IT Strategy Consulting

A new breed of IT Strategy has emerged

Developing an IT strategy has traditionally been a cyclical process, in response to either a known technology shift (e.g. ERP systems coming to end of life) or a business-driven requirement (e.g. M&A activity, growth and international expansion, efficiency and cost-reduction programmes).

These drivers remain critically important but the advent of the fast paced ‘digital revolution’ has added new dimensions to developing an IT strategy:

• An annual or multi-year cycle no longer works; you need a dynamic and responsive approach to IT strategy development
• Customer interfaces are becoming ever more digitised, throwing IT into the forefront of business operations
• Consumers are generating data at an astronomical rate, from which businesses can derive previously unavailable insight, and so enable customisation of their products and services
• Technology is being used in different ways, to develop new products and services rather than just support business operations.

The IT function can only support this if they are truly integrated with their business customer and have the capabilities and capacity to respond quickly. As well as closer business partnering, we have seen a shift towards “bi-modal” ways of working, a merger of development and operations (“DevOps”) and an organisational shift from functional IT to product centric teams.

In many sectors, IT is fast moving from supporting the business to being the business. Not only has IT moved from a being a passive support function to an enabler of growth in recent years; it is now becoming the power-house of growth. And as the IT strategy increasingly sits at the heart of the business strategy, so the role of the CIO is fundamentally beginning to shift. Read more about our views on the changing role of  the CIO.

The impact of Digitisation

Nearly all our clients are grappling with digital and the impact it is having on their businesses. The digital revolution is changing the demand on IT, driving new ways of thinking and a new breed of IT strategy. Some of the key themes driving these  changes include:

Changing role of IT: digital is becoming a preferred route of customer interaction with the business, as well as enabling brand new products and services. E-commerce continues to grow apace and online systems have replaced many other face-to-face activities, changing the demands on IT and requiring a greater alignment between business and IT strategies. The digitisation of products and services that the business provides means IT is no longer confined to the traditional ‘back office’ supporting role i.e. running the infrastructure, enabling shared services and enterprise platforms etc.

IT are partnering ever more closely with the business and, in some instances, becoming embedded within the business: there is no doubt that there is a need for IT to be closer to their business customers so they can quickly react to this new and varied demand. Different organisational are reacting in different ways:

• some are putting in place/strengthening business partners who sit at the top team of the business unit they support;
• others are re-organising their IT function into product or business-unit centric teams;
• and in some cases, the IT team is embedded within the business team (this particularly common in marketing departments who manage and run their own digital marketing).

There are pros and cons to each approach and the reality is there is often a hybrid of all three. Regardless of the approach, it is critical that IT create a relationship with the business that enables them to understand the full scope of activity underway across the business and enforce core standards, but where they are flexible enough to support, host and interface with applications that are developed and run by the business as required

Feeding data hungry businesses: 90% of the data in the world today has been created in the last two years alone. The Internet of Things, Big Data and the Cloud are all making it possible for organisations to benefit from this vast data. More importantly, the business customer has developed a strong appetite for analytics and insight: customer intimacy is required to retain existing and win new customers, while efficiencies can be driven out of a deep understanding of operational performance. This is driving new requirements in the way IT services are provided and the skills required to support them. Read more about our views on Digital, Big data and Cloud.

Development of Bi-Modal IT strategies: traditional needs for an IT function remain (e.g. End User Computing, support, service desk etc.) through the provision of a stable costeffective base to ‘keep the lights on’. However, the inexorable move of the entire IT estate to the Cloud, including use of Software-as-a-Service (SaaS) for all core functions, is changing the role of IT to manage more by outcomes (service and supplier management), than incomes (specifying and building IT systems and infrastructure). IT functions need to be able to manage this transition to new core technology, becoming more flexible and reactive to adapt to the more immediate demand driven by the digital revolution. They also need to recognise the new skills and organisational capabilities this change demands. This is creating a need for 2-speed IT functions: one speed to manage the changing, traditional components of IT, and another, more agile speed able to cope with immediate, digital business demands.