Business-Like IT Management Assessments

Assessment Program Overview

Introduction:

Senior business management find it difficult working with their internal IT departments and often express the disappointment with both their perceived view of IT’s performance and their general interaction with IT. Much of this is a result of IT not engaging the business in a language that business understands! In today’s agile business environment, this gap between IT the business needs to closed. Our IT management programs are designed to improve the performance of IT in bridging the divide between IT and the business and at the same time deliver real and measurable benefits to the bottom line.

These programs deliver the following outcomes to IT departments;

  • Deliver business-like products and services
  • Enhance their reputation and relationships within their enterprise
  • Understand and respond to business issues
  • Manage themselves with confidence, good governance and rigour
  • Improve their working methods and practices
In addition, because the assessment methodology includes business like management, the program acts as a very good communication and educational tool that CIO’s can use to expose the business to issues that IT faces. (We run a similar program for line management that works in parallel to educate and expose line management to their responsibilities and expectations in their interface to IT.)
The focus is on business-like management (the dynamics of what they do), rather than on the technical and functional disciplines of IT (the mechanics of IT). Business-like management uses market economics and practices within the IT domain. Hence the topics for business-like management in IT are:
  • IT Economics and Finance
  • IT Leadership and strategy
  • IT Operations
  • IT Innovation and Entrepreneurship
  • IT HR and people
  • IT Marketing
  • IT Procurement and sourcing
(A description of each of these topics appears later)
 
It is immediately obvious that we are not dealing with IT specific mechanisms (ITIL, Architectures, etc.), rather we bring tried and tested business practices to the above aspects of managing IT.
  • For example, in economics and finance, we use established financial methods (e.g. ROI, NPV, Points of action analysis, Real Option analysis, etc.) to assess the financial and economic prospects of IT initiatives. We also have tools for IT budgeting (using business methods), financial planning, financial governance, tracking, business cases, and many other business techniques, to bring to bear on financial IT problems.
We believe that unless IT behaves in a business-like way, they will never gain the full confidence and trust of their organisations. To this end, we have available a series of assessments which quickly and simply test the maturity of IT functions within their organisation. The value of our assessment process is:
  • Quick analysis of current IT status and maturity with respect to business-like practices in 8 areas.
  • Baseline view of where IT is now – from the organisation’s perspective
  • Development of actions and roadmaps to improve IT maturity in these areas where deemed necessary
  • Effective education of both IT and business in terms of what their mutual expectations should be of each other
  • Improved relationship between business and IT : A fully mature IT department would not be seen as a different unit from the rest of business as they are conducting themselves in a professional and business-like way - in the eyes of the business
  • Improved capacitation (resources, finances, time) from business to IT
So these simple yet immensely effective programs which are quick and easy to administer will change the face of IT within your organisation in a very short time.
 

How our programs work:

Each program is made up of an assessment, a workshop and as an output of the workshop, a road map for each area of IT or individual manager. In addition we support the roll out of the road maps on a flexible retainer basis dependent on each individual need. This provides  an assurance aspect to the program.
 
For each assessment:
  1. First we meet with you to decide the mechanics, scope and logistics of the assessment process.
  2. We then usually conduct a one-hour workshop with your key stakeholders who are going to take the assessment.
  • Our clients usually choose their exco. Or senior management team. One hour is all it takes for them (per assessment).
  • Some clients prefer that we conduct the assessment as individual interviews with executive. This is also possible, or a mixture of one-on-one interviews and workshops can be effective. We can also conduct assessments on-line, but the educational and relationship value of the assessment is diminished.
  • In the workshop / interview, we take the stakeholders through the factors which contribute to effective business-like performance in IT. This process takes forty-five minutes, and its value as both an educational intervention and an eye-opener is exceptional
  • Actually completing the assessment form takes less than fifteen minutes.
  1. We then analyse the assessment forms:
  • We develop a series of charts which show you how business views IT and how IT view themselves for each factor
  • We provide feedback against the general workshop / interview inputs which were not captured by the assessments themselves
  • We also provide input based on our experience and best-practice models
  1. We then conduct a one-day workshop (usually with the IT Management team, but some clients prefer a wider audience)
  • We present the results of the assessments.
  • We validate the results and facilitate a common understanding of the issues at hand.
  • We provide our own input based on our experience and best practice models
  • We decide which factors require an improvement in maturity, and by how much.
  • We examine the implications of this improvement initiative.
  • We develop a roadmap for the way forward in developing each factor’s maturity.
  • We assign responsibilities to participants for factor improvement.
  1. The final deliverable is:
  • Assessment result charts.
  • Factor improvement charts.
Sample results graphs look like this:
 

The workshop:

The 1 day workshop is divided into three
  • The results of the assessment are communicated to the management team
  • The results are debated amongst the team so that they are understood and contextualised.
  • An action plan is be drawn up to bridge the gap between the current status and the target.
The output of the workshop is typically the following;
  • Roadmap for improvement.
  • Timelines and program for implementing the roadmap.
  • In some instances we may provide roadmaps for individuals on request.
The workshops offer CIO’s an opportunity to bring their Management Teams together to focus on one objective: bringing IT closer to the business.
 

