Walking Ever Faster Will Not Get You Running!

If, arbitrarily, you pick 3 levels of Business-IT Maturity – say Level 1 = low, Level 2 = medium and Level 3 = high, you will typically find that the things you have to do to get from Level 1 to Level 2 not only won’t get you from Level 2 to Level 3 – they will actually prevent you from reaching Level 3!  The trick is to recognize what these things are, and that you are entering a very different learning curve.  For example, if your solutions delivery process is broken, you need a great deal of rigor and discipline – in the form of Project Management and a Systems Development Life Cycle.  That will get you from “chaotic” (Level 1 in my hypothetical 3-Level scale) to “managed” (mid-Level 2).  But over time you will find the limitations of a “managed” approach to solutions delivery – especially when you need to implement “fuzzier” solutions, such as social media, or business analytics.

One Size Does Not Fit All

With solutions delivery, one-size does not fit all, and the methodology that works well for a relatively easily pre-specified transaction processing system (order-to-cash, for example) will not work well for something that is less predictable and more emergent.  Hanging in there with the “official” methodology (for fear of reverting to the chaotic situation that persuaded you to implement the methodology in the first place!) will frustrate the developers, annoy the business client, and will probably lead to a poor or unworkable solution – which will upset everybody!  What is needed is a finer-grained way of categorizing types of business solutions, and flexibility with methodologies to fit the best approach for a given solution type.

What Worked for Transactional Systems Won’t Work for Innovation Solutions

Collaboration and Knowledge Management initiatives are not readily planned using traditional project management methods – they tend to follow an ‘emergent’ pattern that is typically non-linear and somewhat unpredictable.   A traditional planning style, with detailed deliverables, work steps, activities and due-by dates must give way to a more iterative and organic approach.

Social Media Projects Should be Led

You cannot mandate participation in a community – you can invite participation and create reasons to do so. You cannot schedule a date by which a given percentage of a community will be collaborating on a wiki, for example – you can only set expectations, model desired behaviors, and create good reasons for people to become active users of the wiki.  Then you must reevaluate the results and adjust the approach in the light of experience.

Recognizing the Hard-Won Battle – and the Need to Fight New Battles

It seems that sometimes the battle of getting from Level 1 to Level 2 Business-IT Maturity is so hard won, and the win so apparently fragile, that leaders hang on to the methods that got them to Level 2.  This is about being really good at solving yesterday’s problems.  It’s a different world today, and the ways that technology and information can be exploited for business advantage demand different approaches.  Don’t let the trappings of Level 2 restrict your ability to get to the next level!

My New Venture

The venture is a partnership with my dear friend and long-time colleague, Roy Youngman.  (See Roy’s blog).  Roy and I have been on a fascinating journey over the last 20 years – learning about the levers that impact IT performance and business value.  Back in the 1990′s, I was a Partner at Ernst & Young‘s Center for Business Innovation while Roy led a team at the Center for Information Systems Planning and Delivery, taking what the Innovation Center discovered and developing tools and methods for use by E&Y’s consultants and clients.   Since then, Roy and I worked together at The Concours Group (and nGenera, when they absorbed Concours) and as independent consultants.

Social Tools Shape a Vision…

For the last 5 years, we have focused on driving IT improvement using social media and, though I hesitate to use the term, leveraging Web 2.0 and 3.0 capabilities.  We have worked together on client engagements and multi-company research.  We have worked to improve how management consulting works – a process that has always struck us as a “leaky” and inefficient!

We’ve focused on three questions:

1. How can the business value of IT be increased using the kinds of social tools that are transforming they ways friends and communities interact, share and collaborate?
2. How can social networking and collaboration capabilities be used to increase organizational clarity and drive higher engagement among IT professionals?
3. How can the knowledge transfer process be improved to, within and between our clients?

We’ve worked with various tools (e.g., SharePoint, MediaWiki, Confluence) and with a variety of plug-ins and extensions in support of IT organizations who are trying to improve their performance and the value they deliver to their business clients and customers. We’ve created a meta-model of IT Capabilities.  We’ve created an architecture for a Semantic Wiki, based on this meta-model and populated from our combined 60 years of IT experience.

The ‘learning journey’ has been rewarding, and from it a vision has emerged – one where IT professionals and their customers deliver services through a Web-based social context.  I will use this blog to post about what we have learned and are learning.

In time, we will create a separate web site and provide the means for others to collaborate with us on this journey, but for now we are strictly focused on our client work (and our respective blogs!)

Some Early “Lessons Learned”

Create a baseline quickly

Set the quality bar high, and make rapid, incremental improvements thereafter.  The name of the game is “emergence” – you need sufficient structure to help people have some sense of the destination, but not so much that they can’t participate in shaping the journey.

