost-reduction benefits.

What many companies don’t realize until they get “into the woods” in their digital transformation journey is that the promise of digital benefits largely rests on establishing a new business model, not just implementing digital technologies.

I’ve blogged before about the need for IT departments to reorganize from their traditional function-based structure to an IT-as-a-Service (ITaaS) construct, but do you know that ITaaS is a key component of digital services? Digital models require an end-to-end approach. This approach is best facilitated by creating small, cross-functional, collaborative teams of IT and business users. The process works better together and faster when IT and the business are aligned than when managed as two separate groups.

I blogged in the past about the game-changing initiative of global mining company Rio Tinto switching its IT group to an ITaaS structure. This strategy not only moved the company’s entire IT supply chain into a consumption-based model and ended challenges arising from functional silos but also changed the company’s pace of innovation and enabled future-proofing its IT investments.

As CIO, if you want to improve the alignment and relationship between your department and the business, or if your company plans to implement digital technologies this year, my advice is the best first step is to reorganize IT into an IT-as-a-Service construct. Here are some tips on how to shape your ITaaS strategy. As a goal for achieving greater IT success in 2017 and going forward, this should be at the top of your agenda.