Modernisation must happen through evolution, not revolution. Although firms that invest effectively in modern IT infrastructure are likely to be more innovative, efficient and profitable, IT investment strategies are under increased scrutiny owing to budget constraints, an accumulation of obsolete tech tools and a lack of understanding at the board level of how technology benefits their organisation.
This was the message from a roundtable hosted by Raconteur and sponsored by Kyndryl, the world’s largest IT infrastructure services provider.
The crux of the problem, according to Ruby McCormack, an independent technology consultant and practitioner, is building a compelling business case for IT. “In this economic climate, there has to be an understanding internally of how technology drives commercial strategy.”
Andrew Bateman, head of sales for global corporate and international banking solutions at fintech FIS, says that success comes when internal business partners understand how technology can deliver results for different functions, such as HR, finance and marketing.
So how can business leaders rally support across the organisation for greater IT investment? And, what are the main roadblocks they’ll need to contend with?
Ensuring IT is flexible and resilient
Byron Wilkinson, director of strategy consulting at Kyndryl, says IT modernisation will accelerate growth if companies have a clear plan, but adds that an effective plan must feature built-in flexibility.
Given the pervasive uncertainty in today’s business environment, leaders must be able to quickly adapt their IT investment priorities to changing circumstances. “One of the problems today is that many organisations are trying to solve problems with behemoth, two-year IT strategies,” he says.
McCormack agrees, stressing that organisations must not attempt to transform all of their IT infrastructure at once. Agility is key, she says, in both the planning of a technology strategy and in how new technology is delivered. “You need the flexibility to respond to trends, which means an openness to experimentation.”
Bateman, too, highlights the importance of agility, particularly in the financial services sector, where “the pace of change is fast and there is constant pressure to discover new ways to serve customers.”
However, for Jeffrey Wood, deputy director of ICT at Princess Alexandra Hospital NHS Trust, an additional hurdle is that too many stakeholders in public sector organisations are still nervous about the security and long-term suitability of new IT tools.
“Cloud resilience is a big thing and people need to be able to trust the technology and know there are backups,” he says. “If an IT system goes down in a hospital the consequences can be serious because, ultimately, lives are at stake.”
Wood, whose background is in the private sector, notes that many of the technology solutions used by private sector firms for years have only recently been embraced by the public sector. “When I first joined the NHS Trust, 65% of our IT equipment was more than seven years old. But because we have demonstrated the efficiency benefits of having modern IT, now less than 10% is older than five years.”
Tackling technical debt
Perhaps the biggest hurdle to IT modernisation is ‘technical debt’ – essentially an account of the time and cost required to rework a poorly planned IT system. Firms can find themselves in technical debt when they compromise on the quality or functionality of the technology that they invest in, or when they fail to maintain or update their systems regularly.
Wilkinson believes technical debt is reaching a crunch point for many organisations, which now acknowledge the need to modernise their IT infrastructure.
“Consider someone who has a car, but doesn’t spend anything on it for five years. Instead of paying £200 a year to keep it in good condition, they end up spending thousands of pounds after five years because they have not kept on top of things,” he says. “You cannot fix all your technical debt at once, but you also cannot fix none of it, because your business and organisational practices will be evolving.”
There has to be someone internally who can broker these discussions, because technological change impacts everyone in an organisation
Bateman adds that companies must keep on top of technical debt because of the need to transform and manage risk, especially cybersecurity risks. However, he says: “There will always be some technical debt and you have to address different issues over time. You have to decide which are the priority areas.”
McCormack agrees that outlining priorities is crucial to addressing technical debt and adds that investment decisions around IT modernisation must be assessed based on risk, customer need and where business revenues come from. “There has to be someone internally who can broker these discussions, because technological change impacts everyone in an organisation.”
Dr Nicola Millard, principal innovation partner at BT, says a crisis situation can usually help to identify priority areas for investment. Moreover, it is often during difficult times that innovation and modernisation occur. One such example of necessity leading to innovation, she says, is the modernisation that occurred during the Covid pandemic.
“Organisations had to modernise and we saw that through the adoption of cloud collaboration tools, when the way employees worked changed overnight,” she says.
Modernisation is a never-ending process
The panel was adamant that modernisation must be continuous but accepted that it can be tricky to always keep employees onside.
Millard says that it must be clear to people how new technology makes life easier for them as individuals, for the organisation and for the clients. And, changes to the IT setup must consider both the physical and virtual environments in which people work.
“Does the technology allow for collaboration in the new ways of working and have people been educated properly on how to use it? Ultimately, is the IT system modern enough to help employees with their strengths and weaknesses? Technology is transforming everything,” she says, “so where is the common ground?”
There was a general agreement that more CTOs should sit at the top table within businesses to help senior stakeholders understand why they should care about modernising IT infrastructure and how to do it properly.
Bateman says the CTO role has become more strategic because technology and customer needs are changing so quickly. McCormack, meanwhile, points out that tech chiefs will be able to ask the best questions about IT investment and explain to others in the C-suite how technology will add value to their specific function.
But, ultimately, tech leaders who can speak the language of their non-IT senior colleagues will have the most success in optimising and modernising their organisation’s IT systems. Kyndryl’s Wilkinson insists that those responsible for explaining the need for IT modernisation must understand which factors CFOs and CEOs are measured on. With this knowledge, he says, it will be easier to get engagement from all levels of the organisation and identify the priority areas for IT infrastructure investment.
For more information please visit kyndryl.com
