In traditional business, advancements largely depend on the speed of IT deployments. IT receives the requirements, engineers build to the specifications, and multiple processes come together, packaged as a project, to deliver systems and services that run the business for users.
If yours is like most IT organizations, it satisfies 80% of its customers' needs in this way; the rest it delivers through a self-service interface.
But to support a digital business, where the application is the product, IT leaders need to concentrate on inverting that approach. The more you can shift IT from project-driven to consumption-driven, the faster the business can move—and the more agility your business will have. That's an essential part of any digital transformation roadmap.
That manifests itself as an IT organization that continuously delivers services that your consumers can use individually or can bundle together. You offer these services through an experience such as an enterprise service marketplace powered by a service management automation platform, and then let the business move at its own pace.
Digital business is all about speed. So, for example, if you offer a set of configurable services—the application, an email service, and a support desk, for instance—your users should be able to mash up those self-service offerings, transform their processes, advance their cause, and go faster.
Your customers shouldn’t need to wait on project-driven deployments to advance their business processes. Here's how we did it—and what you can learn from our experience.
Start with an outside-in approach: Focus on outcomes
Traditional IT concentrates almost exclusively on resource-centric services. Two examples are infrastructure as a service (IaaS) and software as a service (SaaS). These are delivery approaches that may be important to IT efficiency and scale but are not factors that have meaningful impact on digital business transformation.
For example, when you go to a mechanic, he doesn't offer tools as a service or mechanic as a service. He uses these resources to perform acts on your behalf that deliver an outcome that you deem to be valuable, such as a tune-up. The repair shop uses a set of integrated resources—physical, technical, and human—to deliver services that facilitate the outcomes.
The consumer typically has no visibility into, or knowledge of, the complexity of the people, processes, and technology that the mechanic has integrated to create the outcome.
So how do you bring that into the realm of IT? You do it first by understanding the outcomes people are looking for, and then integrating the resources needed to facilitate those outcomes.
My world, which focuses on IT services for product development and SaaS delivery, is more akin to a mix of both traditional and digital business. My business stakeholders concern themselves with getting products created and out the door, measuring customer adoption, responding to customer needs, and so on.
We promote consumption through the service offerings in our marketplace. In designing our services, we start with the premise that a service is an act performed by a provider on behalf of the customer that delivers a resource or outcome. Then we work from the consumer in, rather than from the data center or the system out, to design the services needed.
We look at the outcome the customer is trying to achieve and create ready-to-use service offerings to a "good enough" level. Once those are in the hands of our digital business users, we look at the consumption data and the outcomes and then determine what additional features or changes we need to make on the service.
When the application is the product
When an application is the product, there are some outcomes that consumers desire that help them accelerate their time to value, time to market, and so on. One example is the ability to validate that an application will run in a customer-specified environment, at scale.
To that end, we provide a testing and certification service that our engineers value. We integrate the required resources from across domains—such as infrastructure, software, monitoring, databases, and security controls—that they need to validate that their product will run on, say, SUSE Linux on a 32-processor system in the public cloud.
While I work for an independent software vendor, this concept applies to any traditional IT organization in a business undergoing a digital transformation.
That's not to say that traditional IT is going away. The role of IT is largely the same: You still need back-office systems and core services—including email, access control, and collaboration—that help users maintain productivity on a daily basis and run the business. You still need production operations to ensure availability and provide service restoration.
But for the digital side of the business, where the applications are the products, you need to focus on services that enable the digital business.
The banking sector uses applications to engage with customers and provide new capabilities. A group of people in the bank provides commercial banking services, and may or may not live in the IT organization. Their services are business products. It’s not about running the business; that still falls on the traditional IT department.
Most companies that are going digital consume software-enabled services. Many organizations are going outside of IT and engaging third parties and open-source providers to obtain them. That's how they engage with customers, and it's the digital business model.
Here, IT can play a role by connecting digital business users (software developers) with the services and capabilities they need to deliver products at high velocity and at scale.
The tool is not the service
IT professionals often fall into the trap of conflating the system or technology with the service. We use our hybrid cloud management tool to provision infrastructure services, bundled on premises or in the cloud. When my team first started using the tool, it fell into the trap of thinking the tool was a service. But the tool is not the service. The outcome, not the tool, is the service.
Is infrastructure on demand (IaaS) a service? Yes, but it is not an outcome. Think about it this way: People want rental cars to create valued transportation outcomes. But the rental car company has very little involvement in the actual value creation. Consumers create their own outcomes by using a resource offered through the rental car service experience.
The service act here is providing a resource. The outcome is created by the consumer. And there are use cases where this class of services is needed.
IaaS is much the same. Here, consumers shop and buy based on cost and experience—the quickest time to create the outcome.
Now think about the Uber experience versus the traditional rental car experience. It's about co-creating value between the provider and the consumer. The customer wants to get somewhere. For Uber, it's about outcomes as a service. Time to value is key here, which is why Uber's algorithms place cars in key areas.
It’s the same for digital business. Developers don't place significant value on IaaS; they can source from anywhere and go around IT straight to cloud service providers. On the other hand, if IT can deliver outcomes that matter, and improve time to value for developers, then it is co-creating value for the digital business.
My team's services include helping our engineers go from zero to coding in a matter of minutes because we created the complete development environment on demand for them. Testing and certification for their product is another outcome delivered as a service.
These are the outcomes our engineers are looking for: They’re shopping for oil changes and tune-ups, not resources or tools as a service. That's where digital business acceleration occurs.
Two steps forward
My team has transitioned across a maturity continuum, from "the system or technology is the service," to "resource is the service" (IaaS), to "the outcome is the service." The latter two are relevant for digital businesses. If your organization hasn't taken this approach yet, don’t despair: Most of the industry is struggling as well.
So how do you progress in this transformation? My organization is still getting there, but we've found these two things to be foundational:
- Service-centric thinking, where the experience matters almost as much as the outcome; and
- Service design, which requires that you focus on people, processes, and technology from the consumer in versus from the data center out
Digital businesses move fast. The ones that succeed are those that can work at the pace of customer change. The traditional approach to IT simply can't deliver the speed and flexibility required.
If IT doesn't adapt, it will play a limited role in the company's digital transformation—and then, in some cases, the business will fall short of its objectives. So focus on services, not on systems. Focus on consumption, not deployment. Focus on outcomes, not technology, and you'll accelerate the business.
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