White paper

2-Speed ITthe new reality

Your business technologists. Powering progress

Contents

New decisions in a world of ‘and’… 4

IT’s shifting land mass 6

The great IT irony 8

How can IT be fixed? 9

Operational Speed — Getting IT fit for purpose 10

Digital Speed — Crossing the chasm 12

Conclusion: Technology is a game changer 14

2 2-speed IT

The new reality 3

New decisions in a world of ‘and’… We now live in an and world, where more and more frequently organisations have to balance their strategic decision-making with short-term, tactical trade-offs. Faced with rapidly changing operating conditions, executive management are continuously assessing and course correcting as they grapple with…

u Tensions between Supply and Demand

u Best weighting of Exploration and Exploitation

u Right combination of Business and Technology to drive successful transformation

u Balance between Stability and Agility

u Constant trade-off between short-term Profit and long-term Value.

4 2-Speed IT

2-Speed IT has become the new reality

To these challenges we must add a new ‘and’: Mastering the Operational and Digital potential of technology. It is an increasingly important challenge for mature enterprises with significant technology functions. Soon, no long-term, sustainable success will be possible without addressing it. So what are ‘Operational’ and ‘Digital’ technology types? We define them as:

Operational Existing technology that supports business processes, often represents 20+ years of accumulated investment in legacy platforms and transactional systems, and now underpins almost all business operations.

Digital Emerging technology, providing fresh answers to new business problems, and offering opportunities to fundamentally redesign business operations or create new business capabilities.

These two types of technology differ across almost all measures, but divergence is most stark when we look at them in terms of time. The way that traditional technology is applied

to business challenges is usually measured in months, and sometimes years, but in the Digital domain, tangible results are expected in weeks, and sometimes days. That is why we use the shorthand ‘2-Speed IT’ to describe the patterns that distinguish them.

This paper aims to show why Operational and Digital technology decisions are now critical to the ways that organisations are run and business success is achieved. Behind the theory is unique Atos experience and expertise. We help clients all over the world, in every sector, to adopt 2-Speed IT strategies that best fit their requirements and drive their achievements – applying our fundamental understanding of industrial and administrative business processes and different system environments, coupled with transformative innovation that delivers measurable value.

Enterprise IT is the only game in town

Increasing technical debt and complexity

Technology as a game changer to the overall business model – new

‘whats’ or ‘hows’

Significant decrease in discretionary element

of IT budgets

Acceptable disappointment

Direct supply of IT to business

Voice of the customer

The IT customer now demands:

�Apps economy

�Consumer tech equivalence

�Self adoption

�Default connected

�Tech supports lifestyle

5The new reality

IT’s shifting land mass

The uneasy truce between IT and the business – ‘acceptable disappointment’ – has now become unacceptable…

There has always been tension between what organisations need and demand from technology, and what the IT function within an organisation can deliver.

6 2-Speed IT

From the business, the frequent cry has been: ‘IT is too slow’ or ‘IT only do what they think is important’ or – with increasing exasperation –‘They just don’t get it!’

By contrast, the response from IT has often been: ‘Why can’t they tell us what they need’ or ‘We gave them what they wanted and then they changed their minds’ or – with increasing exasperation – ‘They just don’t get IT!’

Each year the business would draw up a list of priorities. Some would be successfully delivered. Some would be partially delivered. Some would not be addressed at all. However, if a challenge was a high enough priority, it would probably be delivered eventually, and the business opportunity might at least be partially realised.

In this time honoured scenario, there was little to be gained by the business getting indignant about failure or delay, as the only available technology provider was the internal IT department, and would continue to be as far into the future as anyone could see.

In the late-2000s, however, this familiar tension took on a new characteristic. The uneasy truce between IT and the business that could once be characterised as ‘acceptable disappointment’ gradually became unacceptable.

Era of unacceptable disappointmentIn the late-2000s, monopoly provision by IT departments increasingly came under challenge from a new style of IT solution vendor. These external operators started to target business executives directly, offering a more cost-effective, faster, and flexible set of discrete solutions. This model, commonly called Software as a Service, is exemplified by Salesforce.com, and typified by a number of disruptive characteristics:

�Direct selling to a senior business executive

�Little or no upfront integration work

�OpEx rather than CapEx funded

�Rapid implementation

�Per user pricing model

�Future expansion driven by usage rather than specification.

