MYO IT – Building an IT organisation

By Tony Welsh, Associate Partner, Information Professionals

Imagine the excitement of starting again, no baggage, and building a new (or improved) IT organisation; Of being able to build the business from the ground up and manage the business of IT properly from the outset. A scenario like this offers immense opportunities but also prompts so many questions:

InformPros business transformation strategy
  • Is there a legacy to inherit or is it Greenfield?
  • Will we be a service provider? A service broker? A smart buyer? Or a mixture of each?
  • Will we do IT ourselves or get someone else to do IT for us? Which bits?
  • What will be our customer value proposition? How will we stay relevant?
  • Will we be on premise or in the cloud? In full or in part?
  • What capabilities will we need? Where are the gaps?


That’s a lot of questions and I’m only scratching the surface! So let’s take the opportunity to explore some of these issues and also some of the tools that might help us answer the questions. We’ll also consider IT operating models and industry frameworks and standards in an attempt to shine some light on the topic.

Contemplating an IT operating model?

When it comes to ICT management there appears to have been recent interest in filling the apparent void of IT standards and practices. For many who thought that the established frameworks such as COBIT® (by ISACA), TOGAF® (by The Open Group) and ITIL® (by Axelos), already filled that void, the news may come as a bit of a shock. 

The most notable new kids on the block include IT4ITTM (the recent offering from The Open Group) and Technology Business Management (TBM) headed by the TBM Council. In addition let’s throw into the mix a commercial take on ‘Enabling IT as a Service’ from a major IT service provider.

These new players seem to be concerned mostly with managing the business of IT or running IT as a business. Equally, both seem to be focused on emphasising the value of IT and showcase progressive approaches to IT such as brokering services, cloud, IT as a Service, DevOps etc. Both approaches are also ‘data-driven’ which resonates with me from my days in the eighties with LBMS in London who took a data-driven approach to its SSADM and LSDM development methodologies. Both approaches are agile-friendly.

Whilst other methods and frameworks have introduced standards for many of the processes in IT, (enterprise architecture, strategic alignment and governance, security, applications development, program, portfolio and project management, operations and support etc.), it is fair to say that for too long IT Managers, CIOs and CTOs have been left to link those standards together in the best manner they can. This has revealed some gaps.

Let’s consider the new players

IT4ITTM provides a Standard Reference Architecture for IT. This comprises an IT Value Chain plus service, information, functional and integration pillars. The IT value chain is based on the work of Michael Porter and it comprises four value streams being:

1. Strategy to Portfolio (S2P)
2. Requirements to Deploy (R2D)
3. Request to Fulfil (R2F)
4. Detect to Correct (D2C)


The primary value streams in the IT Value Chain are underpinned by five supporting activities. IT4IT models the functions that IT performs to help organisations identify the activities that contribute to business competitiveness.

Now let’s look at what TBM has to offer. TBM essentially defines the organisational elements, disciplines and value conversations of an effective TBM program.



Its apparent focus is (to a large extent) on the cost and value of IT. This includes:

1. Run the Business
    – Cost of Performance
    – Business Aligned Portfolio

2. Change the Business
    – Investment in innovation
    – Enterprise Agility

TBM uses ‘value conversations’ across all of these as well as four core disciplines – Create transparency, Deliver value for money, Shape business demand, and Plan and govern – to help run and change the business. These were certainly second nature to me as an ex-CIO.

Creating an IT operating model

In CISCO’s white paper ‘IT Transformation with Cisco’, they describe ‘Creating an operating model that enables IT as a service’. Email me for a copy of the white paper!

This diagram depicts the ‘Capabilities of a transformed IT organisation’.


Most noticeable is the resemblance between the IT4ITTM Value Chain and the Cisco Capabilities Model above. This suggests some element of synergy, intentionally or otherwise.

So which is the best framework?

To give a practical example it’s worth referring to a presentation on ‘How Shell IT manages data to bend the cost curve’. This is a case study of TBM presented by Shell’s IT4ITTM Team on the TBM Council website. They claim to have achieved a 20% cost reduction in applications run costs. As Shell is one of the principle architects and proponents of IT4ITTM this provides a good indication of how the two approaches might complement each other.

It is most likely that IT4ITTM represents a more extensive and comprehensive IT Management framework whereas TBM offers a richer coverage of specific features and disciplines. The latter would appear to be particularly true in relation to cost containment, business value and portfolio management. COBIT® v5 combined with Val IT (Business Value of IT) clearly offers additional perspective on those topics covered by TBM.

The short answer is to apply the best horse to suit the course you’ve set about travelling. If you’re specifically looking at cost containment or value management initiatives then the best short term approach will most likely involve TBM. If on the other hand what you crave is end to end IT service management and execution, then IT4ITTM would provide a more prescriptive platform.

