The era of digital transformation has brought forth several profoundly powerful new technologies and created a momentum that is putting new demands on the CIO skillset. Whether it’s cloud, DevOps, or automation, the CIO of today must be fluent in applying these big-picture technology trends.
Once relegated to playing a supportive role, the CIO must now become a business partner, driving business process efficiency, exploiting data, and implementing these new technologies to add value to the business.
As the CIO’s role changes, the need to reduce IT run costs while improving performance and supporting growth remains. But the fruits of that cost-cutting must increasingly be invested in:
- automating legacy systems to increase efficiency and free resources to work in new value-creating streams
- giving the organization the ability to carry out digital transformation
- hiring the right mix of people with skillsets that encompass both business thinking and IT challenges.
Mastering the legacy: a prerequisite to transformation success
Looking at best-in-class examples, it is striking how much effort these organizations put into simplifying their legacy applications. New applications and solutions increase the size of a portfolio and costs. Decommissioning apps and redeploying resources is the only way to keep costs within scope while fully leveraging the cloud, DevOps, and Agile to support business transformation.
Demand management is everything
Today’s IT portfolio is the result of yesterday’s demand. Application portfolio management (APM) is key to effective demand management, but it requires mastering the legacy. When introducing new applications, CIOs need to decide what happens to old applications. Will they be decommissioned, replaced, or enriched? The best-in-class succeed by mastering their application portfolio and projecting current trend to estimate target run costs. This creates a dynamic portfolio in which old applications due to decommissioning can be easily identified.
Our eAPM tool has given us some striking insights into these developments. Analyzing the application management maturity of multiple clients has enabled us to establish benchmarks for this discipline across industries. For example, three years ago the average organization was using Agile for just 6% of app development. Today that average is close to 30%, with one recent, best-in-class example jumping from 16% to 50% in that period. The numbers show a clear trend toward Agile-at-scale, and we expect demand to continue accelerating in that direction.
High-quality demand management is also a way for IT organizations to work more efficiently with business stakeholders to pair the right solution with the right demand.
Building the new with cloud inside: power is in the people
With ever-changing technology trends, the CIO needs to find the right mix of people with skillsets that go beyond IT expertise. For critical applications, the right profile has a business mindset, first and foremost, accompanied by technical expertise. When IT and business teams speak a common language, they generate more value from their combined experience.
Managing demand does not require reinventing the wheel – fluency in technologies around DevOps and cloud is required. When leveraging a cloud-native environment, you need a team of people who understand cloud providers’ ever-changing catalogue of services and technical frameworks, know how to integrate them, and know how to leverage the provided assets.
Hybrid talent of this kind is very difficult to find. Often, a CIO will need to create the right team by combining a mix of people instead of finding the perfect match in the talent pool. This team is usually a balance of developers from the organization and new hires that fill the skill gaps.
The right candidates for your team need to shift from project management to a product mindset. They need to be a combination of architect and developer; fuse business thinking with technical expertise and leverage existing libraries to build adaptable applications. In the end, the right candidates create a product that can evolve, with minimal development, by leveraging existing parameters thanks to smart design capabilities.
Mastering your landscape is a prerequisite to IT portfolio simplification
You need a full view of the application landscape in one single repository as well as benchmarks to assess the strengths and weaknesses of the portfolio.
We helped one of our clients, a global company, simplify their IT landscape to make room for new applications with a proper portfolio management with a unique solution, economic Application Portfolio Management (eAPM). The client had acquired various companies so the landscape was siloed and cluttered with outdated legacy and multiple apps running similar processes. They turned to Capgemini for assistance during a recent transformation to new digital applications that would allow them to work as one company and ensure operational excellence. With proper benchmarks in place, Capgemini secured service continuity while decommissioning old apps to keep costs stable, facilitating a smooth transition when the new applications arrived.
Demand management is a critical success factor in application portfolio management. Our research shows that the leading organizations are those that are better at:
- managing long-tail, obsolescence, and associated costs
- addressing shadow IT
- monitoring technical debt
- rich dialogue with their businesses
- securing transformation success
Digital transformation and innovation bring change quicker than ever before. Close collaboration between business and IT is the only way for organizations to withstand the pressure. CIOs need to be at the forefront of this change, mastering the shifting technology landscape and embracing new ways of working that enable business growth.
The CIO’s goal is to bring better end-to-end services to customers and more value for the business but this cannot be achieved by only focusing on what is ahead. Demand management also requires mastering and transforming legacy in order to fully leverage new applications.
Today’s demand generates tomorrow’s IT portfolio and the new will soon become the old, so high-quality IT demand management should be high on every CIO’s agenda. I welcome your comments and thoughts and if you’d like to have a discussion around this, please feel free to reach out to me via my profile or on social media.