What will the IT department look like in the future?

Posted on : 29-01-2019 | By : john.vincent | In : Cloud, Data, General News, Innovation

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We are going through a significant change in how technology services are delivered as we stride further into the latest phase of the Digital Revolution. The internet provided the starting pistol for this phase and now access to new technology, data and services is accelerating at breakneck speed.

More recently the real enablers of a more agile and service-based technology have been the introduction of virtualisation and orchestration technologies which allowed for compute to be tapped into on demand and removed the friction between software and hardware.

The impact of this cannot be underestimated. The removal of the needed to manually configure and provision new compute environments was a huge step forwards, and one which continues with developments in Infrastructure as Code (“IaC”), micro services and server-less technology.

However, whilst these technologies continually disrupt the market, the corresponding changes to the overall operating models has in our view lagged (this is particularly true in larger organisations which have struggled to shift from the old to the new).

If you take a peek into organisation structures today they often still resemble those of the late 90’s where capabilities in infrastructure were organised by specialists such as data centre, storage, service management, application support etc. There have been changes, specifically more recently with the shift to devops and continuous integration and development, but there is still a long way go.

Our recent Technology Futures Survey provided a great insight into how our clients (290) are responding to the shifting technology services landscape.

“What will your IT department look like in 5-7 years’ time?”

There were no surprises in the large majority of respondents agreeing that the organisation would look different in the near future. The big shift is to a more service focused, vendor led technology model, with between 53%-65% believing that this is the direction of travel.

One surprise was a relatively low consensus on the impact that Artificial Intelligence (“AI”) would have on management of live services, with only 10% saying it would be very likely. However, the providers of technology and services formed a smaller proportion of our respondents (28%) and naturally were more positive about the impact of AI.

The Broadgate view is that the changing shape of digital service delivery is challenging previous models and applying tension to organisations and providers alike.  There are two main areas where we see this;

  1. With the shift to cloud based and on-demand services, the need for any provider, whether internal or external, has diminished
  2. Automation, AI and machine learning are developing new capabilities in self-managing technology services

We expect that the technology organisation will shift to focus more on business products and procuring the best fit service providers. Central to this is AI and ML which, where truly intelligent (and not just marketing), can create a self-healing and dynamic compute capability with limited human intervention.

Cloud, machine learning and RPA will remove much of the need to manage and develop code

To really understand how the organisation model is shifting, we have to look at the impact that technology is having the on the whole supply chain. We’ve long outsourced the delivery of services. However, if we look the traditional service providers (IBM, DXC, TCS, Cognizant etc.) that in the first instance acted as brokers to this new digital technology innovations we see that they are increasingly being disintermediated, with provisioning and management now directly in the hands of the consumer.

Companies like Microsoft, Google and Amazon have superior technical expertise and they are continuing to expose these directly to the end consumer. Thus, the IT department needs to think less about how to either build or procure from a third party, but more how to build a framework of services which “knits together” a service model which can best meet their business needs with a layered, end-to-end approach. This fits perfectly with a more business product centric approach.

We don’t see an increase for in-house technology footprints with maybe the exception of truly data driven organisations or tech companies themselves.

In our results, the removal of cyber security issues was endorsed by 28% with a further 41% believing that this was a possible outcome. This represents a leap of faith given the current battle that organisations are undertaking to combat data breaches! Broadgate expect that organisations will increasingly shift the management of these security risks to third party providers, with telecommunication carriers also taking more responsibilities over time.

As the results suggest, the commercial and vendor management aspects of the IT department will become more important. This is often a skill which is absent in current companies, so a conscious strategy to develop capability is needed.

Organisations should update their operating model to reflect the changing shape of technology services, with the closer alignment of products and services to technology provision never being as important as it is today.

Indeed, our view is that even if your model serves you well today, by 2022 it is likely to look fairly stale. This is because what your company currently offers to your customers is almost certain to change, which will require fundamental re-engineering across, and around, the entire IT stack.

Has technology outpaced internal IT departments?

