Embracing the Consumerization of IT (COIT) has the potential to disruptively alter your business and its position in the competitive landscape. Learn more about COIT and the considerations for adoption when determining if this shift can generate a positive return on investment for your business.
There are clouds gathering on the horizon and the storm is headed in your direction. The accelerating and relentless Consumerization of IT (COIT) is heralding a disruptive change in the way organizations connect with and support customers, employees, partners and suppliers. COIT refers to the influx of consumer technologies into the enterprise such as mobile devices, social networks and cloud computing.
We observe that the COIT is causing a paradigm shift in the relationship between the business and IT. Our research shows that there is an increasing amount of pressure from the business to support the COIT and those business leaders are realistic about the inevitability of these trends. An Avanade study reports that 73% of C-level executives identify COIT as a top priority in their organization
The question business and IT leaders must ask and answer is whether there is the potential for a return on investment. We believe that while there is an inexorable march towards COIT, determining what it means to your business is crucial for making the right decisions. This is an opportunity for business and IT leaders to redefine their relationships, core competencies and to deliver better products and services to your customers.
Consumerization of IT: Introduction
Mobile devices have become ubiquitous and the convergence of personal and work computing is now upon us. The pace at which this change is occurring was unexpected and companies that embrace and exploit this change will undoubtedly be in a better position relative to their competitors. This is the result of increased agility and productivity with a corresponding decrease in costs. Somewhat surprisingly, research shows that most organizations are embracing this change despite its disruptive nature. There is a sense of inevitability as well as great opportunity.
Social networking is another key driver towards COIT. Employees are increasingly likely to leverage connections from both personal and enterprise platforms in order to make customer, employee and supplier communication more effective and timely. Employees will no longer resort to wandering the halls and riding the elevators to find the resource that can provide them with the answer they need to solve a particular problem. They will reach out through their social networks, inside or outside the firewall, to access the information they need regardless of company policy.
Cloud computing has revolutionized the way software and services are delivered to both consumers and the enterprise and is a critical pillar of IT’s consumerization. Business units of all sizes now purchase and access services on demand, often without the approval or knowledge of the IT department. Previously a business unit would have made a request to the IT department for new or changed software and waited an interminable period while navigating the maze of approvals, requirements, implementation, testing and chargebacks. Now, armed with nothing more than a credit card, an employee can purchase the service from a cloud provider for a fraction of the cost of the traditional way.
More importantly however, the Consumerization of IT is about a shifting mindset. It is a shift away from the traditional models where IT leads the technology charge to one where end users play an increasingly important role in shaping the technology landscape. It refers to a paradigm where users have a world of technology available to them at their fingertips and a willingness to use that technology in new and innovative ways – with or without approval.
Roughly every decade there is a transformative change in the technology landscape that ushers in new opportunities and challenges. Ten years ago the web enabled incredible changes to the way information was accessed and solutions were developed. The web brought with it significant challenges related to security, compatibility and the integration of legacy systems. Those that rose the challenge thrived while those that did not fell by the wayside. A decade from now we will look at the COIT in the same way.
Consumerization of IT: Opportunities
The COIT presents a series of opportunities for business to become more agile, supported by an increasingly connected and productive workforce. There are multi-faceted opportunities for cost reductions from a business and technology perspective. A secure, integrated and service-oriented technology foundation can provide increase agility while simultaneously supporting increased technical heterogeneity.
Broadly speaking, the business opportunities are illustrated in Table 1:
Increased business agility
· Broad and quickly growing array of simple, specialized software
· Decreased implementation time for cloud solutions vs. on premises
· Integrated data allows for the more rapid development and deployment of value-added business solutions.
