Everyone loves to write and talk about next-generation technology. It’s fun to live vicariously through Elon Musk and imagine a world that includes a human colony on Mars and solar-powered autonomous transportation. It’s intriguing to think about what new product or service could impact your daily life as much as the iPhone. Or, perhaps more relatable, what impact will automation and artificial intelligence have on IT services and how they are delivered in the future? What’s not discussed is how next-generation technologies are impacting the governance of IT services. CIOs and other business leaders now need to adopt a next-generation governance mindset, one much different than previous iterations.
On a recent engagement in Austin, Texas (a next-generation city), our team experienced first-hand how the evolution of technology services is impacting how organizations interact with stakeholders. Our client has a strong sourcing management team with years of experience operating in a traditional model focused on:
- Performance: holding the service providers accountable for contracted deliverables and committed performance outcomes through service levels and operating measures,
- Relationship: primarily focused on fostering healthy relationships with service providers to manage disputes, new services, and customer satisfaction,
- Commercial: ensuring contract compliance, managing contract amendments, and financial planning and analysis based on relatively predictable PxQ (price times quantity) forecasts.
These type of governance models were developed over several decades and supported by thorough procedures and well-documented processes with swim lanes and RACI charts. Although still important and necessary to plug value leakage holes, many of these tasks can be sourced more efficiently, automated, or will be displaced in the shift to a simplified everything-as-a-service (XaaS) world.
As IT organizations take the next step beyond green SLAs and budget containment to automate, digitize, and leverage artificial intelligence, the journey requires the adoption of new behaviors and capacities. At Symbio, we have seen a shift in the desired outcomes sought by CIOs, moving from an intense focus on cost and operational stability to customer-centric business outcomes and cyber risk management. This evolution in what CIOs care about has not always filtered down to the legacy governance practices, which now need to account for:
- Automation and Artificial Intelligence: What are the strategy and tactics for not only automating IT processes but using technology to automate business processes? How does the organization take advantage of artificial intelligence to drive better business outcomes?
- Agile and DevOps: How do we ensure collaboration and integration of services as market forces demand iterative processes and high touch with internal and external customers and between operations and application teams?
- Cyber Security: What people, process, and tools need to be deployed, measured, and tuned to ensure the safety and security of corporate assets and personal data?
- Service Commoditization: What governance roles and processes can be minimized and effort redeployed to higher value activities as the “race to zero” continues (i.e., zero cost, zero errors, zero contracts) and there are no relationships to foster with XaaS vendors?
This evolution of next-generation technology and how those technology services are delivered raises the bar for the retained sourcing management team, providing an opportunity to move beyond just the prevention of value leakage. Soon, SLAs will always be green and the contract is what you scroll through before clicking “Accept”. Customer relationships, though, will take center stage and new threats and opportunities must be managed.
The next-generation governance mindset must add the following capabilities to its arsenal:
- Customer Relationship: with both internal business customers and external commercial customers or constituents, effective CIO shops will anticipate needs and iterate solutions continuously to meet customer objectives,
- Service Portfolio Management: as SaaS, PaaS, and the disaggregation of services continues to disrupt traditional IT supply chains, awareness and implementation of market capabilities through an agile ecosystem (while containing XaaS sprawl) becomes a true differentiator, and
- Risk Management: in a digital world with edge computing and mobile access to everything, the possibilities are endless but so is the attack surface and the threats to data and privacy.
These new, added core skills of the governance organization will help position and support the office of the CIO in the new demands expected of the technology leader. You’ve kept the lights on and optimized the budget. It’s time to lead the business.