2 July 2009 • 7:00 am

Framework for IT Organization Strategy

Our prior consideration of the Strategy-Focused IT Organization and strategy map design intersect today as I present a framework for developing strategy for the IT organization. Please note the considerable distinction between IT strategy and IT organization strategy; the former generally refers to the intent of an enterprise with respect to technology and enterprise information architectures, standards, approaches to sourcing decisions, technology site design and redundancy, etc. These are important considerations about the deployment of technology in the enterprise. But IT organization strategy is about the management, composition, direction, and evolution of the IT organization (hence, ITO) itself

While the ITO strategy framework takes the form of a balanced scorecard (BSC) strategy map, it can be legitimately applied to any discussion of ITO strategy, even if there is no intent to fully develop the ITO strategy map, objectives, targets, and initiatives that constitute a proper BSC. Given the propensity of most ITOs to excessively focus their change agendas on the domains of cost and quality, with insufficient focus on the equally important dolmans of agility and innovation, the framework provides the basis for a balanced change agenda. When used as the basis for a BSC strategy map, the framework contains and organizes the recommended inventory of 20 to 30 strategic objectives for the ITO.

Value Creation Dimension

The four perspectives that constitute the value creation dimension follow the generalized model that can be applied in both for- and non-profit organizations, which applies to business units and support groups inside the enterprise. The names of the four perspectives: Capabilities and Assets, Internal Process, Partner, and Enterprise Results – describe how the ITO creates value. The IT organization develops and sustains its capabilities and assets, which it employs to execute its internal processes, in order to deliver valued services to its partners within the enterprise, enabling those partners to achieve and deliver desired results to the enterprise and its external stakeholders.

Of course, the most important focus in the Capabilities and Assets perspective is the people that make up the ITO, but their skills and knowledge perform in the context of both ITO and enterprise strategy; nearly every ITO’s leadership is explicit about their desire to change the culture.

Every sustainable ITO has well-established processes for service delivery, and this is where the bulk of management energy is applied. But the model invites equal consideration of processes for establishing and enhancing alliances with internal partners, and engaging with those partners to develop innovative applications of technology to create new value for the enterprise.

Nearly all of the dozens of ITOs with whom I’ve worked recognize the importance of satisfying their internal business unit and support group ‘customers’ and understand that calling them customers sends the wrong message. By naming this perspective Partner, the framework reflects the shared desire on the part of the ITO and the groups it serves to achieve a true partnership in their relationship. And the ITO and its partners share, and are fundamentally guided by, their desire to achieve exceptional Enterprise Results.


Organizational Evolution Dimension

The domains of Competency and Contribution overlay and bisect the Partner and Process perspectives to ensure that the ITO doesn’t aspire to mere competence, which is necessary but not sufficient to realize the ITO’s full potential. As the IT organization demonstrates its competency in managing costs and delivering quality services, it establishes the credibility to collaborate with its partners to contribute to enterprise value creation. At the highest level, a journey from competency to contribution represents the aspiration of nearly every ITO.


Process Themes

The three themes in the Process perspective elaborate this evolution from competency to contribution focus. On a foundation of its processes for Operational Excellence, the IT organization expands its focus to build and manage Partner Alliances and lead delivery of innovative Solutions. By allocating equal space to each of these themes in the framework, ITO leadership is invited to move beyond the status quo focus on operations and aspire to higher goals.


It’s Only a Framework

This structure can enable the kind of leadership team discussions necessary at the onset of the change program. One powerful way to begin is to place a (virtual) Post-it note on the appropriate spot in the framework for every change initiative currently underway in the ITO – there is a pretty good chance that they won’t be evenly distributed. The implicit question, “Is this where we need to be focusing our efforts?”

Of course, the perspectives, domains, and themes presented here have generic that I’ve chosen to convey the concepts on which they are based. They can be renamed to fit your ITO’s culture and existing vocabulary. It is vital to use the language is meaningful to the intended audience; this can entail preserving existing vocabulary, or even deliberately creating new language to convey the urgency of the change program.

Needless to say, in future posts, I will have far more to say about each of the areas in the framework, as well as a set of generic strategic objectives to populate the framework.

Does the framework make sense in your ITO? If you already have a strategy map, how does it compare? Please offer your comments and insights below.

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