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Perspectives

The Last Word: The Journey to 2020

2015-02-10


The transition to fully digital business will be agonizingly slow and fraught with difficult decisions. Leaders that embrace IT merchandising, brand management, service management, Professional Engineering and analytics will lead the way in the coming decade.

In my recent IT Odyssey interviews,1 over 80% of the executives I spoke with painfully described their struggles to find more viable business and IT models. Their current approaches appeared to be running out of steam and likely to collapse by 2020, if not sooner. This sounds like a perfect scenario for enterprises to rapidly deploy an array of extremely promising new IT alternative delivery vehicles (ADVs)2 and services. However, as with most things technology-oriented, the devil is in the details.

To deliver material contributions, these new IT ADVs and services (i.e., Code Halos3 built on SMAC technologies) require significant change to business models, IT architectures and organizational structures. Unfortunately, such bedrock enterprise fixtures typically advance far more slowly than Moore's Law. As a result, it is hard to perceive the glacial pace at which ADVs are being applied and assimilated, especially in large enterprises.

The executives with whom I spoke pinpointed numerous factors that will impact the journey to 2020:

  • While change and urgency are not optional, just getting better at what they do isn't enough. Radical — not just rapid — change is needed.

  • Dramatically different approaches, skills and capabilities are needed.

  • Uncertain or weak economic factors increase the angst of introducing risk.

  • Shaky shareholder perceptions entice activists to make short-term demands.

  • Expanding, ambiguous regulations complicate existing businesses and delay new ADVs from moving forward.

  • Non-greenfield businesses must integrate new approaches with overly complex but well-performing legacy businesses, processes, products, skills, customers and IT systems.

Many of today's leading executives built their careers by increasing enterprise efficiencies — tightening known processes, consolidating resources, de-risking, better sourcing commodity business aspects and optimizing supply chains. The 2014–2020 timeframe should be a period of severe culture and capabilities shock for many of these execs.

How do I know? Repeatedly, the execs with whom I spoke described their difficulties in learning what IT could and should do, how to do it and how to achieve material contribution. The organizational learning involved is experiential rather than academic (i.e., taught from a textbook or brought by a new hire or consultant). Learning alpine skiing is an example of experiential learning. Watching a video or reading a text helps, but the novice learns by actually launching downhill

For this reason, it won't be until at least 2020 that most enterprises will have learned enough to make ADVs and their evolving application services the cornerstone of their business-IT strategies. Those that can learn or adapt more adroitly over this period should gain competitive ground by capitalizing on what their organizations can do that competitors can't. For those still struggling in 2020, it may be too late to remain competitive. It is seldom possible to catch up on experiential learning

The Enabling IT Capabilities of 2020

While much hype surrounds the emerging "digital business model," few specific examples of this model or enabling capabilities exist. Pundits advocate hiring a "chief digital officer" who would report to and be empowered by the CEO to override IT naysayers. Others suggest that users be freely encouraged to select which services and ADVs they want. But by 2020, leaders with whom I spoke described broader sets of enabling capabilities that will decide corporate fates:

  • Distinctive working collaborations by the new clowns in the new circus. The applications and services of 2020 will involve IT working in new ways with new players, such as marketing, brand management and newly empowered global executives who want to leapfrog IT and business development. Often, deep divides separate the experience, values, success factors and cultures of these new players and IT.

    Enhanced collaboration demands will require a blend of project, process, subject matter, technical, creative, planning, visionary and practical capabilities, facilitated by management process, funding and governance.Many of the following capabilities may appear to be the same or similar. As Figure 1 shows, they are dramatically unique and must work together in collaborative fashion.

Figure 1

  • IT merchandising function. Thousands of new ADVs and services will continue to arrive on the IT landscape by 2020. Customers, staff and business executives — as well as IT — may drown in those that appear to hold the most promise but are, in actuality, problematic.