The most effective way to instill change is through “Pathfinder Projects”

Pathfinder Projects are ones that have to be undertaken anyway (their primary purpose) but that have an explicit secondary purpose of leveraging one or more social capabilities, such as a Wiki (e.g., adding quality content) as an outcome of the project.

Be “in the flow”

The social tools need to be incorporated into the natural work flow.

Take a ‘cascading’ approach to deployment

Deploy in “waves”, starting with IT leadership and Pathfinder Projects, continuing with Process Owners, natural Communities of Practice, and grow from there based upon how the collaborative/social energy flows.  But also be sensitive to naturally emerging opportunities – go to where the puck is going!

Pride in workmanship trumps controls!

It is far more important to instill a pride-in-workmanship than to install a complex review and control process.

Expect a Power-Law distribution

A Power-Law Distribution is expected and good; a few will contribute a lot and some will contribute little, but everyone has something worth contributing.

Leaders demonstrate commitment by example

Leaders must demonstrate their commitment ‘by example’ while avoiding the temptation to criticize (which will be initially easy).

Are you working with Social Tools to improve IT work?  What are you doing and how is it working?

Image courtesy of pcms consulting

Why IT Renewal?

In the first post in this series, I discussed how information and technology are becoming ever more central to what an organization does and how it does it. I further argued that consumer technology is beginning to have a dramatic impact on enterprise IT – no big news unless you’ve been hibernating for a few years!

With the increasing significance of information and IT, the rapid spread of consumer IT and continued economic doldrums, business leaders are scrambling for any edge they can find to drive business growth and innovation, while keeping costs under control. It’s not just the consumer technologies (e.g., smart phones, tablet computers, sensors) being recognized as potential tools in the competitive battles for customers – it’s also the new workforce with their comfort with IT and expectations for new ways of working (e.g., instant messaging, presence computing, mobile everything.)

How The Cloud can Accelerate Renewal

So, why might Cloud Computing represent an important vehicle for delivering IT services? I see at least three major opportunities for Cloud Computing to accelerate IT renewal:

1. Finding and validating new business opportunities.
2. Improving existing business capabilities.
3. Transforming how IT capabilities are managed and deployed.

Let’s take these in turn and explore how Cloud Computing might fit into your situation.

Finding and Validating New Business Opportunities

Cloud-based services make it relatively easy for a business to experiment with new products, services and even new business models. Not having to procure or build costly infrastructure can reduce or even eliminate capital outlay. It can speed time to market and ensure future flexibility as market conditions and competitive responses change.

Short lead times, the ability to more closely align costs with benefits and the flexibility to scale up or down as needed represent an attractive value proposition for those wanting to explore the unknown. And an added attraction for using the Cloud to explore new business opportunities is that the need to integrate with existing systems and data will typically be less than that associated with replacing or upgrading existing solutions.

Improving Business Capabilities

This can be a more challenging play than the renewal situation above due to the need for interfaces to existing systems. But it can still represent a worthwhile approach, especially if current capabilities are lacking. If you’ve been diligent about Service Oriented Architecture, interfacing legacy applications with Cloud services should not present a significant challenge. If you’ve been proactive around business analytics and data warehousing, again, building necessary data interfaces should not be a reason to break a real sweat.

However, if you are behind the curve on SOA and business analytics, moving existing solutions to the Cloud might be more challenging. On the other hand, now might be a good time to catch up with the state of the art, and see what you’ve been missing in modernizing and virtualizing existing systems.

Transforming How IT Capabilities are Managed and Deployed

This is the Cloud play I am personally most excited by for several reasons:

• Traditionally, true to the “cobbler’s child” syndrome, IT organizations are typically quite lacking in their own use of IT – managing IT capabilities and assets via Excel spreadsheets, email and lots and lots of meetings!
• As I’ve noted before, moving to the Cloud is inevitable – the only question for CIO’s and the IT professionals that report to them is, “Will we lead the shift or be left in the dark while our business clients and customers race to the Cloud?” Leveraging the Cloud for internal IT purposes is one way of getting ahead of the game, at least in terms of learning and experience.
• I believe the nature of IT work, with its complexity and knowledge intensiveness, lends itself to a more collaborative and networked approach, which in turn lends itself to a Cloud-based platform.

So, how can IT organizations leverage Cloud services for internal use? First, we should recognize that as business and IT converge, the management of IT assets and capabilities is becoming both more complex and more distributed.

IT Management as a Distributed Activity

Roles that were traditionally held by IT professionals, such as business analytics and application configuration are devolving into the business units. IT professionals are assuming new roles such as sourcing management, information brokering and enterprise architects. Alvin Toffler, in his remarkable 1980 book The Third Wave, postulated that the separation of production from consumption was an unnatural act, and that technology would over time enable us all to become ‘prosumers’ – producing ourselves what we needed to consume. The Cloud truly opens the door to the age of the Information Prosumer.

