In today's incredibly fast paced markets and operating environments, it's safe to say that conditions are downright tough in many organizations when it comes to getting the latest technologies out in the field and creating a positive impact for the business in a timely manner.
Ironically, our prior investment aren't helping. A major part of the challenge with tech change in most organizations is the vast accumulated legacy landscape of applications and systems that must ever be maintained, nursed, and supported, before innovation can even be considered.
Then there is the tremendous pace of technology change itself, which is squeezing organizations to do more and more in every budget cycle. Combine this with a growing list of large -- and very different -- new platforms and technologies for cloud computing, mobility, big data, digital engagement, and now AI/machine learning, and you have a near perfect storm of competing priorities.
Most enterprises are not responding effectively to these pressures as a growing percentage of the IT resources are consumed -- fully 82% of the budget in the average organization -- just to keep existing systems operating, right as traditional IT skills are falling behind. Skill levels are becoming challenged as new enterprise products and platforms have also become far more sophisticated and complex than in previous generations, further opening up a learning and capabilities gap.
All of this means that organizations continue to fall behind a minimally viable technology adoption and migration curve, while the technology industry just keeps piling a growing stream of new innovations on top of the old.
It's important to note that this critical state of affairs also isn't reflected well in the endless CIO priority lists and other IT planning views that circulate in the industry. While they do sometimes mention subjects like portfolio modernization, though mostly they do not, and instead focus primarily on the novel or urgent topics of the moment, such as cybersecurity, analytics, or a raft of customer-facing technologies. It's time we did better, and look to new methods to meet our IT challenges.
How can IT leaders increase the rate of tech adaptation?
So what's a CIO to do, given relatively static budgets in an era of the greatest tech change in history? Looking at what IT leaders have done different recently in terms of strategies and tactics, some emerging new methods certainly stand out. Note that these new methods don't use staff augmentation, traditional outsourcing, or other old techniques that are too expensive to scale. Instead, they use the power of networks and then give up a little control to get a lot of IT value back. Here's how they break down today:
Open APIs with a developer network. I've referred to this modal as running your IT department like a Web startup, the latter which have long understood they can't possibly build all the features or capabilities that the market wants for their app or platform by themselves. The key strategy here is to carefully open up valuable business data strategically through APIs both internally, as well as outside to business partners and entrepreneurs. Then build out a developer network that makes the API attractive and something that 3rd parties will invest in. Finally help make them successful with fair licensing terms, SLAs, and with promotion in app directories and app stores. IT departments can then let innovators build the apps with their own investment and reap the rewards of the successes, much like a venture capital model, but this time by using a one single point IT investment. Far beyond something that only a tech company would do, many traditional companies now sport public APIs with matching developer networks, including Walmart, Sears, Fedex, and even the World Bank. Well supported APIs can create dozens or even hundreds of new applications in a surprisingly short amount of time, often incorporating many new technologies along the way at low cost to IT.
IT change agents program. As workers and management in the lines of business become more tech savvy, they are increasingly able and willing to help out with the process of digital change and transformation. A change agent program enlists these workers in scale-- each eager to apply technology to their business problems -- by using a formal program that provides guidelines, quickstart kits, advice, solution blueprints, and recognition, among other types of enablement. An effective change agents program can go a long way towards overcoming IT capacity limitations as technology infuses almost everything we do in business today. Perhaps the industry's biggest proponent of IT change agents -- and an active practitioner of what he preaches -- is the FCC's CIO, David Bray, who has saved millions for the government agency using a change agents approach, where major ideas and even a lot of the work, comes from outside of IT and is actively cultivated.
Hackathons. While opening up a developer network can accelerate external innovation, it's not very predictable in the short-term. To address this, organizations can apply the technique of a hackathon, which are an open call to developers and other makers to an event, often backed by rewards, to build on top of a company's platform or otherwise use technology to solve a defined problem. Hackathons are now popular activities in many organizations that want to spur tech innovation in a more deliberate and consistent way. Note that organizations will still need to provide an API if they're expecting solutions to be created that involves their business, though some enterprises only offer them provisionally during the hackathon. Citibank's recent mobile hackathon stands out in particular as a successful example.
Partnering with startups. More and more IT organizations I'm speaking with these days are realizing that there is simply more innovation out in the wild than they could ever tackle. Instead of trying to fund tech innovation themselves, they are fostering partnerships with startups in their industry. Startups are often eager to work with large companies to test out their advances, and companies can learn a great deal from them, and get access to relevant new advances without taking on excessive risk or dealing as much with culture change issues. There are some CIO concerns about the sustainability of the model, however, if venture funding continues to fall.
Center of Excellence (CoE). Long used as a "mini IT department" that specializes in some new technology or method (cloud, mobile, collaboration, analytics, agile, devops, etc.), the center of excellence model has had some success in spreading the knowledge and skills of new technology advances and processes across an organization, while ensuring standardization and governance. It can accelerate tech adoption and adaptation by acquiring or cultivating staff that have skills in new technologies and then giving them a mandate to help the organization broadly apply them.
Network of Excellence. The CoE model tends to bog down, much like IT does in the face of so much internal demand, and so organizations have been seeking better and more enduring models for tech enablement. The emerging network of excellence concept decentralizes the model, and uses a platform, typically an online community, to enlist and then empower change agents across the organization. I've spent much of the last several years helping organizations design and operate these types of change programs. The network of excellence has significant advances in scale, cost, and receives other benefits that take place by combining the CoE model with a change agents network.
Incubator model. Perhaps the most significant investment on this list, enterprises can create a startup division that has funding to try new ideas and fail fast, doubling down on those that show early promise. The journey to find the right model can take a while, even large, well-resourced companies like Coca-Cola have tried both incubator and accelerator models, and settled on partnering with VCs.
Note that the items on this list don't necessarily help with coping with and managing legacy IT. This is where I've now come to believe that organizations that don't invest in solving their issues in moving to public cloud as soon as practical will end up falling so far behind that they will suffer significantly from a competitive standpoint.
In the end, public cloud can greatly help with legacy IT baggage by offloading much of the problem to cloud vendors, who can do all the work to seamless maintain, upgrade, and support their offerings for customers with much higher economies of scale and using the latest technology stacks.
However, despite major successes and impressive growth of the public cloud industry, a minority though increasingly decent number -- 30% of organizations -- have gone all cloud, and so the challenge of legacy IT will be with us for years yet.
So, while the strategies above can help form the basis of a program to considerably accelerate tech change and adaptation in most organizations, they aren't effective in and of themselves at future proofing or migrating legacy IT. That's going to require some breakthroughs in IT modernization. I'll explore soon some emerging strategies to deal with the legacy challenge.
Ultimately, as my fellow ZDNet colleague, Michael Krigsman noted recently, IT leaders face chronic core conflict that we must find methods to resolve:
The urgent requirements of daily IT deliverables create a focus on inward-facing activities that crowds out innovation. Top CIO priorities include cost savings, efficiency, and improving processes. Although these are worthy goals, CEOs want IT to support core company strategies, particularly revenue. The gap between CIO activities and CEO mandates is a real challenge.
In the meantime, IT leaders now have hope that if they're willing to think and act a bit differently, they have a workable and sustainable future in enabling technology within the organization.