Everest Group Advocates New Paradigm for IT—’Systems of Growth’—A Platform-based Model Centered on Revenue Enablement
With increasing disruptions to traditional business models and the rapid adoption of exponential technologies such as Web 3.0, the metaverse and 5G, enterprises need a new technology strategy to compete in the market.
DALLAS, November 1, 2022 — The role of an IT team is no longer as “simple” as keeping the infrastructure running efficiently; today, IT organizations also are charged with driving business growth, change and innovation and meeting sustainability targets. To be able to innovate and differentiate at enterprise speed and scale, IT organizations must adopt Systems of Growth thinking, according to Everest Group.
What is Systems of Growth thinking?
Systems of Growth thinking is when both enterprise and IT leadership view the role and scope of the IT organization as a vehicle to fuel, manage and/or respond to disruption at enterprise scale and speed. An IT organization that adopts Systems of Growth thinking strives not only for operational efficiency, but also to contribute directly to business growth. Within a System of Growth, IT doesn’t just run applications; it manages platforms. An IT System of Growth doesn’t merely “own” the infrastructure, it orchestrates it. An IT System of Growth focuses on being a revenue enabler rather than a cost center.
“As organizations across industries claim to be technology firms, CIO and IT leaders are getting a seat at the table to shape the organization’s growth strategy,” said Ronak Doshi, partner at Everest Group. “A platform-based operating model that measures the platform for its growth and experience outcomes is at the center of the Systems of Growth thinking.”
“Traditional enterprise budgeting methods look at IT spend as a percentage of revenue to account for upkeep and maintenance of systems, and this leads to a constant struggle to find budgets for change initiatives,” said Nitish Mittal, partner at Everest Group. “An organization with a Systems of Growth mindset looks at IT spend as a lead indicator for future growth, and its IT funding model is based on growth and experience return on investments.”
“IT organizations struggle with legacy applications and siloed systems,” said Chirajeet Sengupta, partner at Everest Group. “Systems of Growth thinking helps them break enterprise siloes and use the power of hybrid cloud infrastructure, the enterprise data lake and AI/ML to orchestrate platforms that drive revenue expansion.”
Why is a Systems of Growth mindset critical today?
With increasing disruptions to traditional business models and the rapid adoption of exponential technologies such as Web 3.0, the metaverse and 5G, enterprises need a new technology strategy to compete in the market. Systems of Growth strategies are vehicles to fuel, manage and/or respond to disruption at enterprise scale and speed.
To remain competitive, enterprises using Systems of Growth thinking will:
- Track and respond to the technological disruption that is happening both inside and outside their defined industry boundaries. (Most disruption elements permeate industry boundaries.)
- Balance their “change versus run” priorities.
- Enable collaboration with a broad set of ecosystem participants, which could be internal and/or external to the enterprise. In fact, most use cases will be inter-enterprise and/or inter-industry implementations, with a few contained intra-enterprise use cases serving as the exception.
- Adopt a platform-based operating model to orchestrate technology and the ecosystem. This model is designed with software at the center and services wrapped around it to deliver each transaction.
Systems of Growth thinking will result in product, channel and business model innovation appropriately shaped by the nature, scale and complexity of disruptions.
In its Digital Services State of the Market Report for 2022, “Systems of Growth – Building a Platform-based Operating Model to Innovate and Differentiate at Enteprise Speed and Scale,” Everest Group investigates the reasons why enterprises should adopt a Systems of Growth strategy, which involves investments in data, platforms, customer journeys, process maps and ecosystems.
About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our research also covers the technologies that power those processes and functions and the related talent trends and strategies. Our clients include leading global companies, service and technology providers, and investors. Clients use our services to guide their journeys to maximize operational and financial performance, transform experiences, and realize high-impact business outcomes. Details and in-depth content are available at www.everestgrp.com.