IT Management as a Complex Activity

As IT management expands beyond the traditional roles of the IT professional to the emerging roles of Information Prosumers, the complexity of our IT environments is increasing. How can we turn the increasing complexity of the IT environment to our advantage?

The study of complex systems offers some important insights into this question. It teaches us, for example, that organization is a natural, spontaneous act and that emergent structure trumps imposed hierarchy and control. It reveals that creativity arises from variety and randomness. It highlights the importance of relationships, porous boundaries, free flows of information and self-reference.

These clues point us to what I refer to as the “Five C’s” of Information Management – Collaborating, Coordinating, Connecting, Co-creating, and Coalescing. And these Five C’s, it turns out, are ideally suited to Cloud-based services.

In the next and final part of this short series, we will drill into the Five C’s of Information Management, and how Cloud Computing represents a fast path to realizing these characteristics.

Image courtesy of Forex Learning Journal

For a blog entitled “IT Organization 2017″ and for a management consultant who has had a very satisfying professional career consulting to IT organizations, the title of this post may seem both extreme and inappropriate.  However, I use the title not just as a controversial ‘hook’ to attract readership, but as a sincere expression of what I think is happening today – and will continue to do so.  The traditional role of the IT organization is on the decline and will never return to the importance and business value impact it had over the last 50 years.  The good news is, there is a crucial new role emerging – and for IT leaders that can envision and lead the new possibilities, I believe there’s a bright new future – perhaps brighter than the traditional IT leadership role.

So, Who Screwed Up the IT Organization?

I’m not sure this is anyone’s ‘fault’ per se, or could have been avoided.  Rather it is a natural by product of technological evolution.  Back in the late 1800′s, many corporations employed Chief Electrical Officers.  Nick Carr gets into this nicely in his aptly named book, “The Big Switch.”

A hundred years ago, companies stopped generating their own power with steam engines and dynamos and plugged into the newly built electric grid. The cheap power pumped out by electric utilities didn’t just change how businesses operate. It set off a chain reaction of economic and social transformations that brought the modern world into existence. Today, a similar revolution is under way. Hooked up to the Internet’s global computing grid, massive information-processing plants have begun pumping data and software code into our homes and businesses. This time, it’s computing that’s turning into a utility.”

The shift from electricity as a highly specialized resource to commodity took about a decade as standards such as voltage, alternating current, plug and socket configurations, and so on were settled.  Once the standards existed, businesses could simply plug into a grid – electricity became a commodity, and the Chief Electrical Officers become extinct as the Dodo.

An Historical Perspective

The first commercial mainframe computers, the LEO were created in 1951 by J. Lyons and Company, a British catering and food manufacturing firm.  The idea of a food and catering company today designing and building it’s own computer is unthinkable!  I remember in the late 1960′s, businesses such as Massachusetts General Hospital were creating their own programming languages, data base software and teleprocessing monitors – activities that would be considered wholly irresponsible today.  I wonder if 15 years from now we will look back at the turn of this century and be bemused by the fact that typical companies of any size at all maintained IT organizations – in some cases, thousands of IT professionals – writing programs, tending help desks, and so forth.

So, What’s Happening to the IT Organization?

For many years the annual surveys of top CIO issues list business-IT alignment. It’s a noble and challenging goal – and it’s no longer the right goal! A combination of technology advances, advances in standards and architectures (mostly prompted by the Internet revolution) and the increasing IT literacy across the business means that the challenge has moved beyond Business-IT Alignment to Business-IT Convergence.

From Business-IT Alignment to Convergence

Let’s drill further into this convergence phenomenon. Today, many IT activities, including project management, information analysis, application configuration are devolving into Business Units while others are consolidating with support functions such as HR, Finance, etc.  Helping to drive this is the rapid consumerization of IT devices and services, with iPhone’s, iPads, Android devices and the like becoming an important window into business systems and information.  Further driving this is the increasing ‘IT Savvy’ and confidence with IT that business executives, line managers and workers (especially, knowledge workers) increasingly feel.  This is in part generational – people entering the workforce with high IT literacy, and in part a byproduct of people’s engagement through social media, e-commerce and so on.

From Owning to Sourcing IT Capabilities

The last decade or so has seen a shift from owning all needed IT capabilities (data centers, server farms, software teams, application development groups, desktop support, etc.) to sourcing these capabilities externally.  Today, traditional functional outsourcing is being continuously expanded, and now often includes Business Process outsourcing as well as the outsourcing of compute power, data storage, IT infrastructure, applications and platforms through the rapid rise of Cloud Computing.

Information is Becoming both Strategic and Implicit

Information is becoming an increasingly strategic asset.  There is compelling research data showing how companies are successfully embracing and competing on business analytics.  At the same time, data is also becoming implicit to business management and operations – increasingly representing what the business manages and how it manages. In many respects, the context for IT today is becoming less about IT and more about information – the ability to capture, integrate, interpret, predict, and act is increasingly the holy grail of competitive advantage – and that belongs in the business – not in a separate specialist group.

