Before the cloud, Information Technology Outsourcers (ITOs) offered services that supported on-premise solutions often at a lower cost through economies of scale and offshoring. These services included maintaining the data centre, network infrastructure, servers, operating systems, applications, databases, enterprise security, and more.
The net deliverable was exactly the same as if you ran it yourself – a software application with five-nines, or 99.999%, availability – but with lower costs and fewer headaches. The cloud has shaken this model up, but it’s far more than just a shift.
Put another way, the cloud has abstracted business processes from the underlying technologies used to enable them. Features and even entire applications can now be turned on or off, or scaled up or down almost literally with the click of a mouse. That means that the deliverable for IT is no longer a software application with 99.999% availability; it’s a business outcome. It’s about what you do with the software instead of how that software is run.
Impact on the CIO
This tectonic shift is having a profound impact on the role of CIO. Modern IT’s mission is evolving from supportive to entrepreneurial. It’s becoming an equal partner in defining the business itself, a business enabler instead of a cost centre. Agility, innovation, collaboration and value creation are now its goals.
This shift means that there’s an emerging set of responsibilities to manage that’s different in almost every way from the old set. This one isn’t about data centres, servers, and service patches.
It’s about connecting the digital dots to create flexible, efficient, wide-ranging business processes that fully align with business strategies, and continuously re-align as those strategies rapidly evolve.
It means that today’s IT leaders are now expected to be business and strategy experts, too. Not long ago, it would be difficult to imagine someone in the CIO role who didn’t understand network topologies or know their way around a command line. Now it’s becoming increasingly difficult to imagine someone who doesn’t have an MBA.
And yet, even with these new responsibilities, CIOs are still expected to support legacy infrastructures, enhance cyber security, improve network reliability, implement new systems and architectures, support stay-at-home employees and more.
Modern managed services for modern IT
While the challenges are different, what hasn’t changed is the value of having someone “run it for less with fewer headaches” – if anything, it’s become more appealing given IT’s expanding set of responsibilities.
The challenge is finding a managed services provider designed and equipped to handle the new mission instead of the old – one that has redefined the 'services' in managed services to match IT’s modern mission.
Many ITOs have yet to make the changes necessary to take this on. They’re still staffed to keep the servers running and the operating systems patched – things the cloud providers now handle. Instead, you need a firm with a completely different set of skills and tools, a firm capable of helping you define and execute on a Target Operating Model (TOM).
The TOM defines the desired, ideal future state of your organisation, including the roles, functions, processes, capabilities and controls you must have in place to execute on a business strategy and realise its goals – especially when moving at the pace that today’s cloud solutions enable.
Consider the rapid-fire updates you’ll get from SaaS providers, for example. Gone are the days when significant updates would come once every three to five years. Now they come as often as every 3 months. You’re responsible for assessing the impacts they have on your business, starting with security, privacy and compliance. They may require employee training. They may affect existing business processes. They may even enable entirely new business opportunities.
As they say, transformation is a journey, not a destination. It never stops. Even the most impressive TOM requires regular reassessments and periodic updates to ensure it remains optimised to handle rapidly changing technologies, market conditions and business requirements.
Do you have the people, processes and governance in place to handle such a dynamic environment? While a technologist can configure a SaaS solution or feature, will they understand the implications on compliance or on your business strategy, or spot new business opportunities it might enable? Without these capabilities, you’re failing to extract the full value from your investment in the cloud. You’re leaving money on the table along with your lunch, that a competitor – who gets those same updates – might be ready and eager to eat.
The 2020 KPMG CIO survey bears this out. It found 51% of respondents said they will increase managed services as part of their service delivery model with 45% saying they will keep managed services the same. The top reason they cite for outsourcing is access to skills not available in house (47.55%) followed by the ability to free up resources to focus on the core business (41.26%).
The best of both worlds
For more than 20 years, we’ve built our reputation as a leader in business-lead transformation. Key to that leadership position was our early recognition of the shift in IT’s mission – and the need to balance technical expertise with business expertise to help IT leaders succeed at this modern mission.
Unlike business-only consultancies, we’ve invested in our technology skills and solutions – our Powered Enterprise solutions and Powered Evolution managed services being the prime examples. Our 12,000+ technology professionals have the resources, the engineering expertise, the battle-tested tools and the close alliances with leading technology providers to deliver on your vision at the accelerated pace demanded of today’s IT leaders. And unlike technology-only firms, we have the breadth and depth of cross-functional business expertise to help you recognise the business and organisational implications, and help you exploit every opportunity and sustain every advantage.
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