Reengineering The IT Operating Model to Embrace The Power Of The Cloud

This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here: http://flevy.com/browse/business-document/design-build-and-run-an-effective-it-service-strategy-to-business-needs-279 The "Deliver Business Value with IT" series provides a good overview and actionable material of the ways a CIO can provide valuable and effective support to your company strategy and leverages business model concepts to deliver business value from IT. Martin Palmgren propose an extremely solid piece of work that comes across as the A-Z reference of how to execute and implement IT strategy from a CEO and CIO level perspective." Executive Summary: The CIO and the IT Department need to position as premium provider of IT services and focus on value to cost. In order to avoid the "do we really need a CIO and IT department to bother us with technology when we can use the cloud?" the CIO has to ensure that the business strategy and business objectives are supported by IT (from a Business and IT architecture perspective). Where the IT Strategy support Strategy execution, "Time to Market", Cost Effectiveness and stakeholder expectations from an Executive, Business Unit, IT Management and IT Risk Management perspective.

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Your Challenge Organizations have to adapt to a growing number of trends, putting increased pressure on IT to move at the same speed as the business. The business, seeing that IT is slower to react, looks to external solutions to address its challenges and capitalize on opportunities. IT and business leaders don’t have a clear and unified understanding or definition of an operating model. Our Advice Critical Insight The IT operating model is not a static entity and should evolve according to changing business needs. However, business needs are diverse, and the IT organization must recognize that the business includes groups that consume technology in different patterns. The IT operating model needs to support and enable multiple groups, while continuously adapting to changing business conditions. Impact and Result Determine how each technology consumer group interacts with IT. Use consumer experience maps to determine what kind of services consumer groups use and if there are opportunities to improve the delivery of those services. Identify how changing business conditions will affect the consumption of technology services. Classify your consumers based on business uncertainty and reliance on IT to plan for the future delivery of services. Optimize the IT operating model. Create a target IT operating model based on the gathered information about technology service consumers. Select different implementations of common operating model elements: governance, sourcing, process, and structure.

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Evolution of IT service management practices and standards from Top Gun 1 (around 1990) to Top Gun Maverick (2022) How did the IT management evolve since 1990? When were key standards and practices introduced? The IT management market has significantly evolved over the last few years e.g. introducing DevOps, Continuous Delivery, Agile Development, SRE and IT4IT. Managing this new multi-vendor ecosystem consisting of cloud, containers and micro-services. Managing this new digital reality requires you to combine various practices into one integrated Digital Operating Model, to optimize end-to-end IT value streams.

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IT Function critical capabilities are key areas where the IT function needs to maintain significant levels of competence, skill and experience and practise in order to operate and deliver a service. There are several different IT capability frameworks. The objective of these notes is to assess the suitability and applicability of these frameworks. These models can be used to identify what is important for your IT function based on your current and desired/necessary activity profile. Capabilities vary across organisation – not all capabilities have the same importance for all organisations. These frameworks do not readily accommodate variability in the relative importance of capabilities. The assessment approach taken is to identify a generalised set of capabilities needed across the span of IT function operations, from strategy to operations and delivery. This generic model is then be used to assess individual frameworks to determine their scope and coverage and to identify gaps. The generic IT function capability model proposed here consists of five groups or domains of major capabilities that can be organised across the span of the IT function: 1. Information Technology Strategy, Management and Governance 2. Technology and Platforms Standards Development and Management 3. Technology and Solution Consulting and Delivery 4. Operational Run The Business/Business as Usual/Service Provision 5. Change The Business/Development and Introduction of New Services In the context of trends and initiatives such as outsourcing, transition to cloud services and greater platform-based offerings, should the IT function develop and enhance its meta-capabilities – the management of the delivery of capabilities? Is capability identification and delivery management the most important capability? Outsourced service delivery in all its forms is not a fire-and-forget activity. You can outsource the provision of any service except the management of the supply of that service. The following IT capability models have been evaluated: • IT4IT Reference Architecture https://www.opengroup.org/it4it contains 32 functional components • European e-Competence Framework (ECF) http://www.ecompetences.eu/ contains 40 competencies • ITIL V4 https://www.axelos.com/best-practice-solutions/itil has 34 management practices • COBIT 2019 https://www.isaca.org/resources/cobit has 40 management and control processes • APQC Process Classification Framework - https://www.apqc.org/process-performance-management/process-frameworks version 7.2.1 has 44 major IT management processes • IT Capability Maturity Framework (IT-CMF) https://ivi.ie/critical-capabilities/ contains 37 critical capabilities The following model has not been evaluated • Skills Framework for the Information Age (SFIA) - http://www.sfia-online.org/ lists over 100 skills

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Investment banking firms are under pressure from all sides. Non-traditional competitors, commoditization and new competitive threats combine with cost-cutting that has reached the point of diminishing returns. Complex, inflexible operating and technology platforms make innovation difficult. As the technology consumerization continues, flexible sourcing of people, infrastructure, software and information—using cloud computing and “everything as a service” (XaaS)—has converged with new design, development and deployment approaches and tools. The central investment banking concept is changing. Big ideas come from unexpected places. A digital ecosystem is emerging—one that depends on the customers, capabilities and value proposition of each firm.

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Transformative as-a-service capabilities are enabling leading acquirers to capture and lock-in synergies at a depth and speed previously unseen in historic merger integration programs. As the number of deals continues to proliferate, enterprise IT will continue to serve as either an enabler or a barrier to realizing value in M&A. But with new cloud platforms and Xaas delivery models, transformation during integration will unlock new opportunities, accelerating deal value and boosting overall competitiveness. Making it work will require CIOs to be involved pre-deal as part of the M&A strategy team—as one of the ‘co-pilots’ in the process.

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Young, fast and agile digital disruptors are increasingly posing competitive threats to incumbents. Many legacy companies have responded to these threats by creating a forward-looking digital business strategy. The problem they often encounter, however, is that the weight of an old, out-of-date operating model is a drag on the new strategy. In this PoV, we detail the elements of an effective digital operating model. Such a model—or models—is critical to executing digital business strategies successfully, overcoming disruption and creating value.

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In a healthcare industry undergoing foundational transformation, healthcare provider CEOs and leadership teams are being challenged to adapt. CEOs must expand their leadership teams with skills not historically found in healthcare organizations. To make transformation to an agile patient-centric model stick, retooling the bench for digital and consumer skills is key. View questions every healthcare provider CEO should ask to test their organizations readiness for change.

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Are you ready to realize the strategic value of a carve-out? Too often, companies consider carve-outs only when they feel a part of the business has become too weak or troubled to keep. The result: They miss opportunities to create significant value, actively destroy value, or both. More companies need to recognize that carve-outs are a key strategy to enhance competitiveness by building a portfolio that’s more sharply focused on the most promising markets and customers. Learn more about Carve-outs: http://bit.ly/1teoIjB

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While many leaders are committed to a digital transformation, plans can easily get derailed before reaching execution. CIOs and executives, alike, should consider a different approach—one that takes into account the human and behavioural complexities underpinning this challenge. In this session, we’ll share stories of leaders who have managed successful IT transformations and their lessons learned along the way. We’ll address how to build skills among your IT staff through training and certification. We’ll also discuss ways to take advantage of collaborative workspaces, and best practices to aid in an effective implementation. Bert Weyne, ICT Responsible Application, Manager, Agentschap Wegen & Verkeer Thomas Blood, EMEA Enterprise Evangelist, AWS

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