Businesses are under pressure to radically rethink the way they manage information technology and the ability to introduce new technology quickly has become a boardroom issue.
More than three-quarters of business leaders identify their number one priorities as developing new products and services, entering new markets and complying with regulations, a CEB study of 3,000 business leaders has found.
“We are increasingly hearing from CEOs that their biggest concern is how organisations can change faster. The thing slowing them down and helping them speed up is technology,” he tells Computer Weekly.
Agile is not enough
The CEB – formerly the Corporate Exectutive Board – argues that traditional ways of managing IT are no longer able to meet the demands of modern businesses.
Even agile programming techniques, which do away with long-winded development cycles in favour of rapid programming sprints, are not enough to get companies where they need to be.
A new model for IT is beginning to emerge, which is helping organisations speed up project roll-outs and free up reserves from maintenance to spend on innovative, high-impact IT projects.
Why the IT department needs a faster clock speed
IT departments have always been under pressure to respond more quickly to business demands.
Ten or 15 years ago, they hit on the idea of standardising their IT systems to cut down development time. Rather than roll out multiple enterprise resource planning (ERP) systems in different areas of an organisation, it made much more sense to roll out a single ERP system across the whole organisation.
That worked for CIOs back then, says Horne, but the emergence of cloud computing, analytics and mobile technology means IT can no longer keep pace with the demands of the boardroom.
“Now the environment is so competitive. You have legacy systems, big data, analytic tools, technology for customers. You can’t standardise that. You can’t globalise that,” he says.
The rise of the two-speed IT department
Faced with this recognition, companies have opted for a two-speed approach, carving out specialist teams within the IT department to work exclusively on urgent projects.
The fast teams, often dubbed “tiger teams”, focus on innovation, use agile programming techniques and develop experimental skunkworks projects.
CEB’s research shows the idea has worked, but only up to a point. Once more than about 15% of projects go through the fast team, productivity starts to fall away dramatically.
Andrew Horne, CEB
“You start off with agile tiger teams, top people, and they deliver at speed. They are glamorous, they get a lot of accolades from senior management,” Jaimie Capella, managing director for CEB’s US IT practice, told a masterclass for CIOs in October 2015. “And then we hit the valley of despair.”
Fast teams cannot work in insolation. They rely on other IT specialists in the slow team to get things done, and they need to work with other parts of the business that do work in an agile way. Once their workload grows, the teams find themselves dragged back by inertia in the rest of the organisation.
There is another problem too. As Capella pointed out, no IT professional with any sense of ambition will want to work in the slow team.
“You create the fast team, give it a cool name, put it in new offices. Then everyone on the slow team wants to be in the fast team. That creates morale issues,” he says.
The emergence of adaptive IT
The answer that is beginning to emerge from this growing complexity is called adaptive IT. It allows the whole organisation to respond quickly to projects, if it needs to. CEB’s Horne describes it as “ramping up the IT clock speed”.
IT teams will either work at a fast pace or a slow pace, depending on the needs of their current project, and they will be comfortable changing between the two different modes of working.
What is IT clock speed ?
IT clock speed is the overall pace at which IT understands business needs, decides how to support those needs and responds by delivering capabilities that create value.
“In any given situation the team can make a call whether speed is most important thing, and trade that off against cost or reliability,” says Horne.
Building an adaptive IT department is difficult, and needs a radical rethink of the way CIOs manage their own part of the organisation and their relationships with the rest of the business.
Research by CEB suggests that 6% of organisations have made the transition, while some 29% are taking active steps towards it.
Eliminate communication bottlenecks
Companies can achieve the biggest improvements in IT clock speed by systematically identifying bottlenecks in the IT development cycle. Typically, the sticking points occur when agile IT teams collide with other parts of the organisation.
“Sometimes the problem is conflicting timelines. The IT team needs an architecture decision next week, but the architecture team only meets once a month. Or it needs an urgent risk review, but there is only one person in the organisation doing risk reviews,” says Horne.
Increase your organisation’s clock speed
- Download the CEB’s 30-page executive guide: Tactics for a faster clock speed.
