WEBINAR Future IT Organizational Models Will Be Service-Based Marc Cecere, Vice President, Principal Analyst November 17, 2016. Call in at 10:55 a.m. Eastern time

Agenda What’s driving the future of IT? Where is IT going? Which way are roles going? Some initial thoughts on structure Final thoughts

Agenda What’s driving the future of IT? Where is IT going? Which way are roles going? Some initial thoughts on structure Final thoughts

Objectives which are or were key drivers of digital transformation Sample size: 2,810 global services decision-makers; Source: Forrester’s Global Business Technographics® Business And Technology Services Survey, 2016

High priority IT initiatives over the next 12 months? Base: 18,610 business and technology decision-makers and influencers; Source: Forrester’s Global Business Technographics® Priorities And Journey Survey, 2016

Three-fourths of companies are either investigating or undergoing a digital transformation Base: 2,810 global services technology and decision-makers; Source: Forrester’s Global Business Technographics® Business And Technology Services Survey, 2016

More than one-third say reorganizing IT over the next 12 months is a high priority Don’t know High priority Base: 1,860 global services technology and decision-makers; Source: Forrester’s Global Business Technographics® Business And Technology Services Survey, 2016

Who’s leading transformations Base: 2,484 global services technology and decision-makers; Source: Forrester’s Global Business Technographics® Business And Technology Services Survey, 2016

How are they restructuring to increase agility? (Top 5) Separating digital from nondigital Base: 925 global services technology and decision-makers; Source: Forrester’s Global Business Technographics® Business And Technology Services Survey, 2016

In addition, we are hearing from IT clients that . . . . Business-led technology needs guidance. IT is changing it’s role with the business. Skills gaps are in specific areas. “One IT” is a consistent mantra. Agile and DevOps techniques are expanding.

What’s the next? AoC has moved the focus externally. Services of all sorts are taking over. Agile and DevOps methods are expanding and increasing. Business people are performing more traditional lT activities. IT is centralizing structurally and increasing global consistency.

Agenda What’s driving the future of IT? Where is IT going? Which way are roles going? Some initial thoughts on structure Final thoughts

Near term: five to 10 years

Internal and external customers Over the next five to 10 years, IT will be smaller, flatter, and more specialized Tech builders Size Structure Speed Focus Skills Pyramid structure Slow Internal Mixed Small and leveraged Rhombus Fast and iterative Internal and external customers Narrow and broad Current IT Future IT

IT will be smarter and faster Manual processes will be automated. Agile and cloud are givens. Generalists who build, deploy, and maintain technology will be replaced by specialists in data, security, BRP, Agile, cloud, etc.

IT will rely on external services and focus on internal and external customers Services will be provided internally and externally. If it’s not “core to the business and internally differentiated,” it’s external-sourced. Functionality will come out in clumps defined by product managers.

IT will be smaller and selectively specialized Much smaller in numbers Many roles will disappear or change and some new ones will emerge. Automation and external services providers will eliminate manual jobs and those which do not differentiate. Structure will shift from a pyramid toward a diamond.

Specialized groups will address skills and legacy problem Internal consulting groups or centers of excellence will advice clients and leverage hard to find skills. Digital groups will separate new from legacy.

Agenda What’s driving the future of IT? Where is IT going? Which way are roles going? Some initial thoughts on structure Final thoughts

With increased use of services, roles focus on client facing areas Stressing skills in: Key roles affected The focus moves to: Applications Relationship management Client/vendor management Infrastructure Strategic vendor management External customers Data Project/program management Governance Vendor management Portfolio management Innovation Architecture Customer experience Architecture and strategy Relationship management Automation Product management Data Business processes Security

Some roles will change dramatically Architecture and strategic planning will combine and focus externally. Vendor management will shift to external. Services integrator/manager will manage the portfolio of internal and external services.

Some roles will change dramatically (cont.) Solutions architects are the technical equivalent to service managers. Design (e.g., CX) changes Infrastructure and applications will manage external services.

And there will be some “new” roles in IT Product owners will treat IT services as products. Automation specialists will obliterate manual processes that peek out of their spider holes. Services integrator/broker “Methodologist” Solutions architects are the technical equivalent to service managers.

Agenda What’s driving the future of IT? Where is IT going? Which way are roles going? Some initial thoughts on structure Final thoughts

These are large organizations and change will not be immediate 25% on cloud 20% of IT-driven by business Small reduction in size 30% is agile. Little change in structures 90% cloud and external services Dramatic shrinkage (50% to 75%) Service and DevOps structures 2020 2030

KPMG’s next gen IT operating model is one example

And there are some initial thoughts on structure CIO Projects Client facing Back office Apps services, remote office, and other CEO Traditional IT Event marketing Customer service CIO Strategic services Local services Global services

Long term: 10 to x years

Insulated from automation Long term: IT jobs that lack creativity or social interaction will be automated Insulated from automation Business model change Change management Agile development Creativity Process redesign Image source: KPMG (https://home.kpmg.com/xx/en/home.html) Sources: Carl Benedikt Frey and Michael A. Osborne, “The Future of Employment: How susceptible are jobs to computerisation?” University of Oxford, September 17, 2013. Framework courtesy of KPMG’s “Rise of the humans” Waterfall development Backup Job scheduling Social interaction and social intelligence

Agenda What’s driving the future of IT? Where is IT going? Which way are roles going? Some initial thoughts on structure Final thoughts

What can you do? Short-term Long-term, get ahead of automation Create an operating model (or just a vision) and look for high-priority gaps. Fill gaps with software, training, hiring, and/or contractors. Deploy IT-in-a-box tools as they mature. Long-term, get ahead of automation Encourage business process data collection. Move to evidence-based IT and cognitive technologies.

Marc Cecere mcecere@forrester.com