Digital transformation is synonymous with building mobile apps, personalizing online interactions and conducting ever more business online. The trouble is that unless your service delivery is effective you will have real problems in turning that vision into reality.
At the recent CDO Summit in New York Didier Bonnet, senior vice president and global practice leader at Capgemini Consulting, commented in his keynote address that, “the core job of the CDO is to spark changes to how the company works. Often that’s amid controversy, insecure funding and a deck stacked against new thinking. Often funding can be scarce for CDO led experimental projects with uncertain returns.”
One funding model Didier has seen among clients is to have the CIO give up 5% of the IT budget, where 1-2% goes to the bottom line and 3-5% to digital transformation work. That conversation can be difficult, he said, but to pay for new things, “you have to stop doing [other] things.”
So how can this work? How can the CIO square the circle? And what should the CIO stop doing?
As the majority of the IT budget (c70%) is spent on run services the answer for me lies in quickly transforming how run services are governed and managed by standardising how thing are done and automating the routine.
What does this mean in practice? It means the CIO moving away from the traditional man-marking of each outsource service provider, running multiple service desks and responding to incidents and problems in a myriad of different ways depending on geography and service provider.
The good news is Service Integration is a proven model that addresses these issues and can readily be adopted. To bring it to life; a new way of working that unambiguously defines functional responsibilities between client, service integrator and service provider must be established. It in turn needs to be supported and enabled by a platform of tightly integrated operational processes and procedures that defines how things are done, along with tooling to automate the routine and provide ample high quality data to support decision making. It also requires a commercial model and governance framework designed to formalise collaboration and transparently bind all the parties together, removing ambiguity and building trust. Lastly, it requires the service integrator to have commercial “skin in the game”, accepting accountability for service performance.
And the prize is significant; analysts suggest between 10% and 20% of the IT budget can be saved if services were operated this way, more than enough to fund the CDO’s “experimental projects with uncertain returns”.
As I have said before, Service Integration isn’t for the faint hearted, but it can be the best means to accelerate digital transformation, and as speed is essential, a “buy” not a “make” decision.