The Case for Continual Realignment of the IT Function

The Case for Continual Realignment of the IT Function

A Formicio point of view

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The purpose of this slideshow is to share a point of view

Today’s reality: Our world is becoming more digital Businesses are increasingly dependent

upon IT Most business innovations are IT-enabled Today’s IT delivery model depends upon

multiple partners and suppliers The context within which IT organisations

operate is continually changing

The challenge for IT leaders: Delivering sustained performance in an

ever-changing context

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Our point of view is based upon insights

and experience that we have gained over time

The aim is to inform and inspire

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The context within which an IT organisation operates is continually changing

Changes that shift context include:– New business strategies– Mergers/acquisitions/divestments– Disruptive technologies– New sourcing options

Changes in context can result in the IT organisation becoming misaligned:

– With the business units it serves– Across the different functions, units, partners

and suppliers

Shifts in context can be sudden or happen gradually over time


Continual alignment is a pre-condition of

sustained performance

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Symptoms of misalignment can be many and various

‘Noise’ from business leaders Poor, or inconsistent, delivery of IT

services and service levels Business preferring to talk directly with

external IT consultancies or technology suppliers

Lack of responsiveness to business requests

Business constantly challenging IT costs Over-bureaucratic IT governance Disengaged IT staff IT perceived to be inhibitors of business

innovation


Some misalignments are obvious, others

less so

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The underlying cause is often a lack of alignment across the three ‘domains of IT capability’


IT Operating Model(HOW)

IT Operating State

(WHO)

IT Value Proposition

(WHAT)

The Value Proposition defines WHAT IT delivers to its customers and the value they receive

The Operating Model defines HOW IT resources are organised to deliver value

The Operating State defines WHO people think they are in terms of role, contribution and mindset. Is a principal driver of behaviour and engagement

Sustained performance is achieved when the three domains of IT capability are aligned across the IT organisation

and its external partners

IT’s Value Proposition must be aligned with the strategies of the business

IT Operating Model

IT Operating State


(WHAT)

IT delivers value through: Delivery of IT services Design and implementation of

business solutions Enabling business innovation

Value is typically measured in terms of: Cost Fit for purpose IT-enabled business

solutions Business innovation

IT Value PropositionDefines WHAT IT delivers to its customers and the value

they receive

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IT’s Value Proposition is judged in terms of how it enables the business to achieve its strategic objectives


Delivering Business Solutions

Enabling Business Innovation

Delivering Day-to-Day IT Services

Measure of business value

“Driving up the level of service at a year-on-year reducing cost”

“Fast discovery and timely development of business solutions”

“Number of innovative business ideas introduced”

IT’s Value Proposition Value discipline

Operational Excellence

Customer Intimacy

Thought Leadership

Not all businesses within an enterprise will require the same level of performance in each value discipline

However a threshold level of performance is required in each value discipline As the context changes, IT’s value proposition needs to reassessed and

recalibrated

IT’s value is defined by the Value Proposition ... and delivered through its Operating Model

IT Operating

Model(HOW)

IT Operating State


An IT Operating Model comprises many facets, including: Processes Roles, skills and jobs Structure Governance Management systems Information and tools Internal and external resources

An IT Operating Model needs to be efficient, effective, reliable, scalable and agile

IT Operating ModelDefines HOW IT resources are organised to deliver

value


Org.Design

Measurement

Services PortfolioSourcing

Governance

Processes

IT Operating Model

An IT Operating Model comprises a number of interrelated facets

Executive

Council

Core Process Council

Management Team

Management Team

Companies/BUs

Companies/BUs

OrganizationOrganization

SVPSVP Governance – structures that orchestrate development, funding, adjudication and execution of decisions

Organisational Design – structure of resources and individual competencies

Service Content Richness

Ser

vice

Lev

el Q

ual

ity Standard

Service

PremiereService

• Basic product set• Prime hours• Guaranteed coverage, e.g., - Response time - Repair time

• Basic product set• 24 x 7 hours• Premium coverage - Fastest response time - Fastest repair time

• Product set extensions• Mobile User• Advanced Technology Introduction• Other

ServiceOptions

Services Portfolio – aligned and segmented product and service offerings that meet business demand

