Strategy & Transformation
Flourishing in the modern marketplace relies on an organisation’s ability to make the right choices.
To avoid being left behind in an evolving world it is critical for organisations to jump at opportunities for transformational growth. However, acting without sufficient planning is fraught with risk.
Transformation can only happen when an organisation is aligned on its strategic intent, and IT leaders need the resources to drive great choice-making across their organisation.
From planning to delivery, IBRS can cut through the confusion and guide your organisation all the way through its transformational journey. Our advisors have first-hand experience delivering digital transformation projects and can develop a tailored roadmap to deliver the outcomes you want.
Conclusion: Dropbox’s announcement of a new interface may seem trivial, but its repositioning of ‘folders’ heralds the next disruptive phase of information management. By changing folders from being an approach for hierarchical organisation of information to being a ‘digital workspace’ for collaboration, Dropbox is leading the charge to drop the ‘paper metaphor’ in favour of collaboration. The impact on traditional information management lifecycles and information management will be both significant and challenging.
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- Joseph Sweeney
Conclusion: While release and change management processes have been contributing to good service availability during the last 20 years, the increased service architecture complexity caused by adopting multiple Cloud and digital services has demonstrated that release and change management methods used to date are inadequate for the new world. As a result, end users have been experiencing unscheduled downtime that has impacted their business operations and led to embarrassment in the media. This research publication provides guidance on how to raise the maturity of release and change management processes to address these critical issues.
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- Wissam Raffoul
Conclusion: Agile approaches are being applied to a wide range of projects and activities within organisations including infrastructure upgrade projects of known tools and devices and across existing customer bases. Focusing on the technology elements and progressing quickly to build and test can uncover blind spots due to a high degree of familiarity and assumptions. Areas such as stakeholder engagement, vendor management, integration and the need for discovery and design can be glossed over as it is assumed that most of the details are known. The result is a discovery and gaps are discovered at the end of the test phase, just prior to release or even after release to production.
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- Sue Johnston
Conclusion: Despite being first published over 10 years ago, ITIL service design remains a pain point for both project delivery and service operations teams respectively. The former claims the latter requires the creation of additional deliverables at the point of service transition, while the latter expresses frustration at the lack of attention paid to service design during early stages of project delivery.
The reality is responsibility for IT service design extends beyond both these teams with all functions across IT having a role to play, from strategy all the way through to operations. When all aspects of the IT organisation contribute to the design of new, and modification of existing, services the artificial hump of service design can be avoided. The key is identifying who should be capturing and sharing what information to support service design – an outcome that can be achieved by adopting an end-to-end process integration model for the business IT.
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- Sam Higgins
Conclusion: ERP SW licensing or Software-as-a-Service (SaaS) has many permutations and influences one of the largest IT investments for most organisations. Vendors aim to integrate, at a minimum, shared corporate data from financial data, HR, operations and sales. The benefits of aligned data, reporting and processes helps C-level decision makers track and improve organisation performance.
The most common arguments for implementing an ERP system are the cost savings and productivity improvements1. Effective SW governance is essential to avoid eroding expected cost savings or efficiencies.
Large government departments, local government authorities, public listed corporate entities or privately owned entities are all likely to have significant investment in an ERP and will need continued investment in the ERP if ongoing value is to be extracted. Small to medium organisations tend to be more agile and may be able to migrate to a SaaS solution to take advantage of lower migration costs and more cost-effective licensing arrangements.
Either way, modernisation or migration programs are opportunities to renegotiate SW licensing costs provided the pros and cons have been assessed.
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- Mark Unwin
Conclusion: The increased use of technical point-solutions has created the need for establishing an in-house core team of generalists capable of defining a coherent set of services that can improve the overall business performance. The key obstacle to building these strategic skills is the IT managers’ attitudes towards assigning work to existing staff. For example, IT managers tend to heavily exploit the existing skills of the technical staff to address specific requirements. Managers rarely give staff the chance to build new strategic skills that are beneficial to themselves and to their business.
Managers should strike a balance between strategic skill building and technical skill exploitation. This requires helping staff to acquire a deep understanding of the business operations, gain awareness of industry latest trends and offerings, and becoming capable of defining ICT solutions that can fix critical business problems.
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- Wissam Raffoul
This document provides a template of specifications and requirements for a modern CRM, categorised by several key areas
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- Joseph Sweeney
Conclusion: Despite market hype around the role of data scientists and in-house developers for the successful exploitation of artificial intelligence (AI), organisations are increasingly looking to their vendor partners to provide ready-made solutions. Both business and technology leaders are expecting solutions to be based on the vendor’s ability to leverage their customer base across various industries to create AI features such as machine learning models.
