Consumed, Commoditised and Circumvented…is the internal IT department becoming irrelevant in the Digital age?

Speaker: Craig Cameron MackayHead of IT Strategy & DevelopmentEdinburgh Airport

Not yet but it could be if you don’t adapt. The role of IT in the organisation is changing as we accelerate through the digital age; where technology is more widely understood, more easily consumed and where skills and shared services are becoming commoditised. All too often we hear business units say that it is easier to circumvent internal IT and buy services themselves. It is time to redefine the value proposition of your internal IT department, identify your competitive edge and align your IT model to the changing needs of a digital savvy organisation.

The digital age is challenging the traditional IT operating models and our response needs to go beyond fixing the technology stacksIT continues to struggle to accommodate growing business demands within a fixed IT envelope. Most of the IT budget is allocated to maintaining status quo, which means that little is left for innovation and unexpected activities. There are greater demands on IT by the business to be able to access IT services by any means. BYOD and mobility are forcing IT to change the way it thinks of support – from supporting the technology that delivers the IT services to supporting the consumption of IT services. IT is challenged to maintain its value proposition to the business in a cloud universe. The business is finding it easier to bypass internal IT to buy services from public cloud providers, with the potential for a mismatch in security levels between public cloud providers and the firm’s security policies.

THE WORKPLACE IT EXPERIENCE IS STARTING TO LAG FAR BEHIND THAT OF PERSONAL IT CONSUMPTION

The dysfunctional family caused by misaligned maturity and culture of IT versus expectations of the consumer, business and even IT leaders Symptoms of IT departments with a

misaligned maturity level are:• Consistently missed service delivery

targets.• IT not viewed as critical part of the

business success.• Lack of knowledge sharing among IT

staff.• Unwillingness of staff to comply with

policies.• IT project triage is rarely used to

prioritise initiatives.• IT staff are overworked or

underutilised.• IT is viewed unfavorably by the

organisation.• Difficult to predict when IT projects will

complete.• IT is not a proactive driver of business

strategy.• Technology is overcomplicated or

under-sophisticated for business needs.• IT seen as a cost centre burden.

Expectant Workforce

Frustrated CEO / CMO

Disillusioned CIO

Stressed IT Operations

Ever increasing velocity of business change and technological disruption

The velocity of change required in today’s market, technology advances and digital disruptors can be overwhelming to our teamsBeliefs that make out internal IT departments resistant or unable to cope with change… Still fighting to understand legacy infrastructure and enterprise systems Priority and only focus on making the enterprise resilient and secure Majority of effort on fire fighting and maintaining SLAs Burden by enterprise environment, security and risks that no one else considers The business make decisions too quick and too often, no time to design for the future We have no idea what the business wants, it changes all the time The rest of the business just want to outsource IT

“Cloud what? SaaS, PaaS, IaaS, iPaaS….but we haven’t even finish our major ERP, BPM, SOA, Data Warehouse initiatives.”“Cognitive age……I thought we were just starting digital age??”“IoT, Machine Learning & Algorithmic Data Mining…..is this the big data trend we heard about 5 years ago?”

Maintaining a competitive edge in the Consumer-led Digital Economy

Our internal customers are finding it easier and often necessary to bypass internal IT to allow them to innovate at pace“We can start-up a new business on an iPad for free and quicker than our IT can change an application.” In the majority of organisations Digital initiatives are led and often delivered outside of IT Shadow IT is often seen as the hero innovators by the business but as a threat by IT The workforce is becoming more “Digital Savvy” than the traditional IT team Social Media, Cloud Services and Digital Disruptors are provide the “Internal consumer” with

choice Digital disruption, consumer demands and market competition require high pace of business

change

Internal IT departments cannot be immune from this velocity of demand and consumerism – if we don’t keep up we will lose our “market position” with our internal customers. Being the incumbent is no longer enough.CIOs need to start thinking like CEOs & CMOs – we need to redefine our value proposition, partner in driving the business forward and identify our own competitive edge with the internal consumer.

We need to be able to map our services to the key value levers of the organisation and be able to articulate a compelling roadmap

Is your workforce one big happy digital embracing family?

We need to recognise the change demographic of our workforce and understand the culture change required across all generationsMost organisations recognise the changing demands from a growing Millennial workforce, however few have addressed what this means for the other generations. Digital transformation needs to ensure we bridge the generational gap in terms of culture, knowledge and skills.In technology this is very evident in the common split between IT and Digital teams.

Designed by…

Runby…

Usedby…

Ledby…

The IT Departments Generations

The digital transformation will have a big impact on your teams if your people are not prepared and understand what it means for themResistance to change is natural when you don’t know what it means for you or how you will adapt. We need to be cognisant of the stresses this can bring to our teams and build capability roadmaps so that they embrace the change.

Traditional IT capabilities– “The” IT expert– Technical engineer– Development– Specialist black box

“stuff”– Governance &

Protection– Order fulfilling– Support function

New capabilities required Integrator Collaborator /

Consultant Consumer focused Partner Manager Business Advisor Innovator – even risk

taker!! Business Revenue

Focused

Are you set-up for success?

