Nine big shifts impacting Technology Operating Models

Digital disruption is not going to go away

As new technologies—such as the Internet of Things (IoT), artificial intelligence, robotics, and, virtual reality—proliferate, organizations are coming under mounting pressure to rethink not just their technology strategy but their entire operational strategy. In many sectors, the impact of these trends is so significant that companies will need to change their Technology Operating Models (TOM)—the way in which they configure their operations to execute on their business technology strategy—if they hope to thrive and survive.

The premise of our research is quite simple: every Business will be digital and therefore the ongoing digital technology push will force your organisation to better organize how you Identify, Trial, Evaluate, Risk Assess and Scale or Fail new digital technologies and make them business relevant.

To help organizations address these challenges, Deloitte has identified nine big shifts that will influence the TOM of the future and that need to be addressed in conjunction with each other since they are highly interdependent.

Transforming the Technology Operating Model

While an increasing number of organizations are starting to establish new digital strategies to accommodate changes in the marketplace, many are encountering challenges as they attempt to plot these strategic implications into their existing TOMs. This is because, while TOMs are designed to accommodate new best practices and technological trends, today’s digital strategies involve changes of a different magnitude, creating a jarring mismatch. Typical symptoms of such a mismatch include: lack of speed, lack of innovation and lack of talent.

Organizing for the unexpected

The digital evolution is impacting the way we work, the resources we use, and the nature of technology itself. If organizations hope to respond swiftly to change, reap the business benefits of new digital innovation, and attract top-tier talent in the future, their TOMs must evolve accordingly. For a lot of organizations however, the Digital Strategy that they have identified does not fit their current (traditional) Technology Operating Model: it's like trying to fit a UK plug into a European Power socket. To help organizations address these challenges, Deloitte has identified nine big shifts that will influence the TOM of the future and that need to be addressed in conjunction with each other since they are highly interdependent.

Checking for blind spots

To achieve both short-term and long-term opportunities in the digital era, organizations require TOMs that are capable of accounting for the nine big shifts. It’s important to note that missing one or more big shifts will result in a TOM that is ill-equipped for the digital era, greatly impacts digital maturity, and in some cases even increases risk.

Synchronizing the shifts

The challenge of transitioning the TOM can be compared to tuning a complex piece of machinery with nine different buttons. Turning one button impacts the positioning of the rest, so—to realize the optimal configuration—you have to find a way to turn the right buttons at the right time and get the right feedback loops in place in order to be able to adjust the "machinery" given the past pace of change in the digital space. Similarly, all nine of the big shifts must be addressed simultaneously. Picking only a couple at a time will result in an incomplete TOM.

A tailored approach

Although every company will be impacted by the nine big shifts, the extent of this impact will differ from company to company and industry to industry. In addition, depending on an organization’s individual dependencies, some shifts will have more of an impact than others. To identify which shifts require the most resources, it’s helpful to break them down into four different types:

• The dominant shift will provide the greatest contribution to increasing an organization’s future business value.
• When the dominant shift is determined, the interdependencies between shifts can be used to identify showstopper shifts. These are shifts that must be taken care of first to advance on the dominant shift. Failure to materialize these showstopper shifts always results in failure to achieve the desired results of the dominant shifts.
• The third category is the booster shifts. These are not showstoppers (i.e. they are not foundational for the dominant shift), but they have another effect. If done well, they can boost the effect of the dominant shift in a positive way in terms of time to market or business relevance.
• Finally, seen from the perspective of the dominant shift, there are loosely coupled shifts. These are neither showstoppers nor boosters, but have their own contribution to digital maturity next to the contribution of the other shifts and without major dependencies.

To manage and configure a portfolio of nine big shifts effectively, the analyses and evaluation of each of the nine big shifts and their business relevance to the company’s digital transformation is of vital importance.

Watch the video below for an explanation of the nine big shifts in 3:54 minutes.