Authored by by Kerry Raminiak
It’s late in the year but not close enough to the next year. Projects initiated in the spring have found their groove. New projects will not face evaluation until budgets are set. Executive leadership will not define their goals until they get a look at year end financials.
In the meantime, most IT executives are preparing for the big budget debate. For decades, enterprises regiment these lulls to allow LOB leaders to evaluate, regroup, and plan collectively. The problem is that “the business” is not aware of the resource constraints IT is facing and the competition the company faces.
The cunning IT executive needs to come to the debate not only prepared, but already executing. Here are four reasons why.
Reason #1. Enterprise IT Organizations Should Anticipate Onboarding More Outside Help
According to Forrester’s latest on the topic:
While smart connected product rollouts gain momentum, firms still face an array of technological barriers around connectivity, data management, and security as well as business strategy, organizational cohesiveness, and assembling all the skill sets needed to design and sell connected services to customers.
The article concludes that “Given the array of challenges — from technical integration at the initial project level to the longer-term need for a broader company transformation — Forrester believes that organizations will turn to third-party services firms for help.”
The latest research on Business Transformation found that executives and the IT execution team focus on projects and resources differently:
Executives are envisioning projects across the board: visibility, modernization, mobility, integrations and improved embedded processes are all considered a “High Priority.” The execution team does not share this grand vision. Similarly, executives tend to have plans for third-party support of business transformation plans; individual contributors assume they will be the ones doing the supporting themselves. And even when looking at third parties, they look for different things: individual contributors emphasize the communication of business and financial value to stakeholders outside of IT, executives seek characteristics that indicate long-term availability, such as a CapEx retainer model.
Lastly, EMC recently published their survey of 3,600 global business leaders and found: 75% of business leaders “do not believe IT can deliver the innovation needed to transform the organization”.
The research is definitive on the topic. Analysts and executives alike know that third-party partners will be the key to accomplishing business objectives in 2016. Onboarding now will save precious time down the line.
Reason #2. Waiting for a Problem to Solve is Too Late
This past month, two significant studies were published on the topic of enterprise initiatives.
The first was the PwC Digital Transformation report. It is, by all standards, the ultimate research on how executives are actualizing their digital programs over the next three years. Of particular highlight:
Top-performing companies are more deliberate in their digital strategy, innovation, and execution. They are more likely to have CEO commitment, strategic clarity, and shared understanding. They are more apt to take a broad view when applying technology and identifying sources of innovation. And they are more prone to being skilled at turning their data into insight, proactive in cybersecurity, and consistent in measuring outcomes from digital investments. Those organizations that displayed these attributes—our Digital IQ® leaders— were twice as likely to achieve more rapid revenue and profit growth as the laggards in our study.
The second study, from CA Technologies via Freeform Dynamics (the independent research house), recently released their findings on their Digital Effectiveness Index in the UK/EU. There is a good executive summary here that explains:
…companies are missing out on revenue and profit opportunities by being slower to adopt digital transformation initiatives.
Where the former speaks the advantages of continuous deployment of digital initiatives and the latter the disadvantages, both harken to this recent Headspring-Forrester collaboration. In the presentation, Forrester’s Craig LeClair highlights the need for IT infrastructure so that they are better able to take on digital business requests and industry disruption:
Fortune 1000 companies are dying on the vine because they are not responding to their customer needs fast enough. Consumers are not waiting for legacy products and brands to implement on the tried and true path. Regardless of size and history, a company can become quickly irrelevant if a competitor can give customers digital availability right now.
The idea that there is going to be some defining moment that kicks off a digital strategy is a dangerous one. Consider that the average digital transformation project takes 9-18 months. By the time a pain point or competitive need is important enough to warrant budget (or action), the effort to react sops up even more valuable time. How well can any company withstand two years of losing market share, reputation and stakeholder relevance?
Reason #3. Resources Will Dry Up Around the Same Time
According to Gartner, by 2018, the resources needed for enterprise mobile application development will exceed workforce capacity by five-to-one.
To make matters worse, Cloud, mobile, JAVA, and .NET experts are getting busier and busier. According to the Forrester report, “the professional services market related to services from IoT strategy through to ongoing management will be $3.3 billion in 2020, up from $100 million in 2015.”
Not only is it time to shore up the digital strategy for the long term, but in the short term as well. This is because third-party vendors are most often engaged in early Q1 for projects initiating in the spring. In Headspring’s experience we see a lot of requests from organizations that announce a major digitalization initiative during the kick off to the new year, only to discover many others did the same. Then there’s a scramble to get the best resources, customer service, account management and pricing during a rush.
In this situation, there is a risk that the first continuous delivery milestone is wrought with the challenges of tremendous competition. Are you prepared to tell executive leadership their keystone project of 2016 has to wait in line?
Reason #4. Not Knowing Where to Start is No Excuse
The last reason one should start 2016 digital projects soon is the new availability of portfolio intelligence. In a few short weeks, a comprehensive internal IT portfolio survey can tell the IT organization and executive leadership which applications are redundant, underutilized and require modernization. Pinpointing digital challenges before they arrive is an integral part of this role. Now there are services that provide that visual.
According to the Gartner research, the first thing enterprises should do in reaction to the upcoming talent cliff is to prioritize the project roadmap, specifically, on business need. A simple portfolio rationalization exercise is the quickest (and least expensive) way to do that before the end of the year. Plans can emphasize real business impact as these tools provide empirics to road-mapping decisions.
Can You Call Yourself a Proactive Leader?
I have yet to meet anyone who confesses to running a “reactive” IT department. Doing so would be admitting they function as antithesis of innovation and true leadership.
Being a reactive leader in IT is a terrible spot to be in. It means your budget is not real, your resources are not committed and the expectations of your organization are easily shifted.
According to the research, you are not prepared for 2016 if you do not have a valid understanding of current IT portfolio needs; a milestone heavy (read: continuous-delivery) application development roadmap; and at least one third-party application development resource you can tap for digitalization efforts. If you are not prepared in these ways, you will have a reactive 2016. Acting now — in November 2015 — will go a long way towards fixing that.