The Traditional Model of IT is Dead - Meet Exponential IT
Over the past three decades IT organizations have primarily focused on implementing foundational applications and enabling business priorities, trying to keep pace with technological changes, responding to changing regulations and gaining control over an increasing applications and infrastructure landscape. To address these challenges, they developed a model for managing the “Business of IT” that is based on the primary tenets of standardization, centralized control, automation, process discipline and a workforce model that takes advantage of the arbitrage opportunity provided by outsourced and offshore labor. The adoption of this model has been fueled by large multi-year IT projects, a growing base of legacy applications and a steady evolution in the underlying technology. When implemented well, this model has helped drive down unit costs, improve quality and manage the Total Cost of IT. It has also improved the predictability and quality of delivery on IT projects. However, the unintended consequences of this model have been to stifle innovation, reduce business alignment and drive the balkanization of skills within the US IT workforce. With the ready availability of cloud enabled business services (such as CRM, HR, Marketing, Crowdsourcing marketplaces etc.), businesses are choosing to bypass their internal IT teams and engage these services on their own. This has caused a growing rift between business units and their IT departments.
During the past 5 years we have seen the emergence of Exponential Organizations (ExOs) that deliver outcomes (or impact) that are disproportionally (10x) greater than their traditional competitors through their use of innovative business models, organizational techniques and exponential technologies. The power of these ExOs, such as Tesla, Uber, Netflix, Google and Apple was described in Salim Ismail's groundbreaking book - Exponential Organizations.
"When implemented well, this model has helped drive down unit costs, improve quality and manage the Total Cost of IT."
These ExOs have highly scalable business models that are enabled by ubiquitous access, and powered by real time insights. They focus on attracting and retaining increasingly tech savvy customers who expect and demand better products and services from the firms they do business with. ExOs expect their IT organizations to enable and deliver innovation, flexibility, agility and quality at a lower price point. However, these expectations are not met by most IT organizations whose traditional organizational structures, processes, metrics, and workforce were built to solve the problems of the past.
Over the past five years, I have been working on a new model for managing the business of IT. This Exponential IT model works for organizations of all sizes but, it is especially attractive to fast growing businesses of all sizes. These businesses have the same level of dependence on technology as incumbents but could never achieve Minimum Efficient Scale under the old model of IT that depended on scale to drive down average unit costs. The Exponential IT model, provides simplicity and a smaller footprint that fosters experimentation and innovation and builds business agility as a core capability of any business.
I will be publishing a series of articles that will describe Exponential IT and show how it is different from Two-speed IT and other models that have been in the headlines over the past few years. Here is what's coming next:
- Article #2 - What is Exponential IT? - Describe Exponential IT, a model for managing IT that is built for purpose to address the constantly evolving IT needs of today's Digital Businesses.
- Article #3 - Delivering Memorable Experiences - In this article I will talk about why delivering memorable digital experiences is a key differentiator of Exponential IT.
- Article #4 - Building the Workforce of the future - Identify the leadership capabilities and the workforce that makes up an Exponential IT organization.
- Article #5 - Re-engineering the Supply Chain of Data - Discuss how to leverage Data as a competitive advantage through the use of Exponential Data Architectures.
- Article #6 - Exponential Processes - The evolution of processes using Agile Methods, Lean Management and Continuous Value Delivery.
- Article #7 - Innovation, Design Thinking and Lean Startup - Driving innovation by focusing on customers.
- Article #8 - Organizing for Exponential Results - Organizational structure and constructs that are leveraged by Exponential IT organizations.
- Article #9 - Platform Thinking and Multi-sided platforms - Applying Platform Thinking to IT and
- Article #10 - The Exponential IT foundation - Building and integrating a Cloud native infrastructure and application stack.
I look forward to engaging you in a dialog around Exponential IT. Please share with your teams and get them involved. You can reach me through LinkedIn or directly at firstname.lastname@example.org.
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This is article #1 of 4 articles written by Srini. Here is the listing of his other articles:
Chief Technology Officer
Point of view storyQ&A: George Rockett, DatacenterDynamics
Srini KoushikChief Technology Officer
Point of view storyThe Traditional Model of IT is Dead - Meet Exponential IT
Zahl LimbuwalaCEO and Co-Founder