Relevant IT – IT solutions to bridge the gap between business and IT
Much has been said and written about the existence of a so-called “Business-IT divide”. But what is it, what does it mean for my company and even more important, what can I do about it?
Most small and medium business leaders and IT players (be they internal to the company or external service providers) have given up on answering that question. They often feel that it is impossible to gain real business value from IT and that it is just in the domain of large enterprises to attempt tackling that issue. Rome was not built in a day and there are no silver bullets for instantly bridging the business-IT divide and offering truly effective IT solutions. After all, if it was easy, it would already have been done and this entire subject would be moot! The Relevant IT framework helps to map out a journey to assist businesses to tackle the issue one step at a time.
The esssential first step on this journey will be to understand your company’s current position. We used the Relevant IT framework to build a “Relevant IT Maturity Model”, and a company’s current status is known as the “Relevant IT Maturity”. In addition to determining where you are now, this assessment of current maturity will highlight any misalignment between different stakeholders (most notably business and IT) as well as give some initial advice on advancing the key IT capabilities to a higher maturity level.
Embarking positively in this way will help a company to start closing the divide. With the information provided by the maturity assessment, you could manage this on your own or should you so wish, you could get a Relevant IT Consultant to help you build a “business strategy for your IT” and then even guide you through each phase of implementation.
Overview of the Relevant IT Maturity Model
The Relevant IT Maturity Model is made up of five levels of maturity, starting with IT as merely a supplier of (often disparate) products and services to the organisation through to IT transforming the business model. Each maturity level is not good or bad in itself, for example a level 1 maturity can be all that’s required for a company where IT is not important for conducting the business. Once a desired level has been identified, the Relevant IT Maturity Model helps to map out the journey of progressing towards realising this goal.
It is important to note that each level of maturity always presupposes that the lower levels of maturity have already been attained.
As with any other maturity model, it takes time before the next level of maturity has become the “new normal”, and as such the entire Relevant IT journey is without a doubt a multi-year undertaking.
Six capabilities (each with several dimensions) have been identified as crucial through our research efforts. They focus on different aspects of business-IT interaction, and together cover the full spectrum of the business’s IT functions. As shown in the diagram, each capability is mapped against the five levels of maturity for a holistic understanding of the existing position, which then forms the basic “map” for the business to move forward to their objective levels.
Description of Maturity Levels
The following is a short description of the five maturity levels as defined by the Relevant IT Maturity Model.
1. IT AS A SUPPLIER (MATURITY LEVEL 1)
For a company at this level of business-IT maturity, IT is often seen as little more than a necessary evil and investments in technology, processes and employees are generally only made as and when needed. IT has become, rather like insurance, a grudge purchase delivering little added value but simply providing a service considered necessary.
As mentioned above, this maturity level does not necessarily represent a serious problem, and might actually be a perfectly legitimate maturity for this dimension, capability or even entire company depending on the type of business being assessed and the core criticality of IT in achieving the established business objectives.
2. IT AS A PLATFORM PROVIDER (MATURITY LEVEL 2)
For years the focus of IT departments has been on providing a stable and cost-effective platform – five 9s (99,999%) uptime of all essential services at the most manageable price. Often this is done by implementing recognised frameworks like ITIL, MOF and others or outsourcing the core IT function to Managed Service Providers.
The thinking behind this is that such a stable platform will enable business leaders to do their “magic”. At this level of maturity, organisations are willing to allocate budget to projects which enhance or ensure the stability of IT systems, but will seldom authorise expenditure on more innovative, future-looking developments.
3. IT AS A BUSINESS PARTNER (MATURITY LEVEL 3)
At this maturity level, IT starts working directly with the individual business functions like marketing or manufacturing and starts to look at enabling each of them individually. At this stage a lot of focus is spent on optimising and streamlining business processes and business unit outcomes.
Maturity level 3 is where IT has already become deeply ingrained in the culture of the business it is supporting. The IT department’s efforts are more closely aligned with the requirements of the business units as they engage directly with one another to design and implement solutions or improvements to systems which will drive value for the business unit and, as an extension, the business as a whole.
4. IT AS A BUSINESS DIFFERENTIATOR (MATURITY LEVEL 4)
For a company at this level, IT becomes an important role player for improving the outcomes of the business as a whole and differentiating it from its competitors. The IT leader is a respected equal in the strategic leadership team and plays a pivotal role in enabling the evolution of the business to new levels of success. At this level, IT and business are almost inextricably intertwined and very well aligned with one another, and new investments into IT are authorised in the secure knowledge that the return on this investment to the business will be significant as per the business strategy moving forward.
For any organisation achieving this position, the business-IT divide is minimal. IT understands the business intrinsically and conversely, business has a firm understanding of just how its IT systems play pivotal roles in boosting the bottom line. All objectives are aligned and a unified strategy integrating the necessary IT to support the business goals is clearly laid out.
