IT Operating Models – The Forecasts and The Future

In today’s world, technology is everywhere. From our morning alarms to the way we manage our daily home chores, we are dependent on technology. Taking advantage of this technology and the data collected from it, all small, medium and large businesses are taking their next foot forward in their respective industries. Most of the businesses in the current scenario are indulged into and are following some kind of digital strategy to achieve success through digital transformation. They are employing disruptive technologies to innovate their products, services and business models.

The top-level management of the companies, especially the Chief Information Officers (CIOs) are facing everyday challenges to keep up with the never-ending expectations of their business stakeholders for additional digital capabilities.

Here are a few reports based on the studies:

1.  Based on a report by Gartner, 91% of businesses are engaged in some type of digital initiative, and 87% of business leaders believe that digitalization is a priority.
2. 89% of businesses have already implemented a digital-first strategy or are in the queue to do so.
3. According to International Data Corporation (IDC), approx. 65% of global GDP is expected to be digitised by 2022. So from 2020 to 2023, it is estimated to drive 6.8 trillion dollars+ of direct investments on digital transformation.
4. According to Gartner, global IT spending is expected to grow by 5.1% in 2022.
5. By 2025, the world economy is going to be increased by $100 trillion through digital transformation, according to the World Economic Forum.

CIOs these days are increasingly relying on third-party vendors for the required technical support. Consequently, many of them have implemented multi-speed IT, increased their agile approach usage, or even built new digital divisions from their traditional IT departments.

Since the day COVID-19 arrived, business leaders around the world were focused on recovering from it and in the meanwhile, questions concerning future operating models have arrived that were required to be addressed quickly in order to successfully emerge on the other side. Based on research by Markets and Markets, the market size of digital transformation is forecasted to grow at a CAGR of 19.1%, from $521.5 billion in 2021 to $127.5 billion in 2026.

Few years back, Information Technology in the businesses was seen as the back-office operations in charge for tasks like configuring softwares, providing training to employees, setting up hardware and so on. But today, the scenario has changed. Now IT operations are becoming more proactive and future focused. Leaders in the businesses are becoming more aware about the importance of IT. IT Businesses now are seeking for visionary leadership to help them plan software implementations, enhancing service quality & environment, becoming more efficient and so on. Due to technological advancements, people in businesses may connect with each other, clients as well as service providers.

Here are a few of the advanced IT Operating Models:

Collaboration with Vendors – In today’s work culture, businesses are becoming comfortable with the fact that they don’t have to hire qualified IT professionals unless mandatorily required. Instead they outsource IT services powered by cloud and Internet of Things (IoT). Not only businesses but these IT service providers can also take advantage of outsourcing services as a cost-effective strategy for any growing organisation.

Work Environment Changes – Businesses have actively started using advanced technologies like Agile concepts & DevOps to increase their service delivery, speed and quality. According to a study,in 2020, businesses have confirmed that DevOps has had a positive impact on their organisation. Agile has enabled teams to stay in close contact with their users by working on projects in sprints. Developers are becoming more fluent in different programming languages that enable them to create on-demand cloud services based on business requirements. Better understanding of business requirements, using quick processes and understanding of the issues play a key role in organisations’ success.

Partial Integration – The businesses that rely on IT services delivery and results are using a business model where the IT group of the company collaborates with the team closely to achieve the targeted business goals in a partially-integrated approach. The overall benchmark for them is business transformation. IT departments of the organisations are taking steps like hiring professionals such as CIOs (Chief Innovation Officer), Service Specialist, implementing new performance management processes and engaging in professional development in order to better understand how all of this affects the company’s value.

Full Integration – In this business model, IT needs to be present in every process of the operations. This requires CIOs to expand IT resources from just back-office departments towards a seamless integration strategy on all channels of the business, be it, process,operations and corporate IT.

Increasing demand for digitization of businesses results in improved delivery of services and value creation, both internally and externally. Organisations who are implementing these strategies and models are the ones that are already using data and analytics to track their clients’ requirements. To achieve their business goals effectively and keep up with the competition, businesses need to encourage their IT players to use customers’ data to build new projects. Innovation and a futuristic vision are the requirements for IT businesses today in order to achieve digital transformation.