We are in a consumer led digital age but probably not by our design or planning. So are we set-up for success?Majority of IT organisations self-identify as being in Firefighter mode. This means they are focused on resolving urgent or recurring IT issues to achieve short-tem gains, rather than spending time on strategic goals.

As a result of this firefighting mentality, most structures today are not consciously built – they’ve arisen organically, unguided by a long-term vision. These Band-Aid solutions can work temporarily, but ultimately organisations end up with structures that are ill equipped to meet the strategic needs of the future.

The design of your IT organisation has a significant impact on how it performs. Where you invest in staffing, the level of hierarchy, and the way you manage your relationships with the business have a significant impact on what gets done, when it gets done, how it gets done, and what the business thinks about it.

Effective organisational design is a competitive advantage. By designing the structure with your business and IT goals in mind, you can build a department that enables these goals – and ensure that you are spending money and resources on the most important things.

We need to roadmap transformation of our IT proposition through consumer centric and business value focused operating model design Realign the C-Suite expectations of IT and

their vision for a digital business. Ensure the business has the maturity level required as well as the IT organisation.

Confirming the services required by the business with a consumer centric IT service catalogue. Focus on services and user experience, not supporting existing infrastructure and application.

Determining the best models to deliver these services and by whom, that meets the business needs.

Focus your efforts, talent and resources on where you can differentiate – leverage managed service, cloud and partners where you can’t.

Build an IT strategy that uses data and voice of the consumer to set the mandate for IT and reconfirm your value proposition to the rest of the organisation.

The role of IT in the organisation is changing. Keeping the lights on is no longer seen as a valuable accomplishment and, increasingly, low-level technology skills are commoditised, outsourced and / or hosted in the cloud.

This enables IT resources to focus on more strategic, business focused work – however, the skill sets required for this shift are highly divergent from the traditional IT skill set.Modernising your IT operating structure is pivotal to enhancing the role of IT in the organisation and aligning to business needs of IT. Those who fail to evolve their department past technology to people & process focus will become irrelevant.

Be Bimodal….and do you want me to dance and sing at the same time?

We cannot confront the needs of a digital business with the same single, conventional mode of IT and traditional IT architecture.Digital (social, mobile, analytics and cloud) has made technology more available, agile, scalable and faster in response to consumer demands…..but not necessarily in traditional IT departments.

We must except the new norm in consumer expectation and set ourselves these standards

Doing nothing or doing the same is no longer an option if you want to survive We can’t keep blaming the burden of legacy enterprise and security concerns It is unacceptable to say no, it is not something we support or we don’t have the

knowledge We are already playing catch-up as IoT and the Cognitive Age start to accelerate

technology again We must find a way to provide different solutions to meet the needs of our digital

businesses

Bimodal IT is the practice of managing two separate, coherent modes of IT delivery, one focused on stability and the other on agility.The contradictory challenge for most IT organisations is being excepted to continue to maintain a predictable, reliable and secure legacy enterprise while meeting the requirement for an agile, fast and scalable digital environment.

This requires both Samurai and Ninja capabilities – can one person be both???

Bimodal is more than an IT operating model or technology stack challenge, it is a cultural and transformational change. Think…People: behaviours, mind set, skills, resources and competencesProcess: the policies and procedures required for both modesAccountability: business led, business digital maturity, move security and risk to be business decisions and people centricManagement: need protocols, controls and integration to manage to modes of environmentsRelationships: think supplier performance management and business partnership

SAMURAI (MODE 1)• High ceremony, exists in a hierarchy• Always follows the rules, uses standard tools• Predictable, ultrareliable, takes the order and delivers• Somewhat inflexible

NINJA (MODE 2)• Low ceremony, exists outside the hierarchy• No fixed rules, highly adaptive to context• Innovates to achieve results, failing and learning on the way• Somewhat disruptive

We can’t go back to a day zero start up but we can create a new day for IT

Create islands, build bridges, invite visitors, protect fragile eco-systems

1. IT leaders need to act like CEOs / CMOs – define your business value proposition and competitive edge. Respond to competitors and shape your organisation from a consumer centric view point.

2. Become your own digital disruptor and conduct a “hackathon” on yourselves – design what you would do today if you had no constraints….then starting moving to it. Fail on the way and have fun learning.

3. Think like a start-up business and build credibility - build environments and structures for Mode 1. Create islands, not extensions. Start small, have scalability and maintain momentum

4. Don’t lose focus on Mode 2 – protect the enterprise and resource capabilities associated with it. Continue to optimise, upgrade, retire or migrate to Mode 1, but don’t be burdened by the legacy.

5. Ensure you prepare your teams for the future, build new capabilities and change the culture to move from purely servicing the infrastructure to become service and data orchestration focused.

6. Move from owning and governing everything IT to become a technology partner and trusted advisor to the business.

7. People, Process, Technology are now inseparable parts of the business ecosystem and IT can’t be a black box – educate, led on portfolio & operating model mapping if need be, build business ownership.

8. Explicitly link all IT costs, decisions and risks to business growth & revenue…then “IT only” problems will become business decisions. Organise IT around services, consumer needs and business value.