Managing Disruption in IT

Chapter 12: Managing Disruption in IT

Learning Objectives

  • Understand what disruption is.
  • Understand disruption in organizations.
  • Understand disruption and IT.
  • Understand disruption and the future of IT: roadblocks and best practices.
  • Identify potential first steps.

Challenges Facing Business and IT

  • New threats from non-traditional competitors using new technologies to capture profitable revenue streams require immediate action.
  • The continuous development and introduction of new technologies demand constant awareness.
  • The threat of new disruptions to an organization’s existing infrastructure and legacy environment requires addressing continuity and security.
  • Disruption in delivery models like cloud computing, global outsourcing, and managed services necessitates new skills and faster, better, and cheaper delivery.

Disruption in Organizations

  • Definition: A change or disturbance to a current or settled way of doing something.
  • In organizations, disruption involves:
    • Combination of new capabilities.
    • Complementary products and services.
    • Changes in expectations of and behaviors in a culture, market, or process.

Disruption Severity

  • Disruption poses a serious concern due to the vast number of possible changes.
  • Successful businesses can fail due to disruptions.
  • New technologies or uses can undermine traditional markets and sources of value.
  • The key is to recognize indicators of a disruption early.

Sources of Organizational Disruption

  • New Technologies
  • New Demands
  • New Products and Services
  • New Delivery Methods
  • New Risks

Disruption and IT: The Role of IT

  • Assess new technologies.
  • Develop new products and services in response to customer and business demands.
  • Support new delivery channels.
  • Manage the risks involved.

Disruptive Forces Affect IT

  • Operations groups are disintermediated by IaaS or other outsourcing.
  • Development functions are being displaced by SaaS or outsourcing.
  • Business demands are driving new methodologies, innovation, and experimentation with new vendors.
  • Cloud computing and outsourcing reduce the cost of technology.

Successful Disruption Solves Problems

  • Improves the responsiveness of IT.
  • Acts as a change catalyst for true and extensive process change.
  • Presents an opportunity and healthy change rather than a threat to IT’s existence.
  • Requires a positive attitude and can-do spirit.

Disruption and the Future of IT

  • Lower costs of cloud mean using cloud services wherever possible.
  • Saving scarce internal resources for mission-critical IT activities.
  • More complex services and larger outsourcing relationships to address disruption.
  • IT uses several agreements to provide optimal providers and skills.
  • IT becomes a portfolio of services provided by arm’s length providers.
  • IT applications increasingly become a business-managed concern.
  • IT assumes more of a planning and integration function.
  • IT deals with risks and uncertainties introduced by new partnerships and delivery mechanisms.

Roadblocks to Managing Disruption

  1. Processes and Structure:
    • IT’s existing processes can inhibit possibilities and how people think about them.
    • Funding processes and governance need to shift to enterprise and design thinking.
    • Organize IT to support value chains.
  2. People:
    • A new type of IT function requires new IT capabilities and skills.
    • Retrain existing staff and bring in new people.
    • Use innovation hubs to expose staff to new ways of thinking and working.
  3. Technology:
    • Almost all existing large companies are encumbered with existing legacy systems.
    • These inhibit changes in how information is processed, stored, and used.
    • Cannot always be replaced by SaaS and must be supported and operated.

Managing Disruption in IT

  • Innovation is a proactive response to disruption.
  • IT continually looks for new opportunities.
  • Goals of managing disruption are to:
    • Stay relevant.
    • Manage specific disruptions.
    • Re-evaluate how risk is approached and managed.

Staying Relevant

  • Sense of purpose embedded in culture and common outcomes.
  • Purpose compelling for customers and engaging for employees.
  • Enabled shared decisions and positive stance towards change.
  • Clear about strategy and values.
  • Target for managing disruption is the organization.

Managing Specific Disruptions

  • Detect disruptions quickly and respond appropriately.
  • Business and IT scan for disruptions.
  • Jointly track, examine, and deal with the most critical disruptive elements.
  • Incorporate business and technical perspectives.
  • Develop learning options using experiments and proofs of concept.

Risk Management Approaches

  • IT must become agile, experimental, and open to risk.
  • Experiments are designed to learn.
  • Staff and time are allocated to convert successful proofs of concept.
  • New forms of funding, governance, and metrics are used.
  • Employ bi-modal (two-speed) IT.

First Steps for IT Managers

  • Embrace disruption.
  • Make innovation a priority.
  • Redesign enterprise architecture.
  • Insist on business participation.
  • Develop new capabilities.

Embrace Disruption

  • Planning for disruption is essential.
  • Have a big vision and pay attention to little things.
  • Disruptive changes are easy to do badly: slice finely.
  • Listen to people about pain points.
  • Look outside for new ideas and challenge assumptions.

Make Innovation a Priority

  • Facilitate innovation by working with technology, customers, and viability.
  • Foster collaboration.
  • Deploy innovation comprehensively.
  • Commit IT and business resources to move past proof of concept to successful process and structural changes.

Redesign Enterprise Architecture

  • Scan and prioritize new technologies.
  • Business and IT collaborate on new modes of delivery, applications, and ways of working.
  • Advise on policy and governance issues.
  • Be open-minded to change.

Insist on Business Participation

  • Results in better outcomes.
  • Business adds knowledge of customer and context.
  • Working together clarifies vision and helps establish options for the future.

Develop New Capabilities

  • IT needs to understand end-customers and build and leverage ecosystems.
  • Pay attention to process management and redesign to adapt IT processes to new business models or new forms of technology.

Chapter 12 Conclusion

  • Disruption by new technologies is a fundamental shift in production paradigms.
  • IT leaders must lead their organizations by demonstrating what must be done and how it should be done.
  • To be successful in managing disruption, IT needs to transform itself:
    • Improve the IT function and how it facilitates change.
    • Examine organizational processes, structures, and lines of communication both within IT and between IT and the business that inhibit innovation and speed of change.