1 Core IT Capabilities Within Organizations Dr. Mary C. Lacity The Tower of Babel by Pieter Bruegel...
-
Upload
harold-groome -
Category
Documents
-
view
220 -
download
1
Transcript of 1 Core IT Capabilities Within Organizations Dr. Mary C. Lacity The Tower of Babel by Pieter Bruegel...
1
Core IT Capabilities Within Organizations
Dr. Mary C. Lacity
The Tower of Babel by Pieter Bruegel the Elder,
1563 KbKunsthistorisches Museum Wien, Vienna
2
Session Objectives
Understand 9 Core IT Capabilities that should be kept in-house
EnsureValue for IT
Spend
to
Feeny, D. and Willcocks, L., “Core IS Capabilities for exploiting Information Technology, Sloan Management Review, Vol. 39, Spring, 1998, pp. 9-21.
3
Forces Shaping IT Function
In-house ITFunction
RecessionsCompetitionForce costreduction
CoreCompetence
Strategy
BusinessReliance
On IT
Maturity & Size of
IT Providers
Feeny, D. and Willcocks, L., “Core IS Capabilities for exploiting Information Technology, Sloan Management Review, Vol. 39, Spring, 1998, pp. 9-21.
4
Feeny & Willcocks: IT Capabilities
Business Face
SupplyFace
TechnicalFace
Governance Face
Feeny, D. and Willcocks, L., “Core IS Capabilities for exploiting Information Technology, Sloan Management Review, Vol. 39, Spring, 1998, pp. 9-21.
5
Feeny & Willcocks: IT Capabilities
Business Face
SupplyFace
TechnicalFace
Governance Face
Information SystemsStrategy
Sourcing Strategy
Information Management Strategy
InformationTechnologyStrategy
Feeny, D. and Willcocks, L., “Core IS Capabilities for exploiting Information Technology, Sloan Management Review, Vol. 39, Spring, 1998, pp. 9-21.
6
Business and IT Vision
Delivery of IS Service
Design of IT Architecture
Business SystemsThinking
ContractFacilitation
TechnicalArchitecture
ContractMonitoring
VendorDevelopment
TechnicalDoer
RelationshipBuilder IS
Leadership;InformedBuying
Feeny & Willcocks: IT Capabilities
Feeny, D. and Willcocks, L., “Core IS Capabilities for exploiting Information Technology, Sloan Management Review, Vol. 39, Spring, 1998, pp. 9-21.
7
IS Leadership
Business and IT Vision
Delivery of IS Service
Design of IT Architecture
ISLeadership
Feeny, D. and Willcocks, L., “Core IS Capabilities for exploiting Information Technology, Sloan Management Review, Vol. 39, Spring, 1998, pp. 9-21.
8
IS Leadership
• Integrating IS/IT effort with business purpose & activity • Implements structures, processes, and staffing to fill other 8 roles• Alignment of IS strategy and business• Fosters relationships with senior management
9
•Fosters relationships with senior management
"I went to the city, I usually had one or two things to do. I made it a point when I went in, I went up to the chairman's office and many times his secretary was there when I'd get there. I'd say, 'tell the chairman and CEO, tell Harry I'm in the building. Could I talk to him? I'm available.' I went right down the hall to the president, who at the time was Michael, and said, 'I'm in town for a week if you have any questions about computing, I'd be happy to talk to you about it.' I would also visit every senior vice president on the executive floor. I would stick my head in the door and say, 'hey I'm in town, what can I do to help?'" -- VP of IS, PETRO2
IS Leadership
10
• What are the characteristics of good CIOs?
Business and People skills are more important than technical skills:
“My advice to CEOs is this: Your IT function should be run by a great general manager, not by a traditional technology manager…More and more, business considerations rather than technical ones drive investments in IT. Our businesses are asking, “Why not buy solutions rather than build them? and “How can IT serve the critical needs of the business rather than those narrowly defined by accounting and human resources?” Far too many IT professionals don’t know how to frame questions like these, much less answer them.” -- Gene Batchelder, CFO, GPM Gas
IS Leadership
11
In a survey of 64 CIOs, Applegate and Elam found that 30% had only a technical background; 33% had only a business background, and 37 had a “hybrid background”.
Practice often prescribed:
Have the CIO report to the CEO to ensure the CIO has enoughauthority and power to be effective.
IS Leadership• What are the characteristics of good CIOs?
12
Business Systems Thinker
Business and IT Vision
Delivery of IS Service
Design of IT Architecture
Business SystemsThinking
Feeny, D. and Willcocks, L., “Core IS Capabilities for exploiting Information Technology, Sloan Management Review, Vol. 39, Spring, 1998, pp. 9-21.
