Making IT Work in Your Company, Part 2 - Page 1

Dec 13, 2001

Steve Andriole

Editor's note: This is Part 2 of a three-part series on strategies for making IT work in the enterprise. Part I appeared yesterday and focused on trends shaping IT organizations and how IT should enhance evolving business models. Part 3 will appear on Friday.

One of the steps IT executives can take that will help them transition from where they are today to where they might very well need to go tomorrow is discussed here. It describes an approach to organizational alignment that builds from the assumptions laid out in Part I , as well as current and future core competencies.

The best way to interpret the approach is to read it as an open letter to your company. The organizational structure described below can work within a centralized or decentralized organization, though the clear bias is toward a decentralized structure.

What follows also works within alternative sourcing scenarios. If, for example, you're decentralized but insist on in-house requirements, specification, implementation and support, then you can use the model to help you make it all work.

The "open letter" format is intended to personalize new organizational requirements. It was constructed in response to the problems plaguing most IT organizations and companies struggling with what to do about IT. Please read it with these assumptions in mind and - much more importantly - as something that you might perhaps resend in your company!


An Open Letter to the Business/Technology Community

It's time for us to re-think how we acquire, deploy and support IT and how we should organize ourselves to effectively apply IT to our business models and processes. This letter is intended to explore the parameters of that organization and offer a set of specific suggestions for making IT the strategic weapon it's destined to become. Let's begin with a description of the new business/IT agenda - which really describes a new business/IT partnership.

The New Business/IT Agenda

  • There are clear objectives which together prescribe a new agenda for information technology at our company.
  • IT must align with current and anticipated business processes, products and services; if alignment cannot be determined, then investments in existing or new infrastructures or applications should not be made.
  • The ultimate purpose of IT is to ensure efficiency, profitability and growth, not to champion "technologies."
  • IT is as major a contributor to business strategy and planning as any other "conventional" business activity or function; without (well-conceived, -implemented and -supported) IT, there are no business processes, products or services; IT is therefore as "legitimate" a corporate stakeholder and provider as marketing, financial controls and other "core" business activities.
  • Our IT organizational structures must adapt to changing business priorities; the ability of IT to adapt to new competitor challenges and business opportunities is essential to its ability to contribute to profitability and growth.
  • From Here to There

  • Decentralization is appropriate: our businesses are moving too quickly to be organized or managed centrally. The decentralization of IT is a natural and appropriate extension of the decentralized business environment. While one might argue that centralization/decentralization swings with the political winds, it's difficult to imagine it ever swinging back to where applications development becomes separate from their business units or users. What is possible - and desirable - is the "centralization" of the "infrastructure" - defined in very specific ways - since there is a lines-of-business and enterprise benefit to the central management of infrastructure services.
  • Our internal IT organization must evolve from "control" to "collaboration" and "facilitation." IT is too often seen as an obstacle to progress and growth, not as a facilitator of business.
  • IT needs to identify a short list of enterprise (corporate-wide) infrastructure areas in which to invest - and then invest in them consistently and predictably. These areas include:
  • -- The design and development of a world-class communications network.

    -- Methods for organizing, accessing and securing data.

    -- World-class mobile computing, virtual office and electronic commerce infrastructure technology.

  • IT also needs to identify a set of activities that will add business value to the lines of business - activities that are appropriately conducted at the enterprise level. They include:
  • -- The setting of standards boundaries that simultaneously provide room for the businesses to operate in and offer the cost and performance advantages of less-rather-than-more-variation in our communications and computing environment.

    -- Process improvement initiatives.

    -- The co-management of any enterprise outsourcing activities.

    -- Procedures for aligning systems and technology investments with business strategies.

    -- The facilitation of reuse (of applications, data bases, development architectures) and the reduction of redundant technical activity in the lines of business.

    -- Leadership in enterprise wide initiatives (like major upgrades).

    -- Enterprise hardware and software (license) acquisition.

    -- Contracting and sub-contracting.

    -- Hardware and software asset acquisition and disposition.

    -- Selected security administration and business resumption planning.

    -- Overall security policy.

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