· Rapidly scale up and down as demand dictates
· Employees able to work from anywhere at any time
· Increasing channels to connect with customers, partners, suppliers and fellow employees
· Increased morale and satisfaction
· Shifting the cost burden for mobile devices from employer to employee
· Reduced travel expenses
· Cost reduction for cloud solutions vs. traditional enterprise packages
· Increasingly mobile workforce can result in decreased operational expenses such as office space and communications infrastructure
· A redefinition of the role of IT
· A sharper focus on the services and capabilities IT delivers
· A move from services from behind the firewall to the cloud
· Moving towards a service-oriented architecture paradigm
Consumerization of IT: Costs
Clearly the Consumerization of IT is not a change that will drive improved business performance at little to no cost. There are serious challenges and associated costs that need to be identified and overcome in order to successfully adapt to these changes. The costs from an IT perspective are outlined in Table 2:
· Virtualization technologies to provide secure access to enterprise systems
· Architecting solutions to focus more strategically on service orientation
· Implementation of mobile device management (MDM) solutions
· More complex security infrastructure required
· Ongoing risk assessment & evaluation of new devices
· Increased emphasis on data security
· More diverse technical landscape to support
· Creation of data governance frameworks
· Development & implementation of policies and processes
· Potential for increased costs for per-device licensing
Consumerization of IT: Factors in Determining ROI
We articulated in Tables 1 and 2 that there are benefits and costs associated with the Consumerization of IT which leads the challenge of determining the ROI. Admittedly, the ROI of COIT is still not fully understood but the following section will provide guidance on the areas that you can measure to make an accurate determination of ROI. The following list describes these areas with some relevant metrics. This list is not intended to be exhaustive but rather to provide sample metrics that can form the basis of determining the ROI for your organization:
1. Business Agility – refers to the ability of a business to adapt rapidly and cost effectively to changes in the business environment. How effective your business is at identifying and seizing new opportunities will determine your success in the marketplace. Understanding your current capabilities from both an execution and cost perspective will allow you to objectively measure improvements gained by embracing the COIT as a business strategy.
b. Time to Market
c. Product Development Costs
d. Cost of Change
2. Customer Satisfaction – the COIT provides myriad opportunities to leverage new channels for connecting with customers including the web, mobile, social networks and the cloud. A well-executed CRM strategy that leverages these advances will result in increased levels of customer satisfaction and retention thereby driving increased business. Diligently measuring customer satisfaction will provide valuable insight into the effectives of your strategies.
a. Customer Retention Rate
b. Customer Complaints
c. Complaint Resolution Time
d. Revenue per Customer
3. Employee Productivity – can be measured in the quality and timeliness of employee outputs. Effectively understanding employee productivity is an important goal for organizations as it will allow them to better determine the level of business value being created. The COIT has the potential to increase employee productivity by allowing employees to be connected to the right data and people anywhere and at any time. Devising effective metrics to track employee productivity is essential for determining the effectives of your COIT strategy.
a. Units of work produced in a given time period
b. Quality of work
e. Employee morale/satisfaction
4. Technology Costs – Information Technology is a very capital intensive part of your business. The opportunity for savings here are twofold. Shifting the cost of mobile devices from the employer to employee is an opportunity to reduce costs. Using the cloud to deliver business solutions can lead to cost reductions and also increase the business value generated by IT by focusing on a more clearly defined set of competencies. Identifying where the IT budget is spent and strategically reorienting that spending towards supporting business priorities such as COIT will yield improved IT value to the business. It is important to note that while overall technology costs may not be reduced they will be more effectively targeted.
a. Infrastructure/Hardware Costs
b. Licensing Costs
c. Governance Costs
d. Mobility Costs
e. Time to Market
f. New development vs. maintenance effort
The combination of these metrics into a performance scorecard will enable you to accurately understand the ROI of COIT for your organization. When you undertake pilot project(s) you will be in a position to objectively assess the results of your efforts.
1. Embrace the change. This change is inevitable and is already well underway. The costs and effort involved with attempting to put halt its momentum would be better focused on how to manage and take advantage of these new models. Employees that are always connected and embracing the newest technologies can drive increased productivity and better business results.
2. Start Small, Assess and Expand. Do not panic and initiate a wholesale restructuring of your organization. Identify your current pain points and select pilot projects that you can manage, measure and implement. Take a holistic view of these segments of the enterprise from a business, strategy and technology perspectives and chart a path forward with COIT in mind. This may involve a strategic review of a particular business unit and the relevant business processes. Identify communication channels and identify opportunities for improvement. Examine the underlying technology from the perspective of the cloud, service orientation, security, data and mobile connectivity.
3. Redefine the role of IT. IT departments are no longer the sole decision makers when it comes to technology in an organization. Users are adopting new technologies and circumventing IT departments at an increasing rate. This presents IT departments with an opportunity to evolve their core mission and services. Shifting the focus from monolithic systems to service-oriented architectures and seamless integration between both on premises and cloud offerings will create significant business value.
4. Focus on data, not devices. Devices will clearly continue to change rapidly. Focusing exclusively on the assessment and approval of mobile devices is a Sisyphean task. Ensuring that data is secure, available and integrated is the more important challenge to be undertaken. Identifying key information and classifying it in the context of business criticality and security is the first step in the process in determining which devices to support.
5. Create a mobile strategy. It’s critical to recognize that a clearly defined mobile strategy can help drive business growth. You must identify how your business reaches customers, connects with partners and suppliers and enables employees. The results will form the basis of how your business does everything from marketing and customer support to determining how and what software is purchased or built. Data that once resided solely behind the firewall must now also be securely available on mobile devices and in the cloud.
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