As businesses woke up to the potential offered by external providers, internal IT departments were hit by a second new trend: the march of consumer technology in our day-to-day lives.

Consumer technology has defined, simplified, ordered, disrupted, and increasingly dominated our non-working time. As we become more reliant on technology to mediate our personal lives, we have of course demanded more of the technology that supports our work.

The contrast has not been appealing. At home we live in an increasingly ‘default connected’ world. In the office it can still take 10 minutes to log in, and 10 passwords to gain access to all of the systems and assets we need to do our jobs. On our smartphones we pride ourselves on downloading the latest version of iOS or Android within days of its release. At work we are still too often wrestling with multi-year desktop upgrade programmes.

Together, the emergence of new solution vendors and consumer technology have sounded the death knell of acceptable disappointment. In this climate, organisations now need to marshal all the potential that technology can offer them – in all its guises – to meet business challenges, seize competitive advantage, or at least underpin their survival. In other words, they must become masters of 2-Speed IT.

7The new reality

The great IT irony

Widespread austerity measures have driven successive years of zero-based or reducing IT budgets, at a time when non-discretionary IT spend continues to rise

So the element of IT spend that can be applied to new demand has significantly reduced, leading to a ‘keep the lights on’ mind-set just when radical rethinking is required.

Long investment in legacy technologies, and a culture of well-intentioned expediency

This has resulted in core business platforms that are complex, poorly understood, costly to maintain, hard to test, and ill-suited to respond to change.

Outsourcing areas of IT as a way of reducing costs, improving service levels, gaining access to skills, and providing discipline and rigour has enshrined the status quo in a multi-year contractual framework

Rigid outsourcing contracts make it more difficult for technology to play new and dynamic roles in rapidly evolving business scenarios.

Limited access to human skills that can generate technology enabled solutions

There is now an imbalance between the volume of challenges requiring a technology response, and the number of technologists who can support that response.

Collectively, these factors have led to a crisis of confidence in the IT function.

Against this backdrop of changing technology provision, and the multiplying demands for technology solutions from across the organisation that are an inevitable consequence, the great irony is that the IT department’s ability to deliver has actually been diminishing:

It is ironic that the IT department’s ability to meet new needs has actually diminished over the last few years

8 2-speed IT

How can IT be fixed?

Increasing numbers of CIOs recognise that adapting the IT function to support new operational realities requires two dynamic strategies:

uReplace ‘best practice’ with ‘next practice’

uManage Operational and Digital speeds of IT simultaneously.

Like all business functions, IT has developed and codified a rich canon of best practices: ITIL for IT service delivery, TOGAF for IT architecture, ISO 27000 for information security, COBIT for governance, SIAM for structuring outsourced service delivery, and so on.

These best practice frameworks are valuable, but they are also part of the problem. All have evolved from a world of traditional Operational speed IT, and none provide the flexibility inherent in Digital speed. The challenge is to apply these best practices to the activities where they add value in the organisation, and evolve them (or replace them) where they are counter-productive.

The new need is to develop a set of ‘next practices’ that from the outset embrace the concept of 2-Speed IT, and allow the full, co-ordinated exploitation of Operational and Digital domains.

It is critical that the two speeds do not develop in isolation, and are viewed as twin, complimentary technology commitments to business transformation. What must not happen is the creation of parallel technology organisations, each focussed on addressing a single speed.

We should remember the emergence of e-commerce in the late 1990s to early 2000s, when ‘traditional’ CIOs and their in-house functions were sometimes regarded as incapable of creating e-commerce businesses. The online journey too often led to wasteful and damaging parallel technology organisations, supporting separate ‘bricks’ and ‘clicks’ strategies. This situation was challenged by the customer, who expected online and traditional channels to work together seamlessly. More than ten years on, however, many major enterprises are still struggling with the problems of creating a genuinely integrated omni-channel business.

The lesson for 2-Speed IT is clear – no matter how challenging it may appear, it is easier to build an integrated 2-Speed technology organisation from the outset than wrestle with the integration of two stand-alone technology functions at some point in the future.

