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Digital Transformation: Three Myths About IT Services Examined

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Three questions are commonly being aired these days about the delivery of IT services in support of digital transformation initiatives. Having heard each of these being raised several times, we thought it is a good time to put them through a bit of a reality check. First up for examination...

Is “Fail Fast, Move On” the Right Approach to Digital Transformation Projects?

The “fail fast, move on” (FFMO) concept sounds an attractive concept for clients fine-tuning their digital presence in terms of online functionality. This approach works well with the iterative approach of agile development.

But is this approach optimal for all digital projects?  Selectively, we think.

Mobile app projects are relatively small and the mobile app lifecycle can therefore be managed dynamically, e.g. be fine-tuned to improve the customer experience. This is also true for limited scope changes in the features of a website. 

Cost of projects is also a significant parameter here. Can clients afford failing fast on significant initiative? Can they afford scrapping previous investments? We think not.

Nothing replaces a good effort in planning, understanding business needs and writing non-ambiguous requirements, just as in any non-digital, or waterfall, project.

Of course, a professional approach to digital transformation does not guarantee the success of the app or web site but it will certainly in its IT completion.

Agile and DevOps will Drive Clients to Exit IT Outsourcing Contracts and In-Source Work

The rationale is that agile development requires collaboration while traditional IT outsourcing contracts are governed by strict contractual SLAs (that enforce accountability) that tend to drive silos between development and operations, the very silos that DevOps seeks to eliminate. The kind of collaboration seen in DevOps is not feasible within an environment of rigid contractual agreements.

There is a tiny bit of “apples and pears” comparison in this viewpoint. Agile is about software development in an iterative and collaborative manner. IT outsourcing is mostly about running, in a predictable manner, applications, IT infrastructures and networks. We are talking about different activities.

Of course, ITO contract usually have software development projects either planned for the beginning of the contract (as “transformational outsourcing” contracts) or as discretionary spend projects. These projects are not governed by rigid SLAs but by functionality and technical requirements.

With the rise of digital, the types of applications being developed today increasingly feature multiple integration points and dependencies. The agile approach is particularly well suited to this kind of complexity.

As well as collaboration and iteration, central to the DevOps approach are the adoption of Lean principles, extensive automation, business-aligned metrics, and the fostering of a transparent, blame-free, goal oriented culture – with a clear target of fast, minimal-error delivery. All practices which clients say they like to see exhibited in an outsource “partner”.

All in all, this notion of agile and DevOps driving in-sourcing activity seems largely inadequate. Did we not hear a similar comment back in the late 90s when ASP was going to drive spending in application management to its extinction?

In contrast, we believe that some IT services providers will offer DevOps consultancy services (how to set up a DevOps environment) to large enterprise clients, to supplement the promotion of their own specialist capabilities in the delivery of digital transformation programs.

IT Services Vendors Adapting Their Partnership Ecosystems to Include More Tech Start-Ups (from Silicon and Other Valleys)

The ecosystem of tech start-ups - in California, Israel, India and elsewhere - is booming, and many of the larger IT service vendors are looking to take advantage of this.

IT services vendors have traditionally considered that their mission was to apply proven, best in class, technologies, rather than leading-edge but unproven products, to guarantee the success of a systems integration project to the client. And clients in general have avoided purchasing software for their critical needs from small start-ups, largely to be sure that their investment is supported for a number of years.

Of course, at the offering or service line level, IT services vendors have always had tactical partnerships with smaller ISVs for point solutions and limited investments. The traditional wisdom has been that IT services vendors do not work with start-ups in general, preferring the larger, more established ISVs.

But today, Accenture, Capgemini Infosys, TCS, and Wipro, to name a few, are developing their presence and eco-sytems in the Tech Valleys to be able to leverage some of the innovative solutions being developed around digital, IoT, automation, analytics, and so on.

It is not yet clear how IT services vendors will govern their new ways of partnering with start-ups. Are they relying on the FFMO approach - they act as an intermediary to the market, bringing a point solution from a start-up to a client to solve a specific business need. Or are they looking for a different kind of partnership model, which involves wider collaboration? If so, how does this work outside exclusive arrangements? We’d like to know more!

By Dominique Raviart and Rachael Stormonth

NelsonHall will be publishing soon a report on digital transformation. For more information, please contact Guy Saunders at [email protected].

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