In this second of a two part series Mark Rogers examines the real world impact of the shift to ‘Third Platform IT” and the rise of the “Service Defined Enterprise” – what it means for CIOs, IT Departments and the service innovation that will drive growth and competitiveness.
The emergence of the Third Platform has prompted enterprises to demand much more from the IT department. It has to cut costs while enabling business growth and faster time to market. These demands will see business leaders taking a much greater role in IT decisions.
According to a global study that Logicalis carried out into CIO pressures and priorities, interviewing 186 CIOs and IT managers across 24 countries, the majority of CIOs are aligned with these goals. They want to reduce their organisations emphasis on running IT legacy systems and focus instead on delivering business transformation. However, half of CIOs interviewed said they still spend between 80-100% of their budget on running past investments.
No one wants to be stuck paying for the past – particularly given those twin pressures to cut costs and enable growth through service innovation. Getting out of that rut means modernising internal IT systems, processes and infrastructure, which in turn means working externally with more service partners.
As a result organisations will evolve into what Logicalis calls “Service Defined Enterprises”. A Service Defined Enterprise focuses less on what IT systems it owns and more on which IT services it has access to.
A Service Defined Enterprise is a more agile enterprise, because it consumes the services it needs when it needs them, from the most efficient and appropriate source.
Focus on the End-user experience
The focus will be on the end user experience rather than the underlying technology that enables it. That’s now someone else’s problem – the IT department no longer needs to build and develop its own solutions.
For example, instead of deploying mobile devices it will embrace BYOD and develop effective mobility policies and services. The mindset will be to securely enable, rather than to limit and control.
As we step onto the Third Platform, more and more new technologies and services will emerge. While not all emerging technology will significantly disrupt the business landscape, many traditional business models will be overturned. To put that in context, IDC predicts that by 2018, one-third of the top 20 market share leaders in most industries will be significantly disrupted by new competitors.
All this means that choosing the right services and service partners will be critical for an organisation’s competitive edge, and CIOs will be instrumental in driving this.
Though their role in the new landscape will be different, it will be no less vital. Formerly the technology guardian, the CIO will come to lead the internal enterprise service provider (IESP). It will be their job to perfectly align the needs and ambitions of a business with the technology and services required to fulfil them.
The IESP’s motto will be “externally first”: always looking to see if an external service provider can meet their needs before looking to build the service themselves.
Instead of managing technology, they will manage experiences and offer a well-defined service portfolio. They will need to be thought leaders and proactively investigate new service opportunities and possibilities. Their survival, and their organisation’s survival, will depend on embracing disruptive innovation and using it to transform their business.
To find out more about SDE click here.
NB – The 2014 Optimal survey results are due out in October.