The next step is to minimise the red tape. As Horne points out, IT has become extremely process-orientated. Techniques such as ITIL and agile development are in fashion. “And for good reason,” he says. “It helps IT departments keep control.”
But how much process do CIOs really need? Adaptive companies have found they can manage with much less than they might think. They make streamlined processes the default. And if developers want something more rigorous, they have to argue the business case for it.
How CIOs can become faster
CEB’s research shows that CIOs can encourage a culture of speed by delegating more decisions. That does not mean losing control of IT, but it does mean setting clear goals and guidelines that allow other parts of the IT department to make their own decisions.
At the same time, CIOs need to think about the way they communicate with their IT teams. That might mean congratulating people on rapid delivery of projects, rather than focusing on the quality of the project. Horne poses the question: “What are the things on top of the IT score card – is it speed or reliability?”
If that sounds like a lot to do, it is. But companies can start off in a small way and still achieve some of the benefits. “It does not have to be big bang,” says Horne.
Five things that make IT slower
- Organisations are matrixed: IT must navigate a larger, more complex group of stakeholders as the majority of corporate priorities now rely on technology.
- Business demands are volatile: Fast-evolving market pressures and technology innovations mean that business demands on IT undergo unpredictable and unavoidable changes mid-flight.
- Technology integration is complex: Integration of new technologies is time consuming as legacy environments remain critically important.
- Decision-making is diffused: Technology decision-making and ownership has expanded beyond the boundaries of corporate IT. As much as one-third of technology spending now occurs outside the IT department.
- IT faces more scrutiny: Rising risk and compliance burdens mean that technology decisions face greater scrutiny.
Source: CEB Research
The transition is not always easy. As one CIO put it: “The co-existence of agile with waterfall projects means we can’t devote people 100% to agile. People work two hours on waterfall, then two hours on agile. It’s hard to manage it.”
One mistake IT departments frequently make is to create a fast-track IT process and then “forget” to tell other parts of the business about it.
“I can’t tell you how many times I have heard CIOs say they have a fast-track, but don’t tell business about it because then everyone will want it,” says Capella.
In other cases, IT departments have created such an onerous process for businesses to request fast-track IT – often involving answering questionnaires that can be hundreds of pages long – that business leaders simply don’t bother applying.
The benefits of IT triage
Those companies that have been successful at introducing adaptive IT have taken a cue from the medical world and are triaging their IT projects into streams of urgency.
One US company, for example, assesses each IT project against the following criteria:
- The value the business will gain if the project is rolled out quickly.
- Whether the risk of the project is contained.
- Whether it affects multiple areas of the company.
- How frequently the requirements are likely to change.
It has been able to speed up projects by creating self-service portals for urgent, frequently requested projects. They allow marketing people, for example, to create new marketing campaigns as they need them, without the need to wait for a developer.
Business professionals can also use pre-defined checklists to set specifications for commonly requested IT projects, which then go through fast-track development, with the minimum testing.
Only the most business-critical systems which affect wide sections of the business go through a full rigorous development and testing process.
In another case, a large energy company has decided to do away with formal business cases for all but the most complex 10% of projects. It approves urgent, high-value projects as a matter of course. Non-urgent, low-value projects are simply not approved.
A large consumer goods company has taken a different approach. It prioritises only projects that have the greatest impact on customer experience.
Adaptive IT increases efficiency
For those companies that have been able to take up the adaptive model, CEB’s research shows the benefits can be huge.
Business can typically roll out a project 20% more quickly – a saving of one month on a six-month project.
They also have more freedom to re-allocate cash to the most urgent projects. Traditional IT departments can re-allocate about 15% of their budget if a new project comes up. For adaptive organisations, the figure is 40%.
“Adaptive organisations are also more efficient. If you have a £100m IT budget, they are spending £2m less than average on IT legacy systems, which means they are spending more on collaboration, cloud and big data,” says Horne.
The pressure for IT to become faster is coming down from the CEO and their fellow board directors. “They are frustrated at how slow the company is changing. When they ask why it’s slow, technology is coming up as the answer,” says Horne.
