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Straight Talk Technology

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Traditional IT operating models have had their day. The growth of agile and lean start-up practices is putting pressure on IT departments to deliver quickly and to provide speculative applications and features for testing against customer expectations.

IT conventionally operates within strict governance guidelines with the prime mandate of providing security, availability, reliability, and sustainability. Many of the current practices by executives with their own projects, or agile and lean activities, mitigate against this mandate. However, IT exists to enable business operations and to provide first-class services for its organizations. How can IT provide its traditional solid services while delivering rapidly and acting as a transformer and disruptor within its own organization? IT’s operating model needs renewal.

Operating IT in an agile and disruptive environment requires recognition that the customer drives most business activities, and that these activities in turn drive organizational change. The platform on which IT runs, and on which the business depends, should reflect the speed and agility of business operations.

Most businesses have a digital component these days. Executives often don’t differentiate between technology, digital, and general business activities, so why should IT people? Ovum case studies show that successful agile implementations blur the boundaries between IT and business, and often drive the organizational culture in new directions. The old “plan, build, run” model just won’t work in this environment. If it does, it will have to be quick, responsive, and constantly changing.

The new IT needs a new management team. It needs a CDO (chief digital officer) who is customer-facing, a CCO (chief capabilities officer) who looks at the organization and how it operates in the digital world, and a CTO (chief technology officer) who has responsibility for platforms. IT also needs a CITFO (chief IT financial officer) who not only runs the balance sheet and P&L for IT, but also manages costs and monetizes digital products. This is some of the rethinking that IT must do.

Ovum clients can read an in-depth analysis of this topic in the report “An Operating Model for IT in an Agile and Disruptive Environment” by Terry White and Richard Palmer.

Straight Talk is a weekly briefing from the desk of the Chief Research Officer. To receive this newsletter by email, please contact us.

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