Richard Eglon – Agilitas Marketing Director
IT operations are changing. The globalisation of business, expansion of market opportunities and rising customer expectations are changing the way businesses use technology. IT has become more operational, focused on agility and information. In a recent prediction for 2016, Nick Patience, an analyst with 451 Research, argues that analytics will become more “prevalent throughout the layers of technology businesses use.” At the same time, mobile penetration is also continuing to rise sharply, with mobile-phone users expected to number 6.1 billion by 2020, which is almost one billion more than the current global adult population.
As a result of the growing use of technology and emergence of scalable tools, the role of the CIO and IT support services has evolved as well. The most innovative companies with leading CIOs are managing these changes by developing an operational strategy to IT, enabling profitable growth and agility by lowering costs and becoming more strategic in their resourcing.
Operational excellence is key to any progress. Accenture views operational excellence as a key attribute of successful companies in any industry. Their white paper on the subject argues “relatively small improvements in business processes can put companies significantly ahead of competitors,” calling on organisations to decide “which processes really matter—and develop the disciplines to manage and sustain them.”
For those selling IT, relevance is critical. Companies want their IT suppliers to provide solutions that include support, guidance and a quality service. Consequently, improving one area of a business, by as little as nine or ten percent can “dramatically differentiate a provider from competitors” say Accenture. As a result, IT companies are consequently adopting much more adaptable and efficient models of service to customers. The CAPEX (capital expenditure) vs. OPEX (operational expenditure) debate has raged for a number of years, and OPEX has won.
Taking an operational approach to IT not only improves efficiency, but it’s proven to be cost effective, enabling a ‘pay-as-you-grow’ revolution. Businesses and people alike are no longer interested in owning the asset. Subscription models from the likes of Netflix through to Amazon Web Services have all contributed to the growth of the pay-as-you-grow subscription model. For businesses, taking this approach provides fast scalability. In our space, Inventory Management for example, organisations can just add new products and hardware to their support contracts as they scale.
In my view, the pay-as-you-grow economy is evidence for a need to take an OPEX rather than a CAPEX approach in IT. OPEX provides scalability, and ensures organisations are not having to shell out for products in addition to any support they might require. A good supplier will provide field maintenance, repair services, technical support and even hardware support training to enable your business to improve its service and better retain customers.
With the proliferation of data, cloud technology and SaaS (software as a service) solutions, the landscape has changed dramatically, and today’s businesses who wish to be here tomorrow need to look to take advantage of the new status quo in their IT operations. Technology and CIOs need to be prioritised to lead the charge as organisations evaluate how they engage with customers and use new information to improve the way they do business. The foundations of this have to be ‘what’s in it for the customer’.
There has been a movement within IT towards becoming more operations focused. As organisations look to become more competitive and meet the growing demands of the globalisation of business and rising customer expectations and competition, they need to develop agility and use tools that are flexible and easy to scale. Focusing on agility and information requires leadership from CIOs and I expect their role to continue to grow in importance in driving growth of operations based models within the IT market. In short, as the function of IT and business culture continues to develop and change, the benefits of taking a more operational approach will become clearer, highlighting a need to grow and empower IT leaders.