IT Focus Area: digital
September 2, 2016
Digital Transformation: Are You Going to Lead an IT Evolution or Revolution?
Are your markets getting turned inside out due to completely new expectations for speed and cost?
If so, traditional IT cannot adapt to new rules in many markets. IT transformation is the only option to combat new rules and expectations from your customers. The question changes from if, to how….and the focus becomes: how much transformation and how fast?
Transformation is the new black in IT.
The key choice is: Does your business require an IT Evolution or Revolution?
To determine the answer, ask yourself:
Is your company under attack from new competitors who the market sees as faster and cooler?
Do you have to add radically different, better or new capabilities?
Or can you take a more thoughtful and incremental approach?
What is your company’s appetite for change?
Will your current applications and services continue to meet the company’s needs for 2-3 years out?
Is IT perceived as hurting the brand?
What are your competitors doing?
How quickly are your competitors changing the rules to steal your customers?
Every business needs IT to be faster, cheaper, and more flexible — you are being challenged to cut costs incrementally or to create new value in the current business strategy. Some clients are more successful through optimizing what they have, hiring new skills, modernizing services, and retiring legacy services opportunistically. For these clients, the business model and market dynamics are stable, but you recognize some opportunity for greater speed, and/or the demand for more security, and/or the need for increased accessibility for more or different endpoints.
That suggests a path to IT Evolution.
On the other hand, your business may be facing fundamental changes related to what clients need and demand, or how they want to engage with you or your services. You may risk extinction due to technology-based startups or digital companies with big new ideas, seemingly limitless investment and low overhead. To compete, changing the way IT does business, delivers services, and serves clients is key to adapting to these new threats. This is a different paradigm with different rules.
Welcome to the IT Revolution . . .
For companies focused on the revolution, questions like, "What is my company's appetite for change?" or "Will our culture be able to integrate change at this speed?" are irrelevant. The company will not survive the changing marketplace without it.
Perhaps your company is not so black and white.
Three Use Cases That Drive Transformation
In our work with thousands of CIOs wanting to transform their IT, we typically see three use cases driving their transformation.
Use Case #1: CHANGING EXPECTATIONS Enterprise IT is struggling to keep up with the speed and agility demands of the business — no longer is a 30-day response to a service request acceptable, the business wants it in 30 min. IT must transform to stay in the game.
Use Case #2: ORGANIZATION CHANGES The enterprise faces an impending merger and acquisition (M&A). What is the right way to consolidate two separate IT environments?
Use Case #3: MARKET DISRUPTION A mature business is under attack from several emerging startups with a focus on doing one thing better than everyone else. The business is struggling to adapt — scale is no longer an advantage over speed.
One Size Does Not Fit All
As you look to transform IT, the realization that one size does NOT fit all is a key element to success. Some companies evolve over a period of years and still thrive, while other companies are facing such huge challenges that a revolution is required now.
Here are other questions to consider in determining whether you are ready to lead an IT Evolution or Revolution:
How do you develop a strategy for change while the demands are constantly changing?
How do you keep pace with constantly changing tools, methodologies and new competitors to IT?
Do you even want to be in the infrastructure business anymore?
Should you embrace a SaaS-first model or develop in-house?
“Intelligence is the ability to adapt to change.” – Stephen Hawking
Evolution is driven by the rule that IT has to continue to work — you cannot just throw out the existing workflow and assets in order to begin anew.
Evolving services requires a critical look at doing more with less, whether that is optimizing the infrastructure or automating repetitive tasks.
What does Evolution look like?
Evolution is optimizing the services and applications already deployed to improve efficiency. This process adapts applications and infrastructure to support the changing requirements of the business, while continuing to run the business. The progression of each step has to be able to function independently and successfully, as a minimum viable product, before the next iterative evolution is released.
See the progression of skateboard to automobile: every iteration at every step has wheels and is functional—the objects never ceases to work—that is evolution.
“Every generation needs a new revolution.” — Thomas Jefferson
IT is in the process of a nearly Copernican Revolution: The business/end-user is now the sun at the center of the service universe and is demanding a new paradigm of speed, agility and response.
IT’s new role shifts from managing infrastructure to managing a supply chain. With revolution, innovation is driven through a commodity marketplace delivered and governed by IT. To succeed, IT and the business must partner closely.