    As described in my earlier Cognizanti article,4 organizations require capabilities to sort through these opportunities and select those that are the most prudent and likely to offer rewards. Such capabilities resemble the art of merchandising. The IT merchandiser would be aware of the available ADVs and services, sort out which ones best fit its criteria for success (architectural fit, likely user and IT assimilation, provider viability and support, full TCO, likely benefit) and then assume responsibility for the economic return.

  • Audiencing and curating. Launching social media campaigns, being "liked" on Facebook or trolling your products on YouTube can't, by themselves, significantly grow the brand and business. Leaders who are already seeing sustained impact from digital marketing and social media cite two major capabilities that must be developed, funded, resourced and maintained to yield value, brand enhancement and material new revenue:

    • An audiencing function: As identified in an earlier Cognizanti piece,5 this capability identifies potential audiences, finds proper offerings, promotes offerings to that audience and expands that audience.
    • A curating function: This capability determines which offerings best fit each audience, given the vast amount of collateral and formats available.
  • Ongoing IT brand management. Leaders in 2020 will dedicate skilled resources that extend beyond the common approaches of post it, forget it, move on, expect social masses to embrace it and then buy or use more of their product or services.

    Audiences can become bored, move on to the next shiny new thing or fail to increase enterprise product use. Brand managers will, therefore, need to own and promote the success of an IT offering. This will require deft husbandry — monitoring engagement, building brand equity and ensuring continual refresh.

  • IT service management. By 2020, IT organizations will offer hundreds or more mobile apps, catalog services, customer/partner-facing services, externally provided XaaS (everything as a service) linkages, information reservoirs, analytical tools and self-provisioning capabilities. Winning brand managers will promote the most critical services and service managers will ensure technical delivery and user/customer support of all services.

  • End-to-end, edge-to-edge quality, experience and assurance. Until recently, quality was defined by IT and generally provided through standardized IT, development standards and pre-implementation testing.

    Increasingly, users and customers demand a seamless, end-to-end consumerized experience. IT organizations find themselves stitching together a tapestry of individual, best-of-breed, fit-for-purpose, edge-to-edge solutions sourced from many providers and tied into legacy systems, procedures, tools and data.

    Leaders in 2020 will realize that such quality can't be pasted on to existing approaches. A total rethink will be needed of strategy, principles, user involvement, IT operating models and governance to deliver on user expectations.

  • "Professional Engineers." By 2020, IT will have many more functions tied into enterprise products or supporting mechanical and/or physical devices. Things that can harm people or present liability will be monitored by or operated over the Internet of Things. Such efforts require a variety of Professional Engineering skills and disciplines. Having these handled by a software engineer who loves to tinker is not prudent. Many IT organizations are long overdue in hiring registered Professional Engineers (PEs).

  • Informatics driven by and tied to material business outcomes. Code Halos represent major differentiating opportunities. However, insightful leaders cite two capabilities that they are developing to ensure material contribution by 2020.

    Having "blind squirrel" data science analysts comb through big data in search of insights seldom ensures material contributions. Instead, the goal must be to pursue targeted business purpose insights, such as which customers represent the biggest underwriting risk or which products present what types of higher warranty issues.

    Uncovering purpose-driven issues requires business analysts who understand the nuances of business operations. Most analysts excel at identifying business processes but not the underlying issues that influence business success. Likewise, analytic insights don't magically become material business contributions. Often, analysts are not connected to the business decision-makers. Skilled "happenators"6 are needed to turn informatics insights into practical changes in the business.

  • Software planning, funding, release, fix, update, distribution, support, asset management, conversion and retirement. Visionary leaders say that by 2020 their enterprises will need to embrace and apply key elements of the software business model. They understand that software will increasingly be user-facing, available on mobile devices, sensors and wearables, built into the product or service or actually sold to customers. These leaders realize they are past the point that software is an administrative support sideshow.

    As a result, IT must have the strategy, management processes and financials of a software business. Today's IT finance staff is often skilled at budgeting, TCO analysis and cost control but lacks the skills, funding, resources, processes, frameworks, tools and systems suited to IT or software enterprise financial management.