Implementation:

The output of the workshops is the strategy and is therefore the start of the journey. Through CXO’s flexible retainer service we are able to structure an assurance program to support IT management in the implementation of the strategy. This program combines CXO’s senior consultants with our Digital delivery platform- CXO-Advisor, where our clients will find research, tools methodologies, templates and web 2.0 functionality.  
 

Time lines

The entire process, up to the workshops can take less than two weeks. Often however, our clients’ logistics and time constraints mean that the process takes up to one month. Implementation time will obviously depend on the extent of the agreed intervention and managements capacity to execute.
 

What do we assess?

In addition to the seven business practice areas, we usually conduct our first assessment as an IT Posture assessment. IT Posture is how the business views IT in general, and how IT views itself within the organisation. This is a powerful concept that places the IT function within an organisation. IT Posture is the catalyst for everything that IT does and can do within the organisation.
If an IT function’s posture is poor within an organisation they:
  • Are funded inadequately and constantly have to fight for any funds they get
  • Their mandate is unclear and business expectations do not match IT delivery
  • Business does not provide the capacity (resources, finances, time) needed for IT to do their job
  • Business discipline with respect to It is poor – they initiate projects, acquire technologies and use existing IT services in an uncontrolled, random and expensive way
  • IT skills are erratic. Keeping the necessary skills is difficult. Similarly, business skills with respect to IT are poor
  • Business doesn’t understand IT, its use or the value that IT can bring to the organisation. IT on the other hand doesn’t understand the business drivers and pressures which determine the environment in which they operate
  • With poor trust, things take longer, require more effort and cost more
So it is obvious that IT posture dictates the dynamics of how It works (or not) within the business.
Our other assessments in the” Managing IT like a Business” series include:
 
IT Leadership and strategy: IT leadership and strategy involves the operation and integration of IT at a strategic level in the organisation. It takes into account the expectations, role and contribution of IT in the organisation’s strategic endeavours.
IT Functions which have a poor IT Leadership and Strategy maturity have the following challenges:
  • They are not following economic, business and technology trends, and are unable to advise their organisation of the impact (both positive and negative) of these trends on organisational strategies
  • They conduct no research and development, and have no budget to do so. Therefore technological developments and the fit that they have with the organisation tend to go untested
  • They are unable to “manage attention”: They cannot direct their organisations towards important developments, and importantly they cannot direct people away from unimportant or unsuitable developments
  • They have a poor view of how current technologies will merge with developing or future technologies
  • They provide no information leadership – no data-mining, content implications or direction to the business as to what information is useful or not
  • Their IT strategies tend to be ad-hoc. They may be ignoring business strategies, deriving from business strategies or even guiding business strategy
 
IT Economics and Finance: Finance in IT deals with how the IT Function is funded, what the sources and levels of funding are, how funding decisions are made, how the IT budget is managed, Total cost of ownership and most importantly commercial and economic accountability for financial outcomes as a result of Finance.
IT Functions which have a poor IT Economics and Finance maturity have the following challenges:
  • They are unable to get the funding needed for critical IT services or developments. They have an adversarial relationship when it comes to finance. Business has no clear view of the effectiveness of IT spend, nor of how efficiently IT funds are used
  • Their budget frightens business. There isn’t a clear understanding of different categories of IT budget. They have difficulty in getting IT budgets passed and are often told: “Cut that by 20% and come back to talk to us.” There is no sense of shared responsibility with the IT budget – it’s their problem
  • IT has no clear idea how, where and when their funds are spent. They do not have an “IT General Ledger”, nor do they have tracking and reporting mechanisms
  • There isn’t a clear idea of how much IT costs and should cost, now and into the future. As a result, business are often reluctant to commit funds, and the common complaint is that: “IT costs too much”, with no basis in fact
  • They spring financial surprises on the business, or have them sprung on themselves
 
IT Operations: From an IT perspective it must deliver services that sustain the business “without fuss” and at the lowest possible cost (and appropriate risk level) with the best possible service. Operations runs the day to day business. This assessment is not intended to assess ITIL or the ITIL processes in the organisation, rather the factors that promote success and sustainability.
IT Functions which have a poor IT Operations maturity have the following challenges:
  • They are unable to manage the day-to-day demand for changes, upgrades, new services of products.
  • They have no service catalogue presented in business terms. They have no idea what these services cost and where they affect the business
  • There is poor management of IT Risk, often being reactive fire-fighting. Their quality of service is suspect
  • They have a reactive response to capacity demands, and do not plan ahead for IT capabilities needed for future demands
  • Their infrastructure management is poor. They don’t have the tools or disciplines to amange infrastructure in a business-like way.
  • They have no, or diverging, standards. No-one adheres to them anyway
  • The sustainability of the IT function is in question
  • Operational performance is of the reactive “string and chewing-gum” variety. They can’t tell or report how well or poorly they are doing.
 