Vendors are responding by increasingly incorporating these features into their offerings, along with a new breed of vendors that are producing pre-trained or baseline machine learning models for common use cases for specific industries.
However, organisations must be prepared to contribute to this AI product development or continuous improvement process which in practical terms means giving major vendors access to data. Without access to good data the result will be sub-optimal for both parties.
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- Sam Higgins
Conclusion: The three largest service providers in Australia for mobile phone services, Telstra, Optus and Vodafone, have all committed to providing 5G networks. 2019 has seen the introduction of 5G networks and devices; however, the coverage is still limited. Initial coverage by the service providers will focus on areas with the highest population density, providing coverage to a greater number of potential users. In 2019, it is estimated that coverage should be available to about 4 million potential subscribers.
The jump in speed and reduction in network latency will open up opportunities for new services and customer experiences that would not be practical using existing 3G or 4G networks. There is a large potential economic upside and organisations should be planning for future use cases.
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- Peter Hall
Conclusion: Asset management can be described as ‘the life cycle management of physical assets to achieve the stated outputs of the enterprise’. To achieve the appropriate level of asset management maturity, investment in people, processes and technology all increase the likelihood of developing an effective asset management system. Under-investment could result in asset leakage or increased maintenance costs, thus diminishing the expected returns of the assets.
Where asset management maturity model reaches the level of being ‘integral part of everything we do’, organisations can seek accreditation of the asset management framework using ISO 55000:2014.1
Where the common question is often ‘why waste our time on asset management’ then assets are usually at risk of leakage or poor customer satisfaction ratings. Outages and incidents may occur regularly. The risk of business collapse increases without recognition and change. Here organisations need to consider the steps to commence a review using the asset management model.
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- Mark Unwin
Conclusion: Running IT-as-a-Service requires emulating vendors’ account management function by creating a business relationship manager (BRM) role. The role’s rationale is to provide strategic advice to business stakeholders and act as a single point of coordination between IT groups and business lines. BRM’s focus is to manage the relationship with business strategists and recommend IT solutions relevant to business performance improvement and cost reduction initiatives where applicable.
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- Wissam Raffoul
Conclusion: The success of digital transformation, hybrid Cloud deployment and multi-service providers’ governance largely depends on IT services being integrated and managed in a unified and standard way. Service integration and management (SIAM) is an approach to address this requirement. However, its full implementation is a massive undertaking covering delivery processes, organisational structure changes, service cost tracking, service skills and an effective deployment of end-to-end management tools. This note recommends a quick win approach that focuses on getting the service essentials fulfilled depending upon the status of external services used by an IT organisation.
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- Wissam Raffoul
Conclusion: On 16 May 2019, IBRS conducted a peer roundtable on issues related to data, analytics and business value. The focus of the roundtable was to allow senior IT executives to explore how different organisations are leveraging data to achieve tangible business benefits.
IBRS conducted the Domo-sponsored event, under the Chatham House rule. Participants included senior IT executives from a broad range of Australian organisations both in the public and private sector.
This paper provides a summary of the key learnings from the event.
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- Joseph Sweeney
Organisations that are resisting the shift to Cloud computing are often basing their decisions on common misconceptions around security, price and integration.
That’s a key finding in a recent report conducted by IBRS, The State of Enterprise Software Report 2019.
The Security Myth
Many of the organisations surveyed declared security as the primary reason for not moving to Cloud services.
Concern over the security of systems — and, critically, of the data they hold — was common in the early days of Cloud computing and it seems at least some of that legacy remains. But it’s a myth.
- Read more: How will the shift in how enterprise technology procurement effect your business? Download the 2019 State of Enterprise Software Report.
- Learn more: Watch an in-depth analysis by Dr Joe Sweeney at the key findings webinar
Dr Joe Sweeney, author of the report said cloud service providers exceed most organisations’ budget and capacity to manage complex cyber security risks.
That’s certainly the view of the Commonwealth Government, which is moving to Cloud-delivered enterprise solutions aggressively.
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- Joseph Sweeney
Conclusion: External Cloud services can realise cost reduction up to 50 % p. a. and promise no set-up or exit fees. While the ongoing cost reduction is realistic, there are significant other costs related to third-party services that should be considered to calculate the overall cost saving of Cloud migration. They are:
- Transition-in cost due to the use of external consulting services to set up the new environment (up to $2.5 million for 7,000 users), as well as procurement cost to prepare tenders, select vendors and negotiate contracts (up to $300,000)
- Transition-out fees to migrate the current service to another service provider (similar to transition-in cost)
- Hardware depreciation related to private Cloud exit
- Governance fees to ensure Cloud consumption remains within budget and the desired service levels are tracked and met (up to 7 % of the annual cost)
- Risk mitigation strategies to ensure the Cloud service remains secure.
