1. IS Organisational Capabilities
The source of sustained performance
A Formicio point of view

2. The purpose of this slideshow is to share a point of view on
the importance of developing IS Organisational Capabilities
 The advent of new digital technologies – such
as social media, mobile, analytics and
embedded devices – requires new and
different capabilities that are not yet fully
understood or appreciated
Our point of view is
based upon insights
and experience that we
have gained over time
The aim is to inform
and inspire
 In addition, the IT delivery model is changing
to one that is more virtual and where the
ecosystem is broadening and deepening in
ways that require new and different
capabilities to ensure delivery success
IT leaders need to equip their organisation with
the capabilities required to meet today’s
challenges and realise tomorrow’s opportunities
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3. Traditional approaches to developing capabilities have
focused on training, process improvement and structure
?
?
?
?
“Ladies and gentlemen – this is
the redesigned process. Any
questions?”
Skills of individuals and
maturity of processes do not
in themselves lead to
sustained performance
Examples include:
 Use of best practice templates like
ITIL, COBIT and TOGAF
 Process improvement with external
accreditation
 Technical, service and leadership
training
 Measurement and reporting
 Organisational redesign
 Governance
 Cultural change
While necessary, they are not sufficient
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4. An alternative approach is to focus on developing
IS Organisational Capabilities
Organisational capabilities
consist of shared mental
models; practices;
common language,
mindsets and beliefs;
shared experiences and
individual competencies
IS organisational capabilities:
 Include everything that is needed to
deliver an outcome of value
 Are not lost when key individuals
leave
 Are different from business
capabilities or IT capabilities
 Are developed through practise over
time
 Determine how the organisation
operates
Organisations have capabilities,
individuals have competencies
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5. Organisational capabilities are like muscles – the more they
are used the stronger they get
The stronger
organisational capabilities
become the more they
shape culture and
establish organisational
habits
Examples of IS organisational capabilities
include the ability to:
 Deliver reliable and secure IT services
 Manage the relationship with business
colleagues
 Manage a balanced portfolio of
investment programmes and projects
 Partner with external vendors and
partners
 Lead digital business innovation
 Upgrade IT systems and infrastructure
with no surprises
Each organisational capability delivers
distinctive outcomes of value
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6. Having the right organisational capabilities in place is key to
successful strategy implementation
 Existing organisational capabilities
define an organisation’s current
trajectory
The ‘pull’ approach to
strategy implementation
creates a context where
people can exercise their
judgement and apply their
experience to change
their organisation’s
trajectory
 Changing an IS organisation’s
trajectory – away from its default
future to a target future – requires
different organisational capabilities
 Having the necessary organisational
capabilities in place enables an IS
organisation to ‘pull’ itself from the
present to its target future
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7. The potential contribution of organisational capabilities can
be assessed in terms of their maturity
Levels of Organisational Capability
Maturity
5 = Transforming: leading
transformation of the business
function or enterprise, for greater
business value
4 = Value-adding: making a
significant contribution to business
function or enterprise
performance
3 = Sustained: self-sustaining, based
upon shared language, frameworks
and mental models
2 = Procedural: reliance on the
application of procedures, manuals
and training
 Maturity is an indicator of knowing
how and when to act appropriately
 Lower levels of maturity signify a
reliance on process and oversight
 Higher levels of maturity signify an
instinctive ability to sense and
respond to changing circumstances
and cultural context
 The more mature an organisational
capability, the greater its potential
contribution to organisational
success
1 = Ad hoc: not consistent and
dependent upon a few individuals
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8. IS organisational capabilities need to be managed as a
portfolio
The aim is to have a
balanced portfolio of
organisational capabilities
that are aligned with
strategy and actively
managed as
circumstances change
 IS organisational capabilities are one type
of organisational asset
 Organisational assets should be managed
as a portfolio
 Within the portfolio there are different
asset classes, each defined by its
contribution to strategy
 Asset classes include IS organisational
capabilities that:
– Change the organisation’s trajectory
away from its default future
– Sustain delivery of today’s services
– Anchor the organisation to the
present, preventing change
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9. There are four ways of putting the necessary IS
organisational capabilities in place
Urgency
High
Partner
Acquire
The chosen approach is dependent upon
two criteria – urgency and difficulty:
Develop: through the application of bestpractice frameworks
Develop
Grow
Low
Low
Difficulty
High
The time and effort
needed to put new
organisational capabilities
in place is often severely
underestimated
Partner: with organisations that have the
required capabilities and are willing to share
them
Acquire: through acquisition of other
organisations with the required capabilities
Grow: organically through recruitment of
individuals experienced in the required
capabilities
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10. New organisational capabilities are difficult to understand
and appreciate until they are experienced
The challenge is that
organisations – like
individuals – don’t know
what they don’t know until
they experience it, which
could be too late!
 An example of a new organisational
capability, that is not yet understood
or appreciated, is ‘being digital’
 Being digital is different to traditional
IT; it involves taking a different
perspective on how the business can
be digitally enabled and how digital
enablement is provided
 Like all new organisational
capabilities, being digital needs to be
experienced before it can be truly
understood
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11. Our point of view on IS Organisational Capabilities revisited
Organisational
capabilities are
rarely
understood until
experienced
IS organisational capabilities:
1. Are the source of sustained performance
2. Determine how the IS organisation operates
3. Define an organisation’s trajectory
4. Are like muscles: the more they are used the
stronger they get
5. Can ‘pull’ an IS organisation from its present to
its target future
6. Can be assessed in terms of their maturity
7. Are an organisational asset that needs to be
managed as a portfolio
8. Can be developed, acquired, grown or
transferred through partnering
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12. Five questions to ask if you’re involved in developing the
capabilities of your IS organisation
1. What IS organisational capabilities need to
be in place to change the current trajectory
and pull the organisation to its target future?
2. What is the importance and, more
importantly, the target contribution of each
of these capabilities?
3. How could the contribution of these
organisational capabilities be best improved?
The important thing is
not to stop questioning.
Curiosity has its own
reason for existing
Albert Einstein, 1879-1955
4. Which organisational capabilities currently in
place have the potential of anchoring the
organisation to its current trajectory?
5. How could these ‘anchoring’ organisational
capabilities be best weakened or eliminated?
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13. The power that comes from having a shared point of view
Having a shared point of view is a powerful
tool for collective leadership. It can bring
clarity and balance. It can create a context
where everything makes sense, people know
exactly who they are, what is needed and
why they’re here. Effectiveness is maximal,
yet actions seem minimal. Everything flows
as it should.
Developing a point of view takes time and
effort, but the outcome will be worth it.
The Formicio Team
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14. This is an Insight presentation by Formicio
We work with people who want to improve their organisation
future by delivering transformational change
Specifically we can help you:
 Explore alternative futures that are not only better, but
achievable
 Establish the conditions for successful transformational change
 Develop capabilities needed to ‘pull’ your organisation into an
improved future.
One of our specialist areas is IT transformation
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15. For further information contact ...
David Trafford
david.trafford@formicio.com
Peter Boggis
peter.boggis@formicio.com
+44 (0)20 7917 2993
www.formicio.com
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