What can your IT organization do to help your company achieve digital transformation? That's the focus of a report from management consulting firm The Hackett Group Four Imperatives for Creating IT Agility in a Digital Age. The report tackles the many challenges facing IT organizations in a business environment that's going through rapid digital disruption.
We're seeing the effects firsthand in our reporting. The company's Christian Meissner, head of global corporate and investment banking for Bank of America Merrill Lynch, hit the nail on the head last week in his opening presentation at the company's 2016 Technology Innovation Summit. "Technology has gone from being an important part of our business, to being absolutely core to what we are about."
Earlier this month, Gartner identified traditional, core IT systems as one of five areas crucial to the operation of a digital enterprise. Meanwhile, Accenture warned that IT is at risk of being marginalized as the use of external cloud services increases.
[Don't do it like this. Read 8 Ways to Fail at DevOps.]
The Hackett Group noted that with limited net new funding available for IT, "support of digital transformation activities must be funded through reallocation of resources freed up through improved efficiency of delivery of existing services, largely infrastructure provisioning and application maintenance and support."
According to the report, IT must continuously transform its service delivery model to improve agility. It must be able to respond to shifting demands and opportunities. The Hackett Group report identifies four steps IT can take to cement its role as a facilitator of enterprise digital transformation:
- Reallocate resources from a transactional focus to a focus on adding value. The report finds that many IT organizations still have significant resources tied up in supporting run-the-business activities. This allocation detracts from the ability to support activities that drive business results. The Hackett Group report advises adopting a formal service delivery model that promotes clear roles and responsibilities and ensures that capabilities and cost of resources match the type of work performed. In addition, IT is advised to pursue economies of scale by implementing shared services for all commodity functions, and to strive to reduce complexity in its architecture and application portfolio.
- Embrace digital transformation. This step requires continual monitoring and exploration of technology innovation so that IT is prepared to conceptualize technology-based opportunities to create value for the business. In addition, IT is advised to shorten development cycle times by adopting rapid application development methods such as agile, and integrated solution development life cycle approaches such as DevOps.
- Lead the organization's information and analytics journey. This step involves IT taking ownership of the organization's information architecture with the goal of supporting ongoing, business-led, data-related initiatives by providing services such as master data management, data integration, and database administration. Achieving these goals will require skills in information architecture and analytics, which are scarce.
- Adopt customer-centric service design and delivery principles. The Hackett Group report advises IT to adopt practices such as Design Thinking, not only for external-facing solutions, but also for solutions created for internal customers. If you design and build systems and processes around customer experiences, you must take small, iterative steps and gain immediate end-user feedback. Those requirements can't be met through waterfall development practices. One technique is to set up councils and focus groups early in the process to provide voice-of-the-customer recommendations throughout the project.
It's not easy. But once agility efforts get underway, "IT organizations can see marked improvements fast," according to the report. "Early wins can free up resources, enabling IT to better support digital transformation, including improvement of analytics capabilities [and] supporting [the] development of client-facing systems and mobile initiatives."