In a previous blog, we put forward the view that the time was right for considering a more business-focused approach to Applications Management. Well, a lot has happened since then – and it’s no longer a case of considering it – it’s time to do it!
Business and IT: how do you see IT?
Digital Transformation and the recent Covid crisis have completely reshaped the way business and IT interact – the business both utilizes and sees IT very differently now. The emphasis on end-user experiences and new technologies like IoT have redefined the way products and services are being funded, developed, and delivered to the market.
An impossible act? Keeping the lights on – and moving into the spotlight
In 2018, Gartner, Inc. found that 47% of CEOs are challenging their boards to deliver Digital Transformation. While the CIO and IT function have a critical role to play here, analysis shows that between 50-70% of IT budget is tied up in just “keeping the lights on.”
Recent events caused by the global pandemic have highlighted the challenges of keeping the lights on for many – and this has meant that companies must put a more forensic lens on the costs required to do this. While even in pre-Covid times, Gartner predicted that by 2022, 60% of application management service RFPs will include a requirement to support clients’ digital and innovation agendas beyond cost savings – and this is likely to be even more important as organizations seek to rebound quickly.
Finding the buried treasure in your data
Our previous report with Everest Research, Harnessing Operational Insights for Digital Transformation, showed that nearly three quarters of enterprises failed to realize sustained returns from their Digital Transformation efforts due to challenges such as: limited visibility across operations, sub-optimal IT insights, and lack of alignment between IT and business outcomes.
The report found that organizations could improve their performance and efficiency by mining the nuggets of actionable insight from the wealth of operational data. To do this, Everest Research highlighted the importance of having a Business Value Orchestrator platform to provide a consolidated view across technology and business outcomes.
These increased demands, compounded by Covid and the paradigm shift driven by Digital Transformation, can leave many IT professionals feeling overwhelmed – especially as IT begins to operate in a more unconventional and more business-aligned manner – both in terms of its services and operating models.
Navigating a brownfield jungle full of dinosaurs
Every large organization has its dinosaurs – huge systems running big chunks of business transactions. Many of these have demonstrated a lack of resilience and flexibility during Covid and are now seen as risky. Looking into the future, they will impede speed of change and innovation efforts, while tying up costs and inhibiting value delivery. However, there’s still pressure on the organization to deliver stable, resilient services in the same way – with a demand for unifying processes – while making them thinner and more agile.
A small price for a big headache: fractional structures and Mergers & Acquisitions
A lack of resilience has not just been restricted to applications and infrastructure but has also been seen around partner landscapes. Complicated, fractional vendor support structures have been standing in the way here as well. These complex structures usually stem from the fact that while technology and environments have changed, procurement has not adapted accordingly. While IT teams are talking about upgrading skills here, procurement teams don’t share their enthusiasm.
Under current pressures, we’re seeing pricing (or more specifically – cost) become the core focus within ADM contracts. Such a myopic focus in these contracts may lead to a mismatch with the needs of handling modern technologies, new ways of doing business, or delivering future IT services. Organizations with a short-term, price-driven focus will look to secure the cheapest price from a host of different vendors providing varied services.
Many times, these vendors are not committed to helping their customers with the whole transformation necessary to address any Covid rebound requirements. They’re solely motivated to look after the piece they are responsible for, or merely just focus on business as usual. And like a relay team, one slow or intractable vendor can really pull your operations down. Mergers & Acquisitions are likely to increase as we recover from the current crisis and these can compound things further – one major side effect is duplicated functionalities. You can end up paying twice for same thing – and the more spread out your organization is across geographies can amplify this considerably.
In response to this, we see many players adopting a smart-sourcing approach – seeking out a partner who can offer them one consolidated solution – a value chain that enables them to extract maximum value from their IT estates. They want a business-savvy partner who can see the big picture – a problem solver – rather than strictly a delivery partner.
Business and IT together: smart-sourced Application Management Services
We’ve helped many of our clients eagerly embark on a business-focused application management approach that worked to transform their IT-centric capabilities into insight-driven and business-centric enablers.
This really is the magic formula for value extraction. It enables IT to better understand their current blueprint and spot inefficiencies and errors in current processes. As partners, this approach helps us avoid focusing blindly on manual, repetitive, and time-consuming tasks for simplification or automation by ignoring the full chain of processes on which these are embedded.
Clients can also extract fact-based insights to better decide how much of the new burden they want to address – and to what extent. They can challenge the business in improving its processes, highlighting what needs to change, and where it would be best to stick to the basics.
New challenges require new measures
Over the last few months of the Covid crisis, we’ve seen first-hand how focusing on business expectations and outcomes always helps us to deliver resilience and make our clients successful. With this approach, performance and efficiency of end-to-end business processes take the front seat, while availability of applications and infrastructure play a more dominant role. Delivery of expected business benefits is now the measure for change, in addition to on-time delivery.
To deliver this successfully, we created Business Command Center (BCC) within Capgemini’s ADMnext offering. BCC is a dedicated service that brings in strategic attention to the complete business value chain.
BCC also provides a constant feed for transformation, with the business blueprint evolving from a thorough understanding of business processes. This enables our clients to keep up with the complexity and increased pace of change demanded by Digital Transformation, along with giving them the ability to prioritize spend during times of difficulty. At the same time, BCC can help reduce legacy IT constraints like mushroomed customizations without adequate documentation.
BCC: performance, efficiency, competitiveness, business insights
With BCC, we’re ultimately able to improve business process performance, efficiency, and competitiveness. And with the application of analytics, BCC also provides key business insights. While its capability to create the business blueprint greatly helps decision making and speed of transformation. It also provides you with an insights-based platform to grow out of this crisis and build a solid, business-aligned IT future.