the future of it - kpmg · intelligent automation to reduce the need for additional headcount...

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Document Classification: KPMG Public

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a

Swiss entity. All rights reserved. NDPPS 855937

The Future of IT

read.kpmg.us/Future-IT

Enabling the delivery of products and

services at market speed and scale

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IT in the age of the connected enterpriseThere is no longer business strategy and technology

strategy. There is just strategy, and technology is driving it.

The opportunity for IT is to remove friction and enable a truly

connected enterprise - aligning the front, middle and back

office to become a customer-centric, digitally enabled business,

engineered for profitable growth.

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© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 855937

Transformation ambition and ability are not aligned

96%of companies

are focused on

transformation1

83%of executives are

not confident

their business

can build and

implement a new

operating model1

71%of CEOs are

personally ready

to lead radical

organizational

transformation2

of CIOs believe

their digital

strategy is only

moderately

effective or

worse3

78%Sources:

1. KPMG Global Transformation Study 2016

2. KPMG CEO Outlook 2018

3. Harvey Nash / KPMG CIO Survey 2018

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Today’s technology New world

Sample applications designed and

operated by IT:

Digital solutions delivering business outcomes and designed iteratively in partnership with the business:

Workflow ERP

— Business process

delivery

— Enterprise resource

planning

— Data warehousing

VirtualizationEnabling mobile

— Virtual machines — Enabling

enterprise

applications on

mobile devices

AI & automation Mobile

— RPA

— Cognitive automation

— AI & machine learning

— Bring your own device

— Internet of things

(IOT)

— Smart devices

Advanced analytics

Blockchain

— Predictive analytics

— Business intelligence

— Data mining and big

data

— Payments and

transactions

— Identity management

— Digital wallets

CloudCyber security

— Software &

application dev

— Everything as a

service (EaaS)

— Protect and survive

— Cyber insurance

APIAugmented reality

— Everything joins up

— Substantial

programmable web

interfaces publicly

available

— Physical world

becomes digital

Shifting technology landscape

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Key trends and drivers influencing IT functions

of organizations see business

managed IT (aka ‘shadow IT’)

as the new norm

Business managed IT

66%of organizations are looking to

intelligent automation to reduce

the need for additional headcount

Intelligent automation

67%

Today’s customer

expects hyper-relevant,

heavily tailored, and more

meaningful experiences.

Empowered customer

38%‘Customer centric’ organizations

are more likely to report greater

profitability

of IT leaders are reporting a lack of

skills holding back their strategies

Battle for skills

65%

of companies are “very effective”

at generating actionable insights

from customer data.

Demand for data & insights

23%

of companies reported a major

cybercrime in the last 2 years

Cyber threat

33%

Only

… most still struggle to liberate

their data from siloed systems

Source: Harvey Nash/KPMG CIO Survey 2018 – the world’s largest IT leadership survey. c. 4,000 responses from technology executives across 84 countries.

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© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a



© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International

Cooperative ("KPMG International"), a Swiss entity. All rights reserved. NDPPS 855937

Leading

organizations

today

Most IT

organizations

today

IT as technical support,

reactive order taker,

maintaining legacy systems

IT working with

business as strategic

enabler, adopting Agile

Market speed

IT as the enabler of

new products and

services, securely

at speed and scaleevolve the IT operating model

The IT function must

respond to accelerating

forces and

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Market speedRe-design a dynamic IT operating model

Break down silos between functions and empower

employees. Dynamically assemble enhanced

capabilities to ensure a flexible, scalable, connected

and decidedly human IT function.

Build holistic customer experiences that transcend

touch points and enable new products and services,

securely at speed and scale.

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Integrate teams to support the connected enterprise

Business-

product-

customer-

focused

Technology

- focused &

enabling

functions

Value stream management

Product A

Product B

Product engineering & assembly

Operations

Vendor management

Regulatory & risk

Security & trust

Platform

Product management

Market speedIntegrated & connected

Integrating teams across

functions supports the

move towards the

connected enterprise –

connecting front, middle

and back office to deliver

against increasing

customer expectations.

