By Shailendra Singh, Business Director: Africa Region, Wipro Limited
Rapid advancements in technology are threatening and disrupting the core business models of companies in almost every single business sector.
Take, for example, a few new-age clients’ of ours in the hospitality, seed funding, transportation and manufacturing sector. The common thread between all these companies is that they have achieved massive scale in a very short space of time. More established players in these industries are scurrying to keep up with the new competition.
So, technology is a double-edged sword: embracing it has the potential to produce explosive growth like this; and ignoring it can mean your organisation gets left behind.
Digitally-empowered customers are another powerful force reshaping business models and entire industries – even in those typically ‘asset-heavy’ verticals, historically subject to slow evolutionary cycles. Think of Netflix in the broadcasting sector, Chegg (textbooks), eLance and oDesk (employment) and Square (bank accounts).
This new world in which we find ourselves is one where 640 terrabytes of IP information is transferred every single minute. In that time, over 47 000 apps are being downloaded to smart devices all over the world.
It is a pace that none of us ever expected – and it’s certainly cause for the biggest concern among business leaders. However, for the right-minded, it’s also cause for the biggest opportunity.
Within the organisation, what does all this mean? In our experience, we believe that the CIO faces pressures from many angles, including things like:
- 24/7 support is a non-negotiable business demand
- Service chains are growing in complexity
- End-user demands are increasingly driving IT strategy
- Skills shortages are becoming painfully acute
- Budgets are constrained, not keeping pace with requirements
- There is a need for IT to demonstrate ROI more quickly
- Development and change cycles are compressing
- The need for hybrid IT environments (outsourced, and internal) increases complexity
- And adoption of new technologies and models in IT Services delivery
In order to cater for this myriad of business demands, the CIO needs IT outsourcing partners that elevate the relationship beyond the tired and increasingly-outdated framework of an SLA. The modern era demands a Business Level Agreement: “the BLA”.
BLAs essentially become the business plan that the CIO can sell internally within the organisation. It tightly aligns technology with the broader strategy and goals of the organisation in general.
It serves to address the ‘disconnects’ to which many analysts have alluded – where IT remains a simple order-taker, and is not given the opportunity to add insights into business strategy.
Within the BLA, the roles and responsibilities of each party need to be clearly articulated, KPIs are agreed-upon, and clear penalty-based and incentive-based contractual elements are drawn up.
Most crucially, at the heart of the BLA are tangible business goals – such as increased sales, increased customer retention, or reduced inventory holdings.
Of course, BLAs are not a quick-fix, and cannot be implemented on a whim. Developing a meaningful BLA requires the organisation to commit to an ICT partner and strong Governance layer that ties up Business and IT together (eg. Service Integration layer) that deeply understands their sector, and that sees issues from the end-customer perspective.
The IT service relationship needs to be at a mature state, where the outsourcer has not only in-depth knowledge of the entire IT estate, but is also empowered to roll out a digital IT framework – to foster the key principles of resilience, cost-efficiency and business alignment.
In fact, the BLA becomes contractible and achievable when this new digital IT framework is adopted within the enterprise – across all the core areas of infrastructure management, application management, security operations, and cloud services.
Perhaps the key difference between these start-ups that grew overnight to become massive disruptors in their respective sectors, is that they could build their ICT architecture from the ground-up. Existing enterprises may well be forced to ‘change the wheels while the car is in motion’ – but by adopting a scalable digital IT operations framework, you’re enabling the car to move at faster and faster speeds, as the race to grab customer loyalty continues to heat up.