Posted on : 31-10-2013 | By : john.vincent | In : Data

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In technology we love to put a box around something, or define it in a clear and concise way. Indeed, it makes a lot of sense in many technical disciplines to do this, such as architecture, development, processes, policies, infrastructure and so on. We talk about “the stack”, or “technology towers“, or “Reference Architectures”…it provides a common language for us to define out compute needs. “This switch operates at layer 3 versus layer 2” etc…

In the same way we put our technology human capital into nice, neat boxes. Simple, repeatable stuff: 1) Open up Powerpoint…2) Insert SmartArt…3) Hierarchy-Organisation Chart…and away we go. CIO , next level… Head of Infrastructure, Head of Operations, CTO, Head of Applications, Head of Networks, Architecture, COO (can’t have enough of those)…

The general taxonomy of technology organisations has barely changed since the mid 1980’s and actually, until maybe the last 5 or so years, this has been fine. Whilst technology has evolved, it has done so “within the boxes”. We have gone through shifts in operating model and approach, from mainframe to distributed and back again, but the desktop, data, storage, server, mid range and so on services have remained and with it the support organisations around them.

However, things are somewhat different now. The pace of change through Consumerisation, Commoditisation and Cloud (the 3Cs) has redefined the way that businesses engage and capitalise on technology in work and home lives. At the forefront in comes down to three main business drivers:

  • Increased Agility – access to applications and service provisioning should be as close to instantaneous as the laws of physics will allow
  • Increased Mobility – the ability to access applications anywhere, on any device at any time
  • Increased Visibility – a rich data and application environment to improve business intelligence and decision making

To the end user, everything else is just noise. Security, availability, DR, performance, big data analytics…this just gets sorted. Apple does it. Amazon does it, therefore my IT organisation should be the same. In fact better.

So, how does the traditional IT organisation fit with the new paradigm? Well the 3c’s certainly provide significant challenges. The issue is that you have something that was previous contained within a silo now breaking down the barriers. Today’s compute requirements are “fluid” in nature and don’t fit well with the previous operating models. Data, once centralised, contained and controlled, is now moving the the organisational edges. Applications need to be accessible through multiple channels and deployed quickly. Resources need to scale up (and down) to meet, and more importantly match, business consumption.

How does the organisation react to these challenges? Does it still fit neatly into a “stack” or silo? Probably not. How many people, processes and departments does the service pass through in order to provision, operate and control? Many in most cases. Can we apply our well-constructed ITIL processes and a SLA? No. Can we scale quickly for new business requirements from a people perspective? Unlikely…

So what is the impact? Well, it wasn’t that long ago that CIOs spent much of their time declaring war on Shadow IT departments within business functions. With “Alex Ferguson-like” vigour they either moved them into the central technology organisation or squeezed them out, through cost or service risk.

However, it seems that the Shadow IT trend is back. Is this a reaction to the incumbent organisation being unable to provide the requisite level of service? Probably.

I guess the question that we should ask is whether the decentralised model giving more autonomy to business users, for certain functions, is actually where we should be heading anyway? Even within IT departments, the split between ownership, definition and execution of services has evolved through global standards and regional/local service deployment.  Now perhaps it’s time to go further and really align the business and technology service delivery with a much smaller central control of the important stuff, like security, architecture, under-pinning services (like networks), vendor management and disaster recovery.

And then there’s the question of who actually needs to run the underlying technology “compute”. The cloud naysayers are still there although the script is starting to wear a bit thin. There are very few sacred cows…can internal teams really compete long term? The forward thinking are laying out a clear roadmap with targets for cloud/on-demand consumption.

The old saying of “we are a [insert business vertical], not an IT company” is truer today than ever. It may be just that it took the 3cs to force the change.

Enabling global organisational alignment: A Methodology

Posted on : 30-09-2013 | By : jo.rose | In : General News

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Globalisation versus localisation:  it’s not a new topic of discussion at Board level, but with the increasing complexity in the market, ease of access to information, and an ever-more crowded market, it is more and more important to have a clear strategy on how to attract and retain clients.

