April 30, 2013
Transformation: The topic of many, many conversations Forrester Analysts have with business and technology leaders everyday. But the definition and scope of transformation seems to vary widely depending role, title, industry, sphere of influence, and other factors. For example, here's a sampling of recent inquiry questions from Forrester clients to Analysts focused on transformation:
"How can we transform our customer experience globally to improve ROI?" (Customer Experience Leader, Telecommunications)
"How transformational is the value of social networking and social media to business?" (Marketing Leader, Financial Services)
"What are the key drivers of banking application transformation?" (Application Development Leader, Banking)
"How do we prepare IT skills for transformation as we move from in-house apps to SaaS and outsourcing?" (Sourcing Leader, Entertainment)
"How can we transform our data centers to operate more like a cloud services provider?" (Data Center Leader, U.S. Government)
"What is the business case for large scale desktop virtualization as we transform our computing environment?" (Workforce Computing Leader, Pharmaceuticals)
Transformation is especially important for IT infrastructure and operations (I&O) leaders who face pressures from executives, employees, developers, and customers to better balance reliability and efficiency with flexibility and agility. However, too many discussions on transformation focus on the technology – instead of the people, skills, mindset and culture to deliver it (see Analyst John Rakowski's report and blog on just this).
To help you succeed at transformation, I encourage you to attend Forrester's Infrastructure & Operations Forum in Washington D.C. on May 6-7. One of our sessions will be led by author of "The Quantum Age of IT" and CEO of The IT Transformation Institute, Charles Araujo. In this session, Charles will be joined by, Anthony Iorio, the Senior Vice President of Infrastructure & Operations at The Capital Group. They will jointly discuss how they partnered to transform The Capital Group's company’s culture, people, and processes.
I had an opportunity to connect with Charles to discuss his book "The Quantum Age of IT." Below are his views on what's forcing IT transformation and what it means to I&O teams and skills. Here are his views that you can expect more of at the Forum next week.
Q: You claim that today's IT organization is dead. So what killed it?
A: There are three market forces that have arisen over the last decade or so that I believe have fundamentally changed the way the IT organization operates – to the point that almost everything about who we are, how we're structured and the way we deliver services will change. The first is the "consumerization of IT", but not the way most people think of it. The center of technology gravity has moved from corporate technologies to consumer technologies and that has created a critical shift in how people look at technology, how they expect it to work and the customer experience they expect from their service providers. And that means that they are fundamentally expecting a different experience with us.
Second, technology has become vastly more critical. Every business process, every customer transaction and every facet of the customer experience is being driven by technology in most cases. And that has left our customers feeling very scared. They are now relying for their very livelihood on technology that they don't understand, run by people that they really don't trust. That has left them feeling very vulnerable and looking for options.
This led to the third market force: competition. We now have multiple industries of solution providers – call them SaaS providers, cloud providers (pick your term) – that are all providing technology solutions directly to our customers that only a few years ago could only be provided by us. Our run as the sole source provider of technology has come to an end.
Q: You believe that IT's technical skills may actually be their undoing. How so?
A: As IT professionals, we will continue to need our technical skills, but they will be much more referential than they are operational. As IT organizations cope with the changes being thrust upon them, more and more technology will live outside of the walls of the enterprise and we will build and extend complex ecosystems to deliver services. This will mean that the skills that will be in the greatest demand will be business and management skills that enable us to step into the gap and deliver technology solutions through this ecosystem that deliver strategic value to our customers.
But if we continue to rely on our technical skills as the source of our success and professional differentiation, we will stagnate. From the perspective of our enterprise customer, those technical skills will diminish in value. What they will come to value much, much more are those professionals that can move effortlessly between the business and technology worlds, that speak the language of finance, that understand how business value is created, that can form ad-hoc teams to solve tough problems and who can create breakthrough business process innovations that set the organization apart. Technical skills will be needed to serve this role, but it will be only the very beginning of what's needed.
Q: How much does this impact the IT infrastructure and operations professional versus other roles in the IT organization?
A: I think that the impact of what I call The Quantum Age of IT may be felt most strongly in the halls of I&O organizations. I believe that within 10 years, no organization other than federal governments and the largest 50 or 100 companies in the world will substantially own their own infrastructure. There is just not enough strategic advantage to be derived from owning physical infrastructure to justify the cost of capital. The only reason that organizations have made these investments in the past was because there were limited financial and logistical options. That's no longer true. So as an I&O professional, you're going to have a choice to make and I believe it's going to come down to one of three paths.
Path one will lead you out of the enterprise IT organization and to work for a member of the ecosystem – a service provider of some sort. But the competition and the technical demands will be fierce. Path two will be to be one of the few remaining in-house technologists. I believe that every organization will need to keep a small staff of what we think of as I&O professionals to handle critical in-house platforms and to define and manage the ecosystem architecture. The third path is the one that will be the most common and that is to transition into the role of managing specific parts of this ecosystem.
Our technology platforms and infrastructures are only going to become more complex and more intertwined. The primary role of I&O professionals will be in managing transactions through the ecosystem, looking for ways to streamline and improve the delivery of services (think DevOps) and to protect the business value being delivered.
Doug Washburn is a Research Director on Forrester's IT Infrastructure & Operations research team. Follow Doug on Twitter here @dougwashburn.