How future-ready is

your IT? – Next Gen

Tech Function
Introduction

JUNE 2018
 Intro to NGTF

Key tech impacts over the next ten years

Copyright © 2017 by The Boston Consulting Group, Inc. All rights reserved.
IT applications & Software embedded Data analytics Digital affects
infrastructure move to in or supporting most unleashes massive every aspect
the cloud products & services value of organizations

In the future, most companies will become more and more technology companies 2
 Intro to NGTF
"Do we have a sufficiently
strong cybersecurity
"How do we evolve our tech capability, are we managing
capabilities and assets to tech risk appropriately?"
more nimbly deliver digital
products and services?" "How do we ensure
cohesive culture across
"digital" & "traditional"
parts of tech organization?"

What our
clients are

Copyright © 2017 by The Boston Consulting Group, Inc. All rights reserved.
asking us

"How should we organize "What is our digital

"How do we effectively
digital development at the talent and skills gap and
connect our customer-
enterprise, business unit, how do we close it?"
facing digital services
with our core systems?" region, & function levels?
What governance
mechanisms do we need?" 3
 Intro to NGTF

Become a player in digital product

1 and service technology

5 2
Implement agile ways of working
across the entire organization

characteristics 3
Build world-class tech and

Copyright © 2017 by The Boston Consulting Group, Inc. All rights reserved.
engineering capabilities
of a Next Gen
Tech Function Establish effective steering and
4
governance (incl. IT security)

5 Build a modern data and digital

platform
4
 BCG Client impact examples

3x – 4x >90%
customer satisfaction employee
Next Gen and return on digital engagement
Tech Function investment

can create
2x – 4x 10 – 15%

Copyright © 2017 by The Boston Consulting Group, Inc. All rights reserved.
significant value acceleration1 IT business demand
for clients in delivery reduction

15 - 20% 15 – 25%
shift of indirect2 to reduction in
direct IT activities development cost
5
1. Observed acceleration after typical 1.5-3 yr transformation 2. e.g., internal IT process management, IT strategy
 Intro to NGTF

Unique opportunity for CIOs to transform

the IT function into a Digital Business
enabling organization
What does it
mean for

Copyright © 2017 by The Boston Consulting Group, Inc. All rights reserved.
CIOs?

CIOs not engaging in this transition will

focus on governance of technology, a layer
removed from direct business impact

6
 NGTF Assessment

How ready is your IT/Tech function for the future?

Future-readiness heatmap covering 5 characteristics

and 25 building blocks of the Next Gen Tech Function

Detailed evaluation per dimension including

• View on leading practices
• Strengths and weaknesses observed
• Specific recommendations

Copyright © 2017 by The Boston Consulting Group, Inc. All rights reserved.
!

Applicable cross-industry

Includes qualitative & quantitative analysis,

business & IT view

Building on full range of BCG's industry specific

benchmarks (e.g., EITBB, Factbase, Simplify IT)
Source: BCG analysis 7
 NGTF Assessment

Future readiness
heatmap
What will you
get from an
assessment? Detailed view per
building block

Copyright © 2017 by The Boston Consulting Group, Inc. All rights reserved.
Assessment consists of
~110 questions and ~40
KPIs – can be tailored to
client needs

High-level IT cost
benchmarking

8
 NGTF Assessment

A set of proven KPIs ensures comparability and robustness of the assessment

Excerpt from questionnaire

Characteristics Key Performance Indicators

• Percentage of business applications that are "Commercial Off the Shelf" solutions
Build a modern data & digital • Percentage of business applications that are (highly) customized standard applications
platform • Percentage of applications written/optimized to run in a Cloud environment
• Percentage of server instances using IaaS / PaaS
• Percentage of business applications based on SaaS solutions

Implement agile ways of working • Percentage of projects based on quantified business case (except for regulatory projects)

Copyright © 2017 by The Boston Consulting Group, Inc. All rights reserved.
• Share of projects delivered on time, budged and quality (=at satisfaction of business
across the entire organization stakeholder)
• Share of IT & non-IT staff working agile

Build world-class • Mobile developers, data scientists, User Experience Designers and Cloud Experts as a
tech & engineering capabilities percentage of IT FTEs

• Percentage of enterprise-wide data objects that have been centrally/uniformly defined

Establish effective • Outsourcing degree in IT Infrastructure and Operations (cost of purchased services in IT
steering & collaboration IO as percentage of total cost in IT IO)
• Outsourcing degree in Application Development & Maintenance (cost of purchased
services in ADM as percentage of total cost in ADM)

Source: BCG analysis 9

 NGTF Assessment

Assessment can be done in

2-4 weeks

Output
• Future readiness
heatmap
• Detailed view per

Copyright © 2017 by The Boston Consulting Group, Inc. All rights reserved.
Kick-off Data Results
Preparation building block
workshop collection workshop
• High-level IT cost
2-4 weeks depending on data availability
benchmarking

Note: Typical approach, depending on how fast the required data can be provided 10
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