  • An architecture of architectures. Today's IT architecture strives for common global systems and limited core technologies or providers. A diverse cornucopia of enterprise ADVs and service offerings is already arriving that is best suited for a specific market or functional purpose.

    Business capabilities such as engineering, high-performance computing, customer-facing services, e-commerce, social media, big data, emerging markets, process control, manufacturing or business analytics often require unique architectures. Wise leaders realize that a single, common, centrally conceived and locked-down architecture is no longer optimal and may limit or hurt the business. Fit-for-purpose architectures may be best. But allowing business units or developers to add disparate IT technologies or services will result in disjointed and dysfunctional situations. Balancing all this will be a supreme challenge for businesses in 2020.

    Therefore, more visionary leaders are establishing an overall architecture of architectures (AofA) to tie the individual best-fit architectures together. Today's architects build the equivalent of house plans based on proven models, standard materials, existing codes and known lot sizes. AofA architects must conjure up a full urban design and development plan for an indeterminate and evolving landscape.

  • Progression plans vs. succession plans: Succession plans tend to replace like with like, but 2020 planning requires doing new things in new ways. Progression plans start by identifying the new things in new ways and then determining the capabilities, styles and personas needed.

Figure 2

I suggest you compare how critical each of the 2020 capabilities will be to your enterprise on a scale of 1 to 10 (with 1 being "not critical" and 10 being "extremely and broadly critical") vs. your organization's current 2020 capabilities (with 1 being "virtually none" and 10 being "fully developed and experienced"). Figure2 summarizes the evaluation for companies looking to gain greater advantage of ADVs, IT services and digital marketing.

Not Fumbling the Future

No one wants to be the CEO or leader who allows his enterprise to slide down a slippery slope. As with previous IT era changes, only the enlightened will be able to summon up the capacity to make the right business-IT decisions to weather the coming transition. The DP managers of 1972 were swept away by the MIS directors who emerged later in that decade. MIS managers were then swept away by CIOs in the 1982 era change. Those DP and MIS managers were flummoxed by the formidable challenges introduced by the PC and networked computing revolution, believing they could tweak their way to the future.

Hopefully, today's CIOs will not be hypnotized in a similar fashion. A major rethink and development of new capabilities looms for those who want to keep their organizations out front in 2020 — and beyond.

Footnotes 

1 Independent, face-to-face interviews I conduct each year with over 120 IT executives.

2 Alternative IT Delivery Vehicles (ADVs) represent new ways in which IT capabilities or applications are available to the enterprise. Examples include public-hybrid-private clouds, managed services, XaaS, mobility, mobile apps, converged infrastructure, consumerized IT, BYOD, social media, big data, Internet of Things and over 60 others described by interviewees. 

3 A Code Halo refers to the digital information that surrounds a person, process, organization and device. For additional insight, read "Code Rules: A Playbook for Managing at the Crossroads,"http://www.cognizant.com/Futureofwork/Documents/code-rules.pdf and the book, "Code Halos: How the Digital Lives of People, Things and Organizations are Changing the Rules of Business," by Malcolm Frank, Paul Roehrig and Ben Pring, published by John Wiley & Sons, April 2014, http://www.wiley.com/WileyCDA/WileyTitle/productCd-1118862074.html

4 "We Better Have a Plan B for the 'Something About Services' Era,'" Cognizanti, Vol. 4, Issue 2, 2011, http://www.cognizant.com/InsightsWhitepapers/Cognizanti_Volume_4%2CIssue_2_2011.pdf

5 "Keep on SMACking: Taking Social, Mobile, Analytics and Cloud to the Bottom Line," Cognizanti, Vol. 6, Issue 1, 2013, http://www.cognizant.com/insightswhitepapers/cognizanti9-keep-on-smacking-taking-social-mobile-analytics-and-cloud-to-the-bottom-line.pdf

6 A "happenator" is the person absolutely responsible and accountable for ensuring that the change happens and does so with passion. For more detail, see Cognizanti, Vol. 5, Issue 1, 2012, http://www.cognizant.com/cognizanti

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The Last Word: The Journey to 2020