The revolution starts with a rethinking of the culture that delivers innovation, prioritizing speed and/or agility. It is driven ultimately by experimentation and exploration, and the drive to “fail better” whenever possible.
What Does Revolution Look Like?
The revolution is realized in a gravitational shift toward lean manufacturing concepts driven toward a supply chain framework. IT organizations undergoing a revolution embrace workflow such as DevOps, standardized platforms, services oriented architecture (SOA,) and microservices. These are the new models based on Agile, and ultimately rethink how success is measured. In the past, success was in saving a few percentage points on components and labor in terms of efficiency. Today, success is measured in consistently metering production versus defects, while reducing unit cost using concepts such as Lean Six Sigma.
Many IT organizations have embraced Agile project methods. The fundamental philosophy that Agile embraces is “get close to your customer” and “functionality over documentation.” These philosophies drive a premise called “fail fast and fail often”.
Ultimately, fail fast and fail often should be seen as “fail better,” as the only measurable path to success.
Evolution or Revolution: Which One Is Your Business Ready For?
The question of “IT Evolution or Revolution?” may not actually be an either/or question. It usually is a question of which one is right for your business, right now.
Companies typically fall into one of three categories as an IT organization: a system integrator, a digital service provider, or a full service provider of both categories.
Evolution: Category I -- Systems Integrator
A systems integrator is dependent on third-party application providers for software lifecycle services; however, you can optimize how the workload is run, protected and delivered. Whether primarily delivering SaaS-centric and/or commercial “owned” applications, opportunities for evolution are:
Software-defined enterprise and virtualization of infrastructure services
Application portfolio rationalization
Data consolidation and service bus
Standardization of infrastructure services including data protection and service resiliency
Automation and orchestration
Improved operations management
Improved reporting and “dashboards”
All of these services can be delivered out of a company-owned, company-controlled data center, or from a third party public or external private cloud provider, such as Amazon.
Revolution: Category II -- Digital Services Provider
A digital services provider is a facilitator of development workflow rather than workload services. Leveraging methods such as DevOps and Agile, this team has to get closer to the developer and partner with them, which is crucial as the focus shifts to microservices. The opportunities for the revolution start with:
Continuous integration/continuous development workflow (DevOps)
Microservices architecture portfolio
Metering and measurement framework
Billing and reporting
API management and enterprise integration services
Tenancy model to support scale across IT providers
Both Evolution and Revolution: Category III -- Full Service IT provider
A full service IT provider must deliver solutions in both areas, and evolves into a supply chain manager of a portfolio of bimodal solutions delivered under a manufacturing framework.
IT delivers services within a hybrid marketplace including legacy IT services, private cloud hosted services, and third party services, with IT as the facilitator and integrator. This enables a “best fit” decision for new projects, applications and service requests that IT evaluates for risk, cost and specific capabilities. IT becomes the manager of “inventory” (usually referred to as capacity management) and the sanctioned services of the enterprise architecture, including SOA/microservices, become governed for enterprise delivery.
IT now provides a portfolio solution, including both cost effective and rapid response services, with a cost structure supporting the requirements of the request. IT has provided the tools, maturity and structure to enable the business for self-service and to provide a method for the requestor to evaluate the cost and risk choices specific to the request.
Call to Action
IT can no longer ignore the changes around them.
SaaS providers, public cloud providers and managed services companies have learned that they can sell directly to your business and ignore IT.
To adapt, IT leaders looking to transform must first determine if their best path is through an IT evolution, revolution or a combination of both.
Many looking to transform get excited about delivering the revolution. Workflow enablers, such as DevOps, promise to bring dramatic changes and a new operating model; however, the revolution does not yield the same results for every IT organization. Without a strong focus on key use cases, the revolution can actually make an IT environment less efficient, more expensive and chaotic.
Ironically, for some IT organizations, more significant benefits can be found in evolving, optimizing the way IT does business today. The transformation to an agile, secure, and digital business begins by looking at your IT organization and portfolio to prioritize evolution, revolution or both, based upon who you are. Then rally the business, the leadership, and IT through a clear, decisionable strategy built around shared use cases. The time for change is here, which one will you be driving?
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