Although these frameworks have been around (at least in part) over a few years, this does make them relatively immature when compared with COBIT® (v5) and TOGAF® (V9.1). At the same time, both IT4ITTM and TBM are heavily supported (and developed) by a range of significant industry leaders. Hence they are worthy of significant attention. In an industry that has long suffered the consequences of inadequate standards, it is reassuring to know that we (IT Professionals) may finally be headed towards the same standing that is enjoyed by the likes of HR and Finance practitioners.

IT operating model and organisation structure

The following diagram is an example of another IT operating model. It was designed for a client to respond to the internal and external drivers in their industry.


It generally reflects similar elements to the Cisco model, that is, strategy and planning, governance, IT solutions (i.e. service design and development), IT operations and client services (i.e. support). In addition, its features include Agile Development, Bimodal IT, I/S/PaaS and DevOps. Various frameworks and methodologies have been overlayed including COBIT®, TOGAF®, ITIL® and Prince2 (by Axelos).

It’s also worth introducing Gartner’s IS Lite and IS Lean models at this stage:


Over many years I have applied Gartner’s Lite and Lean models to assist in identifying the most appropriate allocation of capabilities to both in-house and outsourced IT organisations. This knowledge is a critical ingredient in building effective and efficient IT business models and structures.

With all of these models available, the task of designing an appropriate business model for your organisations should be relatively straight forward.

What’s the final step? 

Moving from business model, through macro and then micro structure design, is the last step before such things as job specifications, recruitment and so on. The challenge is to try to maintain the integrity of the underlying business model when building the structure. For example, a structure based upon the four IT4ITTM value streams might well be considered. However, an alternative functional structure might better suit the particular circumstances. The level of IT4ITTM maturity may also be a factor.

So what can we take away from this?

In order to build your IT organisation (MYO IT) you need to:

1. Understand the internal and external drivers for your IT business.
2. Contemplate your customer value proposition.
3. Initiate a change management process.
4. Identify your target capability profile and any gaps (See Gartner’s IS Lite and IS Lean).
5. Design your IT operating model (see IT4ITTM, TBM, Cisco and Client models).
6. Design your macro and micro organisation structure.
7. Complete role descriptions, sizing etc.
8. Build your core IT team.
9. Procure your partners.
10. Complete the change management process.

Now you’re ready to start!


About the Author:

Tony Welsh is an Associate Partner with Information Professionals where he leads their Strategic ICT Practice. He has over 30 years’ ICT experience gained in the United Kingdom, New Zealand and Australia. Over half of that time has been spent working as a CIO for large and diverse organisations. In particular he’s been engaged in ICT strategic planning for organisations including a rural fire service, a union, a large government rail organisation and two large city councils.

He led a team of consultants in developing an IT Sourcing Strategy for a large health organisation and he’s designed IT operating models and IT organisation structures for water and electricity utilities and higher education organisations. Tony is a Certified IT4ITTM Professional.

The Next Step for the CIO

Has the sun finally set for the traditional CIO as we see him or her? Well the short answer is maybe. 

 

 
All you have to do is look back 10 years and you’ll find that the role has basically transformed, so it is not so hard to believe that it will do so again. With the onset of the Digital Age, we should really try to bring the CIO up to date.
 
Is it reasonable to consider the CIO in terms of a service rather that a person? Why not considering the CIO has been doing his/her utmost to translate everyone else’s job into a generic role and in turn to a generic set of services/components. The emergence of the service-based ICT organisation, together with the adoption of outsourcing and cloud, has facilitated this in the form of ‘ICT as a Service’.
 
So why not start by breaking down the service:
 

 

 

The next question is: can these services be delivered as a virtual service or set of services?

Established frameworks such as TOGAF, P3M3/Prince2, ISO/IEC, COBIT and ITIL/ITSM offer guidelines to codify Strategic Planning, Program Management, Risk Management, Governance and Technology Leadership. 
 
Organisation Design and Development are largely experiential with models and frameworks widely available. Stakeholder Management can also be imported as this is based around relationship management although the level of intimacy might be difficult to emulate.
 
It is also true that many CIOs already import many of these skills through the engagement of consultancies. This demonstrates that virtual capabilities may already be in place at an additional cost to the organisation. This is to some extent understandable as the CIO role has expanded exponentially over recent times.
 
It is worth considering what the potential constraints to setting up a virtual CIO arrangement are?
  1. Cost
    The likelihood is that the cost of not having a full time CIO can be more than offset with having a Virtual Substitute for 50% of their time.
  2. Loss of business intimacy 
    Whilst this is probably the hardest to replace, having best in class Strategic Planning and Architecture frameworks in place will enable the essence of the business to be modelled.
  3. Loss of accessibility (i.e. to strategic ICT adviceThis facility can be available ‘on tap’ with the added advantage of having multiple CIO substitutes available to consult.
  4. Loss of capability 
    As above, expect to extend capability by assembling the combined expertise of 3 or 4 Virtual CIOs.
 
