8 minute read 21 Apr 2020

How to lead your IT organization through the COVID-19 disruption: a CIO perspective

Authors

Ingmar Christiaens

EY Global Agile Finance Solution Leader & EMEIA SAP Markets Leader, Partner, Technology Consulting, EY Consulting BV

Content-rich leader with a focus on out of the box thinking. Diversity ally.

Anne Moreau

EY Belgium Consulting Executive Director

Really passionate in steering International Company's complex transformation or strategical changes.

Thomas Richez

EY Belgium Consulting Senior Manager

Experienced IT manager in consulting with a demonstrated history of working in the Power and Utilities industry and the public sector.

8 minute read 21 Apr 2020

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EY Resiliency Framework: Now, Next and Beyond COVID-19

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Now, next and beyond: IT leaders might be disregarding the added value of tangible actions towards the Next and Beyond of COVID-19, mainly due to the uncertainty of what tomorrow will look like. But the desired future can only be attained through decisions taken now.

As governments around the world implemented drastic measures to slow down the transmission of COVID-19, companies are facing multiple challenges: from protecting employees to mitigating various risks. By maintaining (IT and Supply Chain) operations, managing finance and protecting the consumer experience, companies try to safeguard business continuity during this disruptive time. But most leaders now recognize that they were not ready.

EY’s goal is to provide CIOs with a perspective on how to approach and overcome the current crisis through the EY Resiliency Framework: Now, Next and Beyond COVID-19. Here we define the speed at which to deploy technologies and give clairvoyance as to when people expect it, and when and why their organization and their own employees need it. All the while we keep an eye on the future.

Leading through uncertainty and complexity

While trying to tackle COVID-19, governments had to categorize business activities between essential and non-essential to impose remote working. Some industries are more affected than others; with an impact on personnel, operations, supply chain and revenue. As such, some companies have to quickly address critical and incremental demands, while others have to substantially reduce their activities or innovatively reshape their business model to sustain essential activities.

What they all have in common is that they need to implement remote working to a certain extent. And all IT departments have to ensure the resiliency of the business activities, even while working from home.

The three major challenges at the start of the crisis

During the first stage of the pandemic, IT leaders had to face three high priority challenges:

New ways of working: Being pushed by remote working, IT has to heavily invest in digital collaboration tools, sometimes in urgency, despite their own previously established priorities (e.g. when working from home is forbidden by the code of conduct). Also, IT has to sustain new business processes and information systems to support these new ways of working (e.g. digital signature).
IT infrastructure: Acquisition of new hardware/licenses has to be accelerated for those newly acquired collaboration tools, but also for software normally managed on site, instead of remote, centrally instead of decentralized. The biggest challenge here is to ensure that the infrastructure can withstand the extra load due to employees working from home (e.g. VPN, …).
Technological quick wins: To cope with the additional workload associated with the pandemic, companies invest heavily in new technologies like RPA (Robotic Process Automation) and Data & Analytics. They also enable agile ways to meet rapidly changing customer expectations.

While necessary, handling these three challenges demonstrates more of a reactive approach to immediately ensure employee safety and trust, while also mitigating reduction of revenue. But it neglects a proactive long-term vision.

How EY can help

Digital Strategy and Transformation

We help companies thrive in the transformative age by refreshing themselves constantly, experimenting with new ideas and scaling successes.

Looking ahead of the crisis is crucial

Naturally, companies are tempted to use short-term solutions while their business is at stake (top-line preservation, cost cutting, margin optimization, cash preservation, etc.), limiting IT investments to sustaining business continuity. While that is understandable, it is also critical to keep an eye on the beyond. Indeed, it is known that the competitive landscape is reshaped during large crises; markets, competitors and value propositions differ from those before the pandemic. At this stage, it is crucial to understand the changes ahead in order to take the correct steps that will align the company with the world beyond the crisis.

A window of opportunity to implement changes within the company

While at first it might seem counterintuitive to discuss business/technology transformation, considering the main priority is to focus on the impact on human beings, this is an excellent window of opportunity to implement innovation, review business processes and identify new business opportunities in an Early Recovery Scenario that will mitigate future impacts.

The three phases of the EY Resiliency Framework

To help companies bridge the gap between now and then, EY defined a Resiliency Framework divided into a three-phase approach (Now, Next & Beyond) ensuring the continuity and redeployment of IT initiatives, while also making it more resilient.

How EY can help

Technology transformation

Organizations must consider foundational transformation rather than quick fixes and ad hoc investments to give them the agility to adapt.

The Resiliency Framework: Now, Next & Beyond

1) Now

First phase of this framework: the “Now” consists of defining the short-term action plan which needs to be considered urgently after the basic business continuity actions are up and running. Three actions need to be considered:

Realigning IT with the (new or) refined business strategy

As previously mentioned, the impact of the pandemic might affect the business model of some companies. But even with companies who do not need to change their business paradigm, the challenges faced will reveal areas within IT that need to be improved.

