Boards have always challenged the spiralling costs of IT. They question the five-year cycle of transformation that delivers little or no change and is never measured in terms of growth or value. They intuitively know their teams, suppliers and partners design overly complex yet inefficient solutions that never get close to meeting the evolving needs of their markets, their clients or their staff. And they don't know how to break this habit.
It's no coincidence IT refers to the staff in a business as users.
Companies are tired of large, costly and disruptive technology changes that don't deliver what they promise to. And to make matters worse, these solutions are often archaic in the way they are designed, sourced, procured and contracted.
This cycle of addiction starts with the design of a target operating model (TOM). The very nature of a TOM is an indication the business is trapped in an expensive cycle of failure. This may be a strong statement, but let me explain.
A TOM is a fixed contract with a static design that will span anything from five to 10 years. Requirements will be defined, but only once, and are often spurious. They don't take all client and user requirements into account. And even if they did, and factored in the pace of change within the market, the company's transformation to this new TOM is still doomed to failure. Why? Because the needs the business is serving are not static.
All that has really been done is a set of requirements has been defined based on where the business stands currently. It's not based on requirements for three months' time, or six months' time, and it's certainly not based on the company's requirements for a few years down the line.
Find a partner that champions an agile, iterative approach to transformation.
By the time this TOM has been procured (nine to 18 months is not unusual) and implemented (nine months - infinity), the needs of the users may have changed significantly. And now for the good news. They will continue to change in line with technology innovation, market trends and the wind. Flying in the face of common sense, the IT and procurement teams will sign this lengthy contract with extension clauses that see companies locked into a static, expensive, inflexible and truly poor architecture for the foreseeable future.
Miss Piggy?
Consultancies may call this IT transformation. They may even call it 'digital transformation' in line with the latest hot topic, but no matter how much lipstick they put on the pig, all they are selling is a repetitive, redundant and costly cycle. Unfortunately, it's not only consultants who perpetuate this cycle; a company's in-house IT department is equally culpable.
This endless cycle sees complacency take hold, and businesses get used to the idea that IT is - and will remain - out of step with their needs. Companies claim it's far more complex than it really is. They rely on inappropriate procurement, archaic governance, compliance, security and legacy systems until users become convinced they don't understand the complexities and withdraw. Over to the consultancies. Recognise the pattern? This is why companies are setting themselves up to fail, and fail hard.
Some may think the situation isn't as bad as all that, because, after all, if a company is stuck in this rut, there's a good chance its competitor is too, and this may be true. But, they are discounting the new and hungry players and disrupters in the market that most certainly are not. They are changing the paradigms and forcing well-established businesses to change the way they work, and deliver products and services. And believe me, among the competition, there are those that are listening, and realising they can't keep up without a completely different approach too.
Now, imagine building adaptive, iterative solutions that enable the company to take a componentised view of the business and keep it aligned to the needs of the market, clients and staff - and by keeping it aligned to those needs, allowing the company to keep up with its competitors, which are not burdened by the costs, complexity and inflexibility of the past.
Now for the good news. Companies can. And they must.
Companies must start by getting rid of anyone trying to convince them what they need is a TOM. After that, find a partner that champions an agile, iterative approach to transformation, and one that focuses on user needs and knowledge transfer, so changes become embedded.
Don't be fooled by quick fixes. A hackathon, agile everything, bimodal approach isn't fixing anything. Find a clear and aspirational vision to anchor the company's direction of travel and an approach that acknowledges and drives adoption of internal changes across the business. Co-creation is key, as is transparency.
It takes discipline and courage to apply user needs, design and appropriate integration to every component before considering sourcing. The company might think it will be too expensive and too much work. It won't. And it will be aligned to the business, its staff, clients and the pace of technology and change.
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