After pulling off what most considered the impossible, IT is now turning its eyes from the triage and stabilization of the disrupted enterprise toward recovery and enabling a new reality. In what promises to be a much more economically challenged, but digitally connected world, the CIO is facing a dilemma of how to deliver digitally native capabilities, while containing costs, skilling up and running lean.
Every enterprise faces unique challenges in adapting to the New Reality. The focus of IT will depend upon the specific mix of economic recovery patterns your business faces and how capable the IT function is to enable the shift.
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IT in the new reality
Steve Bates, Principal, Global Leader, KPMG’s CIO Center of Excellence
Not long ago, business and technology executives everywhere were scrambling to keep pace with the accelerating speed of digital business transformation in response to the rewrite of global economic, social, political and technological institutions. Then COVID19 emerged and changed everything. Or did it?
For technology executives, CIOs and CTOs, the drivers of IT have clearly been reordered, but for many, the imperatives are still there. Efficiency, security, innovation, insights and enabling new ways of working are more important than ever.
However, what was once a homogeneous story (after all, IT is IT, right?), is no longer quite that simple. IT in the new reality will be shaped by economic recovery patterns unique to each sector, country, and company. For the foreseeable future, the future of IT is not a one size fits all story.
Varying degrees of risk exposure to COVID-19-driven shifts are resulting in an “alphabet soup” of recovery curves, shapes abound like Ls, Ws, Vs, Us. In this context, we explore four of those recovery patterns and the implications to IT:
- Surge: These are industries or companies which are scaling as consumer behavior, which was altered as a result of COVID, is sustained in their favor. Investors sense their potential to lead and provide capital to scale aggressively during recovery.
- Transform to re-emerge: These are sectors or companies who will recover, but along a protracted path requiring reserves of capital to transform operating models to emerge stronger and more in line with changed consumer priorities.
- Modified business as usual: These organizations are seen as daily essentials and will suffer effects of the consumer shutdown and a recession but will recover more quickly as consumer demand returns in similar volumes.
- Hard reset: These are companies which will struggle to recover from COVID due to “permanently” lowered demand for offerings, insufficient capital to ride out extended recession, and/or poor execution of digital transformation.
In many cases, organizations will experience one or more of these recovery patterns simultaneously. Clearly, the priorities and strategies for the IT executive addressing each of these quadrants requires a unique and tailored approach.
Take a moment and explore the content here to learn more about where your organization fits and how KPMG can help move your IT function into the new reality. If this strikes a chord with you, we are offering interactive virtual workshops to help you outline and execute on your strategy. We look forward to working with you.
Where are you on this journey?
Answer the questions below to determine which patterns apply to your organization, then explore further to understand next steps. KPMG’s Wayfinder assessment can help you achieve your goals to emerge as an agile, future-ready enterprise.
Industries and companies which scale post-COVID as consumer behavior that was altered during the crisis is sustained in their favor. Investors sense their potential to lead and provide capital to scale aggressively during recovery.
Are you in a "Surge" pattern?
- Has your business seen a significant spike in demand as a result of COVID?
- Are you seeking to preserve and grow the newly acquired customer base?
- Has the ability to meet business demand been exceeded the organization’s capacity (supply chain, service delivery model, staffing, etc.)?
- Have your digital channels replaced your primary customer interaction methods?
Delivering modular, agile, and highly scalable IT can help you meet growing demand.
Transform to Re-emerge
Industries/companies who will recover but along a protracted path requiring reserves of capital to endure and transform operating models to emerge stronger and more in line with changed consumer priorities.
Are you in a "Transform to Re-emerge" pattern?
- Is the viability of your organization threatened unless you fundamentally shift your business model?
- Is your tech stack causing delays/challenges in adapting to the changing market?
- Do you need to adjust your service model to respond to changing ways of working?
- Are you struggling to pivot to digital channels as a result of lack of flexibility, scale or stalled transformation initiatives?
If YES, then your business may be in the Transform to Re-emerge pattern.
Becoming more flexible, digitally native, and experience-centric can help you adjust to new business models.
Modified Business as Usual (BAU)
Industries and companies seen as daily essentials will suffer effects of the consumer shutdown recession but will recover more quickly as consumer demand returns in similar volumes.
Are you in a "modifed BAU" pattern?
- Is your business on track for a full recovery as customer demand increases?
- Are customers looking for new ways of interacting with your services going forward?
- Prior to COVID were you already invested in emerging technologies at scale?
- Do you need to scale modern delivery practices like agile and DevOps to keep pace?
If YES, then your business may be in the modified BAU pattern
Stablizing IT swiftly can help you achieve recovery and position the business for continued success.
Industries and companies which struggle to recover from COVID due to “permanently” lowered demand for offerings, insufficient capital to ride out extended recession, and/or poor execution of digital transformation.
Are you in a "Hard Reset" pattern?
- Do you anticipate a permanently lowered demand for your offerings?
- Do you have an immediate need for materially reduced operating/capital costs?
- Do you need to support an immediate business reorganization to support supply chains and customer channels?
- Is your workforce under skilled or misaligned with the needs of the business going forward?
Assessing cost optimization opportunities with a data-driven approach can help you rapidly deliver lean IT operations.