A new study from Forrester shows that companies that achieved higher levels of performance are transforming their IT business models and tackling challenges incrementally.
IT control models are in transition with organizations experiencing a high degree of uncertainty and the need to adapt to rapid change, according to Forrester. For organizations to be successful in the future, they must transform at the pace of the business and establish a dynamic vision for the business model, the newly released report said.The state of IT business models 2022‘ finds.
Forrester makes a connection between technical maturity and maturity in the customer’s obsession.
“Maturity in customer obsession determines what IT must do to enable business success at every maturity level,” the report said.
According to Forrester, there are four characteristics of customer-obsessed companies: they are customer-centric, insight-driven, fast and connected. The technical organization must keep pace with business transformation as companies develop these strategies that enable customer obsession.
Three maturity levels for technical organizations
Traditional IT acts as a utility and order taker
The traditional IT organization is cost-driven and struggles to reduce technical debt through modernization, simplification and consolidation of legacy technologies. Waterfall methodologies dominate project delivery.
Modern IT becomes a partner player
Modern tech executives are driven by a focus on customer and business value and producing results. They mainly use continuous delivery (agile, DevOps, CI/CD automation) with results-based metrics.
Forward-looking IT shares responsibility for business performance
Future-fit IT builds on modern IT and adds the ability to quickly reconfigure business structures to meet future customer and employee needs with adaptability, creativity and resilience. There is a shared responsibility for customer and business outcomes driving forward-looking technology on flexible platforms, increasingly delivered through co-innovation partnerships.
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Better delivery with an ever-changing business model design
Forrester conducted 25 interviews with tech executives and concluded that designing an IT business model is an ongoing process due to the need for organizations to adapt to a dynamic business environment.
The interviews also revealed that, regardless of their maturity level, few tech executives had achieved their preferred high-performing business model. Those who came close had deliberately redesigned their IT operating model.
Those furthest from their desired state relied on an emerging design or chose a model and introduced continuous learning to refine the implemented model.
Improve the business model by transforming incrementally
Companies that achieved higher levels of performance while transforming their IT governance model incrementally took on the challenges “as part of an ongoing evolution and maturation of their IT governance model, starting with the customer,” according to the Forrester report.
These continuous improvements had woven feedback loops into the operating model design process.
Significantly, the study found that a critical success factor was making changes in line with the company’s own capabilities, maturity, speed, and journey to customer obsession – whether moving from underperforming to high-performing or between traditional, modern , or forward-looking maturity levels.
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Drive performance improvements
In strategy, operations and leadership, the Forrester study found performance improvements and barriers overcome when tech executives took the following actions.
Proactively invested in an improved IT customer experience to increase satisfaction
Creating a great CX requires establishing and maintaining an ongoing relationship with customers.
Recognized that talent mobility is critical to the performance of IT business capabilities
Organizations looking to improve the performance of their IT business model made improving the employee experience within IT a priority.
Shared business goals and integrated teams adopted to improve value delivery
Tech executives seeking to maintain the required level of technical aptitude by accelerating market changes integrated IT governance with general business governance.
Selectively applied practices across the value stream to reduce time to market
There is no single practice, platform or partnership that increases delivery speed. High performers are adopting practices such as agile or DevOps in areas that are ready to realize the benefits. In addition, they recognize that adopting new ways of working within IT may require changes in business practices to be successful.
To drive a high-performing IT business model, tech executives look at organizational culture, the current state of IT capabilities, IT workforce needs and partner competencies, Forrester said.
