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3 Core Tasks to Modernize IT for a Digital Era

IT was originally conceived to do things like maintain servers and help the tech-illiterate with their printers. Now IT is tasked with differentiating the business through innovation to drive new profits—quite the promotion. Driek Desmet, Markus Löffler, and Allen Weinberg write for McKinsey with three steps to modernize IT architecture:

  1. Define the target IT state.
  2. Decide which changes to make across the technology landscape.
  3. Determine the sequencing and scope of change.

Benefits through Collaboration

Defining the target IT state for the whole organization is an expansive undertaking. IT and the business must set their priorities and decide which business capabilities are the best candidates for improvement through technology. For instance, a retailer may want to focus on improved customer segmentation by way of analytics and a centralized database. McKinsey’s research has further indicated that the better IT and the business collaborate, the more effectively IT performs core services and creates a healthy organizational culture. Thus, there are additional benefits to having a tight relationship.

Pertaining to the “technology landscape,” the authors take this to include systems, people, and processes. They anticipate that having to fully redesign critical systems will be a rarity, and that APIs and middleware will perform a lot of legwork. New team structures and skill combinations might be necessary to realize goals though. The authors continue to say this:

As a first step, the IT team should take inventory of existing applications and other technologies and identify those that can be improved, consolidated with other applications or other technologies, or decommissioned. The team should come to the table ready to ask questions such as: How much real-time data do we need to support a digital customer experience? How quickly do we need to launch new features to meet customers’ needs? How will service response times need to change? Will workload grow or shrink among groups within IT?

When building a roadmap for where and how modernization will occur, IT and the business must pay particular attention to the technical interdependencies at play. Teams can also devise metrics that calculate the value of various digital initiatives, in order to decide how to sequence them and how heavily to invest in them. The authors emphasize how important it will be for the CIO to articulate the financial needs to the CEO and other executives in order to make modernization successful—especially since these initiatives will likely play out over two to three years.

For even more depth on these concepts, and to read an applicable case study, you can view the original article here:

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