5. IT AS A CORE BUSINESS CAPABILITY (MATURITY LEVEL 5)
For companies that aspire to this level of business-IT maturity, IT becomes a catalyst to drive continual business (model) transformation. The business depends entirely on continued investment in cutting-edge IT solutions which will enable the next level of business model transformation as the enterprise rapidly scales up both in size and success. This is not a maturity level which will be automatically applicable to all operations – there are models which are unlikely to require such a high-level of technology-driven agility and may not even benefit from this next-gen approach at all.
Description of Capabilities
Six core capabilities have been identified as key considerations in the Relevant IT model:
A. BUSINESS’ EXPECTATION
What does the business as a whole and the other business leaders in particular expect from the IT function and what mechanisms have been put in place to achieve this outcome?
The maturity level of this capability usually determines the maximum maturity level that the company as a whole can attain as strategic business decisions will be guided by the potential value that executives see in their IT. However if your aim is to close the business-IT divide, it’s naturally critical that you first gain a clear picture of how the business leaders in your organisation ideally envisage IT supporting their efforts.
B. ROLES & RESPONSIBILITIES
How does the organisational design of the IT function support business needs?
It is important to have the correct leader(s), staff and vendors in order to be able to attain the set goals. An enterprise without clearly-defined IT and business roles and responsibilities will have difficulty aligning these disciplines at all, and certainly can’t expect to reach a point where IT becomes an invaluable, integrated function supporting the business as it evolves.
C. STRATEGIC POSITIONING
How does the IT function position itself in relation to other parts of the business and its leaders?
Apart from the position that IT would like to have, it is important to determine how IT is seen by business leadership as well as the general employee. For a business with a low reliance on IT systems, the IT department will be positioned as a mere service provider, while an enterprise heavily dependent on technological innovation must ensure that IT is recognised throughout the business as a core function.
D. SHARED UNDERSTANDING
How do Business and IT leaders communicate and reach understanding on complex Business and IT topics?
On the one hand it is imperative to have a common understanding on what IT wants and is supposed to achieve in a business. On the other hand one may not forget that we need to actively reduce the complexity as much as possible in the first place! Achieving this balance relies heavily on business and IT leaders speaking the same language and sharing the same understanding of these objectives.
E. PLANNING & DECISION MAKING
How does the business make complex IT decisions and who makes them?
When looking at the planning and decision-making process of a company (especially regarding funding of initiatives), one can predict many of the resulting outcomes. A business unit manager with extensive experience in their field may well be the best person to be a decision-maker on product development, but without a firm grasp of newer opportunities and IT capabilities this same manager isn’t going to be able to effectively decide on new systems’ implementation.
F. EXECUTION & RESULTS
How does the overall performance of the IT function compare against promised deliverables?
This capability is all about the type of IT initiatives and if/how they are being achieved and measured. Granular measurement of the IT component of key deliverables is a must for the true value of this component to be assessed, and for moving forward with new projects which may unlock previously unattainable business value.
The Relevant IT online assessment
In order for companies to determine their current Relevant IT Maturity, we have made available, for free, an online “Relevant IT assessment” tool – which is still very much under development. This is an ongoing project and as such many enhancements will be expected over time, however the fruits of our organisation’s intensive research into this subject can already be extremely useful to SMEs keen to get started on addressing the business-IT divide straight away.
The online Relevant IT assessment is a high-level bird’s-eye view of a company’s current situation in terms of the alignment between business and IT. It tests three dimensions in each capability with one core question each and maps these to the relevant maturity levels.
The output is a report of the current situation of a company, highlighting the existing position and providing some high-level guidance regarding the process of escalating the different dimensions and capabilities through the necessary maturity levels.
Different evaluations of this current situation by different stakeholders are expected – this is a manifestation of the very divide the Relevant IT framework addresses. In its initial form, it is outside of the scope of the Relevant IT online evaluation to factor in these differences in views – and instead the lowest common denominator is taken as the current level.
How to use the Relevant IT Model and Assessment
For any change initiative to be successful it is imperative that one understands the current position.
A close second is setting a goal to aspire to. One needs to determine if the current level poses a problem and what the desired maturity should be – only then should one undertake any actions intended to improve a level.
In general the Relevant IT Maturity Model needs to be worked through from bottom to top and left to right.
This means you first need to identify the capabilities/dimensions with the lowest maturity score. Then start with the leftmost of these and determine your strategy to advance to the next level.
No level can be skipped; all capabilities need to be taken into account and brought to the next highest level. Otherwise the business-IT divide will not be properly addressed.
Make sure all stakeholders (business and IT) agree on the outcome and are aligned from the start of this expansive project. Without clear communication of the value of undertaking this journey from all players the process will be stalled by the very divide it aims to address.
Conclusion / Next steps
Completing the online assessment will give a good indication of the next steps to take on your journey towards Relevant IT. This single action will not only provide the baseline highlighting your organisation’s current business-IT maturity level, but will also highlight the next area in need of addressing and guide your business on how to go about elevating this dimension to the next level.