The Federal Reserve estimates that in 2012 one in six checks was deposited as a digital image rather than in physical form. For consumers, almost 50 percent of these image-based deposits were through mobile devices. For financial services organizations, this created an immediate need not only for the mobile apps to allow this service, but also the infrastructure to handle hundreds of millions more images to manage, retain, archive and keep secure.
Mobile deposit is just one example of new digital services that customers expect — and that businesses that want to stay competitive must deliver. For IT executives this translates into a competitive imperative to deliver a broader array of services more quickly despite the constant challenges of security, compliance and cost. So how should a state-of-the-art IT team balance these competing priorities?
Here are five realizations we encountered during our own adoption that helped BMC remain focused on practicing the new rhythm of IT.
Complexity and application proliferation
The first realization must be that complexity and application proliferation are here to stay. While consolidation and standard architectures/platforms are useful constructs to manage existing large applications, the future is filled with brokered services, composite applications and fragmented infrastructures. Managing across this environment will require more focus on common process and less on mandating uniform technology.
The second imperative is that cycle times have to be much faster. Annual planning cycles and multi-year implementation projects are not compatible with rapid release and iteration methodologies, let alone with the adoption of new technologies that are emerging at an ever-more-frequent pace.
While some IT efforts will continue to take substantial time to deliver, parts of the organization must get used to a much faster organizational rhythm and should be allowed to operate outside of “normal” planning time horizons.
Required infrastructure and information
The third challenge is that required infrastructure and information may come from anywhere and will increasingly depend on systems outside the direct control of IT. The expectation is a seamless user experience, whether it is cloud infrastructure such as Amazon Web Services, a discrete service such as Google Maps incorporated into an app, or use of photo and location-based services in a customer’s smartphone.
IT must be able to flexibly adapt to ongoing changes in externally available services. In particular, the idea of “service brokering,” choosing to source a particular service based on cost, value, or some performance parameter becomes increasingly important.
The fourth hurdle to overcome is internal talent. For many IT organizations, successive waves of outsourcing have eliminated key skillsets, and some critical areas such as algorithm development, design expertise and data science may have been in short supply at the start. Although some of these gaps can be filled with outside service providers, achieving self-sustaining continuous creation of competitive advantage requires a team that knows the business as well as it knows IT and is in constant conversation with business leaders about potential for new, valuable services.
It is no accident that some of the companies that have been most successful operating in this new model are either technology companies themselves or have maintained highly skilled internal IT staffs because of the specific demands of their industry.
Outsourcing in all of its forms will continue to remain important (indeed, it will become part of the service brokering ecosystem), but forming small, talented, multi-disciplinary teams internally will be critical to drive continued success.
Defining success and failure
The final challenge is defining and measuring success and failure. For this challenge, the simplest metric is one of volume: How many new services have been launched in the last 12 months? While the definition of service can be somewhat loose, a new service should deliver a capability to some set of customers that is objectively different from what existed before.
Setting an appropriate hurdle for this metric will depend on the size of the business and the specific industry competitive dynamics involved, but a good start is counting the number of externally facing services offered today and assuming that a reasonable rate of innovation is to see at least 20-30 percent of this number refreshed or launched in a year.
Simply counting the number of new services delivered is a good beginning. But for each new service both user adoption (registrations, downloads, etc.) and user engagement (time spent or number of transactions) should be measured and, in most cases, automated reporting of such information should be built into the service. This information can help prioritize future development activities and should be used as feedback for the internal teams engaged in launching the next new services.
In 2014 the effects of 2007’s mobile revolution are in full effect. While the technology they empower will continue to bring personal computing and the Internet to billions, it requires companies be diligent about preparing for the next major computing age. As this transition continues to play out, IT will cease to be necessary support for the business and, instead, will increasingly become the business.
Ken Berryman is the senior vice president, Strategy and Corporate Development for BMC Software, Inc. He joined the company in September 2010 and previously worked at Symantec Corporation and McKinsey & Company.