IT Innovation and Entrepreneurship: The assumption for “Managing IT like a Business” is that IT entrepreneurship takes place inside an established organisation, and involves using IT to develop new products, markets, channels, and businesses, associated with that organisation.
IT Functions which have a poor IT Innovation and Entrepreneurship maturity have the following challenges:
  • There is no mechanism for identifying innovation opportunities, neither is there a structured process for doing so
  • The environment in which IT operates is not conducive to innovation. Risks are avoided and failures are punished. There is no isolated ideas testing environment in which failure is allowed provided learning occurs
  • People may innovate, but often in contravention of company policy or managerial edicts
  • There is no capital or support for innovative activities
  • Risk is seen as bad, in spite of the possibilities.
  • Individuals are not rewarded for innovative behaviour, neither is their performance contract inclusive of innovation and entrepreneurial measures
 
 
IT HR and people: There is a need to understand how IT people think, work and are motivated, in order to provide an environment in which IT People can grow and are rewarded – and in doing so, to retain this scarce resource. Therefore the application of generic Human Resource disciplines needs special attention in the IT environment.
IT Functions which have a poor IT HR and People maturity have the following challenges:
  • The culture and relationships in IT, and between IT and the organisation are neutral at best, adversarial at worst
  • There is no specialised IT HR expertise in the organisation
  • Recruitment is difficult: Attracting the right people, motivating them and keeping them is difficult
  • People in IT aren’t trained on a continuous basis, thus losing currency within their organisation and in the marketplace
  • Career paths are not clear, and remuneration is patchy
  • They are constantly reorganising to meet challenges. There are stovepipes within IT and between IT and the business
  • There is poor communication within IT and between It and the business
 
IT Marketing: One of the universal observations about IT is that IT doesn’t communicate well or enough to promote its value. IT needs to adopt some marketing practices, tools and techniques if it is to redress these perceptions.
IT Functions which have a poor IT marketing maturity have the following challenges:
IT doesn’t know who their stakeholders are and have not developed strategies for communicating with each “customer segment”
IT doesn’t communicate well, if at all
IT doesn’t actively promote themselves, technologies or the benefits that the business can gain from technology
Change management within the business is poor
IT are not aware of business plans and developments, and are unable to manage the business demand
There is no IT marketing strategy and plan, meaning that communication is often a post-hoc even
 
IT Procurement and Sourcing: Procurement means different things to people. We mean the activity of acquiring Information Systems (an Information System includes People, Technology, Networks, Data and Processes) and related resources. This must be approached strategically to achieve economies of scale and scope and to ensure sustainability. Procurement therefore includes or at least has a strong relationship to Sourcing, selection, contracting, implementation, & oversight (or benefits realisation). The assumption for “Managing IT like a Business” is that IT Sourcing and Procurement is a strategic competency. Whether in-sourced or built inside the organisation, effective IT Sourcing and Procurement adds business value.
IT Functions which have a poor IT procurement and Sourcing maturity have the following challenges:
  • The IT procurement and sourcing strategy does not align with the business strategy. Strategic business decisions do not kick off an IT procurement process.
  • IT’s procurement capabilities and approach are ad-hoc. They don’t plan sourcing and procurement decisions and follow through on their plan. They have no IT procurement specialists, nor is the performance of IT sourcing and procurement measured.
  • IT’s sourcing of goods and services is not linked to company strategy.
  • The IT sourcing process is immature, leaving vendors with the upper hand when it comes to how goods or services should be supplied
  • Different sourcing options are not scientifically considered on an ongoing basis. The effectiveness of past sourcing decisions is not considered
  • The selection of vendors is of concern, with no clear and transparent rationale or process supporting sourcing decisions
  • They contract vendors poorly – often giving these vendors contractual advantages
  • The business outcomes from sourcing decisions are not tracked, or rectified where a problem
 
An example of the final roadmap may appear as follows:
 
This roadmap includes all factors in the assessment, so naturally appears crowded. Conducting fewer assessments would result in a simpler map. Typically actions fall onto one of three curves:
  • The red curve contains actions against factors that need to be taken to “get the basics right”.
  • The green curve represents tasks that engage with the business in order to improve business results.
  • The yellow curve represents “leadership” actions which depend strongly on IT’s posture within the organisation
All actions needed to be taken against factors that need to be improved are prioritised into three periods, so that in the first period (which may be weeks or months), only the priority actions are attended to. Actions in this roadmap are then assigned to individuals and personal roadmaps are produced.
 
We offer mentoring of stakeholders in the implementation of the roadmap as an additional service to clients. This mentoring brings our experience and access to best practices and tools to our clients.
 
Our experience with clients shows that they are able to focus on IT business-like behaviour in a short time. The program is structured to achieve 80% of the results with 20% of the cost and effort. We believe that organisational dynamics are sufficiently fluid that quick actions and results are preferable to exhaustive analysis, reports and plans.
 
Assessments are an efficient way to identify areas that need improvement and develop action roadmaps that result in meaningful change in IT Management practices and behaviours.