In the mid-90’s, I had the privilege to work with BP as their IT organization went through a major transformation. Part of this work included working with Cranfield University (UK) and Nanyang University (Singapore) on a joint business-IT leadership development program, focused on what today we would call Relationship Management. One of the frameworks we came up with became fondly known as “Jacob’s Ladder.” (I had a particular fondness for this term as it was also the title of a great song by the Canadian rock band, Rush!)
I was reminded of this framework the other day by a response to my post on Shadow IT. Here’s Jacob’s Ladder:
The best way to think of this model is as describing a “value stack.” Although IT infrastructure delivers little to no direct business value, the valuable things you do depend upon a solid, stable, and enabling IT infrastructure (common, shared IT capability that enables everything else). With an IT infrastructure in place, you can run applications – they have more direct value than the infrastructure does, but can’t deliver any of it without that infrastructure. Applications have even more value when they enable improved (or even, innovated) business process. And improved (innovated) business process had the highest value when it creates and leverages information.
These “rungs on the ladder” are all inter-dependent, and, of course, any one of them can be further decomposed – Bob Landstrom’s comment on my earlier post referred to the OSI stack which is buried deep inside the IT infrastructure stack. As technology matures, and as business-IT maturity develops, the things in the lower levels tend to become compressed, standardized and externalized. Think of all the complexities and closed “standards” such as IBM’s SNA and so on that are now irrelevant to most of us as we leverage the Internet? As these things compress and standardize, they tend to commoditize and move into the public domain. As they do so, IT organizations are able to shift their focus and attention to the next higher rung on Jacob’s Ladder – at the very least, leveraging the standardization below, and sometimes leveraging the commoditization that comes with it (think outsourcing).
With Software as a Service (SaaS), we are seeing things from the application stack move out of the closed proprietary world (think Siebel and MS Office) into the open and external world (think Salesforce.com and Google Apps). With business process outsourcing, we are seeing entire business processes commoditized and externalized (think Amazon.com’s Fulfillment Services). The most progressive users of IT are now heavily immersed in business analytics and are focused on the top rung of Jacob’s Ladder.
So, business-IT maturity is about climbing Jacob’s Ladder – about shifting focus from Supply Management to Demand Management. Of course you have to keep coming back to lower rungs as they advance, re-standardize, and commoditize, but if you really mastered a rung on the ladder, this should not be a massive distraction. If, on the other hand, you “faked it” with bailing wire and string, the dips back down into lower rungs (i.e., lower maturity levels) are not quick dips – they are lengthy and distracting “wallows” in the mud.