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The Case for Continual Realignment of the IT Function

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The Case for Continual Realignment of the IT Function

  1. 1. The Case for Continual Realignmentof the IT FunctionA Formicio point of view
  2. 2. 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 Our point of view is  Today’s IT delivery model depends upon based upon insights multiple partners and suppliers and experience that we have gained over time  The context within which IT organisations operate is continually changing The aim is to inform and inspire The challenge for IT leaders:  Delivering sustained performance in an ever-changing context © 2013 Copyright Formicio Limited 1
  3. 3. The context within which an IT organisation operates iscontinually 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 Continual alignment is a pre-condition of sustained performance  Shifts in context can be sudden or happen gradually over time © 2013 Copyright Formicio Limited 2
  4. 4. 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 Some misalignments are obvious, others  Business constantly challenging IT costs less so  Over-bureaucratic IT governance  Disengaged IT staff  IT perceived to be inhibitors of business innovation © 2013 Copyright Formicio Limited 3
  5. 5. The underlying cause is often a lack of alignment across thethree ‘domains of IT capability’  The Value Proposition defines WHAT IT delivers to its IT Value customers and the value they Proposition (WHAT) receive  The Operating Model defines IT Operating IT Operating HOW IT resources are organised Model State (HOW) (WHO) to deliver value  The Operating State defines Sustained performance is achieved WHO people think they are inwhen the three domains of IT capability terms of role, contribution andare aligned across the IT organisation mindset. Is a principal driver of and its external partners behaviour and engagement © 2013 Copyright Formicio Limited 4
  6. 6. IT’s Value Proposition must be aligned with the strategiesof the business IT delivers value through: IT Value  Delivery of IT services Proposition (WHAT)  Design and implementation of business solutions IT Operating IT Operating  Enabling business innovation Model State Value is typically measured in terms of:  Cost IT Value Proposition  Fit for purpose IT-enabled business Defines WHAT IT delivers to solutions its customers and the value they receive  Business innovation © 2013 Copyright Formicio Limited 5
  7. 7. IT’s Value Proposition is judged in terms of how it enablesthe business to achieve its strategic objectives IT’s Value Proposition Measure of business value Value discipline Delivering Day-to-Day “Driving up the level of service Operational Excellence IT Services at a year-on-year reducing cost” “Fast discovery and timely Customer Intimacy Delivering Business development of business Solutions solutions” Enabling Business “Number of innovative Thought Leadership Innovation business ideas introduced”  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 © 2013 Copyright Formicio Limited 6
  8. 8. IT’s value is defined by the Value Proposition ... anddelivered through its Operating Model An IT Operating Model comprises many facets, including: IT Value Proposition  Processes  Roles, skills and jobs IT Operating IT Operating  Structure Model (HOW) State  Governance  Management systems  Information and tools IT Operating Model  Internal and external resources Defines HOW IT resources are organised to deliver value An IT Operating Model needs to be efficient, effective, reliable, scalable and agile © 2013 Copyright Formicio Limited 7
  9. 9. An IT Operating Model comprises a number of interrelatedfacets Manage Customer Relationships Manage Business-IT Portfolio Processes – effective Manage Enterprise Architecture and efficient Discover Business Deliver Business Operate Business processes delivering IT Operating Model Organisational Design – structure of -IT Solution Systems predictable and Potential s resources and Operate IT Infrastructure Manage IT Supply repeatable services Manage IT Organisation individual Org. competencies Processes Design SVP Governance – structures Companies/ BUs Executiv e Council that orchestrate Measurement – that Management Team development, funding, reflects outward- Core Process Council adjudication and Governance Measurement facing business execution of decisions Organization objectives and key performance Services indicators Sourcing – segment Sourcing Portfolio suppliers, understand their value proposition, Services Portfolio – Premiere Service aligned and segmented Service Options develop the right • Basic product set • 24 x 7 hours • Premium coverage - Fastest response time • • • Product set extensions Mobile User Advanced Technology Introduction product and service - Fastest repair time • Other relationships and offerings that meet Service Level Quality Standard Service execute flawlessly business demand • Basic product set • Prime hours • Guaranteed coverage, e.g., - Response time - Repair time Service Content Richness All the interrelated facets of the Operating Model need to be in alignment in order to deliver the intended Value Proposition © 2013 Copyright Formicio Limited 8
  10. 10. The Operating State of IT is a reflection of who they ‘thinkthey are’ WHO people ‘think they are’ is defined by: IT Value Proposition  The degree to which their values are aligned with those of the organisation IT IT  The type of work they are asked to do Operating Operating Model State  Their relationship with colleagues (WHO)  Their relationship with their manager  Methods and style of communication Operating State  The degree to which they feel Defines WHO people think they empowered are in terms of role,  The degree to which they feel they contribution and mindset. Is a are learning and developing as IT principal driver of behaviour and engagement professionals © 2013 Copyright Formicio Limited 9
  11. 11. The Operating State can be viewed on a spectrum acrossfour facets Low performance High performance Easily stopped Resignation Possibility Resourceful Little accountability Accountable Risk-averse Power Risk-taking Frustrated Ambitious Narrow thinking Separateness Connectedness Holistic thinking Independent action Coordinated action Finger pointing Identity Responsible Sub-optimising Optimising Fear and Safety Avoid conflict Suppression and Resolution Address conflict Distrustful Trustful Undiscussables Contention Straight talk Kill the messenger Safety Look for the fatal flaw Arrogance and Inquisitiveness Looking for possibilities Defensiveness and Receptiveness Trust authoritative views Challenging status quo Don’t admit failure Learning Learn from failures ‘Not invented here’ Open to new ideas © 2013 Copyright Formicio Limited 10
  12. 12. Continual Alignment is an organisational capability thatneeds to be developed  Alignment does not come naturally: it takes conscious and deliberate effort IT Value  Alignment is an organisational Proposition (WHAT) capability  Organisational capabilities are IT IT Operating Operating embedded in the way things are done Model (HOW) State (WHO) and are not lost when individuals leave  Organisational capabilities comprise Accountability for continual shared mental models, frameworks, alignment rests with the IT leadership language, skills, mindsets, beliefs, conventions and experiences that collectively drive behaviour © 2013 Copyright Formicio Limited 11
  13. 13. 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 misalignment 3. Prioritise critical areas for realignment 4. Define the specific actions to close the gaps Sustained 5. Implement the actions performance is an 6. Track progress to realignment outcome of continual alignment At the same time develop alignment as an organisational capability © 2013 Copyright Formicio Limited 12
  14. 14. 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 The quest for 4. Each of the three domains comprise facets that alignment is never also need to be aligned ending: as the 5. Alignment is an organisational capability that context changes so does the need needs to be developed to realign 6. Accountability for alignment rests with the IT leadership © 2013 Copyright Formicio Limited 13
  15. 15. 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 © 2013 Copyright Formicio Limited 14
  16. 16. This is an Insight Presentation by Formicio 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 © 2013 Copyright Formicio Limited 15
  17. 17. For further information contact ... David Trafford Peter Boggis +44 (0)20 7917 2993 © 2013 Copyright Formicio Limited 16