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Next Generation IT Operating Models — Part One: Broker

Over the past two decades, the role of Information Technology (IT) has changed drastically, thanks to the powerful, unstoppable march of digital transformation — with most organizations employing disruptive technologies to innovate across products, services and business models.

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Over the past two decades, the role of Information Technology (IT) has changed drastically, thanks to the powerful, unstoppable march of digital transformation — with most organizations employing disruptive technologies to innovate across products, services and business models. No longer is technology simply a business enabler, but it has itself become a critical value proposition and revenue source.

Due to the fast-paced change of the business landscape, digital capabilities must now be delivered at a rapid pace. And no longer is the technology ecosystem controlled by IT — instead, according to the most recent Harvey Nash/KPMG CIO Survey, one out of 10 IT decision makers said that over 50% of their firm’s IT spend was controlled by or managed outside the IT function.

According to Marc Snyder, ‎managing director with KPMG in the U.S., these trends are rendering the traditional “design-build-run” operating model for IT to be less relevant. A next-generation IT operating model, originally discussed by KPMG in 2014, focuses on three new and essential roles for IT: Broker, Integrate and Orchestrate. In a new report, KPMG takes a closer look at the broker role, in which IT must act to help their business partners understand available technology-enabled opportunities — such as to participate in industry ecosystems and to evaluate implications including technical readiness, supportability, privacy and security.

“The full soup-to-nuts internal IT shop is moving toward a world more integrated with outside solutions,” he explains, but those in marketing, sales or product development can’t spend their time understanding technology opportunities and the implications for the business, and how something like cloud solutions fit into the big picture. “Having a tech-savvy party that’s looking out for the company’s best interests and helping explain the challenges of integrating new solutions to existing systems to them is useful,” he says.

All three aspects of the Next-Generation IT Operating Model — the broker, integrate and orchestrate roles — require new positions and skills, leading some current IT positions to evolve while others may be reduced or even eliminated. For the broker, key roles that evolve include the business relationship manager, who works closely with business unit leadership to educate, facilitate and measure performance; enterprise architects who develop a pluggable architecture, simplify and standardize, and design for resiliency; and agile developers who assist with proof of concepts and develop prototypes.                                               

The Broker: Three Major Priorities

1. Proactively engage the business in a partnership and shape demand                                                                   

In the broker role, it is important for IT to facilitate development of an enterprise-wide integrated digital business strategy, working as a consultant and trusted advisor to the business. To accomplish this, IT needs to work cross-functionally to simplify and digitize business processes wherever possible to gain efficiencies and agility.

Finally, IT helps shape technology demand, by working closely with key business stakeholders to understand the organization’s strategic and tactical needs, and map them to existing services in the current portfolio whenever possible, or source the most appropriate solution.

“This is where the business relationship manager has to get out ahead of the curve and understand what the business needs to make it successful,” says Snyder. “You can’t be an observer from the sidelines, you have to be at the table with people in the business and understand what drives success and value.”

2. Leverage emerging technologies to drive innovation

 The broker serves as an important advisor to the business to help it understand emerging technologies and ecosystems, and how they may be leveraged to create new opportunities for innovation in products, services, business models, and customer experience to gain competitive advantage.

To succeed here, IT needs to maintain an R&D capability with dedicated funding to discover and gain experience with emerging technologies and services, and assess their potential usefulness within the business. This should include an innovation lab where cross-functional teams representing IT and its business partners can test out new technologies.

“Organizations are looking at IT to apply creativity to help the business understand how they might apply emerging, and emerged, solutions to their business — whether it’s IoT or robotics or biometrics,” says Snyder. “It’s up to IT to help inspire and innovate around these technologies.”            

3. Promote and manage a solutions portfolio

One of the things that many IT organizations have not been good at in the past, says Snyder, is creating a clear catalog of services that the business can use and understand what IT can do to help them in these various areas.

To that end, the broker role includes serving as a facilitator to match business needs and service options. The IT broker leverages its knowledge of business strategy, business processes, and market offerings to assist the business in selecting the most appropriate products and services to meet its requirements, wherever possible choosing standardized services rather than unique, customized approaches.

Overcoming Challenges of the Broker Role

One of the most important obstacles to overcome in implementing the broker role, says Snyder, is education. “A primary business complaint is that IT doesn’t understand their business and what drives value,” says Snyder. One way to start to address this is through co-location: “This gets IT folks up close, physically close, with their business stakeholders as opposed to sitting in a location physically remote from the business,” he explains. “The proximity helps IT get educated and more deeply understand the needs of the business.”

In addition, these efforts can help IT overcome some of the natural tendency to get wedded to existing solutions. “IT may say, ‘We already have some great solutions, why would you need to look at something outside?’ ” he says. “Instead of always looking at building something internally, IT also needs to help the business look at new creative solutions. It’s a balance.”

As a first step toward implementing the broker role, KPMG’s report, Next Generation IT Operating Models — Part One: Broker, recommends beginning with an assessment of your current staff and skills against the requirements of the broker role, and conducting a gap analysis.  Next, assess your current emerging technologies and innovation capabilities. Do you have in place the expertise, dedicated resources and separate funding to evaluate disruptive technologies and their impact on your industry, business model(s), products and services? 

We will explore the “Integrate” role of the next-generation IT operating model in-depth in Part Two of this two-part blog series.

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