An IT Operating Model for a Digital Age
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Speed and innovation are at the core of any successful business today – with power placed increasingly in the hands of digitally-savvy and fickle customers, the pressure to continuously improve products and services has never been greater. If they’re not delighted by each and every interaction with a brand, today’s customer simply moves on at the click of a button or swipe of a screen.

For digitally-native businesses – for example, Spotify or AWS – this competitive, customer-focused spirit is in their blood. But otherwise, most traditional businesses today are not set up to deliver a great customer experience. Bogged down by traditional organisational models, they are instead structured more around cost efficiencies than innovation.

Think, for example, of a typical IT team – generally, all tech staff will sit in their own division, removed from the rest of the business because it’s easier to track, manage and budget their work. What happens, then, if the Head of Customer Experience has a request? It’s unlikely they’ll have much interaction with the team, and probable that they’ll be answerable to different KPIs than IT. The result is often two frustrated parties lacking a common language and unable to deliver innovation at the pace required by customers and the wider business.

The challenge is to reorganise team structures in a way that allows for innovation to flourish. In the era of Digital Transformation 1.0, that meant a bolt-on or ‘bi-modal’ approach to digital, essentially giving a dedicated team the resources and license to operate at pace, while the rest of the business continued plodding along in a traditional environment. It’s not a bad place to start to get digital initiatives prioritised, but the reality is that ‘digital’ now impacts every transaction and every touchpoint.

For example, even if customers go into a bricks-and-mortar store, it’s likely they’ll have first researched products and compared prices beforehand. Meanwhile, on the business side, sales & marketing teams are now using aggregated data insights to inform their campaigns in the hope of shortening sales cycles. Or how about airline passengers – how many people do you think would go into a travel agency? Now, we can book our flight, seat, meals and luggage online, as well as check-in before we even get to the airport.

This means that a one-dimensional team isn’t enough to change or impact customer experiences. Instead, businesses need to be gathering people from across their organisation – whether that’s Product, CX, Distribution and of course IT – who today have different metrics, budgets, priorities and timelines, and give them the mandate to work together towards one united goal.

In an airline, that might mean moving from a structure where they have logistics, ticketing, loyalty, IT, project management, customer lounges, check-in, and baggage all into a single team called “pre-flight experience”. Every time a change needs to be made to the customer experience before the flight, all the roles that can impact that change can come together easily, knowing that they share the same goals and are driving towards the same outcome.

It’s a divide and conquer approach – instead of putting all the IT eggs in one basket, you send them into the product and experience teams to develop and improve digital services on the ground. The new structure of IT teams (Figure 1) would have:

  • Product and project managers working side-by-side, complementing each other’s skill sets while overseeing the process of developing and improving products, services and experiences
  • Developers embedded in the teams, sitting alongside Quality Assurance to ensure the development of digital services is not unnecessarily slowed down
  • DevOps providing the cloud infrastructure and platform services as required
  • Customer / User Experience teams, working closely with tech to ensure final products and services are easy and intuitive to use, and delight the customer
  • Data Management shared across teams to ensure insights are not siloed, but rather treated as a product and integrated throughout a business
  • Architecture as a guiding function, constantly evolving and improving capability that makes the business better, more efficient and faster

Security, often shared across teams, and given the ultimate power to say ‘no’ if a product could compromise customers, employees or the business itself

 

 

But, where to start? Ultimately, the power to drive changes lies in the hands of the CIO, but will require collaboration across the c-suite as business leaders adapt their relationship with IT and determine team KPIs. It’s also important to provide training to help employees prepare for the new structure.

Once in place, this model could well change the face of IT teams as we know them. For Technology Leaders, the role of the CIO will inevitably evolve – whether they become a technical leader, run innovation and invention functions, or take responsibility for delivering revenue and/or customer outcomes. CIOs who are ahead of this change will be able to shape their role going forward based on their profile – but it’s worth noting that those who have change forced upon them will rarely be in a position to be masters of their own destiny.

On the flip side, for Technology Vendors, this model is likely to bring challenges. By bringing business and tech buyers together into one team, we should see a shorter sales process – but it will also make it harder to find the right buyer in the first place. To further complicate matters, with a focus on delivering continuous customer value, buyers are likely to require specialised solutions tailored to their unique needs and goals. Vendors will therefore have their work cut out to better understand their customers and the outcomes they are trying to drive in order to make the sales process smoother.

This new model of delivering continuous customer value is not perfect – it has inefficiencies, and moves away from focusing on big-ticket inventions towards smaller, everyday innovations. However, it is only through making the transition to becoming a fast and evolving business that companies will maximise their IT and digital capacities.

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Tim brings more than 20 years of experience in designing and implementing Cloud, AI, CX and Automation strategies to the Ecosystm network, to support businesses in their IT decisions. In his previous role, Tim spent 12 years at Forrester Research, most recently as a Principal Analyst, helping IT leaders improve their digital capabilities. Prior to this, he was Research Director for IT Solutions at IDC in Australia, where he assisted IT vendors in designing solutions to better fit market requirements and IT buyers in improving the effectiveness of their IT functions. Beyond the office, Tim boasts an international reputation as an entertaining and informative public speaker on the key trends in the IT market. Tim graduated from the University of Technology Sydney with a BA majoring in Marketing and Research. In his free time, Tim enjoys playing football (badly!) and tennis and watching rugby. But while he may enjoy that, he spends most of his time driving his two children to various sporting and social activities.


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