Ceb New Principles For Adaptive It

New Principles
forAdaptive IT
CEB CIO Leadership Council
A Framework for Member Conversations
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When we bring leaders together, it is crucial that our discussions neither restrict competition nor improperly share inside information. All other conversations are welcomed and encouraged.
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sources, or b) reliance upon any recommendation made by CEB.
CEB is committed to
helping IT leaders stay
ahead of changes in how IT
is managed, structured and
The
Future
creates business
value.
of
Corporate IT
A LONG-STANDING COMMITMENT TO HELP YOU

NAVIGATE THE FUTURE OF CORPORATE IT
The Future of
Corporate IT
The Future of
Corporate IT
The Future of
Corporate IT
Rapid Change as Information and Technology Become Ubiquitous
2010
The Future of
Corporate
IT
The
Future
of
Corporate IT
IT faces five radical shifts in

value, ownership and role.
2011
Business
Engagement 2.0
Business
Engagement 2.0
ITs role becomes educate

and integrate.
2012/2013
The New Model for
IT Service
Delivery
The
New
Model for
IT Service Delivery
IT realigns around businessoutcomes based services.
2014/2015
Adaptive IT
Adaptive IT
How can IT best create

value in an era when
technology is ubiquitous?
2015 CEB. All rights reserved.CIO1692715SYN
Eight business trends are

changing how technology
is used in all areas of the
enterprise.
CEB researchers collaborate

across corporate functions to
understand the full picture of
changes in the workplace, value
chain, and marketplace.
CEB has unparalleled survey
data from functions including
HR, Finance, IT, and Marketing.
Other technology advisory
services lack CEBs
multidimensional views.
EIGHT TRENDS ARE DRIVING RAPID CHANGE

IN HOW COMPANIES USE TECHNOLOGY
Delivery Value Chain Trends
1. Open InnovationInnovation increasingly occurs by exploiting ideas, expertise, talent, and data
from suppliers, channel partners, and customers.
2. Information-Rich Products and ServicesEnd products and services are increasingly enabled
or enhanced by using data and technology.
3. Eroded Brand RelevanceCustomers are increasingly willing to abandon incumbents in favor
of new brands.
4. Greater B2B Pre-Sales DecisionsOn average, customers progress nearly 60% of the way through
the purchase decision-making process before engaging a sales rep.
5. Effortless Customer Experience ExpectationCustomer loyalty is driven by the ease and simplicity
of the customer experience, not by being delighted or by the number of digital touchpoints customers
can access.
Enterprise Management and Support Trends

6. Greater InterdependenceWork is more interdependent as high performance comes from network
performance,the ability to inflect the performance of others.
7. Frequent Organizational ChangeBusiness objectives and operating models are changing
at an unprecedented rate.
8. Greater Knowledge IntensityAlmost all work requires analysis, judgment, and influence.
Source: CEB analysis.
As business trends are

changing how companies use
technology, opportunities
to deploy information
technology now extend well
beyond back office process
automation and impact
all areas of the enterprise.
As greater opportunities
emerge to use technology
to develop, market and
sell products, IT can make
a growing contribution to
competitive advantage.
THE IMPACT OF TECHNOLOGY BECOMES UBIQUITOUS

Percentage of Processes That Can Be Improved Through the Use of Analytics, Collaboration, Mobility,
or Process and Decision Automation
< 70%
7080%
8090%
> 90%
Delivery Value Chain

Develop
Vision and
Strategy
Market
and Sell
Products
and Services
Develop
New
Products
Deliver
Products
and Services
Manage
Customer
Service
Enterprise Management and Support

Develop and Manage Human Capital
Manage Financial Resources
Acquire, Construct, and Manage Assets
Manage External Relationships
Source: APQC Process Classification Framework; CEB analysis.
More technology decision

making occurs outside
Corporate IT as employees,
business leaders, customers,
and suppliers all seek
greater roles.
IMPLICATION 1: TECHNOLOGY DECISION MAKING

