PTS Consulting®

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The IT Department of the Future

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Kuldip Sandhu- People are notoriously bad at guessing the future; when asked, they typically describe a better version of what already exists. With regards to the IT Department, their predictions may be right; the answer exists today, but is yet to be fully realised.

PTS looked at multiple sources – comments from respected CIOs at respected firms – in an attempt to unearth the general consensus around the “IT function of the future”. The result was an idealised IT department, possible today but not being achieved for a number of non-technical reasons. Below, we outline the fundamental shift in the way that businesses are consuming IT, and share the vision of the future of the IT department based on our own research and through the eyes of those CIOs.

IT as a Service

Organisations are finally beginning to understand Cloud Computing not simply as a buzzword and more in terms of the significant value it can offer to their businesses. The pay-as-you-¬use nature of a cloud service combined with the ability to scale up or down within extremely short timeframes, allows an organisation to efficiently allocate resource and respond decisively to unexpected changes; being able to mitigating risk and optimise costs so effectively is of huge benefit to CIOs and the business. The variety of methods in adopting the cloud, from public through to virtual private hosting solutions, means that organisation can find a solution that is as bespoke as their needs – or risk portfolio – dictates.

What is slowly being understood is that IT will soon be treated as a utility – even a commodity – just like electricity or water, in that the responsibility for its development, operations and maintenance can be shifted almost entirely to a third party. All that an organisation will need to retain in this instance would be the ability manage its third parties effectively to ensure that it can meet the demands of the business. The impact that this has on the business is monumental not only due to the huge value it brings, but also in the way that it will fundamentally change the business’s target operating model; it represents the start of a shift in which IT goes beyond merely supporting the business strategy, and begins to drive it.

Consumerisation of IT

The other side of the coin is that the business is becoming far more demanding of IT. Its changing expectations can be traced to the consumerisation of IT, taking the lead from technology consumers at a general public level, and it means that organisations and their personnel are far less tolerant of failure in technology, and even less patient with regards to recovery time.

As the internal customer grows increasingly more demanding at the same time that IT gets increasingly outsourced to third parties, there will be a monumental shift in the identity of the IT department:

  1. 'No' or Later', will rarely be an answer accepted by the internal customer
  2. IT will spend considerably less time on actually operating and fixing the IT function
  3. It will have to be extremely adept and vigilant in managing the relationship with, and the performance of, its vendors to satisfy the internal demand
  4. It will have to be increasingly aligned to, and talk the language of the business

Put simply, enterprises that fail to give due consideration to cloud computing when reviewing their target operating models, and the challenges it will bring, fail to prepare for the change that is already occurring across all industries.

The IT Function of the Future

When we shared this insight with our network of CIOs and senior management across our client base, spanning all industries and regions, and consolidated their views with our own insight, we began to build a picture of the future role of IT.

Strategy - The technology strategy will be inextricably linked to the business strategy, meaning that advances in technology will increasingly drive the business strategy.

Only if a service is strategically important will it be kept in-house; otherwise it will be outsourced to a third party, which will be able to manage the service more efficiently and effectively.

Structure - The main purpose of the Service Management function will be to the ‘keep the lights on’ in relation to services. The function will be small as most applications and infrastructure will be outsourced. IT Project Management and Business Support will provide the necessary skills and resources to implement business projects and enable change. Innovation Management will provide the ability to assess and adopt new technology seamlessly.

Systems - There will be no legacy systems managed by the IT department of the future as these typically cause unwanted risks and issues, taking up valuable time and resources to maintain. What can be moved to the cloud will be; other departments might use an ‘app store’ to purchase or access applications from the cloud. Sandbox environments will exist in order to test new within the business at low risk.

Shared Values - IT will provide a business service to customers, demonstrating the ability to understand the business and its needs. The department will be empowered to say "Yes", by overcoming barriers that would have once prevented objectives from being achieved.

Style - The IT department will work closely with the business and be more friendly, open and collaborative. IT will demonstrate leadership, showing the business new ways to solve new problems and identify new opportunities. There will be a key focus on generating thought leadership to share within the business.

Staff - The team will have a much smaller headcount than ever before. Staff will be friendly and approachable with good social skills; exceptional technical acumen will not be enough in the new environment. The rest of the business will have a higher degree of IT awareness and will be represented by individuals that are comfortable with a high rate of change.

