I was consulting for a client recently, and they used the term “walled-off” resources to describe IT professionals who were dedicated to specific business units. (As an aside, when I first heard them using this term, I thought they were saying “Waldorf resources” and could not imagine what this meant!) Anyway, I think the principle of dedicating IT professionals to business units is important, and will be a major aspect of IT circa 2017. However, deciding exactly what IT roles should be dedicated to business units is of critical importance.
I believe that for both efficiency and effectiveness purposes, it is essential to maximize the use of common and shared IT capabilities – commonality is good for leverage, consistency, and cross-enterprise learning. Common IT infrastructures, for example, can be the most agile (assuming they are architected as such!) On the other hand, business units need IT resources who really, deeply understand the business and its customers, and are organized and motivated to move quickly in helping address business-unique challenges and opportunities. This is, of course, the age old tension between centralization and decentralization, and between generalization and specialization. Most companies today have landed on some form of hybrid model (both centralized and decentralized) – the key question is always, where to draw the ‘line’ between dedicated, business unit-specific needs and more general, shared resources.
The same issue, by the way, plays out in the broader shared services settings. I posted yesterday on process management and organizational change management being capabilities that should be grouped with IT organizations – typically as part of the centralized, shared capabilities. So the exercise of figuring out common, shared capabilities, versus business unit dedicated and unique capabilities needs to be approached from the broadest possible organizational perspective, rather than simply from an IT perspective. This exercise also needs to be reviewed on a regular basis, perhaps annually. I suggest some formality to the approach – this is ultimately a question of business operating model, and needs to involve the right stakeholders – after all, absent any formal intervention or counterbalancing forces, natural forces will ultimately drive all capabilities into business units – cost and redundancy be damned!
I’ll discuss some ideas and approaches that I have seen work well for this exercise in subsequent posts, but suffice it to say, I believe you need to start with the assumption that “it’s all common and shared unless proven otherwise.” Now, if you end up with everything being common and shared, you’ve undoubtedly missed something, but starting with the assumption that it’s all business unit unique will take you too far the other way.
Filed under: Change Management, IT Infrastructure, IT Management, IT Maturity Tagged: | business unit specfic capabilities, centralized, common and shared capabilities, decentralized, shared services