The purpose of this research note is to provide a step-by-step approach to determine the ongoing cost-saving opportunities needed for Cloud migration business case1 preparation.
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- Wissam Raffoul
Conclusion: Many strategic planning activities that are meant to set the future direction for the organisation fail to meet that objective. Current success, a high level of incumbent expertise or even passion can prevent an organisation from considering red flags or other indicators that will impact on future success. At worst, it can result in significant failure; at best, it limits the activities of the organisation to do more of the same with a tactical work plan. Overcoming this myopia is critical to ensuring that strategic planning i.e.fective and provides a useful compass for the organisation.
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- Sue Johnston
Conclusion: Business executives in different business units are bypassing ICT with enterprise Software-as-a-Service. Two early leaders in this trend – marketing and human resources departments – are now rediscovering age-old challenges of uncoordinated software selection. CIOs must transform the ICT group to run IT-as-a-Service to help the organisation avoid information and process fragmentation, as well as reposition their teams as consultative partners. There is no time to wait.
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- Joseph Sweeney
Conclusion: New digital services introduce new challenges and opportunities to traditional performance measurement. Start with simple, repeatable metrics and recognise the imperfections in the initial stages of implementation. It is more important to capture data consistently and identify trends than it is to achieve precision. As the new services bed down and the organisation matures digitally, more sophisticated measures will emerge.
Measurement alone will not lead to digital success. Reliable data capture and critical analysis will yield valuable insights. Acting on these insights can lead to further investment in digital programs and be used to fine-tune existing digital services.
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- Ewan Perrin
Demand for chatbots – automated conversational agents that may be deployed across multiple digital channels, including websites, social media feeds, instant messaging, voice assistants etc. – is growing. As outlined in Chatbots Part 1, organisations should take an evolutional approach to develop an understanding of chatbots, and the skills and capabilities needed to harness them.
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- Joseph Sweeney
Conclusion: The ubiquitous availability of smartphone and wearable technology has opened up opportunities for a wide range of new applications that take advantage of knowing the location and proximity of these devices.
One of the newer underlying technologies that enable these new apps are low-cost small beacons that provide regular transmissions, usually to Bluetooth-enabled devices. When working on digital transformation projects or opportunities to innovate, these technologies should be included in the developer’s tool bag.
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- Peter Hall
Conducted by Australia’s Intelligent Business Research Services (IBRS) and commissioned by TechnologyOne, the survey of 261 business leaders in ANZ has shown that business functions are having more sway about technology decisions and are increasingly opting for Cloud-based applications.
But it is not always a case of “shadow IT” in the traditional sense where a business unit goes behind the technology department’s back to buy a product or service.
Instead, it is “enterprise shadow IT” selected with the blessings of IT, said Joe Sweeney, principal analyst at IBRS, adding that in some organisations, CIOs have transformed and are more supportive and consultative.
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- Joseph Sweeney
Conclusion: Chatbots have become a hot topic among senior executives, especially in HR, customer services, citizen service, marketing and sales groups. Chatbots, powered by the increasingly accurate natural language processing capabilities, hold the potential to radically change the way people interact with an organisation without human intervention.
Separating chatbots into two aspects – clients and engines – provides a basis for very low-cost proof of concepts, while also protecting investments in the most valuable asset of the bot: the training data.
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- Joseph Sweeney
Conclusion: Globally, organisations are dealing with the challenges of “digital transformations” and the need to “innovate”. Chief information officers (CIOs) need to support their organisations in these initiatives, but the ownership in defining what is required rests with the business managers, and the key executives such as the chief marketing officers, chief supply chain officers, chief human resources officers and chief executive officers. If the organisation has one, chief technology officers would be a contributor in terms of how technology can be included in innovation initiatives.
CIOs need to be valued as trusted advisors to the business leaders in terms of what technology solutions will support their businesses’ initiatives.
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- Peter Hall
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- Joseph Sweeney
Conclusion: Media played up the impact of Artificial Intelligence (AI) and Digital Transformation in 2018. However, the potential AI remains underestimated and its limitations misunderstood. In short, AI is reaching peak hype with investments sporadic and confused. In contrast, Digital Transformation remains a primary driver for investment, though it means very different things to different organisations and even different stakeholders within organisations.