So where should the combined 2-Speed technology organisation sit within an enterprise, and who should lead it? There is no single right answer. Large companies and organisations are by nature complex adaptive entities, and any arrangement that does not fully recognise the individual context of the organisation is almost certainly going to end in failure. Once this link to individual context is recognised, however, some common overarching principles can be used to guide decision making:

�The two speeds of IT need to ultimately be accountable to a single technology leader

�That technology leader needs to sit at the most senior level within an organisation, because exploitation of emerging technologies is a key enabler of future organisational performance and is genuinely transformative

�The technology leader needs to be able to balance not only the two speeds of IT but manage the tension between supply and demand

�While there needs to be single overall leadership, with governance and control to ensure joined up solutions, the organisations that support each speed will be predominantly independent.

The new reality 9

Operational Speed – Getting IT fit for purposeSo what are the main drivers for Operational and Digital speed decision making.

The big challenge for Operational IT is to enable organisations to deliver solutions to business challenges against a backdrop of continually declining IT budgets. In the wake of decreasing non-discretionary budgets, traditional calls to ‘work smarter’ or ‘run faster’ or ‘lean thinking’ will not be enough. We need to rethink how IT is organised and operates. There are a number of new approaches that can help to support this step-change:

Minimum specification We need to replace the practice of specifying everything we might want, with only what we absolutely need in order to deliver the business benefit. By ruthlessly focussing on the functionality that drives the benefit, we simplify the solution, save costs, reduce time to delivery, bank the benefit, and move on to the next challenge.

Right to left planning IT has traditionally delivered against ‘bottom up’ or ‘left to right’ plans that treat time as a variable commodity. In a world of ‘deliver and move on’, the optimum approach is to agree on a delivery date that most project participants feel is ‘unachievable’ and then start pruning the project until it fits into the time box, or operate ‘surge’ resourcing to deliver the existing scope in an expedited timeframe. Right to left planning also means that the pace of governance and decision making needs to mirror the pace of delivery.

Transition state transformation A transition state is a clearly definable step change in a business transformation. It should have its own core purpose, and when delivered should represent a major milestone towards the overall vision. It is also a powerful mechanism for driving pace, aligning stakeholders to a cause, and delivering significant, tangible benefits. Typically taking three to nine months, transition states enable focus on relevant activities, and avoid worrying about future aspects of transformation that will be addressed in due course.

Silent service If IT is to enhance its ability to respond to new demands it first needs to ensure that ‘urgent’ activities do not crowd out ‘important’ ones. Regular or ongoing IT service failures can dominate IT attention, often at the expense of project delivery. One solution is to rigidly partition the run and change elements of the IT function. A better solution is to avoid IT service issues altogether. The aim for IT functions should be to aspire to ‘silent service’, where operations are largely invisible to the end user, and service is simply taken for granted.

Pattern based thinking Smart IT functions constantly search for existing patterns to solve new problems. These patterns increasingly sit outside the specific industry domain or IT best practice, but when identified can build confidence in a proposed solution and cut time to delivery. Pattern based problem solving has been successfully applied in engineering disciplines for more than 50 years, but IT functions and business stakeholders often still start with the belief that their problem is different.

Balancing the voices of IT The most successful IT functions demonstrate a healthy tension and open debate across different viewpoints. Often, IT opinions are in direct contradiction, and all need airing to reach the best conclusion. For example, a programme director is usually motivated by achieving deadlines, and will push for introduction of a new solution as a priority. A head of service delivery will be passionate about service stability, and will often push back until every level of testing is evidenced. If these points are debated, and equally weighted, the best outcome will emerge. The CIO is effectively conductor and facilitator, and should avoid becoming a single point of decision making.

Service Integration and Management (SIAM) as a foundation SIAM is a valuable pattern to move the capability of an IT function forward, but it is not in itself a solution. A well-implemented SIAM capability can enhance service delivery, control costs, provide transparency, establish a level playing field, address skills shortages, and reduce risk. However, a SIAM needs to be designed within the context and constraints of the host organisation, and then constantly monitored and adapted as the environment changes.

10 2-Speed IT

The new reality 11

12 2-Speed IT

Digital Speed – Crossing the chasm

To establish a successful Digital capability some foundation challenges need to be addressed:

uWhere does Digital responsibility sit?

uHow is it governed?

uWhere does executive responsibility sit?

uHow is it resourced?

uHow is it funded?

uHow it is nurtured?

The structures and dimensions of Digital speed will change over time, and require constant course correction. However, whilst each Digital capability is and will be unique, there are certain characteristics they share, which differentiate them from the Operational speed IT function.

