2021 is the time to throw away incremental improvements. CIOs and CTOs need to aggressively establish new capabilities and drive digital transformation. Being aggressive means engaging and partnering with business stakeholders on technology projects that have a measurable impact on the bottom line by generating increased revenue. The risk-return tradeoff will be high, but the truth is, continuing to operate the same way is the fastest way out of leadership in today’s digital landscape.
New Business Engagement and Funding Models
Having the ability to partner with business stakeholders to build, fund, and operate new products is crucial. Leaders need to build joint business cases for product development initiatives. These initiatives then need long-term funding models that focus more on revenue and less on shared allocations.
New Metrics and Measures
Pivot towards business impact metrics and measurements and move away from general IT cost savings metrics. In the new world we currently live in, how much it costs to deliver something doesn’t matter. What matters is how much it costs to build and operate compared to the revenue potential and business impact.
New Delivery Models
If going by business impact rather than cost savings, there’s a need for delivery approaches that maximize speed and value delivery to production. Agile work management and DevOps operating processes should be the target.
New Technology Platforms
Just as delivery models need to maximize speed and value delivery to production, so do our technology platforms. Cloud-native platforms are the key. You have to excel at building, operating, and using cloud-native application platforms.
As a leader, it’s important to realize that your workforce needs a variety of new skills to be able to accomplish these enablement activities. The reality is it’s very difficult to simply hire your way to new skills sets. The external talent pool isn’t big enough. You have to help your people develop new skills and institute a learning culture.
Implementing the New Operating Model
Now that we’ve identified the new approaches CIOs need to take, the next question is how exactly do you implement? The following are the best practices and methods for implementation and getting your team onboard with these changes based on my substantial experience working with enterprise-level CIOs helping them do just that.
Begin with a High-Impact and Iterative Approach
This isn’t about shifting everything at once. Find the most impactful digital business initiative and start there. You’ll be impacting the bottom line and be able to produce frameworks, established ways of operating, and functional examples that can be used for a complete overhaul of the IT operating model.
For the first year of the transformation, find impactful business initiatives and institute all the previously mentioned approaches – business engagement, metrics and measures, delivery models, technology platforms, new skills. Then, for year two, plan for a complete overhaul because, by this point, the business and your IT team will understand both the critical need for transformation and the difference in operating.
Complete the Overhaul
This is when the formalization of an expanded operating model occurs. Focus on scaling skills and development capabilities. Ensure you are increasing the efficiency of legacy IT systems so your IT team can shift their skills to become more cloud-native. Also, at this point, begin to change your organizational structure in order to scale the Agile and DevOps-based delivery model.
Monitor Changes with Data
You need to be able to show the impact on the business, efficiency gains for legacy, and increases in your team’s skills and capabilities through data and analytics. If trying to impact the bottom line, be able to measure it. If trying to increase delivery speed, show substantial increases over a 2020 baseline. If trying to change something or do something new, be able to answer how we are measuring our progress towards the change.
2021 and beyond is going to be a litmus test for CIOs. There will be a lot of noise around what to buy, change is not the answer, and incremental changes are enough. Obviously, that’s not the path that’s going to work. What will work is expanding IT’s reach and capabilities.
For CIOs, a seat at the table is not bestowed, but it is earned by presenting a vision for how IT can truly affect the bottom line. Focusing on the cost of doing business is now obsolete. In today’s digital landscape, the focus has shifted to how business gets done, and IT is going to be the key to growth and revenue going forward. CIOs that understand this and build an IT organization that excels in that context are going to have a permanent seat at the table.