IT operating model impacts of COVID-19

While there are many paths toward IT transformation, in the end all roads lead to the operating model. With every change you make to navigate the COVID-19 crisis, you will impact your IT operating model across multiple dimensions: process, technology, governance, people, service delivery, performance insights and data.

For many organisations, the future is suddenly now, with their physical, human, and digital worlds massively converged and requiring scale overnight. For many companies, hundreds of IT activities and priorities are being executed across the organisation, but is it sustainable?

Throughout this video series, KPMG has highlighted a wide-variety of practical tips and insights for the CIO to consider when navigating COVID-19. In this final video, we bring all of those points together and discuss the implications on the IT operating model within the new reality.

Full video also available on YouTube.

By Steve Bates, Global Leader, KPMG’s CIO Center of Excellence, KPMG International and Principal, KPMG in the US

There are many paths toward IT transformation, and while organisations are making adjustments in response to COVID-19, it is imperative to address the implications on the IT operating model within the new reality.

With every change you make to navigate the COVID-19 crisis, you will impact your IT operating model across multiple dimensions: process, technology, governance, people, service delivery, performance insights and data. For many organisations, the future is suddenly now, with their physical, virtual, and digital worlds dramatically converged and requiring scale overnight. For many companies, hundreds of IT activities and priorities are being executed across the organisation, but is it sustainable? Let’s talk about four steps you can use in this moment that matters to create a transformative event, embedding the changes you want and discontinuing the things that are less valuable going forward.

Step 1:  Understanding the nature of work going forward

The new reality post COVID-19 will not just be about technology and digital solutions, but, instead, how the nature of work is redefined. Before jumping into the foundational commitments of architectures, platforms and tooling, leading companies will first seek to understand the full span of work being impacted and then challenge themselves by asking—going forward, what is the work we do and how does it add value? In addition, asking questions like, who will do the work and where and how should it be performed are also critical in understanding the full value chain framework, which will in turn help ensure that the IT function makes fully informed decisions that impact the overall user experience cost, and risk.

Step 2:  Determining what levers to pull and where

The reality of this pandemic has shown companies that the days of a single speed IT operating model are in the past. When looking for ways to improve your IT operating model, prioritise levers that strengthen and advance the strategy in the new reality, such as resiliency, agile ways of working, speed to market and cost competitiveness. Always keep in mind what is sustainable for the business and its suppliers. Roles that will play key parts are the CIO, portfolio owner and internal audit, as they will look at the risk landscape of the new business model and make any necessary adjustments to the governance controls to enable faster decision-making while remaining secure and in compliance. Finance should be consulted in case of any funding or budgeting impacts, and HR should be included to assess the impact and implications on any necessary reskilling, organisation shifts or learning paths. In doing so, recognise that more often than not, any major change to one layer of the operating model causes ripple effects across the other layers; they are all connected.

Step 3:  Decide what to stop

When considering all the new things you want your future operating model to do, apply the same energy and rigor to determine what needs to stop or is no longer relevant. Could you look at shorter, forward-looking sessions that address urgent issues? Reduce complexity of your governance by streamlining your steering committees, change boards and design authorities? The takeaway here is that to emerge from this situation in a more competitive stance, the changes you are making to your IT operating model today need to include shedding historical baggage, not add yet another layer over the top.

Step 4: Thinking about the future

While all organisations are experiencing similar short and long-term macro-economic conditions created by COVID-19, each will move through its own reaction, resilience, and recovery and new reality phases in different ways. That said, it is clear that there will be different priorities and pathways for every organisation depending on your sector, company, region and maturity of your IT operating model.