So, Where Do IT Capabilities Belong?

Now, I’m on dangerous ground, because the answer depends – on the nature of the business, IT savvyness of business managers and knowledge workers, and their vision for how they want to deploy and manage information and IT.  But, I’d argue that many IT capabilities belong in business operations.  For example:

• Business Process Management
• Business Analytics
• Project Management
• Satisfying Business Unit application needs

Other IT capabilities belong in the governance of the business.  This might include, for example:

• Enterprise Architecture
• IT Strategy
• Portfolio and Program Management

And finally, some IT capabilities should be centrally coordinated and shared. Examples here include:

• Common and shared IT Infrastructure
• Enterprise Applications

So, What Are the Implications for IT Leadership and the IT Professional?

I will save that for a follow-up post, but suffice it to say that most companies and their IT organizations are not quite ready for the shift I’m espousing (and, indeed, predicting).  And, I think it is the clear responsibility of IT leadership to help lead this revolution – ensuring that it is orderly and safe – ensuring that the business and IT professionals are fully prepared and able to take advantage of business-IT convergence.

Please join me in the next post on this topic – and in the meantime, please weigh in with your perspectives and observations.

Painting by Joseph-Noël Sylvestre: The Sack of Rome by the Barbarians in 410

Some Principles for ‘Social’ IT Management

Over the course of several client engagements, Roy and I have developed a short list of principles to guide the way we help a client move towards a ‘social’ approach to IT management:

• Create a baseline quickly, set the quality bar high, and make rapid, incremental improvements thereafter.
  • Rationale: The emergent and more parallel process implied by a social approach can feel a little intimidating at first.  “Will I look like a fool?  How will my co-authors react?”  We’ve found that the best way forward is to “Just do it!”  Get started, and damn the torpedoes!  But also, don’t ask people to begin with a blank slate.  While some clients are o.k. starting from scratch, most prefer a starting point – a straw dog, if you will.  Having said that, it’s important to make it clear that the straw dog is just a starting point – that the expectation is that this will be refined into something we can really use and be proud of!
• Follow a ‘cascading’ approach – deploy in waves, starting with IT leadership, rapidly engage Process Owners, then members of Centers of Excellence, and finally everyone.
  • Rationale: To be frank, there is something “1.0″ about this cascading approach – it’s rather top-down which flies in the face of a truly emergent, egalitarian and collaborative approach.  But most organizations have a hard time jumping from the “1.0″ to the “2.0″ paradigm.  So, we’ve found a “1.5″ approach to be a useful interim state.  It acknowledges the special role of the IT leadership team, and the reality of engaging them first.  It also puts them in a better position of experiencing the new approach and being able to model desired behaviors.  The trick is not to get stuck in a mode where everything has to start with the IT leadership team.  Get the process owners appointed early (they usually already exist, even if that role has not been formalized) and they in turn will engage process teams.  Typically, there are Centers of Excellence or Communities of Practice that are already blogging and participating in wikis (the IT architecture community is often an early adopter) so it is a natural to bring them into the tent.  Just be careful to not shut down their activity by legitimizing it.  They thrive as a 2.0 collaborative community because that was a truly emergent practice for them.  Legitimizing this practice as “leadership sanctioned and monitored” can shut it down, or drive it back underground, so don’t be too heavy handed in this sanctioning – shine a light on it, but not a floodlight!
• It is far more important to instill pride-in-workmanship than to install a complex review and control process.
  • Rationale: Coming from the 1.0 world, it is natural for leadership to want to place controls all over the wiki environment.  I recall one client executive, when I first described the plans for their ‘social’ IT management, looking aghast, and saying, “You aren’t seriously suggesting we’d let stuff go up on the Wiki before it was fully vetted and approved?”  This is a natural reaction, but must be resisted.  The power and wisdom of the crowd to shape and continuously improve is relentless – if you let it be!
• A Power-Law Distribution is expected and good; a few will contribute a lot and some will contribute little, but everyone has something worth contributing.
  • Rationale:  There’s no way around this.  It’s a well-researched and documented phenomenon.  Your major contributions will be limited to a small proportion of the IT organization.  Many will seemingly be bystanders.  The fact that they aren’t in the Wiki every day, participating in discussion threads, creating Wiki pages does not mean they aren’t participating or getting value from the it – they are.  Don’t be put off by it – just accept it and be thankful.
• Leaders must demonstrate their commitment ‘by example’ while avoiding the temptation to criticize (which will be initially easy).
  • Rationale: Early on, people will look to IT leadership to see if they are “walking the talk.”  If they are, others will join the revolution.  If they are not – this too shall pass!
• Consistency is a key to success; if every content page looks different, the Social platform will not create a sustainable social web.
  • Rationale: The emergent properties are a good force to tap, but can be a double-edged sword.  We’ve seen many clients with SharePoint (or Lotus Notes way back) where people were encouraged to participate. And participate they did – in spades!  Before long there were SharePoint sites everywhere – each with their own structure and style.  Pretty soon, the collaboration ecosystem is un-navigable.  You have to strike a balance between emergent and structured – and consistency in style and structure are important to sustain this.  Provide templates to make it easy for people to conform to a common style.  And have active Collaboration Managers and Wiki Gardeners whose role includes encouraging a clean and consistent style.

