It's not all about mindset: The lack of IT talent is the biggest roadblock to reaching the Digital OneOffice promised land

April 02, 2018 | Phil Fersht

If I had a dollar every time an executive bemoaned their firm’s inability to “change their mindset”, to do anything differently to escape their habitual ways of running operations.  And if I had a further greenback for every advisor who bemoaned how idiotic their customers are, because they “just don’t have the deep expertise to fix their underlying data structure", I would have long retired to the Trappist Order to brew very strong beer for connoisseurs with beards (that doesn’t actually taste very nice, but it's just so beardy).

Surely the perfect desired outcome, even if it tastes like crap

It's all about bringing the operations closer to the customer, and lacking IT talent is a major impediment to achieving it

Getting to the point here, it’s one thing demanding your employees change how they approach their jobs to benefit your firm from deploying advanced automation and cognitive tools, but entirely another if you don’t have the technical expertise to put them to work.  It’s one thing to design a leading-edge digital interface with your customers, but it’s rendered pretty useless if you don’t have the capability to integrate it with your operations to provide customer support, get your products and services to them and harvest their data to keep making smart marketing decisions to stay ahead of demand. It’s one effort to redesign processes around your customers, entirely another to redesign your operational infrastructure to make it actually happen

We recently interviewed 100 C-Suite executives from major enterprises and split the discussion across both business and IT leaders.  While the industry obsesses about whether C-Suites know where to where to invest, what are their desired outcomes etc., we don't focus nearly enough on the impediments preventing them from achieving these goals.  We focus far too much on firms' short-term spending on tools, and not enough on defining the ultimate outcomes and drawing up real investment and change management plans to get there. As we recently discussed, if we only focus on the means, we will never arrive at the end. To address this, we presented the OneOffice Concept to understand what is holding back both business and IT leaders from reaching the promised land of perfect real-time symmetry of their business operations staying ahead of their customers’ needs:

Click to Enlarge

The Bottom-line: The Right Brain only functions when it's in sync with the Left Brain 

As we have widely discussed, four-out-of-ten customers (see earlier blog) going through initial deployments of RPA software are struggling to meet the business cases and cost savings goals.  And when we bring hundreds of enterprise leaders together at our HfS Summits, the story is consistent: business struggling with change, but they struggle even more with aligning the right technical expertise to work alongside their business talent.  Simply put, today's firms are struggling with having IT depth to take their ambitious C-Suites where they want to go.  So where do we go from here?

IT is at the heart of C-Suite strategy - it's a business discussion that only works with the right IT capability.  You only needed to eavesdrop on the many C-level discussions at Davos to know the IT discussion is firmly at the core of the business. Being able to satisfy your customer's digital business needs is where it's all heading.  I was recently talking their the Group Finance Head at HSBC and his whole focus is on two elements - having the best digital app delivery and providing the best customer experience, which is incredibly challenging for any business environment grappling with differing compliance needs across borders, and ever-demanding customers wanting to do all their banking on an iPad.  However, while this is a challenge, it is also a massive opportunity for the ambitious who get their business design and IT skillset equation right.  

Finding the right partners is more crucial than ever.  There is a massive opportunity to lead in the world of IT services, provided you can plug these skills gaps.  The challenge is breaking out of the traditional sourcing model to access niche talent across the globe in areas such as crypto-technology, Python development, Lisp, Prolog, Go and C++.  While most traditional firms still rely heavily on bread and butter IT services delivered at scale from regions such as India, the emergence of talent in Central and Eastern Europe, China and parts of South America also need to be brought into play.  The IT services world will be a very different place in a couple of years as boutique firms offering niche skills come into the fore.  Not to mention the emergence of crowdsourcing for IT talent.  Having really savvy IT leaders who can cobble together crack teams on-tap to solve their IT headaches is already becoming a huge differentiator for many firms.  The will also be a role for the super services integrator, who can pull together teams for clients to work with them on complex projects.

Simplification of business operations is the real key to future success. In short, there is no silver bullet to solve these endemic issues companies are facing to break out of legacy ways of working, but being able to align a determined mindset shift on the business side with smart IT skills to bring it to reality, is the only true way forward for firms who know their days are numbered, if they cannot change their inner workings to get somewhere near a OneOffice end-state.  The future is really all about simplifying operations to bring them completely in line with the world of the customer.  Hence, successful businesses need IT folks who can think logically to simplify business operations through the use of automation, cognitive, AI and digital.  It's not just about software packages and APIs, it's about both business and IT staff learning to understand each other's strengths and challenges better.  It's really not rocket science, it's about learning to simplify business models to stay ahead of your customers' needs and not giving your competitors a window to take you out of your market...because that may already be happening to you.

Posted in: Digital OneOffice

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1 Comments

13 Comments

  1. James Randolph
    Posted Apr 02, 2018 12:22 PM | Permalink Reply

    Phil,

    Very interesting piece. Interesting it's the CIOs acknowldging they lack the talent to get results. Why do think this is?

    James

  2. Phil Fersht
    Posted Apr 02, 2018 01:12 PM | Permalink Reply

    @James - I think IT traditionally took standard apps and rolled them out across the business, helped with training, did some basic integration work etc. It was predictable and the business units used the apps as they were directed. With the emerging RPA apps (and some AI tools we're seeing such as IPSoft), it's a very different story - the business lines need to assess where they need automation and work with IT to figure out how to implement the software, where it makes sense, where it is cost effective and how to make a lot of ongoing modifications to get it functional. Not only do the IT staff need to train up on the software (which isn't particularly complex), but they also need to learn how to work with the business execs and understand what they are trying to achieve. Hence, there is much greater need for IT staff to get the business need - which many have never done before (or needed to). In more sophisticated areas, such as Machine Learning and Cognitive, the skill level to understand and develop algorithms, and some emerging programming languages, is very challenging for many IT staff. Plus the cost of hiring top IT talent with this training is too exorbitant for most firms. I see a significant opportunity for boutique IT consultants who push this "Phds on tap" model... A whole new world of "partnering-based outsourcing" is going to emerge as these skill gaps continue to plague CIOs.

