When we went into our first lockdown in 2020, industry analysts predicted the rapid advancement of digital transformation. What was overlooked by many was that, while we knew the old world was in crisis, the new digital world was still forming – complicating transformation for even the most digitally sophisticated organisations.
New research from Forrester aims to guide tech leaders on how to build a coherent, next-generation technology operating model that will finally address these challenges and enable meaningful transformation.
As far back as 2016, Forrester analysts predicted that for companies to become digital leaders, they would need to achieve digital operational excellence as well as digitisation of customer experiences. Not all companies would make the grade. Many would adopt a bolt-on approach to digitising customer experience, while neglecting digitising operating systems.
In its report, “The Digital Operations Platform: Your Bold, Next-Gen Approach To ERP”, Forrester’s research found that while many companies have invested in digital experience platforms (DXPs) for customer experiences, they have often failed to invest in systems for finance, operations, and human capital management.
But these operational systems also power customer experience (CX) and business success.
The Covid-19 pandemic has exposed this disconnect for many businesses.
Specifically, today’s operational systems move too slowly for today’s pace of business, lack the real-time insights necessary to drive key business decisions, and drag down the business with unnecessary complexity.
IT as we know it no longer exists
Digital operational excellence is at the heart of digital transformation, but for many organisations the transition of IT to becoming a digital leader has been extremely challenging.
In the report, The Future of Technology Operations, published by Forrester in August this year, principal analyst Charles Betz, points out that global I&O organisations are in a phase of transition.
He says while the operating practices of ITIL, COBIT, the Project Management Body of Knowledge (PMBoK), and Capability Maturity Model Integration (CMMI), are quickly losing relevance, there is still little agreement on what an integrated, digital-first technology operating model looks like.
Betz shares that this is eliciting a strong response from IT departments, and the disagreements over which practices to retain and which to evolve can lead to organisational conflict.
He explains that one of the main challenges is that IT organisations are phasing out the traditional way of doing things. This includes:
* The end of hierarchical organisations built on speciality – and could include the end of the IT department itself. Betz says the future lies in cross-functional product teams and points out that the logical end game is the elimination of the traditional IT organisation. This notion is supported by recent research at MIT’s Center for Information Systems Research (CISR).
* The end of project management – Betz shares that Forrester has seen a growing disinterest from digital and IT organisations in project management offices and PMBoK, saying this has been replaced by what he describes as “a product mindset”.
* The end to traditional process management as well as governance based on stage gates.
Take action to embrace the new operating model
In the report, Betz gives a detailed outline on how organisations can take concrete actions to adopt the new operating model.
As part of the pivot, however, Betz cautions firms, saying next-gen organisations that are moving away from processes and projects should guard against assuming that coordination in any form is unnecessary. He warns that teams, especially in larger organisations, are never fully autonomous and he stresses the need for good coordination.
He also says IT leaders must recognise that complex systems present tremendous challenges to the humans responsible for operating them, and suggests leaders investigate resilience engineering to ensure the long term wellbeing of their teams, referring to the practice as “the future of modern technology operations”.
Other advice includes extending product discovery across the DevOps lifecycle; investing in observability; testing the overall system with resiliency and chaos engineering; and implementing dynamic controls.
Betz concludes: “Human and machine interaction will undergo a renaissance of thought and experimentation. The continuing convergence of development and operations will usher in radically new operating models, based on a fundamental acceptance of emergent complexity and discovery.”