The New Economics of IT in a Cloud-First World
The challenges IT leaders face have never been greater. In addition to keeping critical systems running, they are increasingly called on to help the business innovate–often while budgets remain flat or in some cases are shrinking. The pressure to do more with less is present. Throw in factors like the consumerization of IT with BYOD policies and the increasing need to collaborate with other business functions, including marketing, sales and HR, and it is little wonder that traditional IT architectures, skills, processes and technologies that have worked in the past are rapidly becoming obsolete in this cloud-first world.
This tension between competing priorities has long been the subject of industry research seeking to uncover ways for IT to maintain its relevance while earning a seat at the table as a strategic partner to the business. Our 2014 global study of IT and business leaders showed that 36 percent of IT staff’s time is spent managing and maintaining legacy systems. This commitment to legacy technology has a consequence–a lack of innovation. That same study showed that fewer than one in four executives say IT staff regularly suggests new technology solutions on their own. Two years later, we are still seeing the same trend.
In order to deliver results for the business and thus wield greater influence within their organizations, a new perspective is needed, one that calls for two distinct approaches: a predictable approach to optimize core IT systems, and an exploratory approach to innovate the business with new technology. This new perspective defines the creation of value through new IT approaches used to maximize efficiency, increase agility and speed innovation. A concept popularized by Gartner and sometimes referred to as bimodal IT, a dual approach to IT is a concept that IT leaders claim to understand, but when pressed, struggle to define it or put it into practice– particularly when the lines between the predictable and exploratory modes become blurred.
IT is not here just to keep the lights on in core systems; its role is evolving to help the business support digital transformation and advance its agendas
For example, let us say your IT team partners with the business to build an innovative new product or service. That would be a Mode 2, or exploratory, initiative. However, the moment it goes into production, you need to support it, secure it, ensure it scales, etc. That’s when it becomes a core function and starts to require a predictable Mode 1 approach, and more importantly, your Mode 1 IT needs to adapt to any of the new demands this innovative product or services requires. Therefore, in thinking about a cohesive IT strategy, IT leaders should seek to have methodology/tools/ processes in place that support both modes and allow for smooth transitions between the two modes. Liquid applications, intelligent platforms and connected ecosystems help to implement these dual approaches to IT, ensuring predictability, and enabling exploration.
Let us look at a specific example. Avanade has been working with Williams Martini Racing, a Formula 1 motor racing team based in the UK, to help it transform digitally in the cutting-edge world of F1. Williams is known the world over for the speed and performance of its F1 racecars –but its website was another story. To take full control of its web estate, and to decrease the time and expense to implement site updates, the team wanted to move that process in house and enable its marketing department to perform site updates without an outside vendor. It also wanted a complete web redesign, to present a brand image reflective of its contemporary look and feel, and to make its content easier for visitors to find and use. It needed the site to be highly scalable, to support the traffic surges that inevitably accompany races. Moreover, with the annual race season just weeks away, Williams wanted all of this accomplished at a speed that even its drivers would envy.
To accomplish these goals, we partnered closely with Williams and deployed the new site using Site core on Microsoft Azure in a matter of weeks. As a result, the team now enjoys a more dynamic content platform that is easily updated directly by its marketing team and improves the user experience fans have on the site. There were elements of new and innovative technology being used at Williams to improve its marketing function and more effectively communicate their brand to the world. There were also elements of optimizing a core IT function and infrastructure required to support the highly variable web loads inherent to the Williams business; not to mention the cost savings here allowed the team to reinvest in other areas of the business.
While the above example illustrates a dual approach to IT in action, there is a big difference between understanding the concept on paper, and putting it into practice. How do IT leaders make it real? Here are a few steps to consider:
• Understand first that a dual approach to IT is not an “either/or” situation. It is an “and” situation. Old IT perspectives are no longer sufficient; a new approach is needed, one that optimizes core IT systems while innovating with new technology. A predictable approach emphasizes reliability, cost efficiency and an IT-centric culture. An exploratory approach emphasizes agility, revenue, brand, customer, and a business-centric culture. Here is where IT has a new freedom to fail— yes, fail—because experimentation is cheaper and faster than ever before, so every failure gets the enterprise closer to a potentially game-changing success.
• Adopt a cloud-first approach. Cloud-based solutions increase efficiency and agility. The major cloud platforms are providing richer and richer functionality by the day and are allowing the IT organization to focus more on delivering the relevant and specific value their stakeholders demand and less on recreating/ operating commoditized services. In many cases, using a cloud platform can speed development and deployment cycles and improve cash flow–helping IT organizations meet the mandate to do more with less.
• Engage the business as a Services Broker. Many IT leaders acknowledge that they spend too many resources on running core IT systems. When IT departments act as services brokers, sourcing IT services (often cloud-based) from inside or outside the company to solve business problems, they free up resources within the organization to partner with the business on innovation. In many cases, organizations struggle with a talent gap, and external partners can help bridge that gap.
IT is not here just to keep the lights on in core systems; its role is evolving to help the business support digital transformation and advance its agendas. The challenges are numerous and the rate of digital innovation is only accelerating; however, IT leaders can be successful when they have a mindful plan to effectively tackle their many competing priorities–and adopting a dual approach to IT is an excellent framework to achieve this success.
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