13
Business Systems Thinker
• Envisioning the business processes which technology makes possible• Focus on business process improvement rather than just IS improvement
“To serve customers well, companies need to be proficient in half a dozen key areas: reduced cycle times, reduced asset levels, faster development of new products, improved customer service, increasing empowerment of employees, and increased knowledge sharing and learning. Information technology is a key resource for accomplishing those goals” John Rockart, MIT
14
• Not all IT managers are welcome in this role:
"The IS organization have a tremendous amount to contribute if they ever get out of the back room and be perceived as having an opportunity to participate in the resolution of problems rather than being one of those problems." -- Corporate Planning Manager, Occidental Petroleum
Business Systems Thinker
15
Proven practices include:
IT representation on major business initiatives:• Business Strategic Planning• Operating Committees• Capital Budgeting Committees
Educate senior managers on IT capabilities:"We'd make it a point that every one of our executives attended that four day class. Every time we got as many as ten or fifteen people at the general manager level who had not taken the course. I'd call to schedule the course. And we'd schedule it and we'd get the CEO's signature saying, 'You've been selected to attend a computer concepts class. Please be at the homestead on four o'clock on Sunday, signed, Harry Thompson, CEO." -- VP of IS, PETRO2
Business Systems Thinker
16
Relationship Building
Business and IT Vision
Delivery of IS Service
Design of IT Architecture
RelationshipBuilder
Feeny, D. and Willcocks, L., “Core IS Capabilities for exploiting Information Technology, Sloan Management Review, Vol. 39, Spring, 1998, pp. 9-21.
17
User-Business Relationship Builder
• Getting the business constructively engaged in IS/IT issues.
•Focus on ability to speak “business” language to gain credibility
• Working with business community to understand cost/service trade-offs,•what technology can and cannot do
When a unit manager requested a new system that would save$250,000, IT manager had to explain it would cost $500,000to build.
18
• Focus on ability to speak “business” language to gain credibility
“The senior managers within BAe and even more the managers within the business units, by and large didn’t want to hear people talking pure IT. What they wanted was to hear people talking their language, the language of making airplanes. And we were able to do that, we were able to produce these people who talked their language.” -- CSC Quality Manager (Transferred from BAe)
User-Business Relationship Builder
19
Often prescribed practices might include:
• Dedicating systems analysts to specific business units to build relationships and learn about business.
• Cross-training users and IT
• Governance Structures that include business users
User-Business Relationship Builder
20
Technical Architect
Business and IT Vision
Delivery of IS Service
Design of IT Architecture Technical
Architecture
Feeny, D. and Willcocks, L., “Core IS Capabilities for exploiting Information Technology, Sloan Management Review, Vol. 39, Spring, 1998, pp. 9-21.
21
Technical Architect
•Defining architecture standards•Centralized computing environment•Distributed computing environment•Technology renewal (n, n-1, n-2?)•Technology replacement•Security•Disaster recovery management
Creating the coherent blueprint for a technical platform that responds to currentAnd future business needs.
22
Technical Architect
"You shouldn’t outsource technical architecture.
[The suppliers] are going to take your architecture where their business is going, not where you want to go. Those that let all their technical architects go, and we have an exposure there because we let most of ours go, and now as I skill up my group, I to build up an expertise that can keep up. It’s probably most contentious in the mainframe area...suppliers want vanilla, and customers want chocolate. And we even have discussions on the supplier's standards. We want to run this security environment, not their standard security environment for these reasons." -- Contract Administrator, PBS5
23
Technical DoerBusiness and IT Vision
Delivery of IS Service
Design of IT Architecture Technical
Doer
Feeny, D. and Willcocks, L., “Core IS Capabilities for exploiting Information Technology, Sloan Management Review, Vol. 39, Spring, 1998, pp. 9-21.
24
Technical Doer:Making Technology Work
• Rapidly Troubleshoot Problems• Technical work-arounds• Bypass political bureaucracy
What are the stereotypical characteristics ofa technical doer?
25
Outsourcing Roles
Business and IT Vision
Delivery of IS Service
Design of IT Architecture
ContractFacilitation
ContractMonitoring
VendorDevelopment
InformedBuying
Feeny, D. and Willcocks, L., “Core IS Capabilities for exploiting Information Technology, Sloan Management Review, Vol. 39, Spring, 1998, pp. 9-21.
26
Informed Buying
Business and IT Vision
Delivery of IS Service
Design of IT Architecture
ContractFacilitation
ContractMonitoring
VendorDevelopment
InformedBuying
Sourcing strategy, RFP process contract
negotiation
Feeny, D. and Willcocks, L., “Core IS Capabilities for exploiting Information Technology, Sloan Management Review, Vol. 39, Spring, 1998, pp. 9-21.
27
Informed Buying
•Develops a sourcing strategy•Analyzes external market for IT/IS services•Leadership of the tendering, contract, and service management processes
“If you are a senior manager in the company and you want something done, you come to me and I will go outside, select the vendor, and draw up the contract with the outsourcer, and if anything goes wrong it’s my butt that gets kicked by you.”
28
Informed Buying
Proven practices include:
• Joint senior executive/IT manager development of IT sourcing strategy
• Creating RFP and inviting internal & external bids
• Short term contracts
• Detailed contracts
29
Business and IT Vision
Design of IT Architecture
ContractFacilitation
ContractMonitoring
VendorDevelopment
InformedBuying
Ensures success of existing contractsUser/Supplier Liaison
Contract Facilitation
Feeny, D. and Willcocks, L., “Core IS Capabilities for exploiting Information Technology, Sloan Management Review, Vol. 39, Spring, 1998, pp. 9-21.