There might be other constraints but these are most likely to be the most significant. In summary, the Virtual CIO service offers the potential advantage of being more cost effective, equally business intimate and substantially more accessible and capable.

To really step up to the Digital Age, it seems that the next logical step is to create the Digital CIO. This would require the ‘CIO as an Avatar’ to be created before teleporting him/her/it into the stratosphere – an area 10km to 50km above the Earth’s surface that has no Clouds.
 
 
About the Author
 
Tony Welsh – Associate Partner, Information Professionals
 
Tony has over 35 years’ experience as an ICT professional including 15 years in Chief Information Officer (CIO) roles. His particular skills include ICT and business strategic planning, program management, business and ICT alignment, stakeholder management. He is particularly valuable for organisations seeking to get more out of their ICT investments and/or to use ICT to transform their organisation. He has extensive experience in the management and design of ICT organisations.

So you want to be a CEO?


This is a question that frequently raised its head during my tenure as a CIO. Almost as frequently as: does CIO stand for ‘Career is Over?’
There are certainly examples in which CIOs have risen to the rank of CEO. Generally these tend to relate to either company restructures that have seen the emergence of new business subsidiaries under a larger parent, or more typically internal ICT organisations that have restructured as ICT Companies, possibly from what Gartner terms as Internal Services Companies (ISCos). So, yes it can happen!
If that is your aspiration, I’ve provided five tips below to help you to make it happen.  They comprise:

 

·        Step one – Gaining Acceptance

·        Step two – Achieving Parity

·        Step three – Adopting a CEO Champion

·        Step four – Extenuating the Positives

·        Step five – Establishing your Virtual Footprint

Each is outlined below.

1.     Gaining Acceptance
The fact that CIOs are generally well represented around the ‘Top Table’ these days, removes one significant barrier to career escalation. As senior executives, CIOs get the opportunity to get to know the CEO and possibly members of the Board or Government whichever it happens to be. At the same time, they will have dwelled in the same pastures and to a large extend fed from the same trough as their senior executive colleagues. Above all else they should (if they’ve done their job well) have gained a whole of business perspective as well as fostering a degree of mutual respect and support.
2.     Achieving Parity
At least CIO’s can consider themselves to be alongside the likes of the Chief Finance, Strategy, Operating and or Procurement Officers in the line to the Head Hunter’s door, or can they?
I’ve worked with at least one CFO who has subsequently been appointed as CEO for another organisation and I’ve worked with a variety of other business executives that have done the same. Backgrounds have included Procurement, Engineering and assortment of Business Operational Executive Managers. The experiences differ but they do tend to have some things in common:
·        Most have a solid tertiary qualification;
·        Most have done more than one senior executive role;
·        Most have taken the lead in a significant change/transformation program;
·        All have been driven towards CEO attainment.
3.     Adopting a CEO Champion
Another important factor is that all of them have been mentored and supported by a sponsoring CEO. There is nothing quite like having a well-respected CEO in your corner to champion your cause, to mentor you through the teething troubles or to kick start you on the trail to being a CEO. It is a sure way to attach credibility to your aspirations.
4.     Extenuating the Positives
But there are also a few factors in your favour as a CIO:
·        Likelihood of a strong connection with transformational initiatives?
·        Familiarity with many other parts of business operations and offering a unique perspective?
·        Experience with good governance and service delivery and/or shared services?
·        Tertiary qualified?
·        More than a passing familiarity of the potential for ICT to generate business value.
The first thing to do is to articulate your value proposition.  I suggest using, practising and refining this as an elevator pitch. Then you’ll need to find a nurturing CEO (not the simplest of task in itself) to get you moving in the right circles and elevate your profile. In the interests of achieving parity, a sideways step into an alternative Executive Management role might round-off your preparation.
5.     Establishing your virtual Footprint
Today the tools are at hand to help you to establish and raise your profile on a local, national and international basis. Tools like LinkedIn, Twitter and even Facebook are all at your disposal through which you can boost your virtual presence. Twitter and Blogs especially offer a means to get your views and opinions across, all of which can help to establish your reputation. You may also want to investigate how to accumulate your Klout score via Klout.com to represent the extent to which ‘you influence the world!’ Keep in mind of course that both good and bad reputations can be made over night!
At the same time, presenting at industry events and getting involved with industry bodies and associations can create openings through which you might display your talents. In other words, plan to migrate from being seen as a company champion to being revered as an industry champion.

In the meantime, as for me I think I’ll just stick to my ‘vowel theory’. That is in terms of my aspirations of moving from ex-CIO to CEO, I’ll continue to dispute the rule that suggests it should be “I comes before E, except after C”!

 

Tony Welsh
Associate Partner, Information Professionals

Tony has over 30 years experience as an ICT professional including 15 years in Chief Information Officer (CIO) roles. His particular skills include ICT and business strategic planning, program management, business and ICT alignment and stakeholder management. He is particularly valuable for organisations seeking to get more out of their ICT investments and/or to use ICT to transform their organisation.