We will end this 3-part series here – but please keep an eye open for upcoming posts that further explore our work in this space.  Or ping Roy or me for a discussion on how this might apply in your organization.

And, of course, please comment on your thoughts and experiences – this is an emerging space, and we all have lots to learn about social means to improving IT management!

Graphic courtesy of Literate Web

Related articles

• ‘Social’ IT Management – Part 1 (vaughanmerlyn.com)
• ‘Social’ IT Management – Part 2 (vaughanmerlyn.com)
• Who should be in charge of Enterprise 2.0? | ZDNet (zdnet.com)
• Enterprise 2.0: at an Inflection Point – Express Computer (expresscomputeronline.com)

What Does ‘Agility’ Mean to an IT Organization?

Wikipedia defines agility as:

The ability to change the body’s position efficiently, and requires the integration of isolated movement skills using a combination of balance, coordination, speed, reflexes, strength, endurance and stamina.  In business, agility means the capability of rapidly and efficiently adapting to changes.”

From the perspective of the research project, we defined IT agility as:

The ability to rapidly and easily incorporate new technologies and methods into the way the IT organization operates, thereby having the capability to effectively sense and respond to changing business conditions in a timely manner.”

Why Does Agility Matter to an IT Organization

Simply stated, most business executives I speak to feel that their IT organizations lack agility! To paraphrase the typical response:

Things take too long to get to the point where they are delivering business results, and the IT organization typically seems to be behind the curve on emerging technologies!”

You may disagree with this statement, but I think most of you will agree that it is the common perception of your business executives.  In a world that seeks instant gratification, that is a value that is not typically embraced by IT organizations – and perhaps it should not be?  In a world where the business and competitive context can change almost overnight, increasing IT organizational agility should become an active goal.

So, What Have We Found?

The data is still coming in, and the numbers being crunched, but a couple of early observations:

1. Your perspectives on Enablers and Barriers to agility depend upon where you sit.  In a federated IT Operating Model (some centralized, some decentralized), those that sit in the central camp tend to see shared IT capabilities as enablers of agility, whereas those in the decentralized units tend to see shared capabilities as inhibitors to agility, and seek more freedom from the ‘mothership’ in order to increase agility.
2. Even with the definition of IT organizational agility provided as part of the research, its meaning is very squidgy and Rorschach-like – you read into “IT organizational agility” what you want to see.
3. Fans of Agile Development equate IT organizational agility to Agile Development – they are essentially one and the same to them.  On the other hand, when you drill into what teams are doing with Agile Development, what you find is all over the map.  To some teams, it is a license to take short cuts, no matter what the consequences!
4. Governance is desperately misunderstood!  This will be a subject of a separate post (or two!), but what I am seeing as I pour over the research findings indicates some governance perceptions that are way off base.  Again, it depends where you sit, but while some see governance as an agility enabler, others (in the same organization!) see it as a major barrier!
5. The very different perspectives on what is meant by IT organizational agility and why it is important is quite troubling – if you can’t agree on what it means and why you want it, you are unlikely to increase your IT organizational agility!

Three Ways To Increase IT Organizational Agility

So, given those findings, here are three relatively ‘quick wins’ that will at least get your leadership talking in the same direction (excuse the mixed metaphor!)

1. Get clarity on what IT organizational agility means to you.

Don’t get wrapped up in academic definitions – focus on what it means to your organization.

• What are your business drivers for IT organizational agility?  If you were more agile, what good things would you be capable of that you aren’t today?
• Complete the tool in our research survey and use the 6 Domains of IT Agility to drive discussion internally on your enablers and barriers to agility.
• Get to a consensus on the factors that need to be worked on for increased agility.
• What do you see as the connections between agility and collaboration?
• What do you see as the connections between agility and knowledge management?
• What do you see as the connections between agility and Enterprise Architecture?

2. Identify where Agile Development fits in and how you will exploit that without increasing project risk.

Get clarity on Agile Development – what it is, and what it is not!

• How do you define Agile Development for your organization?
• When, where and how should you use Agile Development?
• How will you define and monitor success?
• What ‘unintended consequences’ will you look for and how will you mitigate against them?
• What else is needed to increase IT organizational agility above and beyond Agile Development as you’ve define it?

3. Get to a shared understanding of IT Governance.

Get clarity on how you define IT Governance.  Again, don’t get wrapped up in academic definitions – define what it means to your organization.