BEYOND IT
Number of People Making Decisions About Technology
High
Business-Centric Approach
Customers
Use new digital channels

Expect digital products to integrate
Suppliers and Channel Partners
Propose digital capabilities to benefit the full value chain

Provide new sources of data
Employees
Use apps and devices they source for themselves

Rely on external networks and data to get work done
Business Leaders
Take the lead on technology decisions

Allocate money to technology outside the IT budget
IT-Centric Approach
IT makes technology decisions, guided by business leaders

Other stakeholders consume technology, but have little say
Low
Corporate IT
Extended Value Chain

Locus of Decision Making About Technology
The horizons for IT

strategies, roadmaps and
budgets become shorter
and less stable due to rapid
changes in technologies and
business demand.
IMPLICATION 2: SHORTER, MORE ITERATIVE PLANNING

HORIZONS
Average Number of Technologies Forecasted to be Adopted
69
Companies forecast few

technology solutions more
than 12 months out
as the many fast-changing

solutions on the horizon make
it hard to define an end state.
Number of Technologiesa
59
2014/2015
2016
Tracking But No
Plans to Deploy
Before 2017
Anticipated Deployment Time

a
Number of technologies and Capabilities are calculated from CEBs Emerging Technology Roadmap and Digital Capability Roadmap.
While opportunities to use

technology for competitive
advantage across the
enterprise increase, CFOs
continue to constrain the
IT budget by managing
against fixed benchmarks.
Seventy-three percent of
finance leaders report that they
are under pressure to reduce
the growth in G&A costs,
including IT spending.
The majority of CFOs continue
to disagree that IT spends the
right amounts in the right place.
IMPLICATION 3: A GROWING MISMATCH BETWEEN

FUNDING AND DEMAND
CEO Ranking of Technology

as a Business Driver
IT Budget as a Percentage
of Revenue
2004
2013
6th
1st
2.5%
2.5%
Most CFOs continue to manage

the CIOs budget against
a fixed benchmark such
as a percentage of revenue.
Technology decision making

beyond IT, shorter and more
iterative planning horizons,
and the growing mismatch
between funding and
demand emphasize the need
for a new framework for IT.
WHY ADAPTIVE IT IS THE WAY FORWARD
Ubiquitous Technology
Implication 1
Technology Decision Making
Beyond IT
Implication 2
Shorter, More Iterative
Planning Horizons
Implication 3
A Growing Mismatch
Between Funding and
Demand
Adaptive IT
Adaptive IT is a framework that CEB has developed to help IT organizations maximize
value from IT in an era of ubiquitous technology. This framework provides guidance on
how to transform ITs strategy, governance, delivery, and workforce.
What differentiates Adaptive IT from other approaches today is that it doesnt stipulate
a specific end-state but allows organizations to thrive in any environment.
To meet business demand

for the next three to
five years, IT leaders
must introduce five new
management principles
that make IT adaptive.
PRINCIPLES OF ADAPTIVE IT
In an era of ubiquitous technology, IT leaders should apply five principles to help the
enterprise maximize returns from its technology investments. Collectively, these principles
make IT adaptive.
Excellence Should Be Targeted IT must focus disproportionate effort

in areas where it has comparative advantage and dare to be adequate
elsewhere.
Role is Context BasedIT must adopt different responsibilities and

relationships based on its operating context such as where the ideas
and money come from.
Judgment Shapes ProcessIT must apply judgment to governance

and delivery processes to ensure the level of rigor is appropriate
to the business outcome.
Speed-to-Market Comes FirstIT must increase the priority given

to urgency when making trade-offs against cost and risk.
Technical and Business Talent Isnt Either/OrIT must sharpen its