Measurement – that reflects outward-facing business objectives and key performance indicators

Processes – effective and efficient processes delivering predictable and repeatable services

Sourcing – segment suppliers, understand their value proposition, develop the right relationships and execute flawlessly


Manage IT Organisation

Manage IT Supply

Operate IT Infrastructure

DiscoverBusiness

-ITPotential

DeliverBusinessSolutions

Operate BusinessSystems

Manage Enterprise Architecture

Manage Business-IT Portfolio

Manage Customer Relationships

All the interrelated facets of the Operating Model need to be in alignment in order to deliver the intended Value Proposition

The Operating State of IT is a reflection of who they ‘think they are’

WHO people ‘think they are’ is defined by: The degree to which their values are

aligned with those of the organisation The type of work they are asked to do Their relationship with colleagues Their relationship with their manager Methods and style of communication The degree to which they feel

empowered The degree to which they feel they

are learning and developing as IT professionals

Operating StateDefines WHO people think they

are in terms of role, contribution and mindset. Is a principal driver of behaviour

and engagement


IT Operating

Model

IT Operating

State(WHO)


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The Operating State can be viewed on a spectrum across four facets


Power

Easily stoppedLittle accountability

Risk-averseFrustrated

Narrow thinkingIndependent action

Finger pointingSub-optimising

Avoid conflictDistrustful

UndiscussablesKill the messenger

Look for the fatal flawTrust authoritative views

Don’t admit failure‘Not invented here’

ResourcefulAccountableRisk-takingAmbitious

Holistic thinkingCoordinated action

ResponsibleOptimising

Address conflictTrustful

Straight talkSafety

Looking for possibilitiesChallenging status quo

Learn from failuresOpen to new ideas

Resignation

Separateness

Fear and Suppression

Arrogance and Defensiveness

Possibility

Connectedness

Safety and Resolution

Inquisitiveness and Receptiveness

Identity

Contention

Learning

Low performance High performance

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Continual Alignment is an organisational capability that needs to be developed


Alignment does not come naturally: it takes conscious and deliberate effort

Alignment is an organisational capability

Organisational capabilities are embedded in the way things are done and are not lost when individuals leave

Organisational capabilities comprise shared mental models, frameworks, language, skills, mindsets, beliefs, conventions and experiences that collectively drive behaviour

Accountability for continual alignment rests with the IT

leadership

IT Operating

Model(HOW)

IT Operating

State(WHO)


(WHAT)

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The first step is to assess the degree of misalignment


1. Conduct an assessment to identify the critical areas of misalignment

2. Identify root causes of misalignment3. Prioritise critical areas for

realignment 4. Define the specific actions to close

the gaps5. Implement the actions6. Track progress to realignment

Sustained performance is an

outcome of continual alignment

At the same time develop alignment as an organisational capability

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Our point of view on IT Alignment revisited

1. The context within which IT organisations operate is continually changing

2. When IT organisations under-perform it’s often as a result of a lack of alignment across the three ‘domains of IT capability’

3. The three domains of capability are IT Value Proposition, IT Operating Model and IT Operating State

4. Each of the three domains comprise facets that also need to be aligned

5. Alignment is an organisational capability that needs to be developed

6. Accountability for alignment rests with the IT leadership


The quest for alignment is never

ending: as the context changes so

does the need to realign

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The power that comes from having a shared point of view

Having a shared point of view is a powerful tool for collective leadership. It can bring clarity and balance. It can create a context where everything makes sense, people know exactly who they are, what is needed and why they’re here. Effectiveness is maximal, yet actions seem minimal. Everything flows as it should.

Developing a point of view takes time and effort, but the outcome will be worth it.

The Formicio Team


16© 2013 Copyright Formicio Limited

We offer insights, capabilities and experience that will help you understand and improve your organisation’s future.

Specifically we can help you: Explore alternative futures.

Transform organisations to an improved future. Develop capabilities needed to ‘pull’ your organisation into an

improved future.

One of our specialist areas is IT transformation

This is an Insight Presentation by Formicio

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For further information contact ...


David [email protected]

Peter [email protected]

+44 (0)20 7917 2993www.formicio.com

mailto:[email protected]



http://www.Formicio.com/

The Case for Continual Realignment of the IT Function

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