    PF

  3. Ramesh
    Posted Apr 02, 2018 07:47 PM | Permalink Reply

    Phil -

    This data concurs with everything I've been observing for a very long time now. IT is stuck in its old way of implementing, and not engaging strategically with the business. The fact that CIOs now see this is very concerning,

    Ramesh

  4. Tony
    Posted Apr 03, 2018 07:13 AM | Permalink Reply

    I agree that there’s a talent gap, Phil. Yet, if executives would invest in their people (rather than outsource or hire consultants - as many companies have for 2 decades), their companies will thrive...

  5. Phil Fersht
    Posted Apr 03, 2018 07:48 AM | Permalink Reply

    @Tony- Is it a lack of confidence in IT leadership to administer training effectively? Seems that most internal IT departments have got stuck somewhere in the old world of implementing packaged software and really struggle when it comes to working on strategic initiatives with the business lines. Plus anything that smells of job elimination, such as 'outsourcing' or 'automation' and the C-Suite prefers the hide behind the facade of a branded consultant to rubber stamp decisions...

    PF

  6. Paul Smith
    Posted Apr 03, 2018 07:59 AM | Permalink Reply

    Phil,

    Great article and very revealing data. Regarding Tony's comment, I think it's very clear why so many companies bring in consultants - they do not have the skills themselves and clearly do not believe they can develop them internally. As you pointed out, Phil, it's also becoming extremely expensive to hire IT experts in new programmikng languages, ML, AI, RPA etc.

    Paul

  7. Anthony Rivera
    Posted Apr 03, 2018 11:26 AM | Permalink Reply

    Personally I agree with Tony. I chalk up a lot of this to the "immediate gratification" complex wrapped in the tyranny of the urgent mindset that pervades business currently. Many companies used to have HR handle "training and development" and aligned this to the overarching business need. Not everything needs to be outsourced and there is plenty of opportunities for automation that don't result in significant job elimination but can change the focus of existing, good, long-term employees. Let's examine the problem, identify the root cause and then develop a solution, instead of the reverse.

  8. Tony Filippone
    Posted Apr 03, 2018 06:07 PM | Permalink Reply

    Is it a lack of confidence in IT leadership to administer training effectively? Seems that most internal IT departments have got stuck somewhere in the old world of implementing packaged software and really struggle when it comes to working on strategic initiatives with the business lines. Plus anything that smells of job elimination, such as 'outsourcing' or 'automation' and the C-Suite prefers the hide behind the facade of a branded consultant to rubber stamp decisions...

  9. Kathryn Campbell
    Posted Apr 04, 2018 05:15 AM | Permalink Reply

    To your point, Phil, “It's not just about software packages and APIs, it's about both business and IT staff learning to understand each other's strengths and challenges better. It's really not rocket science, it's about learning to simplify business models to stay ahead of your customers' needs.” I would argue that the fundamental issue here is that the desired skill set for IT team leads has changed, and I don’t just mean the niche programming languages and techniques that you mention in your article. I mean the cross functional communication, ideation and problem resolution skills necessary to co-create solutions that anticipate and resolve organizational readiness issues rather than just throwing a solution over the wall. It takes training and focused recruiting to develop an IT team that can work with their business unit peers to solve big problems and take advantage of big opportunities. In my world we call that design thinking. And by that we don’t mean design as in UI design, but designing user oriented, cross functional solutions that create value. I think it’s instructive that IBM is now training all f their people in design thinking principles as they try to remain relevant in today’s IT environment.

    Kathryn

  10. Muthu
    Posted Apr 05, 2018 05:25 PM | Permalink Reply

    Considering the number of people going jobless everyday somewhere, diminishing projects, tumbling economy, it doesnt seem to be lack of talent in IT esp. Digital is not a born-with skill to absorb only specific resources. it could be suitable for anyone if they are given the chance. it is about mindset of who to use or not use

    Muthu

  11. Phil Fersht
    Posted Apr 04, 2018 07:20 AM | Permalink Reply

    @Kathryn - am a big proponent of design thinking's impact on the role of IT as a business enabler... PF

  12. Tony Filippone
    Posted Apr 04, 2018 06:13 PM | Permalink Reply

    I think the the common theme of all middle office and back office functions, except marketing, is limited front office intimacy. Finance, HR, IT, and procurement all have the same issue. I think methodologies like Agile break down those barriers.

    Truthfully, they are all little more than micro-professional services firms imbedded in a company. Human capital pools ready to be deployed. The state of any company’s team’s capability is dependent on the investment they make in it. Don’t get me wrong - I see the chicken and egg game wherein people won’t invest because they don’t believe in the return on investment. I also see the investment governance / budget methodology guide money. Ultimately, you get what you put in.

    I guess I just feel that technology is awesome, but it’s all about data and/or automation and is not always a competitive distinction. Our people can be.

  13. Anthony Rivera
    Posted Apr 05, 2018 10:33 AM | Permalink Reply

    Personally I agree with Tony. I chalk up a lot of this to the "immediate gratification" complex wrapped in the tyranny of the urgent mindset that pervades business currently. Many companies used to have HR handle "training and development" and aligned this to the overarching business need. Not everything needs to be outsourced and there is plenty of opportunities for automation that don't result in significant job elimination but can change the focus of existing, good, long-term employees. Let's examine the problem, identify the root cause and then develop a solution, instead of the reverse.

    Anthony

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