The next evolution of the IT framework toolkit for successful startups
Executive Summary
In a previous report, we outlined an IT toolkit for startups, and analyzed how USAA was able to leverage principles of the toolkit to develop agile capabilities to address the expanding mobile landscape. Often when we speak of IT frameworks and maturity, it is from the perspective of established firms looking to resolve performance issues, or respond more effectively to changing market conditions that may include competition, declining market opportunities or adverse political and economic environments.
When composing the IT Framework Toolkit for Startups, the original intent was to build a modular infrastructure suitable for a young startup. The volatile startup environment, along with the often inevitable pivots in strategy, necessitate that any framework must be able to grow and adjust to support the organization, while reducing the need for expensive, wholesale changes down the road. Early stage adoption of IT framework principles can be an enabler for quest style, rapid-results delivery that we typically reserve for new firms.
As startups and mobile app developers come under increasing scrutiny for data privacy concerns, technology frameworks that simultaneous allow for rapid market delivery and due diligence will be critical to ensuring firms can absorb market changes, such as increased FTC regulation, while also remaining competitive and relevant.
Evolving from a highly agile and distributed organization to one with tighter processes represents a distinct challenge for many organizations. Structure and predictable performance become critical to ensuring consistent results. Change management and the theory of the business are needed to assess where the firm may need to pivot, and how to manage the changes in strategy and operations that result from revising said theory. Successful evolution requires changes to a culture and systems ecosystem that worked well when the firm was young and less complex.
Whether a firm is technical at its core or not, IT must deliver functionality that is both directly and tangentially related to delivery of core business products and services. In this report, we develop the next generation of the IT Framework Tookit for the startup firm that has developed a solid business model, and is poised to develop their capabilities in order to:
- Respond to trends;
- Build dynamic capabilities in a dynamic environment;
- Transform the vision and theory of their business;
- Deliver agility through alignment;
- Measure the business value of IT, and;
- Proceed from strategy to execution.
Respond to Trends
Applegate (2009) defines the business model as “how an organization interacts with its environment, to define a unique strategy, attract the resources and build the capabilities, required to execute the strategy, and create value for all stakeholders.” Likewise, Drucker (2005) speaks about the importance of accurately defining the theory of the business, which are “the assumptions on which the organization has been built and is being run” including markets, customers, competitors, technology, dynamics, strengths and weaknesses.
How an organization defines its business theory will drive other key decisions. Leadership would be spurred on to set goals for IT delivery that would enable them to operate at higher efficiency based on the goals they want to accomplish.
The theory of the business, in tandem with the vision, colors how a firm interprets and responds to market trends. CIOs should be monitoring trends in the consumer products landscape for all device types from game consoles to feature phones. Are there potential partnerships they can leverage with device manufacturers? What peripheral consequences could arise from a new tablet or mobile device that is multimedia focused (Ofek et. al., 2010), or targeted towards a highly engaged mobile demographic like African-Americans or Hispanic-Americans (Brenner, 2013)? How could the leapfrogging trend for technology adoption in emerging markets impact content consumption from studio servers, or analytics regarding content popularity and future distribution decisions?
CIOs must consider the fact that consumers tend to be more engaged on mobile versus desktop (Tilton, 2012). For emerging markets, this is even more critical where consumers are skipping laptop adoption and engaging with the Internet on smartphones.
Additionally, the Internet infrastructure is being challenged by the rising Internet of things. In an article from Forbes (2012), they note that over 15 billion things are connected on the Web, and these generate more than 50 billion intermittent connections. By 2020, over 30 billion connected things, with over 200 billion with intermittent connections (Forbes, 2012). This heralds a shift away from a client- server model to a model where devices, like sensors and RFIDs, behave autonomously and are becoming “a world of intercommunicating devices serving as the new web” (Hoffman, 2012). The existence of a direct user endpoint is no longer required, or necessarily a given (Hoffman, 2012).
Hoffman (2012) notes that for high priority devices like those used in medical delivery, network uptime and device reliability must be high. The billions of devices online will also contribute to the big data trend discussed above. Combining sales information from POS systems with RFID in warehouses and sensors measuring traffic in-store can provide retailers and suppliers with real-time information of customer behavior that drives strategic decisions about product offerings and customizations with high revenue potential.
Managing shorter windows or even simultaneous product releases means CIOs will need to consider embedding responsive design paradigms into the software development and infrastructure strategies to adequately manage increasing mobile page views, as well as shorter development cycles for web development.
Looking Forward
With the growth of smartphone ownership and mobile device usage, data networks must rapidly evolve to meet the growing information needs of a highly connected world. By 2015, Gartner (2013) predicts that over 80 percent of mobile devices sold in mature markets, like the United States, will be smartphones, and that 50 percent of laptop shipments will be media tablets. In-house IT departments will no longer be able to standardize on a Windows platform with only a few models to support.
In the consumer domain, ISPs will witness a rise in traffic as more smartphone users come online, and as brands begin to develop and promote their mobile web offerings. Apps still enjoy a more robust experience since they have access to unique device OS features such as those found on iOS. However, mobile web offers brands an opportunity to reach more consumers, especially those who do not frequent app stores, but do have the ability to go online with their mobile device.
As HTML5 continues to expand its capabilities, mobile sites will deliver richer functionality, thus creating a positive feedback loop that entices users to view more web content on mobile devices. IT leaders will be challenged in this new digital landscape to ensure that technology is supporting a theory of the business that aligns with market forces as the ways in which revenue is captured, and content is consumed, continue to evolve (Drucker, 2005).
By focusing on responsive design, real-time analytics and flexible infrastructure, CIOs can enable the firm to be more nimble, and respond to changes in the market faster than they have historically. Being responsive means not only expanding a firms operations or product offerings, but also growing an organizational culture that values innovation and views flexible IT as an enabler for strategic advantage.
Process, governance and workforce capability maturity need not be synonymous with impeded growth. Instead, these cornerstones of IT framework best practice can increase a young firm’s ability to seize opportunities in a measured way, and position them to capitalize on high ROI opportunities in the future. Speaking the language of business through well aligned IT metrics and less technical jargon can help to foster relations, and drive better collaboration, understanding and risk-reward decision making for business and technical leaders.