30
Contract Facilitation
• Provide one-stop shopping for the business user• Develop user guides to the contract• Help manage user expectations of the contract• Assess and prioritize user demands• Determine if user demands will trigger contract excess fees• Determine if users are demanding too little
31
Contract Monitoring
Business and IT Vision
Delivery of IS Service
Design of IT Architecture
ContractFacilitation
ContractMonitoring
VendorDevelopment
InformedBuying
Protect business contractual position;Monitor supplier costs
and performance vis-à-visthe contract
Feeny, D. and Willcocks, L., “Core IS Capabilities for exploiting Information Technology, Sloan Management Review, Vol. 39, Spring, 1998, pp. 9-21.
32
Contract Monitoring
• Monitor vendor performance (service)• Review monthly bills (cost) • Solve disputes with vendor• Refine performance measures as needed• Benchmark existing contract against developing market capability• Escalation procedures • Negotiate detailed amendments
33
Vendor Development
Business and IT Vision
Delivery of IS Service
Design of IT Architecture
ContractFacilitation
ContractMonitoring
VendorDevelopment
InformedBuying
Develop supplier relationshipbeyond contract
Feeny, D. and Willcocks, L., “Core IS Capabilities for exploiting Information Technology, Sloan Management Review, Vol. 39, Spring, 1998, pp. 9-21.
34
Vendor Development
• Identifies opportunities for added-value:1. Business value-added, in which the supplier applies their expertise to help the customer exploit IT for business advantage.2. Capacity value-added, in which the supplier infuses new skills and technologies in an effective manner.3. Utility value-added, in which the supplier provides cheaper IT services.
• Focus on innovation and exploiting opportunities • Explores potential for new vendor services
“Yes, [the vendor] can achieve all the things that were proposed---but where is this famous "added-value" service? We are not getting anything over-and-above what any old outsourcer could provide.” -- IT Services Director, Aerospace Company
35
Evolution in the Management of IT
Education
Learning
DELIVERY REORIENTATION REORGANIZATION
ServiceCompetence& RightPerception
Vision to transform& right agenda
Informed Buyer& right sourcing
Feeny, D., “The Five-Year Learning of Ten IT Directors,” in Managing IT as a Strategic Resource (Willcocks, Feeny & Islei (Ed), McGraw Hill, 1997, pp. 475-493
36
Evolution in the Management of IT
Education
Learning
DELIVERY
ServiceCompetence& RightPerception
Focus on establishing operationalCredibility, project successes, CIORole always important, but technicalRoles also very important here…
Feeny, D., “The Five-Year Learning of Ten IT Directors,” in Managing IT as a Strategic Resource (Willcocks, Feeny & Islei (Ed), McGraw Hill, 1997, pp. 475-493
37
Evolution in the Management of IT
Education
Learning
REORIENTATION
Vision to transform& right agenda
CIO role is key as isRelationship BuildingTo help educate businessAbout strategic potentialOf IT. Then IT “allowed”To become business systemsthinkers
Feeny, D., “The Five-Year Learning of Ten IT Directors,” in Managing IT as a Strategic Resource (Willcocks, Feeny & Islei (Ed), McGraw Hill, 1997, pp. 475-493
38
Evolution in the Management of IT
Education
Learning
DELIVERY REORIENTATION REORGANIZATION
Informed Buyer& right sourcingRightsourcing,
With centralized,Decentralized &Outsourced portfolio
Feeny, D., “The Five-Year Learning of Ten IT Directors,” in Managing IT as a Strategic Resource (Willcocks, Feeny & Islei (Ed), McGraw Hill, 1997, pp. 475-493
39
Capabilities & Skills in Emerging IT Function
Technical Business Interpersonal
CIO Medium High High
Business Systems Thinking
Low/Medium High High
Relationship Building Medium Medium High
Technical Architecture High Low/Medium Medium
Making Technology Work
High Low Medium
Informed Buying Medium High High
Contract Facilitation Medium Medium High
Contract Monitoring Medium Medium Medium
Vendor Development Medium High Medium
Feeny, D. and Willcocks, L., “Core IS Capabilities for exploiting Information Technology, Sloan Management Review, Vol. 39, Spring, 1998, pp. 9-21.
40
Core-Periphery Model RevisitedDEMAND
Information Management
Information Systems
Information Technology
SUPPLYSTRATEGY -------------- ENACTMENT
CORE
Non-CORE
?
41
Core-Periphery Model RevisitedDEMAND
Information Management
Information Systems
Information Technology
SUPPLYSTRATEGY -------------- ENACTMENT
CIO
SystemsThinker
RelationshipBuilder
Fixer
Monitor
Facilitator
TechnicalArchitect
VendorDeveloper
InformedBuyer
42
Conclusion
Most critically, the core IT capability model implies migration to a smaller ITfunction, staffed by highly able people.