So, whatever the appropriate strategy, it is critical to get the balance right, between offering a scalable global product, and a tailored customer experience.  There are big gains to be had for those who get it right:  Deloitte Consulting estimates that the globalisation of assets, investment opportunities and information can bring efficiency gains of between 5 and 30 percent for providers of financial services that are able to build scale and efficiency into their operating model.

Identifying and implementing the appropriate solution is much more all-encompassing than building a technology platform and encouraging people to work better together.  It’s about defining and embedding a permanent behaviour change.  Put another way, it is about aligning the entire organisation to service the customer.  In other words, it’s really about the most unquantifiable of concepts:  ‘culture change’!

So what is the secret to defining and embedding a customer culture?  Over the coming months we’ll be covering these in detail. Here is a brief introduction to our methodology:

 

Step 1:  Build the team, purpose and philosophy

Any commitment to aligning the organisation must be led by the CEO, and must have the engagement, buy in and involvement of the key Executives in the organisation.  That team must decide on what the Purpose of the organisation is.  An effective Purpose is not ‘to make money’ – that is a by-product.  The most effective Purpose will be around servicing the customer. Until they are clear on what they are trying to achieve, it will be impossible to align the organisation.

Step 2:  Create a customer strategy

Once the Executive team are aligned around servicing the customer, they next step is to establish the growth strategy.  Broadly there are three options:

  • Sell more to existing clients
  • Develop and sell new products to existing clients
  • Sell existing products to new clients

How should the team decide what to focus on?  The only way to do it is to develop an in depth understanding of the (existing and potential) customers’ needs

Once clear on the customer strategy, the team must devise a way to articulate that strategy internally, to engage and inspire the entire organisation. 

Step 3:  Organisation design

Clarity on the customer needs will bring clarity to the appropriate organisation structure to service the client effectively:  How many people are required to service each segment?  How should they work together?  Who should they report to?  Should teams be product-centric, geography-centric or customer-centric?  These are critical questions to answer.

Step 4:  Consistent and aligned metrics and incentives

What is the most effective and appropriate data to deliver the customer strategy and align and incentivise employees?  What metrics should be provided, and how should those metrics be balanced between ‘lag’ and ‘lead’, and financial’ and ‘non-financial data.

 Step 5:  Aligned systems and processes

Only at this stage should the team tackle the question of what systems and processes are required, what reporting tools are required and how the systems and processes underpin and enable the teams to deliver the customer strategy.  The technology infrastructure is a critical enabler to embed a change in ways of working, and are central to the change process, but must be implemented as part of a bigger customer strategy.

Step 6:  Training and follow up

For employees that have worked in a certain way for their entire career, the challenge of changing behaviours and ways of working must not be underestimated.  Key considerations are:

  • What is the ‘story’ that is being sold to the employees?  How is that story engaging and compelling?
  • How is the training delivered and embedded to make it stick?
  • How do we ensure each level of the organisation buys into and embeds the change?

Step 7:  Performance Management

To embed the change, a long term shift in the approach to performance management is required.  How can you use information and performance data to measure people against the appropriate behaviours, as well as results?

The ‘culture’ of an organisation is the aggregation of the behaviours of all employees.  Changing, and aligning those behaviours requires a comprehensive, and all-encompassing change programme.  Technology is the enabler at the heart of that programme, each one of these phases is critical to the success of a process to create global alignment.  Those companies that jump in to one or two of the stages, thinking that’s ‘job done’ will soon find the changes are not embedded and the ‘change process’ has been a costly failure.

Piers Robinson, biography

Piers has a passion for creating high performance business environments.  His philosophy of aligning the entire organisation to service the customer is founded upon his unique combination of blue chip sales management experience with PepsiCo and Diageo, alongside his strategic HR experience as the Global HR Director of Fitness First and organisational change consulting with a range of blue chip clients.  Piers has also developed his leadership skills as a Commonwealth Gold medal winning rowing coach and as a Visiting Fellow at Imperial College Business School.