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Five key tips for a customer centric IT operating model

Everyone talks about ‘going digital’, but what does this mean to the leadership team of a large company in structuring the IT function? In short, we think it is all about customer centricity.

An IT operating model is the basic framework an IT organisation follows to interface with the business, develop or procure services, which ultimately should deliver what customers want.

However, when designing the IT operating model, a trap many organisations fall into is managing the design as a technology focused exercise. This is often, maybe unknowingly, further cemented by IT service providers focussing on their technology solutions. So, given these challenges, how do you design to operate with the customer at the centre of everything you do?

Here we share our top five tips for designing and implementing a customer-centric IT operating model that can keep pace with changing customer demands: -

 

  1. Start with understanding your customer

In too many situations, we find IT operating models being designed inside out.  Effective operating model design start with a clear understanding of who your customers are. For an IT function, this could be internal employees from around the business or external customers who are buying products or services from the business.

Through understanding your customers, or value proposition, you can start to think about IT provision in the context of the customer journey and how IT can improve their experience and deliver value. This will allow you to move the design and definition of the IT function by technology or functional silos to one that is based around the customer demands.

 

  1. Organise around the customers

Many IT organisations today typically see two types of customer demand. One is focused on stability and efficiency, and the other is experimental, agile, and focused on the rapid application of new ideas to market. Gartner has termed this dual running as ‘Bi-modal IT’. However, what does this proliferation of customer demand mean in organisation design?

It means that one size does not fit all, and you will need to consider both types. Traditionally, IT is typically organised around a design, build and run model. This drives industrialisation and standardisation of IT, and drives efficiencies. However, for those agile and ever changing services anoint service owners to align functional based delivery around the customer requirement. A service owner, like a product owner, manages the full lifecycle of the service and brings together IT delivery team and the business.

 

  1. Adopt new tools and ways of working

Naming your organisation Bi-modal, and facing into those evolving customer demands is unfortunately not enough. The nature of those rapid services means that new tools and ways of working will need to be adopted.

Where appropriate, take advantage of agile techniques to test the value of new ideas. Agile development methodologies are designed to keep software development efforts aligned with customer/company goals and produce high quality software despite changing requirements. Recent adoptions of DevOps are bringing about a change in culture and smoothing out the interaction between development and operations. This means that building, testing, and releasing software can happen rapidly, frequently, and more reliably. 

The challenge then becomes the interface between old and new processes and tools. For the two worlds to work effectively together, organisation wide processes and standards will need to be adapted. This might sound like a big and complex move, but change can be incremental and prioritised. The benefits of increased organisation agility and faster benefits realisation from investments can far out way any investment and time spent in improving ways of working.

 

  1. Thrive on data and their insights

Typically, businesses have invested in disparate systems which have created data silos, limiting the ability to drive further revenue or provide predictive insights. For example, having years of customer data can allow you to analyse buying trends and deliver personalised marketing and tailoring of services. The increase in cloud-based applications, and number of suppliers, is further exacerbating the proliferation of data across multiple application.

According to Forbes, the data service industry is expected to increase at a compound annual growth rate of over 14 percent, reaching more than $90 billion by 2026.  This growth comes from the opportunities to aggregate and manipulate data to drive analytics, spot trends quickly and ultimately value based decision making. Clear and fit for purpose data strategy, architecture and integration standards are required to ensure data continues to flow across the business – and ensures IT is seen to be enabling rather the inhibiting the business.

 

  1. Speak in business language, not IT

IT jargon can alienate your customers, IT functions need to be better at translating IT into what it means to the business. This means recruiting and retaining business professionals, not just IT systems experts. There is also benefit it sitting IT teams closer to the business.

An IT function should define and publish their services in business language. You should be able to map the technical components of delivery to each business service, and know how important that service is to the relevant customer group. Own that knowledge and embed it across the IT function. This helps operations teams to understand the impact of their work, creates a customer focused ethos, and enables effective allocation of resources based on the customer rather than IT impact.

 

The relentless focus on the customer is challenging organisations to adapt to a world that ruthlessly drives forward innovation to improve the customer experience. Therefore, the IT operating model must provide the right conditions for innovating new digital products and then scaling them. 

‘Keeping up with the Customer’ applies more broadly than the IT Operating Model. It is an area that we are constantly exploring with our clients and their customers and our recent White Paper on the steps to take to achieve this can be found here.

If you would like to talk to us about the changes required to your IT function, and the challenges in delivering against these changes, please don’t hesitate to contact us at info@moorhouseconsulting.com, or via our website.