If you want your firm to stay competitive in a marketplace increasingly dominated by “born on the cloud” digital disruptors, you need to think like a startup and reengineer your IT operating model.

Digital disruptors are changing the competitive landscape, beating out incumbents through nimble and swift cloud-based digital capabilities. In my previous post, I explained how the key to incumbents’ ability to fully leverage cloud capabilities in our digital world was to embrace an IT paradigm shift—swapping command-and-control operating modes for experimentation and innovation.

Clearly, the writing is on the wall. Accenture research indicates that a large majority of firms recognize the IT organization is shifting from a traditional service provider to a service broker able to offer everything-as-a-service.1 The question is, how can incumbents fulfill this digital age demand, especially when they are encumbered by legacy IT systems and issues? The answer is, by making a paradigm shift.

Thinking like a startup

For incumbents to stay competitive in a disruptive digital environment, they need to think like startups and reengineer their IT operating model for speed and agility. There are two fundamental principles behind this process:

  1. Dismantling siloed and hierarchical structures (digital startups tend to have “flat” organizations, which means decision-making is streamlined and they can move quickly)
  2. Tapping into and taking advantage of ecosystem alliances and relationships (startups are very collaborative—they don’t build everything they need; they “borrow” from others)

Reengineering the IT operating model goes beyond how to apply technology. It’s a culture shift—which has challenges of its own. A good starting place is to establish small service teams—which are collaborative, self-contained units without organizational barriers. These teams are responsible for building, managing and running services. Some companies create an interim service-team-based structure within the larger legacy organization. Once the interim structure is functional, it can migrate out and over time evolve the entire organization.

Reduce boundaries, start small, fail fast, move on

Key points to keep in mind when transforming the organizational structure are:

  • Reduce any boundaries that impede collaboration
  • Start small, fail fast and then move on to the next iteration

Because reengineering the IT operating model is a cultural change, it also requires new roles and a new IT workforce strategy. In my next post, I’ll explain how firms can reshape their IT workforce to support a new operating model.

For more information on reengineering your IT operating model, please see: Reengineering the IT Operating Model to Embrace the Power of the Cloud

 

Reference:

“Reengineering the IT operating model to embrace the power of the cloud,” Accenture 2016. Access at: https://www.accenture.com/us-en/insight-reengineering-it-operating-model

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