Monthly Archives: September 2007

The “Level 2″ Sticking Point


I believe that the major inflexion point comes at the middle of Level 2.  The things you have to do to get from Level 1 to Level 2 are quite different from the things you must do to get from Level 2 to Level 3.  The Business-IT Maturity model is a learning curve and the middle of Level 2 is the steepest part of the curve.  The good news – progress in that middle space can be fast.  The bad news – it’s literally an uphill struggle, fraught with ambiguities and elusive shifts in IT’s role and direction that IT professionals typically don’t like.

 

If getting from L1 to L2 is about bringing order to the chaos – simplifying IT infrastructure, centralizing control over IT spending and standards, establishing credibility for project results and service performance, implementing strong process disciplines – then the L2 to L3 journey is about living with complexity, fostering self-service, decentralizing control and empowering the network.  If Level 1 to 2 is internally focused, and IT-driven, then Level 2  to 3 flips to external focus and business-driven. 

The mid-point between L2 and L3 (I estimate that about 70% of businesses in North America are here today) is a point of discontinuity.  Consider learning to crawl, then to walk, and then to run.  Once you can crawl, it’s no use trying to crawl faster and hoping to walk!  It’s no good trying to learn how to run by walking faster.  The movements are different, require different skills and bring different muscles to bear.  Similarly, the good and important disciplines you’ve introduced such as consistent project management, ITIL processes and CMMI based improvement programs that helped you get to mid-L2 will not get you to L3, and may actually impede progress.  All those disciplines are optimized for traditional transactional systems solutions and applications – the stuff of Level 1 and 2, not for collaborative, web based and groupware solutions – the focus of Level 3.

It is important to remind ourselves that as a maturity model, this is cumulative – the Level 1 and 2 demand never goes away, so the processes and disciplines needed to be effective in managing and satisfying those types of demand are important to sustain.  However, in order to stimulate demand for Level 3 capabilities, and to satisfy that demand, new disciplines must be learned, and some older disciplines must be applied with a careful hand.  An example – the Level 1 to Level 2 shift typically requires a far more rigorous approach to business cases, often achieved through sophisticated templates and NPV analyses.  Now, imagine this Level 3 scenario:  A business executive comes into work one morning bubbling with an idea she had in the shower about a novel way to incorporate RFID into the companies supply chain.  She calls her friendly IT relationship manager and explains the idea.  He says, “That’s great!  Now, here’s the business case template.  You have to figure out the lifecycle costs and value, and complete these 12 pages of project definition.  Let’s meet in a couple of weeks, and we can go through this.”  Two weeks later, the executive, with no idea how to estimate the value of an innovative business capability, and daunted by the 12 page template, decides maybe the idea was not that great after all, and drops it!

The problem here is that getting from Level 1 to 2 requires a more disciplined and consistent approach to framing, prioritizing, and driving transactional solutions.  If those same methods are applied to the more innovative possibilities that are the focus for Level 3, they will die on the vine.  The Level 2 to 3 journey requires more of a “portfolio” based approach – portfolio management for all IT investments, and a portfolio of project and program prioritization and approval methods, each suited to the types of investment being considered – infrastructure, transactional, information, and innovative, for example.

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Business-IT Maturity – a helpful lens for the future?


The Next Generation Enterprise (NGE) is highly (totally?) dependent upon IT.  A rich and robust infrastructure, user friendly tools, on demand web services, on demand processing capacity and storage space are merely table stakes for tapping the next generation of collaborative, social networking, and marketing capabilities.  IT organizations need to partner with business units and functions in new ways.  Business and IT need to have the skills to collaborate and converge in news ways – finding opportunities for product, service and process innovation.  The massive burden and resource drain from legacy systems and technologies, which often consume 80% or more of the IT budget, must be reigned in so as to free up funds and resources for the new sources of business value that are available to NGE’s.  And yet, this is proving elusive for most businesses – especially those with a long history and the associated “legacy” environment, including infrastructures, systems, skillsets and, above all, mental models about the role of IT.  Why is this proving so challenging?

Business-IT Maturity Model

Maturity models can be very useful.  I think Richard Nolan was one of the first to propose a Stage theory for IT management back in the 60′s.  The Software Engineering Institute has contributed much to comtemporary best practice with a Capability Maturity approach, and its current manisfestion CMMI.  Maturity can be a great lens or perspective through which to understand the journey to 2017.  The highly simplified Business-IT Maturity Model above separates business demand (the business’s “appetite” for IT) and IT supply (the enterprise’s ability to satisfy that demand) and explores how they mature over time, and how they are mutually dependent.  Business demand at any point in time is a complex function of industry characteristics, market forces, business vision and leadership, and many other variables.  Capital Markets (e.g., investment banking and brokerage houses) and high technology companies tend to have high demand maturity – in the financial services case, information and IT are at the very heart of the business, while in the high tech case, rapidly evolving business models (think Dell and Google, for example) are highly dependent upon agile IT infrastructures.

Business demand is also a function of IT supply – low supply maturity will constrain business demand.  For example, an IT infrastructure that is unreliable and hard to use will tend to dampen the business appetite to leverage IT for business innovation and for collaboration with customers and partners.  Typically, if business demand gets too far ahead of IT supply, there will be a change of IT leadership.  On the other hand, if IT supply gets too far ahead of business demand, IT will be seen to be overspending, resulting in a change of IT leadership.  The most common patterns are that at Level 1, business demand leads IT supply; in Level 2, IT supply tends to ‘catch up’ with and overtake demand, and in Level 3, demand and supply are closely aligned. From the perspective of late 2007, we see the majority of companies at mid-Level 2, some at high Level 2, and a minority at either low Level 3 or high Level 1.  Why are so many at mid-level 2, and seem to be struggling to get to the next level?  

 

Hello world!


Welcome to my first entry in my first blog!  (Actually, I did blog for a few days a year or so ago as a camper at a Rock ‘n Roll Fantasy Camp in New York, but it was more a monolog than blog!)  I know I’m not the first to sit at a computer intimidated by the act of joining the blogosphere.  More of this later. (I hope to explore my own reaction to/resistance to change against strong suggestions from colleages that I join the blogosphere.  I think much of that is shared experience, and what IT professionals face as the business worlds and IT profession converge over the next 10 years).

I’ve named this blog “IT Organization Circa 2017″ in an attempt to position the domain of interest – what will the IT Organization inside businesses, governments and other organized entities look like in 10 years (2017) and how did they get there?  I picked 2017 as it’s 10 years from now – a time-frame that seems to allow much change to be possible, but that I will (statistically, and hopefully) be around to see.

I’ve worked with IT organizations for about 35 years, in the US, Europe, and Australasia.  I’ve been involved with dozens of multi-client research projects that have attempted to gain insight and understanding of IT effectiveness, business value realization and organizational change management.  I watched (and hopefully, helped) over that time as the IT profession evolved from mainframe, to client-server, to web; from Assembler and COBOL, to RPGII and C, to Java and C#.  I’ve watched as the most valued IT skills evolved accordingly from coding, to business analysis and design, to demand shaping and innovation.  I’ve watched as the IT organization came “out of the shadows” as a perceived “necessary cost” to a “strategic enabler.”  Where does it go next?  How does it get there?  How does the line between what the IS organization does for the business with IT, and what the business does for themselves with IT get drawn and redrawn over time?

I hope that this blog will become something of a focal point for engaging in a global conversation about how IT organizations will evolve over the next 10 years.