Australia’s CIOs remain focused on tactical issues: upgrades of core systems, adoption of hybrid Cloud (as opposed to simply Cloud migration, which was a dominant theme in early 2018) and changing the culture and structure of the ICT group to support “as-a-Service” operational models entity
It is important to note that these tactical priorities of CIOs all have one thing in common: they are aimed at providing a technological infrastructure for the organisation to adopt “Digital Transformation”. In this sense, Digital Transformation is being used as a way to secure agreement and investment in more fluid, responsive and modern tech infrastructure and operations, rather than a specific, measurable business outcome.
In 2019, Digital Transformation is a rallying call, more than a discrete program of work with measurable outcomes. This rallying call will be heard by all stakeholders, but interpreted differently. The challenge for senior ICT executives will be to leverage the short opportunity the Digital Transformation call has to deliver genuine long-term benefits and update infrastructure and operating models to be more flexible and responsive to changing business needs.
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- Joseph Sweeney
Conclusion: There are two broad groups of digital strategies – bold and defensive. Companies that choose bolder strategies tend to be more successful. However, there are good reasons why certain enterprises should consider choosing more conservative defensive digital strategies as there are still benefits to be gained from this approach. Strategy selection depends on a variety of factors, including industry forces and other factors which make each enterprise unique. It is important not to be half-hearted about digital ambition – defensive strategies are not sufficient in the long run. Strong and committed leadership at the top and throughout the organisation is still crucial to the successful implementation of digital initiatives.
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- Ewan Perrin
Conclusion: Innovation is a growing key competency for organisations in the public sector and seemingly an imperative for the commercial and not-for-profit sectors to grow or maintain market share and relevance in a continuously dynamic marketplace. Although innovation is included in nearly all current strategic plans, both business and technology, organisations still struggle to actually adopt innovation in practice. Only by recognising how not to innovate can organisations ensure that change to their actions and behaviours supports innovation and does not kill it.
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- Sue Johnston
Conclusion: The IT organisation in most enterprises suffers from the “Cobbler’s Children” syndrome – they give great advice but do not practise what they preach. A prime example is when IT does not apply Enterprise Architecture approaches and capabilities to the business of IT itself1 and yet expects other departments to apply such principles. Sadly, a new deficiency is emerging in IT as increasingly the role of analytics is democratised across the business – leading to the lack of data analytics capability for IT itself.
As organisations embrace data science, artificial intelligence and machine learning to generate increasingly sophisticated insights for performance improvement, IT must not let itself be left behind. This means ensuring that within a contemporary IT-as-a-Service operating model, space is created for the role of IT Data Analyst. This should be an inward-facing function with primary responsibility for the generation and curation of the IT organisation’s own core information assets in the form of data relating to the portfolio of IT assets, services and initiatives, including curation of operating data from Cloud providers and other partners.
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- Sam Higgins
Conclusion: Some ICT strategies are technology-centric while others are business-centric. The technology-centric strategies are usually developed without business stakeholders’ involvement resulting in limited business buy-in. Business-centric strategies are based on business strategies but have a short life-span. This is because market forces require business strategies to change frequently. IBRS recommends that ICT strategies be derived from business and IT guiding principles.
The rationale is that guiding principles have a longer life-span than business strategies and can deliver the desired outcome such as:
- leveraging new technology
- involving business stakeholders in the development process
- realising business value in a timely and cost-effective manner.
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- Wissam Raffoul
Conclusion: Public Cloud is not the solution to all IT organisations’ technology and services problems. This is because most IT organisations use a portfolio of environments such as legacy systems, in-house and outsourced services, customised IT service management tools and standard applications (e. g. email) that cannot be all retrofitted in a public Cloud architecture without major rework. As a result, hybrid Cloud has become the preferred direction because it allows the multiple environments to co-exist in a cost-effective manner. However, a convincing business case is needed to gain business and IT senior executives’ sponsorship to adopt hybrid Cloud. While Cloud migration benefits and risk mitigation are critical success factors, the deployment-hidden cost is a major contributor to failure. The objectives of this research note are to provide a framework1 to develop the business case and to ensure its cost includes the following:
- Hybrid Cloud strategy development,
- Risks identification and mitigation,
- Go-to-market strategy, providers’ selection and contract negotiation, and
- Ongoing governance to realise the desired business benefits. This can reach up to 7 % of the yearly cost.
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- Wissam Raffoul
Conclusion: Agility has been introduced into organisations as part of their approach to increase the cadence, or velocity, of design, development and implementation cycles for project delivery. Increased levels of activity and visibility are also integral to many social media solutions and their approach to online presence. However, strategic planning processes evolve slowly and for many organisations this critical business and technology planning activity is lagging behind and no longer supports the business objectives in the digital era.