Skills - IT will have business support skills, project delivery skills and relationship skills at its disposal. The team will be made up of ‘innovation people’ with a mix of technical knowhow and business and customer understanding. They will have the ability of to sell new ideas to the business and manage both business and systems change.

How to Adapt

Tomorrow’s business environment will be characterised by even more dynamic working practices, boundless agility and rapid Time to Market; it is clear that IT will be shaped dramatically by these changes. The commoditisation of IT represents the next logical step, and will ensure that IT enables the enterprise to soar to these new heights.

Commoditisation need not be stigmatised by IT personnel, as it will bring an abundance of new opportunities and challenges, thereby freeing resources for better and more strategically important and valuable, but less time-critical, initiatives. The new challenges brought about by operating within the new IT model now need very careful consideration.

It starts with understanding the cloud options open to organisations. At one end, simply adopting the cloud piecemeal – tentatively offloading infrastructure, for example – will have limited value. At the other, jumping into relationships with vendors too readily may result in organisations having to adapt the majority of their business processes to fit with those vendors. The lesson here is that only a comprehensively thought out strategy will safeguard against these challenges and reap the benefits not just of efficiency and cost optimisation, but of the alignment of IT and the business.

Resources:

  • Outsourced and/or internationally located staff
  • Operating services with an IT department that has been re-skilled, up-skilled and rationalised

Business Agility:

  • Complexities in the management of outsourcing and cloud providers
  • Pay as you go pricing
  • Increased expectation of 24/7 availability and support for services
  • Meeting the needs of business users quickly and efficiently in the new environment

Risk:

  • Large number of changes occurring in an innovative and agile environment
  • Data stored outside the company firewall
  • Increased reliance on cloud-based services and outsourcing partners
  • How to manage primary and secondary suppliers
  • Managing the possible breach of contract from primary and secondary suppliers
  • Malicious attacks and threats arising from the cloud and other technologies

Consumerisation:

  • Rise in the number of consumer devices in the workplace
  • Users are becoming enabled and connected by smart phones, tablets, laptops and games consoles
  • Integration with corporate social media and web 2.0 offerings
  • Risk of information overload

How Can Service Management Help:

As the new IT function emerges, Service Management transformation will hold the key to realising the benefits, and mitigating the risks, of the transition to the cloud, the commoditisation of IT and the management of third party suppliers. Below are some areas that such a transformation would address:
 

Visibility:
Configuration Management:
- Document & Streamline IT management processes; build comprehensive knowledge management resources

Service Catalogue Management:
- Have a record of services currently available to users close to hand, including features, guidelines for appropriate use, means of accessing the service and key contact information

Quality:
Supplier Management:
- Obtain value for money from third party suppliers
- Ability to effectively design services that are increasingly reliant on external parties

Availability Management:
- Manage and achieve agreed availability requirements contained in Service Level Agreements
Release Management:

- Balance speed-to-market with adequate IT controls
- Formalise, document and enforce standards from development through to production and beyond
Change Management:

- Includes recording, evaluating, approving, testing and reviewing changes to services, systems and other configuration

Service Level Management:
- Provides a process to manage agreements regarding levels of performance and reliability associated with specific services

Innovation:
Configuration Management:
- Develop solutions faster through better understanding of the current architecture and business requirements

Strategy and Architecture Management:
- Achieve faster time-to-market through a better understanding of business requirements

Change Management:
- Manage risks associated with changes

Financial Control:
Strategy and Architecture Management:
- Reduce complexity and costs by componentising the architecture

Financial Management:
- Match quality of service to perceived business value
- Provide pricing models that fit with overall business goals
- Prioritise work according to value, to make the best use of limited IT resources
- Enable the business to understand the cost of IT and appreciate its value

Operational Control:
Release Management:
- Match release cycles to the business requirements

Strategy and Architecture Management:
- Automate operations and shift focus to long-term strategy
 

The Prognosis:
IT organisations tend not approach IT Operating model and Service Management Transformation efforts appropriately; i.e. without with a fully formed strategy and communications plan. But transformations need not be difficult, contentious or costly; instead they can have a significant contribution to the business’s objectives and can put IT Services at the forefront of business value. This is where PTS can help. We have significant experience in helping organisations to transition and transform their operating model, including the change management process to effect that change and then into BAU for the appropriate level of Governance for the management of IT services.

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