9.10. The costs of moving to the new model

Intimately linked to any requirement to change business models would of course be the costs of change. What would it cost to move to the new model? What would it cost to not do anything and continue with the current model?

Let's start by answering the second question first because it's the easiest. The costs of not doing anything would be a continuation of the costs incurred today in terms of not 'getting value' out of IT. Examples could be unacceptable costs from a balance sheet perspective; poor operational processes with bottom-line and customer impact; missed business opportunities because of an inability to combine innovation with a short time-to-market; unwelcome legal scrutiny due to regulatory non-compliance – all the way to the near-certainty that many of your systems will be earmarked for retirement soon after a merger or acquisition because most of your IT sucks.

The answer to the first question now suddenly becomes quite easy, namely that the costs of moving to the new model would pale in comparison to the costs of doing nothing.

If we tried to quantify these costs at a high level, this is what you could expect:

  • Additional heads in the business for the new role of application manager (count 1 for each key functional area or key business process).

  • Additional heads in IT for the new roles of client manager and service manager (maps directly to the previous point, i.e. count 1 for each key functional area or key business process). ...

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