Is Enterprise IT relevant in the As-a-Service World?

Mazen Baroudi, Managing Director, Accenture and Matthew Taylor, Managing Director, Accenture

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Mazen Baroudi, Managing Director, Accenture

According to recent research by Accenture Strategy, 77 percent of executives feel that their IT organization lacks the skill sets necessary for an as-a-service world, and almost 40 percent only involve IT when the as-a-service option has been or is being implemented. This raises the question: “Is enterprise IT still relevant in an as-a-service world, where services are available on demand, any time, on any device?”

With changes at the infrastructure, architectural, and operational levels, cloud is transforming the enterprise IT industry, and companies are transitioning to the cloud at a staggering rate. For example, according to IDC, the worldwide use of public cloud services will grow at a 19.4 percent annual rate over the next five years, from $70 billion in 2015 to more than $141 billion in 2019. That equates to six times the growth rate of enterprise IT spending as a whole.

These changes suggest that CIOs and other leaders have the opportunity to be key enablers and innovators in the migration to the as-a-service model. It also is incumbent on IT to make fundamental changes in both mindsets and skill sets so this opportunity can become a reality.

To succeed as a service broker, IT needs to assume a service-first outlook leveraging both internal and external service capabilities.

Is enterprise IT still relevant in an as-a-service world, where services are available on demand, any time, on any device?

Bypassing IT could pose a threat to business outcomes

According to Accenture’s data, 60 percent of executives believe IT today does not have a significant influence on their choice of an as-a-service provider. Rather than collaborating with IT, business unit leaders are increasingly contracting with cloud-based service providers—with or without the support of enterprise IT.Matthew Taylor, Managing Director, Accenture

Such workarounds could put a business in danger, especially at a time when risk management and governance are critical. In fact, data shows that more than half of the respondents are aware of the risks involved with bypassing IT—such as security, cost overruns and delayed delivery.

Enterprise IT has a critical balancing act here: enabling services and platforms that improve productivity while simultaneously protecting against fragmentation and security threats across the broader ecosystem.

Four ways to reinvent IT for the as-a-service era

Enterprise IT is at risk of being marginalized. But, rather than being overshadowed by as-a-service, IT must renew itself as a service broker, and regain the trust and confidence to be a player in this cloud-driven world.

Businesses that are strategic about IT, and that devote the necessary resources towards the digital transformation, will be better positioned for success. Below are four strategies for CIOs and business executives to consider:

1. Assess your IT organization: By self-testing the IT organization and its performance as a service provider, the CIO can better understand the company’s current situation and assess changes that need to be made.

2. Develop a startup mentality: In an as-a-service atmosphere, companies must adapt practices and modes of operation that enable them to move at the same speed as a startup, while leveraging their larger scale. Many components of a company’s operating model—such as processes, governance, KPIs, tools and organizational structures – will change considerably in an as-a-service environment.

3. Be a business enabler, not a blocker: While transitioning to a service-first mentality, it’s vital to nurture the disruptors and offer new business models, processes, tools and structures before the sustainers kill them off. This means adopting a technology-driven mindset that prioritizes revenue first and cost-takeout second.

4. Remember, you don’t own IT: No single company can act as a monopoly for all IT services, so changes in behavior, strategy and attitude must be made. IT should be viewed as an organization that can compete with other service providers for the same capabilities. At the same time, it can provide value to the business by implementing an effective governance structure to help the enterprise IT organization to drive business outcomes.

Rather than being diminished in importance by the as-a-service model, enterprise IT has an opportunity to reinvent itself as a service broker. In this new role, IT can protect the business, and help it achieve greater outcomes.