As such, we find the following ways of thinking and working are critical success factors for successful exploitation of Digital speed in most organisations:

Ask ‘what would the web do?’Looking at how the Web would respond to your business opportunity helps ensure solutions are Digital by default. What would the web do (WWWD) is a technique that goes beyond considering the technology options and looks at the approaches, culture and philosophy that successful Web companies consistently adopt. For example, there is a tangible difference between Amazon’s recommendation engine and the more traditional ‘marketing knows best’ approach to identifying what a customer truly wants. Consumer technology, Internet standards, open source, RESTful architectures, combining elements that already exist with smart stitching, are just some of the building blocks of a WWWD mindset.

Agile by defaultFrom product conception to funding, execution and evolution – all need to be approached in an agile way, where handling uncertainty and emergent characteristics is part of core capability. This can challenge long held management practices designed for predictability and maintenance of status quo, but needs to be tackled head on for an organisation to master Digital speed.

Days and weeks not months and yearsOne of the key manifestations of agile by default is dramatically reduced cycle times. If a proposed solution is going to take months or years to be implemented, then it is likely to be the wrong solution. An over-riding focus on Minimal Viable Product and subsequent delivery of additional business value through incremental and frequent releases needs to be the default setting. When this culture becomes embedded, organisations find themselves able to deliver real business value in weeks, or even days.

Show me not tell meSpending years developing arguments on paper, or arguing about what a thing could look like and the business value it could address does not help the business react rapidly to changing circumstances, or seize fleeting opportunities. ‘Show me not tell me’ focuses on quickly turning ideas into working concepts, and then scaling them into fully deployed solutions and capabilities. Opportunity for ambiguity to arise during delivery is also radically reduced.

Innovative commercialsDigital speed is often about acceptance of uncertainty, and designing and delivering a solution that is enhanced rather than undermined by changing circumstances. Most commercial models are still predicated on assumptions of certainty and predictability, and to fully exploit Digital speed requires a commitment to innovation – in commercial arrangements as much as in product and services. One way to make this happen is to change the measurement scale. For instance, a Digital speed project might be highly uncertain in its overall outcome and the route to the outcome. However, within a given ‘Sprint’ the linkage of planned to delivered is tightly defined. The commercial model therefore needs to operate at the more granular level, where planned and delivered can be easily reconciled.

A/B testing Not sure which feature or option will add most value? Test; test again; and let the product users inform you. Whilst this might be common practice in developing user interfaces, we increasingly find the broader concept of A/B testing, used to generate evidence-based answers to finely balanced questions, can be applied across multiple business domains – such as choosing between competing products or even selecting the best functional operating model.

Shared IP and pattern based thinkingWhether adopting open innovation, or allowing solution partners to exploit specific solutions and patterns in non-competing domains, IP sharing is already with us. This is an opportunity to take breakthrough thinking and solutions from one domain and creatively adapt them to solve problems in other areas, to mutual benefits.

Commodity infrastructureWWWD shows that leveraging commodity products and services for infrastructure tends to decrease time to market, and increase quality of service. It also fully aligns cost and usage models, while eliminating barriers to experimentation by greatly reducing upfront costs – both time and money.

Open source / open data / open standard‘Closed’ or proprietary elements add ‘drag’ to digital speed potential. Whilst openness can still intuitively feel like the enemy of sustainable advantage, a plethora of highly valued WWWD businesses and products, that are fundamentally ‘open’, proves otherwise.

Partner ecosystem In our increasingly complicated world, no single company can or should ‘do it all’. WWWD shows us that combining partners’ strengths can amplify an organisation’s unique capabilities and increase Digital speed. Increasingly, the ability to partner effectively has become a source of sustainable competitive advantage.

13The new reality

Conclusion: Technology is a game changerFor an organisation that can truly master 2-Speed IT the opportunities to outperform the market are significant. Whilst it is difficult for an established organisation to fully adopt the attitude and behaviours of a new-entrant technology start up that is disrupting their market, there are significant challenges in the other direction. Challenges of scaling up, both internally and customers; the need to move from venture funded and loss making to profit; the pitfalls of geographic expansion; the absence of long-standing customer relationships, or historical transactional profiles, are all significant hurdles to be cleared for the new entrant.

In addition, this year’s leading edge technology is next year’s legacy platform and the challenge for a 5-year-old company that needs to replatform its core business platform can be as daunting as an established company embracing Digital Speed.

