Why should large organisations ‘couple’ IT transformation with disruptive change? What advantage do mature organisations have over challenger organisations?
Disruption and transformation are a marriage made in heaven, but like all good partnerships they
are far from just two identical creatures; they challenge each other, have friction which sparks creativity and somehow inexplicitly complement each other to become far more than the sum of their parts.
Disruption and Transformation: How Are They Different?
Fundamentally disruption is about upsetting the status quo and using technology to turn traditional services completely on their head; just look at what Uber has done to the taxi business, Deliveroo to the restaurant business and Monzo to banking. These are wonderful examples of innovation and industry disruption through the use of technology.
IT transformation at its heart is about the effective and controlled implementation of technology change. It provides governance to ensure that new processes, services and technologies are successfully implemented, and the benefits realised (positively disrupted), whilst ensuring that existing services are not adversely affected (negatively disrupted)
Therefore, it is clear to see how the two can work in partnership; disruption brings radical change, whilst transformation provides the tools and mechanisms to effectively implement it.
For start-up and challenger organisations, with flatter structures and minimal legacy technology, it is easier to quickly adopt new technologies, and in some instances, disruption is in the DNA of the company
For larger and more traditional organisations, disrupting the status quo is much more complicated, due to complex structures, countless stakeholders, live services, third-party IT service providers with contractual constraints etc, etc.
Whilst it is more complex for larger organisations to implement disruptive change, they do have the advantage of untapped potential - their wealth of data and information on customers and interactions with them. This can be used to inform what, how and when disruptive change should be implemented. The depth of data is a key advantage to mature organisation over start-up and challenger organisations, it should not be underestimated, or the opportunities missed.
Why 'Couple' Disruptive Change With IT Transformation?
To successfully implement disruptive change, it should ideally be coupled with IT transformation. This ensures stakeholder engagement, organisational buy in / adoption and a smooth transition from the current mode of operation to future mode of operation through robust planning - which should ultimately lead to benefits realisation.
Organisations must also make sure they have the right experience, tools and skills to deliver and embed disruptive change whilst ensuring that existing lines of business and revenues are not adversely affected.
Adjusting For Disruption
More traditional organisations, with mature project governance structures, may need to adapt to new agile practices which are typically used to deliver disruptive change. They may also need to change in order to work effectively with disruptive technology partners or suppliers (view ‘Disruptive Sourcing’ case study here).
For many, this will mean moving away from traditional waterfall methodologies and embracing more agile implementation processes, where changes tend to be smaller but released much more frequently. Typically, disruptive technologies and solutions will be cloud-based and use Agile project methodologies and DevOps models.
Where organisations have evolved and matured using waterfall approaches, moving to DevOps can be a seismic shift. Typically, this will mean redesigning their IT change and service transition arrangements, whilst reconsidering their risk appetite for rapid incremental change.
Changing methodologies doesn’t need to be big bang. We have supported organisations with establishing a hybrid approach with two speeds of change, ensuring that legacy environments and processes are maintained whilst rapidly introducing disruptive change.
The Importance of Planning And Leadership
Organisations need to prepare themselves for this change if they are to embrace disruption. Disruptive change can be uncomfortable, but it is necessary to evolve and survive.
It is vital not to underestimate the extent to which change must be planned for and managed, as it won’t happen through osmosis. Organisations need to go on a journey and stakeholders need to be engaged. Establishing clear and direct leadership for disruptive change is critical – this has undoubtedly been an issue in recent times.
For example, our annual CIO and IT Leadership Survey (view here) asked: “Over the last two years, what are the main reasons that your strategic IT change projects did not meet their objectives in your company?”. Over seven in ten respondents (71%) cited at least one of: “the business strategy/plan changing, senior management not being completely bought into the change, or not taking enough risks”, as a reason for failure.
Larger more traditional organisations can, and have, adapted to embrace disruption. Some organisations have successfully created spin off ‘start-up disrupter’ subsidiaries which can be more agile and dynamic with technology, without adversely affecting their traditional business and technology stack. Royal Bank of Scotland, for example, established a team of 100 staff to develop Bó to meet the competition of digital challengers such as Monzo and Revolut (view here). Whilst other long-established companies have completely revolutionised their industries without having ever been branded a ‘disrupter organisation’.
Disruptive change is happening, is your organisation - and its technology - prepared for it?
If you'd like to talk to our experts about disruption in your industry please get in touch.