• What are the various aspects of organizational governance in your organization? (Don’t be limited by “formal” structures – consider aspects such as empowerment, decision rights, accountabilities, processes, culture of compliance, consequences for compliance or lack thereof.)
• What is it about your IT governance that enables agility?
• What is it about your IT governance that inhibits agility?

My roles have included:

• Leading breakthrough research into IT Transformation and Value Realization at the Center for Business Innovation
• Helping large, global companies align IT capabilities with business strategies, and establishing mechanisms and structures to maintain continuous alignment
• Improving the performance of IT organizations through the adoption of leading practices and Web 2.0 technologies
• Working with senior IT and business executives and their change implementation teams to address the people implications of IT-enabled change to accelerate and strengthen value delivered
• Educating IT and business executives on the strategic and innovative use of IT

I have led many significant multi-client research projects from a groundbreaking IS Leadership Program that studied IT transformation initiatives over a 3-year longitudinal study at 30 leading multi-national corporations, to Capability on Demand, Contemporary Practices in IT Benchmarking, Sustaining Enterprise Architecture and IT Value Realization Strategies.  I am a seasoned public speaker, lecturing around the world to business and IT audiences.

My publications include Development Effectiveness: Strategies for IS Organizational Transition (co-authored with John Parkinson) published by John Wiley & Sons, The Annual CASE Report, published by CASE Research, and numerous articles on organizational change and IT management.

Previously, I was an Executive Vice President of nGenera (formerly, The Concours Group) where I led the firm’s IT transformation practice and a Partner at Ernst & Young’s Center for Business Innovation, where I headed the firm’s global research into IT effectiveness and business change implementation.  I received my bachelor’s degree in Electrical Engineering from the University of Salford in the United Kingdom, and began my career as a computer hardware design engineer.  I quickly transitioned from hardware into software, and eventually into management consulting.

Today, in addition to leading The Merlyn Group, LLC, I’m on the Faculty of the Next Generation Enterprise Think Tank, a Founding Partner of Formicio, a Partner with Stryve Advisors, and an Associate with IT Renaissance.  Welcome to the world of Charles Handy’s Shamrock Organization!

For a more detailed bio, please visit my LinkedIn profile where you will find many endorsements from my clients and former colleagues.

In Part 1, I discussed the importance of IT Organizational Clarity, the symptoms when clarity is compromised, and the challenges of trying to address those symptoms rather than the root causes that lead to compromised clarity.  Part 1 closed with a discussion of the two key dimensions along which IT Organizational Clarity can be tackled – scope (units of IT Capability) and meaningful and assessable characteristics for evaluating and improving IT Capabilities.

In Part 2, I discussed ways to define IT Capabilities and provided guidelines on the manageable number of IT Capabilities and appropriate depth of decomposition.  In this post, I will describe three different types of IT Capability.

Not All IT Capabilities Are Born Equal

It is helpful to classify IT Capabilities into one of three different types, as illustrated in the graphic above.

Value Chain Capabilities

At the core are those capabilities that take inputs, add value, and deliver outputs to a customer or end consumer (in the world of IT, these tend to be services and products).  Think of these Value Chain Capabilities as those that the end customer appreciates (hopefully!) and is willing to pay money for.

For example, as a business user, I may have a business problem I’d like IT help to solve.  That problem (or opportunity) is the input to a Value Chain.  The first Capability that will approach that problem adds value by analyzing the problem, identifying and proposing a solution.  As the business user, I appreciate that value has been added – drilling into my stated problem and offering (and perhaps demonstrating via a prototype) one or more proposed solutions.  The next Capability in the Value Chain might take the chosen solution and develop and deploy that solution.  Again, as the business user, value has been clearly added – taking a proposed solution and delivering it.  The final Capability where value can be added is supporting and maintaining that solution – again, a recognizable way of adding value for me, the customer.

Ultimately, as the business user or consumer, these are the only Capabilities I care about and am willing to pay for (directly or indirectly) because of the value they add for me.  Unfortunately, while these Value Chain Capabilities are necessary, they are not sufficient.

Enabling Capabilities

Value Chain Capabilities typically draw upon other Capabilities that enable them.  Think of these as Shared Services that are common to other Capabilities, or to other instances of problems/solutions working their way through the Value Chain.  Examples of IT Services that might enable the Value Chain Capabilities include Project Management, IT Operations, and IT Supply.

Alignment and Governance Capabilities

Value Chain Capabilities also typically depend upon other Capabilities that ensure that the work they are doing is aligned and governed to ensure they are operating effectively and in the interests of the enterprise.  For example, determining which business problems will be addressed, which solutions will be selected, how staff and resources will be allocated are all important control that Value Chain Capabilities will be subject to.

