Firms set eyes on digital, but will it fulfil their demands?

We look at the effect of digitisation and how CIOs can help businesses move forward while keeping day-to-day systems running

Digitisation could change IT's value, but is IT ready? New products and services often promise business value, but more often than not they simply offer a slight improvement over what came before.

On the one hand, they are responsible for the IT infrastructure businesses rely on, but they are also being asked to support technology-powered business initiatives.

When the web started to become popular, every company wanted a presence on it. Now every company wants a chunk of the digital pie. IT may not be able to deliver business value but it can facilitate those initiatives.

Changing the rules of engagement

How can CIOs keep day-to-day systems running while helping businesses move forward with digitisation? In the McKinsey paper, Competing in a digital world: Four lessons from the software industry, consultants Hugo Sarrazin and Johnson Sikes write that, in the past, IT and business have tended to operate as separate functions in many organisations, making it harder for those trained in one discipline to cross over to the other. The article describes why companies should become more like software companies. Along with the need for IT to become more business-savvy, the authors recommend business unit leaders become software-savvy. 

"A base level of software fluency will be required for all levels, including upper management, to understand not only the core technologies, but the dynamics of working in a quick-turn, more connected and digitised marketplace," states the report.

If digitisation will force enterprises to become more like software companies, IT will need to adapt, because traditionally organised enterprise IT has been constrained due to working practices. Analyst Gartner predicts that by 2015 the speed of change in business will outpace IT’s ability to support those changes. As a result, Gartner expects IT organisations will need to embrace a 'bimodal' IT architecture to make the transition to an agile infrastructure, which is required to address the proliferation of data generated by digital business and the internet of things.

Bimodal is Gartner’s terminology for splitting work that needs to be done quickly from long-term projects, such as those that relate to core IT infrastructure. Complex projects should be split to make them more manageable. Ideally, each part should deliver a tangible business benefit. 

Quocirca analyst Clive Longbottom says breaking everything down into small pieces and managing each part in a joined-up manner is among the key attributes of successful project management.

"Yet in many cases, it is only the total project that is addressed; the tasks that make up the processes of the project are hardly managed. This is most visible in the public sector, where many projects have been set up to run over several years. As time goes on, the user needs change – yet the desired result remains the same in the project plan, and the sum of the changes makes it seem that the desired outcome will never be reached," says Longbottom.

The idea of becoming more agile has been popular in the industry for several years. In October it arrived at VMworld Europe, when VMware CEO Pat Gelsinger described the need for agility in the enterprise. In Gelsinger’s vision, virtualisation removes hardware constraints in the datacentre, allowing businesses to become more dynamic and agile.

Many people regard agile as a way for businesses to be more responsive to change. Rather than spend months or years creating a formal specification for a project, IT can become lightweight. This is how online recruiter Reed.co.uk introduced bitcoin as a payment system, when CTO Mark Ridley encouraged his team to develop ideas in a Google-like initiative.

How Legal & General embraced Agile

Legal & General (L&G) moved a project to agile development after using traditional methods, which became unmanageable due to scope creep. It is often difficult for IT to say 'no' when a new project sponsor comes on board and has different requirements. This is the cycle L&G found itself in after it began a project to speed up the process of delivering enhanced annuity quotes for pensions. Previously, the turnaround for such a quote would be around 48 hours. L&G’s Russell Evans says the company began the project in 2011 to take advantage of the Origo standard, which enables customers to receive enhanced annuity quotes through pension portals.

The project would enable L&G to drive business through the pension portals but progress was slow. "Changes in sponsorship and changes in the leadership team meant people leading the project would come in with a different focus," says Evans. L&G generally took a traditional, risk-averse approach to projects. But to gain a competitive edge, it needed to rethink the project. "We took the massive project scope and chunked it into something that could deliver in a few months," says Evans. L&G subsequently worked with TCS to rework the project in a way that would enable parts to be delivered in stages.

What agile can do?

Ridley’s developers were given a day every fortnight to work on their own project. One of the teams took an interest in bitcoin and presented their idea at a meeting. Within a few weeks there was a working implementation showing Reed.co.uk accepting bitcoins. Given the financial implications, the project needed CFO oversight, but even the senior management had to accept the timescales dictated by fortnightly sprints in the Scrum project management methodology.

Thanks to the rapid development and deployment process, Reed.co.uk’s bitcoin system was ready after three project sessions. The company has integrated bitcoin payment by converting currency to pound sterling at the point of transaction. Bitcoins are then converted to a currency the company’s CFO and accounting system can understand. But agile should not be considered a panacea for developing apps faster. “All methods are flawed, some are useful,” says Manav Mehan, principal agile consultant at TCS. "Problems with agile have nothing to do with process. It’s about people."

In fact, unless the people in the organisation understand what is achievable with agile, such a project can run into trouble just as catastrophically as one that takes a traditional waterfall approach.

Barbara Roberts, DSDM Consortium director of product innovation, says: "It is all about changing people’s perceptions."

In any organisation there will always be people who are difficult to change, while some will come with an open mind. Roberts says the challenge is how to manage this. She says agile is not about throwing away the work that has previously been done. Instead, she recommends looking at areas of a project that are not working. "Project management is a good thing. But if the style of project management is wrong, look at how you can change the style," she says. 

Agile project management helps teams work more autonomously, but there will always be constraints. "Team members are not in the best place to set corporate standards," says Roberts. She says agile projects work well when people have a natural team culture. But it can be disruptive for someone who is naturally introverted. A project manager may need to divide the work up so this individual is able to concentrate on a distinct part of the project using a more traditional approach. "You make compromises where it is necessary," says Roberts.

Continuous development

Forrester analysts Margo Visitacion and Gordon Barnett said IT must adapt to deal with continuous change. "Transparent performance measures and metrics enable balanced investments across new and current initiatives more frequently, preventing the need for once-a-year or half-year planning and budgeting cycles. Long-term investment strategies and short-term execution are defined using data from feedback loops," the analysts said in a report. Arguably, continuous development and delivery will become the norm for CIOs managing the demands for business that will arise from digitisation.

This was last published in November 2014

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