Technology estates are becoming increasingly complex and inflexible for many organisations. Between mergers and acquisitions, the need to prioritise core versus emerging operations, business cycle-driven investments and a history of getting by with ageing technology—the IT function has often tolerated these challenges. Rather than modernising their technology, they’ve held onto the status quo, continuing to maintain their systems—or worse, having to continuously triage legacy systems to keep up with changing conditions.

But rapid market shifts are making the previously tolerable, intolerable. Customer and business user experience expectations are rising. Regulations are mounting. Sustainable technology and security are increasing priorities. And emerging technologies like cloud, data, AI and more recently Gen AI have spawned a new era of modernised IT.

Put simply: modernising today’s IT function can be more than just updating technology. It’s about shifting the orientation of the function from a business service provider to a business value driver. In this article, we explore barriers to making that crucial shift and highlight tips for helping successfully drive modernisation programmes.

Rethinking IT incentivisation and success measurement

An effective method for changing the way we approach IT modernisation is to reconsider the incentives that drive day-to-day operations and deep-seated perspectives of what success looks like. Historically, there have been three ways the IT function has been inadvertently incentivised into being inflexible and unable to keep up with the pace of change:

1. Myopic focus on performance metrics. When you measure IT service performance based on static Key Performance Indicators (KPIs) like uptime, response time and resolution time, the main goal of the team becomes fixing issues. Instead, if you incentivise more proactive problem-solving, incremental value generation, automated issue resolution, user enablement or self-help, your team will have less busy work and more time to adapt to higher priorities. Rather than focusing on metrics around satisfaction, more value can be generated by metrics that focus on broader business impact.
2. Weighing near-term vs. long-term views of success. When you orient your IT operations around reactive solutions to short-term problems, it can be difficult to maintain a clear focus on bigger strategic outcomes and planning for long-term operational success. An example of a more future-thinking mindset is the willingness to accept some near-term imperfection—think “MVP” or minimally viable product initiatives. This can feel experimental and require additional time and investment upfront but ultimately has the goal of creating a faster path to greater long-term value.

Although it may sound obvious to some, the key is to think beyond the walls of your IT function and to measure and deliver what is most important to your business.

Inviting the outside in. Next-generation managed services

Like legacy IT, conventional outsourcing and managed service providers (MSPs) have traditionally delivered reactive, short-term wins. Through next-generation managed services—or what Deloitte calls Operate services—we are seeing organisations repositioning IT as a reliable business value driver. This is materialising in a variety of ways for Deloitte clients, but here are three big wins we see repeatedly:

1. Proactive issue resolution and elimination of low-value tasks and processes. It’s one thing for a MSP to fix problems that arise with existing systems. But it’s far more valuable to prevent the problems before they happen. In our opinion, predictive and proactive maintenance should always trump response and resolution time. And using MSPs whose capabilities are not just enabled but underpinned by automation can dramatically increase long-term gains by freeing up time and resources to optimise and innovate.
2. Reducing technical debt. Simplifying complex IT programmes and limiting unnecessary system customisations can significantly support the scaling and futureproofing of your ever-evolving technology environment. By helping you to govern change, simplify integration architecture, retire low-value applications and cleanse data, the right service provider can help limit unnecessary complexity so you can unlock more value from emerging applications and technologies like SAP S/4HANA or Gen AI.
3. Reorienting operational focus from narrow metrics to strategic business outcomes. Instead of prioritising traditional IT metrics mentioned earlier in this article, Operate services favour metrics that are aligned with strategic business and IT objectives. For example, if an enterprise has a goal of reducing Sales, General & Administrative (SG&A) costs, measuring the incremental improvements of supply chain processes could be of greater value. Even modest shifts in IT metrics and culture can drive meaningful value for an organisation. With a combination of industry and domain experience alongside change management capabilities, the right service provider should help IT “walk in the shoes” of both their customers and fellow employees and develop KPIs that prioritise business value.

Setting yourself up for success

In today's fast-paced business environment, modernising the IT function is no longer just about upgrading technology, but shifting the orientation of the function from a business enabler to a value creator. Providers of next-generation managed services or Operate services, are emerging as important players in helping organisations achieve this shift. These third parties can help businesses unlock more value from emerging applications and technology by helping eliminate low-value tasks and processes, reducing technical debt, reorienting operational focus towards strategic business outcomes and rethinking outdated approaches to incentivisation and success measurement.