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— Technology leaders

working together

Flexible

— Breaking down

siloes

— Cross-functional

agile teams

— Delivering complex products

at scale requires the high-

skilled capabilities of IT

Scalable

— Business managed

tech supports

incubation of new

products and

services

— Scalable architectures built on

ecosystems designed for change

Connected

— End-to-end product-

aligned delivery

capabilities

— Shifting enabling

functions higher up

the delivery cycle — Empowering teams to

make rapid decisions

— Shift from project to

product mindset

Decidedly human

— Reinforced by

leadership at all

levels

— Shared power and

control

Key characteristics

Market speed

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© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All

rights reserved. NDPPS 855937

The IT function

will favor…agility over

methods, principles

over practices, and

products over

projects.

Senior leadership

will recognize that the

best ideas are usually

born from necessity,

and experience

typically comes from

making mistakes.

The technical debt

of tomorrow will be

an organization’s

operating model,

not legacy platforms

and systems.

Community

over hard

lines

Open

sharing

over control

Trust over

self

IT’s culture will

be driven by

forward-thinking

servant leaders

who embody…

Market speedBuilt on principles

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Collaborative with open sharing

Agile, iterative, scalable principles

Product focus

Prescriptive value stream analytics

Connected community

Customer obsessed

Extreme automation

Influence

Forward-thinking servant leader

Empathetic, and decidedly human

Control driven and risk averse

Deliberate, methodical, rigid practices

Project focus

Data rich, insight poor

Rigid organizational structure

Internally focused

Manual processes

Rules

Authoritarian

Technical skills above all

IT in the futureIT today

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Market

speed

Modern

delivery

Data as

an asset

Dynamic

investment

Customer

trustPowering up to market speed:

CORE SLIDE

Key elements

Flexible IT

workforce

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Market

speed

Realign capabilities,

people, architectures,

and ways of working

to enable the delivery

of new products and

services at variable

speeds and scale

Deploy a “think like a

VC” portfolio

investment approach

and leverage lean

financial processes to

drive dynamic and

continuous funding of

technology and

investments

Develop a 360

degree view of the

IT workforce,

including business,

technical, and

virtual skills, to

create a flexible

ecosystem of talent

Integrate business,

engineering, testing

and operations into

full stack teams,

automating large

portions of the value

chain

Instil technical trust

throughout the

organization,

delivering intrinsically

safe products and

services, to influence

perceived trust for

customer value

Powering up to market speed

Dynamic

investmentModern

delivery

Data as

an assetCustomer

trust

Evolve foundational

data assets to fuel

demand for actionable

customer insights,

transparency to risk

and opportunity, and

operational efficiency

Flexible IT

workforce

Six elements needed to deliver business value

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Dynamic investmentThink like a VC and dynamically reinvest resources

and capital for winning ideas.

Place business investors inside the organization, being

brought many ideas, making many small bets, having

transparency of performance against value objectives,

and dynamically reinvesting resources and capital for

winning ideas.

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Dynamic investment

Fund value instead of projects Shift to funding products linked to business or customer value which

are connected to the overall business strategy.

Adopt iterative and leaner fundingBe willing to fund products before all of the details are defined.

Decentralize and delegate decisionsDelegate decisions down to the business and technology leaders

closest to the technology project being funded.

Catch bad ideas fasterAdopt a mindset and toolset to enable smarter and faster decisions,

while discarding bad ideas more quickly.

Communicate transparency and valueTransparency should be built across the entire lifecycle of products from

ideation through support, with a way to share the results and value.

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Flexible IT workforce Develop a 360 degree view of the IT workforce,

including business, technical, and virtual skills, to

create a flexible ecosystem of talent.

Intelligent automation will trigger a game changing

transformation of skills and roles.

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Recognize that

technology skills

are a core business

capability across

the organization

Elevate intelligent

automation to

augment knowledge

workers, enhance

insights and drive

higher value creation

Create a flexible,

scalable, multi-

channel talent

ecosystem that

works within your

culture

Flexible workforce

Enterprise

architects

Portfolio

managers

Business

relationship

manager

Project

managersInfrastructure

engineer

Evo

lvin

g r

ole

s

19







Modern deliveryBreak down the traditional silos that limit IT agility by

integrating engineering, testing and operations into full

stack teams, automating large portions of the value

chain, and creating a culture of collaboration focused

on customer outcomes.

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Modern delivery relies on seamlessly automating

portions of the IT tool chain to increase speed,

reduce risk and increase the quality of software

deployments. Focus shifts to the automation of

monitoring, alerting & recovery, releases, continuous

code integration checking, and testing.