The power of combining Digital Speed patterns with massive Operational Speed platforms opens up new opportunities. However, these will only manifest if each of the two speeds can fully complement the other. When this orchestration occurs, the full power of Business Technology can be delivered.

14 2-speed IT

Atos is uniquely positioned to partner organisations in their journey to Two-speed IT. Our work with British Airways is just one example of the capabilities our business technologists offer in every sector. Using highly innovative open source technologies and agile ways of working, Atos helped the airline to manage flight disruption more effectively than ever before – safeguarding the experience of its customers, and protecting its bottom line. This is what happened:

In mid-2013, British Airways wanted to aggregate its raw data into a ‘Single Version of the Truth’ to prevent the kind of disruption to flight operations caused by snow at Heathrow in January of the same year. It combed the market for a system to achieve this, but none came close in terms of time, cost and quality. British Airways asked Atos to devise a strategy for a new system to improve disruption management before its winter programme started in October 2013.

The timeframe was very aggressive, but the alternative was to face another winter with only incremental improvements to its existing systems. There was deep and widespread scepticism that any robust solution could be live by October. Starting virtually from scratch, Atos knew it had to be innovative.

Our five-strong team led a highly collaborative one-month assignment that became a model for the rest of the project. We used screen visualisations and storyboarding to explore different scenarios with users. Simplicity of display was critical if staff were to interpret and act on the data quickly and reliably.

We identified and prioritised what data was required to manage any disrupted state, and where this would come from within 10 disparate systems across the airline’s entire operations.

By the end of June, Atos delivered:

�A fully scoped solution for a new browser-based dashboard for all involved in disruption management, accessible across PCs and mobile devices

�A way of aggregating data into extremely simple accessible graphics

�An agile development plan to deliver it in time

�Full confidence that all this was achievable ready for winter

�A roadmap for future evolution of the dashboard and continuous improvement to disruption management.

Conventional procurement and implementation routes would take too long to meet the deadline. Instead, Atos had a bold solution: to use open source technologies to develop the dashboard. This would circumvent lengthy processes while achieving the same technical maturity and robustness. Conventionally associated with innovative mass-consumer brands, this was the first time open source technologies were used for a mission-critical system at British Airways. A key strength was that they support very high transaction-processing across millions of events daily.

Winter was getting close. Atos was commissioned to develop and implement the dashboard for go-live on 23 October 2013, and we met the target date. Now, British Airways operations staff have an easy-to-use dashboard of live intelligence that has never before been possible. For the first time, the true operational status of the airline at Heathrow is available. Time taken between events occurring and staff being alerted has dropped from 20 minutes to 20 seconds.

There is nothing comparable in the market and the airline believes it has pioneered a unique solution for the industry. Without Atos and its Digital speed strategy, British Airways could not have implemented such an innovative and robust solution so quickly and embedded it so effectively.

“The real-time dashboard that Atos and the British Airways team have built provides a step change in the way we undertake data-supported decision-making to maintain high levels of service to our customers.” Mark Pierson, Manager, Business Resilience, British Airways

Atos helps British Airways transform disruption management at Heathrow Airport

The new reality 15

uk.atos.net

About AtosAtos SE (Societas Europaea) is a leader in digital services with 2013 pro forma annual revenue of €10 billion and 86,000 employees in 66 countries. Serving a global client base, the Group provides Consulting & Systems Integration services, Managed Services & BPO, Cloud operations, Big Data & Security solutions, as well as transactional services through Worldline, the European leader in the payments and transactional services industry. With its deep technology expertise and industry knowledge, the Group works with clients across different business sectors: Defence, Financial Services, Health, Manufacturing, Media & Utilities, Public Sector, Retail, Telecommunications and Transportation.

Atos is focused on business technology that powers progress and helps organisations to create their firm of the future. The Group is the Worldwide Information Technology Partner for the Olympic & Paralympic Games and is listed on the Euronext Paris market. Atos operates under the brands Atos, Atos Consulting, Atos Worldgrid, Bull, Canopy, and Worldline.

For more information, visit: atos.net

Atos, the Atos logo, Atos Consulting, Atos Sphere, Atos Cloud and Atos Worldgrid, Worldline, blueKiwi are registered trademarks of Atos Group. 2920-1114 November 2014 © 2014 Atos.