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- Sue Johnston
Conclusion: Digital transformation is top of the agenda for most companies in 2019. Many organisations have initiated digital transformation programs and are seeing success with small-scale pilots. However, these activities do not easily scale across the enterprise or ecosystem, limiting an organisation’s capacity to fully realise the benefits of their digital transformation investment.
The biggest barrier to scaling is not technology. It is culture. The established culture in a stable and successful organisation is likely to resist disruption. Existing remuneration and recognition frameworks tend to reward existing behaviours. Individuals and groups will resist change if they do not believe the “digital vision”. A clear, compelling narrative is needed.
Effective scaling of digital initiatives must be led with a commitment from the top, intense communication at all levels and a clearly articulated vision of the future. Organisations that recognise this and can source the right capabilities to deliver large-scale digital transformations will have higher success rates than those which do not.
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- Ewan Perrin
Conclusion: Developing a digital strategy or embarking on a digital transformation program is now a common business narrative. For some organisations it is a process of recasting existing IT strategy and continuing in more or less the same manner. For others it involves initiating a technology project as a way to learn new processes and update platforms and skills. Understanding the business readiness of the organisation is a critical element for any change but is key to digital transformation.
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- Sue Johnston
Conclusion: While the current artificial intelligence (AI) initiatives are data-driven, there are instances whereby the current data is insufficient to predict the future. For example, answering the following questions might be challenging if the available data is only of a historical nature irrelevant for forecasting purposes:
- Q1: What will be the effect on sales if the price is increased by 10 % as of the next quarter?
- Q2: What would have happened to sales had we increased the price by 10 % six months ago?
The purpose of this note is to provide a framework that can be used to derive sales principles to answer the above questions. The same approach can be used to derive other business processes principles such as procurement, customer service and client complaints tracking.
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- Wissam Raffoul
Conclusion: Increasingly, leaders in the field of AI adoption are calling out the limitations of the current machine learning techniques as they relate to knowledge representation and predictive analysis.
Organisations seeking to adopt machine learning as part of their AI-enabled transformation programs should ensure they fully understand these limitations to avoid unproductive investments driven by hype rather than reality by expanding their definitions of machine learning to include the use of graph networks and social physics solutions.
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- Sam Higgins
Conclusion: As self-service data analytics and visualisation becomes mainstream – due in no small part to Microsoft’s Power BI strategy – traditional data teams within IT groups need to reconsider traditional business intelligence architectures and plan a migration to a new environment. Underpinning the new architecture must be a sharper focus on tools and practices to support data governance, which is not a strength of Microsoft’s portfolio.
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- Joseph Sweeney
Conclusion: Artificial intelligence technologies are available in various places such as robotic process automation (RPA), virtual agents and analytics. The purpose of this paper is to provide an AI maturity model in the analytics space. The proposed maturity model can be applied to any type of industry. It provides a roadmap to help improve business performance in the following areas:
- Running the business (RTB): Provide executives with sufficient information to make informed decisions about running the business and staying competitive.
- Growing the business (GTB): Provides information about growing the business in various geographies without changing the current services and products.
- Transforming the business (TTB): Provides information to develop and release new products and services ahead of competitors.
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- Wissam Raffoul
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Conclusion: Digital transformation is happening everywhere. It is being included in organisational strategic plans for government service improvements and in commercial organisations to address market challenges and industry disruptors. Digital transformation efforts include a core group of domains including strategy, innovation, experience, automation and trust and these must be addressed in any digital transformation approach. However, a core element of digital transformation is people and the hardest part of digital transformation is the cultural piece.1 Understanding the people elements of digital transformation and appropriately addressing them can mean the difference between success and failure for organisations.
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- Sue Johnston
Conclusion: There are many strategies to consider as well as challenges to be aware of when migrating from a traditional waterfall development methodology to an agile methodology. Plan and prepare carefully and be patient during this transition and anticipated benefits will be realised.
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- Peter Bickerton
Conclusion: In IBRS’s 2018 Top Business Technology Trends Priorities Report, we noted that despite significant media attention on blockchain or distributed ledger technology (DLT) in 2017, the primary concerns of Australia’s Chief Information Officers (CIOs) in 2018 remains focused on the more pressing issues of migration to the Cloud, and its impact on IT operations and staffing.
However, ignoring DLT in the long term is no longer an option. After 10 years since the advent of blockchain, real world and production examples are now emerging from market-influencing players in Australia such as the Australian Securities Exchange (ASX) and Commonwealth Bank (CBA). This, combined with significant investment from credible vendors (both old and new), requires that CIOs and their Enterprise Architects review the implications of DLT becoming a mainstream means for secure, immutable data exchange to enable fully automated multi-party workflows.
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- Sam Higgins