In the 20 years that I have been a management consultant, I’ve seen over a hundred IT organizations (ITOs) up close. Although I have come to see the ITO as a strategic asset to the organization, unfortunately, more often than not, the ITO has been seen as a liability by the most members of the parent enterprise. In the diversity of ITOs that I have seen, I observed that ITOs seem to evolve through a series of stages until their value to the parent enterprise is fully mature (first described in an article I wrote in 2001). The maturity model was based on my observations about the different change agenda I saw in different ITOs. In short, ITOs are either Defensive, Reactive, Responsive, or Strategy-Focused.
Before IT can begin contributing to the execution of business strategy, it must first demonstrate its competency in cost control and quality. Defensive ITOs focus their time and energy on defending the IT budget and keeping systems running properly. There aren’t too many Defensive ITOs; either they’ve improved marginally to the Responsive stage, or the problem has been addressed by outsourcing the entire IT function.
Reactive ITOs sustain their focus on cost and quality, but expand their focus to better handle the stream of requests for IT services. Reactive ITOs must navigate internal enterprise politics to successfully allocate scarce IT resources among competing requestors. The majority of ITOs that I’ve observed are at the Reactive stage of maturity.
When cost and quality are no longer a central focus for the ITO (although these domains can never be ignored), the focus shifts to the domains of contribution: agility and innovation. Responsive ITOs are those where the greatest energy is spent on defining, managing, and building a partnership between the ITO and its enterprise customers. The ITO – business partnership is most evident when the ITOs representatives are included in each business unit’s strategic planning process. In the Responsive stage, the ITO is credibly able to undertake technology research on behalf of the enterprise. But building and sustaining trusted partnerships is challenging, and can easily be set back if issues of cost and quality return.
A true Strategy-Focused ITO (SFITO) is seen by all as competent in managing cost and quality, responsive to business unit strategy, and able to anticipate, identify, and propose new technology applications that enable strategic evolution in the firm’s value proposition. At the center of technology solutions leadership, the Strategy-Focused ITO is recognized as a full partner in formulating and executing enterprise strategy.
What stage of maturity do you think your IT organization has achieved? What behaviors demonstrate this maturity? How did the ITO reach this stage, and what efforts are underway to further mature? I hope you’ll share your reactions to this model and your own experience in the comments below. Much has already been posted, and much more will be written about the SFITO concept in future posts.