But to succeed, organisations require a strong CIO, with strong leadership skills. “It needs someone willing to lead change rather than just keep IT stable; someone who can work well with business leaders and communicate with their teams. If you are an old-style CIO, interested in technology, keeping the lights on, you are going to be in trouble,” he concluded.
Four ways to increase your IT clock speed
- Drive speed through cross-cutting collaborations, rather than in functional silos, to deliver results quicker.
- Encourage IT staff to use the fastest processes by default, and match the level of rigor to the value and risk of the project.
- Make IT staff at the point of delivery accountable for more decisions and ensure senior staff don’t cause delays by revisiting those decisions.
- CIOs should develop a culture of speed by modelling speed behaviours, telling a consistent story about speed and providing the business context.
Case study: Atkins ramps up its IT project speed
Design and project management group Atkins has begun a major project to transform the way it delivers IT projects.
The group, which is involved in major infrastructure projects, including the HS2 rail network and Crossrail, has set itself the target of delivering every IT project within three months.
The project – One Atkins 2020 – is part of a wider programme in the engineering company to focus more on digital technology.
“There was an internal realisation in information services that we need to be something different. We are talking about revolution, not evolution. We have changed our working practices to deliver IT much faster,” says Atkins chief transformation officer Tony Scott in an interview with Computer Weekly.
Short, fat projects
As part of the transformation, Atkins is running its information systems department as a business, taking a commercial approach to every project.
“We have moved away from long, thin projects to short, fat projects. We have all seen the 18-month project that does not deliver what the business wants [because the specification changes]. Now, nothing should take longer than three months,” says Scott.
“We are talking about revolution, not evolution. We have changed our working practices to deliver IT much faster”
Tony Scott, Atkins
At the same time, the company has appointed a head of policy and process, who has been given the remit to review, simplify and, where appropriate, automate processes used across the company.
Scott says the company has shied away from creating a fast IT team to work on high-priority projects – an approach that many companies are experimenting with. Instead, the IT department is prioritising projects that make a real difference to business outcomes.
Going for gold
“My previous organisations had marathon runners and sprinters – both wanted to win gold medals – but I challenged that. There are some things where you don’t need win the gold medal. They just need to be good enough,” he says.
The company is encouraging innovation through what it calls a “front door” policy, which encourages anyone in the organisation to walk into the IT department with an idea or a potential project.
“It could be an idea, a minimum viable product, or a business case that has had a lot of effort put into it. Our architecture team, our business change team, will shape it pretty quickly to take it to a prioritisation body,” says Scott.
The projects that emerge fall into one of three tracks:
- Completion phase – project due in the next three months.
- Intent phase – projects where it is recognised that the requirements may change.
- Aspirational – any project that has a time horizon longer than six months.
Atkins has spent time building a team of people in its information systems department who adapt to this new way of working. Staff are encouraged to experiment to take more risks with IT projects that may or may not be successful.
“The key is having the right behaviours. Bold experimentation, taking risks and trusting other people. It means having people who are willing to buy into this new way of working,” says Scott.
The company has moved from having IT project managers to having product managers who report to business steering groups and have strong links with the business units requesting the work.
Although it is early days, Atkins’ transformation programme is beginning to bring tangible results.
Customers have been surprised to discover Atkins hosting hackathons to develop applications – a practice that might have seemed out of place in a traditional company only a few years ago.
In another example, Atkins used crowd-sourcing to develop a more effective way of bidding for contracts.
“We had a concept called bid in a box. People can go in and collaborate very quickly and get all the material they need to put together a bid, and that has been quite transformative in the way we do business,” says Scott.
In the future, Scott would like to see Atkins develop its internal app store to give people across the organisation access to software that will make their jobs easier.
He would also like to develop ways that will allow the company to make better use of its data, through a data hub that will make company information widely available across the organisation so that it can be used to drive innovative projects.
Essential reading for CIOs
- IT leaders risk being relegated to a “care and feeding” role if they do not take the initiative.
- CIOs are missing out on funding to invest in innovative technology despite a projected growth in IT spending.
- When trying to win backing for digital technology, IT leaders would be wise to focus on benefits, not costs.
- We have now reached the point where corporate IT as we know it will succeed or fail.