Why These Distinctions Matter to IT Organizational Clarity

The distinctions between Value Chain, Enabling and Alignment/Governance Capabilities are significant:

1. Different types of IT Capability tend to be optimized towards different value propositions, with implications for how they are organized.  For example, Enabling Capabilities tend to be optimized for Operational Excellence (as shared services, they need to deliver predictable, consistent, quality services at the lowest possible cost).  Value Chain Capabilities tend to be organized for Customer Intimacy, delivering what specific customers want; anticipating customer needs.  Alignment and Governance Capabilities tend to be more about decision-making – rather than delivering services, they make decisions or provide decision-making frameworks – think Enterprise Architecture and the mechanisms and structures that support it as Alignment and Governance Capabilities.  As such, these tend to be networked, linking stakeholders and decision makers, and optimized to maximize the business value delivered or enabled by IT Investments..
2. Some types of IT Capability lend themselves to alternate sourcing more than others.  For example, Aligning and Governance Capabilities lend themselves the least to straight outsourcing approaches (do you want to pass decision rights to an external vendor?)
3. Different types of IT Capability lend themselves to different funding models.  For example, Value Chain Capabilities lend themselves to direct business funding, whereas Enabling Capabilities lend themselves better to indirect funding models (e.g., overhead charge).

IT Capability Model Example

As an illustration, below is a ‘normative’ IT Capability Model.

The Fractal Nature of IT Capabilities

Note, that as you decompose any IT Capability, you will generally find that the decompositions will have a similar structure – a primary Value Chain, drawing upon underlying Enabling Capabilities and influenced by Alignment and Governance Capabilities.

For example, Manage Business-IT Portfolio & Programs might decompose into the following sub-Capabilities:

In the following post, we will look at the assessable characteristics of any IT Capability as a means of determining Capability Maturity and determining how to increase maturity and thereby improve performance.

1. Bounding scope by defining “IT Capabilities” at an appropriate level of granularity. (Units of analysis).
2. Defining meaningful and assessable characteristics for IT Capabilities. (Means of assessing and improving).

Note – the ultimate gauge of IT Organizational Clarity is in the ‘health’ of the IT Organization and the business results to which it contributes.  However, there are all sorts of demand-side complexities in assessing these things, so for now I will focus on the notion of capability maturity as a worthy proxy for and predictor of end results and the ability to continuously improve.

In this and the next couple of posts I will discuss the notion of IT Capabilities and how best to define them.  I will then address the assessable characteristics of IT Capabilities.

What Is an IT Capability?

In order to adequately define an IT Capability, we need to clarify a couple of common terms – Service and Process:

Service

A Service in the context of IT Capabilities is best described as the interface point between a provider and a consumer where value is exchanged.  Services should be defined from the perspective of the consumer.  They need to be ‘discoverable’ and the service interface understood by the consumer.  They need to have clarity on what they do, what they cost, how they are invoked, and how problems are reported and resolved.  The service provider should have a good understanding of the value received by the consumer, as well as the overall quality of the customer experience.  This may comprise both tangible and intangible elements, most of which are ultimately subjective.

Process

A Process is a sequence of interdependent and linked procedures which, at every stage, consume one or more resources (employee time, energy, money) to convert inputs (data, material, etc.) into outputs.  These outputs often serve as inputs for the next stage until a known goal or outcome is reached.

Capability

A Capability can be thought of as everything it takes behind the scenes that makes a service possible.  This will include:

• One or more Processes.
• Descriptions of the Roles needed to perform one or more of the procedures within a process (e.g., Project Manager, Business Analyst, Relationship Manager).
• Descriptions of the Competencies needed to perform a given role (what the person performing the role needs to know, e.g., business knowledge, what skills they need, e.g., facilitation, and what behaviors they should exhibit, e.g., results orientation).
• An adequate supply of competent human resources filling the given roles.
• Tools and technologies needed to automate or execute necessary processes or procedures.
• Management systems necessary to ensure the health and performance of the Capability, including funding, organizational will, personal incentives, and so on.

How Many IT Capabilities Should You Have?

This is a tricky question to answer.  First, of course it depends on the mission to be served by a given capability.  But more importantly, this is a question of granularity.  In the heady days of business process re-engineering, I learned that picking the right granularity for an end-to-end process is crucial, and perhaps as much art as science.

I think this question has more to do with the characteristics of and limitations to the workings of the human mind than anything else.  If you end up with, say, 3 IT capabilities, chances are that you are at too high a level of granularity to be really useful in terms of analytical and management discipline.  On the other hand, if you have 12 or more IT capabilities, you are at too low a level.  From my experience, between 7 and 9 is the right number of IT Capabilities to have in a ‘top-level’ IT Capability model.

How Many Levels of Decomposition Should You Go To?