Therefore, the first step to recovery is an assessment, realignment/redefinition of the IT missions, values and governance. They will likely need to be reviewed, confirmed, optimized and secured. The digital collaborative tools implemented in urgency might reveal additional functionalities that could support other (less) critical business processes. Optimization of licenses and hardware will also be crucial to maintain IT costs.

This step will ensure the (re)alignment of the IT strategy with the (future) business (critical) processes. Not investing in this realignment might result in IT investments for non-critical initiatives or business processes.
Prioritizing IT business Architecture & Ecosystem

The next step is to adjust all the impacted IT components (Infrastructure, Applications, Data). As already mentioned, some companies are facing insufficient capacity to support remote work. Through this second set of services, the infrastructure will be assessed towards its sustainability and scalability, and the applications and related data will be reviewed to evaluate flawless data flow integration.

The objective of this step is to clarify the Enterprise Architecture, maximize the integration of IT applications, ensure resilience of the hardware solutions (Cloud, On Premise, Hybrid) and maintain the data consistency across the company ecosystem. Fit-Gap analysis identifies subsequent actions to be taken in the long-term resilience plan after the crisis.
Optimizing IT Operations & Projects

The final step in the short-term action plan, is to conduct a review of the IT organization, procedures and tools as well as the project portfolio to ensure adaptation to new business paradigms. Some disruptions or subjects for improvement that were identified during the crisis (lessons learned) will need to be taken into consideration so that they can be resolved efficiently. Also take 3^rd party providers into account. The collaboration with the providers in the ecosystem will need to be addressed through vendor evaluation and selection aligned procedures.

This step covers the re-definition of the IT Target Operating Model, in terms of IT service and capabilities, related KPIs, competences, resources, procedures and tools.

2) Next

Once the current situation (lessons learned) and gaps have been assessed, the “Next” phase covers the embedding of recommendations in the implementation plan, and this in a pragmatic and straightforward way. The way this plan will be implemented will set the course to early recovery. However, right after the peak of the crisis, when the related economic impact will be felt, it is critical to focus on the resilience of internal as well as external resources.

Managing deployment of critical tools/processes
In order to realize the requirements previously defined, the objective of this action is to:

Prioritize critical business applications that need to be implemented in the future organization,

Redefine and optimize within the IT strategy the components that were urgently set in place,

Relaunch the reshaped project portfolio, with an adequate IT Operating Model.

These three activities should embed the remote/agile aspects (revealed crucial now) but they should also be seen as a future state baseline (e.g. IT Agile & Program Management of deployment of platform - collaboration, ERP, reporting solution, …).
Sustaining IT performance

While envisioning the future, acknowledge that similar disruptions could happen again. In order to mitigate future risks and meet business expectations once the market picks up, IT capacity, vendor capabilities and service level will need to be the keystones of future-oriented organizations. IT Service Levels will be based on reduced resources and remote working, and it will have embedded the post COVID-19 lessons learned, setting up a robust continuity roadmap and plan that addresses all the components of the future IT Strategy.

3) Beyond

The final phase of the EY Resiliency Framework, the “Beyond” ensures that the company remains future-oriented. As we clearly understood through this COVID-19 crisis: weaknesses of companies are emanating from inabilities to embrace change at a faster pace.

The integration of change within the company will need to drive continuous improvement. The objective of this action is to ensure that development initiatives maintain the current technological/digital adoption. Companies need to make sure that the opportunities created by the modification of the business plan and the digital strategy are correctly embraced, while also taking into account modification to the resourcing and a shift in the workforce disposition.

Assessing your resilience towards business disruption will get you in a better shape to respond with agility to the changing of your critical business activities, allowing you to adapt them seamlessly to the coming challenges.

EY offers an IT strategy alignment with business, a resilience assessment and insight in future-orientated IT strategy.

Business leaders should already think beyond COVID-19:

An IT strategy aligned with the business, that focuses on IT talent recruitment, the appropriation of resources for prioritized investments and optimizes business benefits,
An Enterprise Architecture As-Is and To-Be, that focuses on the most critical business components and the assessed versus industry standards, including identification of major fit gaps,
An IT Target Operating Model designed to your needs with adequate in-house operations and proper vendor management,
A future-orientated roadmap that sustains your business endeavors and includes a resilience action plan,
An experienced program/project management team, committed to delivering business values, and ready to accelerate your IT relaunch (operations & projects).

Summary

IT leaders might be disregarding the added value of tangible actions towards the Next and Beyond of COVID-19, mainly due to the uncertainty of what tomorrow will look like. But the desired future can only be attained through decisions taken now. And though it is difficult to make these decisions, if they are not made now, the window of opportunity will close and ‘difficult’ will turn into ‘impossible’, especially in this rapidly changing environment. It is therefore crucial that IT leaders undertake a set of actions immediately to reduce the impact of the crisis and to ensure the ability to support the future direction of their company.

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