technical edge and engagement competencies in parallel so that
technology expertise stays ahead of changing business needs.
10
ADAPTIVE IT IN PRACTICE
Principles of Adaptive IT
What Being Adaptive Means in Practice
Excellence Should
Be Targeted
Adaptive
Strategy
Role is Context
Based
Judgment Shapes
Process
Adaptive
Governance
and Delivery
Speed-to-Market
Comes First
5
Adaptive
Workforce
Technical and
Business Talent
Isnt Either/Or
Expand ITs StakeholdersCreate value in all contexts by balancing ITs interactions with business
leaders with direct relationships with frontline employees, end customers, and value chain
partners.
Offer Multiple OnrampsEnable multiple starting points for ITs engagement rather than always
being involved from the beginning.
Flex Between Engagement RolesShift between delivering technologies, consulting, brokering,
and coaching depending on where IT has a comparative advantage.
Accelerate Governance ClockspeedRedesign governance processes to devolve decision making,

reduce decision makers, and prioritize judgment over analysis for simple decisions.
Dynamically Reallocate ResourcesFund and staff new, unplanned initiatives by variabilizing
costs, rapidly stopping failing projects, and constantly realizing operational efficiencies.
Align IT Services to Business CapabilitiesDefine business-outcomes based services that can be
changed rapidly and independently.
Make Engagement Competencies UniversalEquip all IT staff with competencies such as

influence, communication, and learning agility.
Replenish ITs Technical EdgeBuild a workforce strategy that gives IT employees the support
and incentives to stay ahead of emerging technologies.
Develop a Flexible, Risk-Tolerant ClimatePromote behaviors in IT that encourage openness to
uncertainty and new ways of working.
11
Learn More
CEB identifies the best business solutions to challenging functional and IT
management problems facing senior IT executives. Our solutions are vendor
independent, peer informed, and immediately actionable, helping our members
elevate corporate performance by becoming not just better IT managers but
better business leaders.
To learn more about membership, please contact
IT.Support@executiveboard.com
www.cebglobal.com/IT

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New Principles

CEB CIO Leadership Council

A Framework for Member Conversations

A LONG-STANDING COMMITMENT TO HELP YOU

Rapid Change as Information and Technology Become Ubiquitous

IT faces five radical shifts in

ITs role becomes educate

IT realigns around businessoutcomes based services.

How can IT best create

2015 CEB. All rights reserved.CIO1692715SYN

Eight business trends are

CEB researchers collaborate

EIGHT TRENDS ARE DRIVING RAPID CHANGE

Enterprise Management and Support Trends

Source: CEB analysis.

2015 CEB. All rights reserved.CIO1692715SYN

As business trends are

THE IMPACT OF TECHNOLOGY BECOMES UBIQUITOUS

Delivery Value Chain

Enterprise Management and Support

Manage Financial Resources

Acquire, Construct, and Manage Assets

Manage External Relationships

Source: APQC Process Classification Framework; CEB analysis.

2015 CEB. All rights reserved.CIO1692715SYN

More technology decision

IMPLICATION 1: TECHNOLOGY DECISION MAKING

Number of People Making Decisions About Technology

Use new digital channels

Suppliers and Channel Partners

Propose digital capabilities to benefit the full value chain

Use apps and devices they source for themselves

Take the lead on technology decisions

IT makes technology decisions, guided by business leaders

Extended Value Chain

Source: CEB analysis.

2015 CEB. All rights reserved.CIO1692715SYN

The horizons for IT

IMPLICATION 2: SHORTER, MORE ITERATIVE PLANNING

Companies forecast few

as the many fast-changing

Anticipated Deployment Time

2015 CEB. All rights reserved.CIO1692715SYN

While opportunities to use

IMPLICATION 3: A GROWING MISMATCH BETWEEN

CEO Ranking of Technology

Most CFOs continue to manage

Source: CEB analysis.

2015 CEB. All rights reserved.CIO1692715SYN

Technology decision making

WHY ADAPTIVE IT IS THE WAY FORWARD

2015 CEB. All rights reserved.CIO1692715SYN

To meet business demand

Excellence Should Be Targeted IT must focus disproportionate effort

Role is Context BasedIT must adopt different responsibilities and

Judgment Shapes ProcessIT must apply judgment to governance

Speed-to-Market Comes FirstIT must increase the priority given

Technical and Business Talent Isnt Either/OrIT must sharpen its

Source: CEB analysis.