Modern delivery unites the Agile SDLC and DevOps

continuum into a single operating model through

collaboration and communication between

developers and operations.

Development Operations

Provision Onboard Plan Build Integrate Test Deploy Release Monitor

DevOps

Continuous delivery

Continuous integration

Agile development

Source code

control

Single repository

Build

automation

Compile and build

Test automation

Execute: unit,

integration & UAT

Continuous

integration

Code check-in

throughout day with

automated builds

Release

automation

Packaged,

deployed &

verified

Operate

Automated

monitoring,

alerting &

recovery

Modern delivery

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Data as an assetSubstantially reinvent the data supply chain, make

data more modular and governed, while helping to

usher in higher levels of data literacy across the

business.

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Strategic

data assets

(those that

directly

generate

revenue and

profitability)

fuel growth

By 2022, it is predicted that 80% of revenue growth will

depend on digital offerings and operations1

2022

2021

2020

2019

2018

Requiring

data to be:

On demand

Responsive

and agile

Reusable

and transparent

Available

Governed

Achieved through a focus on foundational data assets:

Next

generation

data supply

chain

Data

as a

service

Fit for

purpose

data

governance

Federated

accountability

Overall

levels

of D&A

literacy

80%

Data as an asset

Reve

nu

e g

row

th

Source:

1. IDC Press Release, IDC Launches New Framework to Accelerate Digital

Transformation and Help Enterprises Become Digital Natives (IDC, Oct 2017)

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Customer trustTrust is the foundation for a successful, sustainable

business strategy and will require trust in technology to

be instilled throughout an organization to influence a

customer’s perception of the company.

Customer relationship health becomes more dependent

on complex – often invisible – connected technologies.

But people instinctively distrust things they can’t see,

feel or understand.

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© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative

("KPMG International"), a Swiss entity. All rights reserved. NDPPS 855937

92%Customertrust

Servecustomer

Hierarchy of trust in technology

— Future technology executives should be a ‘catalyst for trust’, enabling

trust in technology throughout the front, middle, and back office

Protectcustomer

Governtechnology

Building customer trust

top three priority with

CEOs2

Cost of lack of trust

to global brands1

Cost

$2.5Tn/Yr

Priority

61%Of C-Suite worry about

impact to reputation due

to trust in data3

Impact

Sources:

1. Lack of trust costs brands $2.5 million per year (Social Media Week, February 6, 2018)

2. Guardians of Trust (KPMG International, 2018)

3. Me, my life, my wallet (KPMG International, 2018)

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How can we make

our operating model

more flexible

and scalable?

Moving to market speed:

CORE SLIDE

Market

speed

Customer

trust

Key questions

How can we instil

the principles of

technical trust into

all delivery

models?

Modern

delivery

Where do we

have silos that

limit our agility?

Dynamic

investment

How can we as an

organization remove

funding friction and

eliminate waste?

Data as

an asset

How do we make

our data available,

reusable, quickly

with reduced

proliferation?

Where are our

skills shortages

likely to impact

us most?

Flexible IT

workforce

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Moving to market speed:Key next steps

• Secure leadership alignment on objectives

and priorities

• Assess operating model readiness to deliver

the promise of a connected enterprise

• Develop a holistic, integrated transformation

plan. Be sure to include interdependent

operating models such as procurement,

finance, HR, sales and operations

• Put cultural change and a principles led

approach at the center of the transformation

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How KPMG member firms can help

IT sourcing strategy Third party risk assurance

IT cost optimization Cloud transformation

Emerging tech risk strategy Agile / DevOps transformation

Application StrategyExperience design and

engineeringIT governance, risk, and compliance

IT business management

(IT Svc mgmt, TBM,

IT analytics, Portfolio mgmt)

IT strategy Software design & development Enterprise architecture Cyber defense and response

Cyber security strategy and transformation Data management

IT operating model Program and project management Infrastructure optimization IT attestation / Assurance

Data strategy Testing / Quality assurance Information governance

KPMG professionals work

with clients to help shape

and execute their IT

strategy

KPMG specialists build

innovative and elegant

technology solutions that

are designed to transform

business

KPMG specialists can

create the IT capabilities

clients need to thrive on

change

KPMG professionals apply

functional and industry

knowledge to help manage

their risk throughout

technological change

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Thank you

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provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the

future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.


Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 855937

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the future of it - kpmg · intelligent automation to reduce the need for additional headcount...

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