Yes – you guessed it – it depends!  On the basis that you really don’t understand a Capability unless you can see a level of decomposition below it, I think the answer is at least two levels of decomposition are necessary.  Beyond that, it depends on the Capability you are trying to understand or improve.  Consider, for example, the Process aspect of an IT Capability.  Capabilities that are highly procedural, such as those found in IT Infrastructure and Operations, will typically need more levels of decomposition (i.e., more detailed process definitions).  Coincidentally, this is the domain of ITILv3, so you can effectively ‘buy’ process definitions and a process architecture off-the-shelf.

On the other hand, a Capability such as Opportunity Discovery may be more about analytical skills and the magical space between problem understanding and solution definition.  This space is much more about specially-skilled people and specific business domain knowledge rather than sequential, detailed and rigorously controlled processes (as in Statistical Process Control.)

We will pick this up in the next post and look at three different types of IT Capability  – Value Chain Capabilities, Aligning/Governing Capabilities and Enabling Capabilities – and examine the distinctions between these and why the distinctions are important.

Graphic courtesy of MassBay Organization Development Learning Blog

I believe that Organizational Clarity is particularly important for IT leaders today as IT management and operational roles are increasingly dispersing throughout the business rather than being performed within a homogeneous IT organization.

There are a zillion analogies for illuminating what is meant by, and the importance of Organizational Clarity.  One that resonates for me is rowing boat racing. I attribute that to growing up in the UK and getting excited about the annual Oxford and Cambridge Boat Race (I lived on Oxford Gardens in London, so it was always clear which team I was supporting!)  The sight of a rowing boat, with 8 rowers and a coxswain sitting at the rear, steering and uttering commands to help the crew keep the cadence and stroke rating, is a compelling image.  When all the rowers are in perfect harmony and staying on course, there is enormous power in the boat.  If the coxswain screws up, or any of the rowers don’t follow the instructions, havoc reins and the boat slows way down or goes way off course.  I think of IT organizations that lack organizational clarity as the slow boat, or even worse, the fast boat heading in the wrong direction!

Common Symptoms Reveal Lack of Organizational Clarity

From my consulting and research work, I will assert that the symptoms of the lack of Organizational Clarity are common and prevalent.  How often do you or your colleagues say or hear:

We Don’t Communicate Well!”

Not only has virtually every client I’ve worked with raised this complaint, but I don’t think I’ve ever seen an IT organization that claims, “We communicate really well!”

This is a non-trivial symptom.  It leads to redundant work, leakage of business value (i.e., value that should have been captured, could have been captured, but is not captured) and a general sense of confusion and disorientation.  For the beneficiaries of IT work, it contributes to a poor customer experience – “The left hand doesn’t know what the right hand is doing!”

We don’t have clear accountability!”

This is another common symptom – failure to be clear on who is accountable for what, and, more to the point, what happens when something goes wrong.  This is often (and unfortunately) referred to as, “Not knowing who’s throat to choke!” but is probably more constructively thought of as, “Not knowing what actions to take to ensure that this error is never repeated!”

This symptom also means that managers and individual performers often do not understand how their work contributes to the overall mission and vision for the IT organization, and, more importantly, how it contributes to the success of their internal and external customers.

We exist to support the business!”

This common misunderstanding leads to the ‘order taker’ mentality, and an IT organization that is always extremely busy (to the point of rampant overwork!) and yet is seen by the business as adding little to no value.

Don’t Attempt to Address the Symptoms Directly!

It is essential to recognize that these are symptoms and not root causes in of themselves.  You cannot solve the communications issue by mandating or even organizing for better communications.  I’ve lost count of the number of IT leadership teams I’ve worked with who talk about putting a marketing/communications specialist on their staff “to address the communications problems.”  I’m not saying this is necessarily a bad idea – I’ve posted before about the importance of bringing marketing skills and disciplines to IT management.  But adding such a role with the purpose of ‘fixing communications’ rarely, if ever, works.  Communications problems are symptomatic of a lack of Organizational Clarity – not just for the IT organization as a whole, but for its ‘moving parts’ such as IT Infrastructure, Enterprise Architecture, Solutions Delivery, and so on.

Similarly, you cannot address the accountability issue by simply trying to mandate accountability.  Unless a given IT Capability has clear goals, service definition and guiding principles, and the appropriate processes, roles, competencies, tools and technologies are in place, it’s little use trying to tie accountability to anything!

Two Dimensions of Organizational Clarity

Improving organizational clarity – and in turn increasing focus and effectiveness – must be tackled along two dimensions:

1. Bounding scope appropriately, or defining the ‘unit of analysis.’  An appropriate unit of analysis is commonly referred to as “an IT Capability.”  Typical IT organizations can be described through 7-9 Capabilities, such as IT Infrastructure, Enterprise Architecture, Opportunity Discovery, Solution Delivery, Portfolio Management and so on.
2. Defining Capability Characteristics, including Purpose, Commitment, Ability and Accountability.

In the next couple of posts, I will drill into these two dimensions as a means of describing IT Organizational Clarity and how to measure and achieve it.

Image courtesy of What’s Running You