Separating digital from traditional IT operations might help get digital transformation projects off the ground but is an unsustainable strategy in the long run, argues Mckinsey & Company.
A new report titled, Toward an integrated technology operating model, argues IT teams, once seen as a roadblock to digital transformation, should be combined with digital operations.
“Skunkworks digital teams working outside the purview of a conventional IT organisation can quickly tackle pilot projects that they can then turn into innovative products or customer experiences,” the authors write.
“For their part, most senior business leaders often decide to stay the course with this approach, with separate digital and IT units adhering to different operating and service-delivery models. They recognise that a shift to the ‘pure play’ model of digitisation pioneered by the likes of Amazon and other internet companies might be overly ambitious or disruptive in the near to midterm.”
However, embracing a pure play digital model requires companies to shift to an integrated digital IT operating model – codifying how technology capabilities are delivered by both digital and conventional IT groups.
Keeping the two groups separate may lead to inefficiencies and a fragmented technology stack.
According to McKinsey, 60 per cent of the highest-value technology projects companies pursue require collaboration and delivery from multiple technology groups across both digital and IT teams. What’s more, fragmented technology stacks can put pressure on overall system stability, scalability, and resilience.
The separation can also cause organisational and cultural problems, the consultants argue.
“The physical split between digital and IT groups can create confusion among business stakeholders about which team is handling which tasks. Even within technology groups themselves, the culture can become bifurcated as employees identify with either old or new ways of working,” the authors write.
According to McKinsey’s research, companies that pursue an integrated IT operating model can realise greater process efficiencies, often through the elimination of redundant roles and initiatives, and they can deliver products and services to customers more quickly.
McKinsey recommends organising teams around technology capabilities rather than specific technology assets and functions and using agile methodologies to speed up the provision of IT services.