Three Strategic Orientations towards IT Excellence
value. This means that we seperate three discrete strategies for IT organizations to add value
to the business. What strategy is best for your organization is dependent on the strategy of
your business and the role of IT contributing to that strategy.
Using these three strategies BlinkLane Consulting defines the ambition of IT organizations in
terms of its capabilities for adding business value. These capabilites are the basis for
improving IT organizations aimed at improving business performance.
Organizing and Managing for Value
The last few years a lot of attention is given to the
way IT is or isn’t adding business value. The latest
research shows that the only visible discriminating
factor in the question if organizations are
successfully adding business value using IT, lies in
the way IT is organized and managed. So if
organizations are looking for ways to add more
value through IT, the challenge is to optimally
organize and manage IT.
Outsourcing for Value
When looking at outsourcing of IT, we see
important similarities. Many organizations have
successfully or unsuccessfully outsourced (parts
of) their IT to external service providers. Looking at
all the research around the risks and success
factors around outsourcing, valuable lessons can
be learned. The one most striking lesson is that
the success of an outsourcing, in terms of the
extent to which the goals of the outsourcing are
met, are again mainly dependent on the
organization and management of the outsourcing
on a daily basis. So if organizations are looking for
ways of getting more value from an outsourcing,
the challenge is to optimally organize and manage
the outsourcing.
direction that it will generate more value?
BlinkLane Consulting has come up with a unique
concept and approach, where the capabilities of
the IT organization play a central role. We define
these capabilities as the whole of skills,
knowledge, attitude, culture, processes and
procedures of the organizations and its people,
focused at delivering output. By linking the
capabilities of the IT organization to performance
indicators BlinkLane is able to improve the
organization and management in a measurable
way. BlinkLane has defined these capabilities and
performance indicators in the Blink ITExcellence
Framework, see more in the frame below.
IT CAPABILITIES
IT STRATEGY
BUSINESS
STRATEGY
IT PERFORMANCE
BUSINESS
PERFORMANCE
figure 1, strategy, capability and performance
Capability Drives Performance
As shown above, it is all about improving the
organization and management of IT, including the
ability to outsource and manage outsourcing. So
how to improve the IT organization, in a way and
Three Strategic Orientations
The question still remains, how to improve IT
organizations based on these capabilities in such a
way that it adds business value. The answer is in
the linkage to business and IT strategy. For
BlinkLane, improvement starts with the notion that
the business and IT strategy should set an
ambition for the IT organization, in terms of
needed capabilities. To define this alignment
between strategy and capabilities, we introduce
Three Strategic Orientations towards ITExcellence.
The Three Strategic Orientations are defined as
different strategies to add value to the business,
dependent on the business strategy and the role of
IT. We differentiate: 1. Cost Orientation, 2. Quality
Orientation and 3. Innovation Orientation. The
definition of these three orientations are given in
the table below.
In many cases IT organizations do not have a one
single orientation. Two combined orientations or
even more are common. For example an IT
department can have a quality orientation when it
comes to delivering application services to its
users, but when it comes to managing their IT
infrastructure the same IT department has a cost
orientation.
The use of these orientations helps to understand
and define the capabilities in which the
organization has to exceed to add maximal value
with IT. For example; if an IT department is going
to outsource their IT infrastructure. When
managing the IT infrastructure for this organization
has a Cost Orientation, it makes sense to establish
an outsourcing relationship based on a utility
relationship. This means that this IT department
has to strive for a standardization of the service
delivery, against the lowest costs. It also means
that the capabilities in managing the service
delivery by the external supplier is different from
an outsourcing by a quality oriented IT
organization.
1. Cost
Orientation
2. Quality
Orientation
3. Innovation
Orientation
How to optimize IT Optimizes IT to lower costs Optimizes IT for the users of IT Optimizes IT for the business
and their customers
How to Managing Value Primarily based on TCO Primarily based on ROI /
Business Cases
Enabling new business
options, Portfolio
Management
Sourcing relationships Utility relationship, focused on
non differentiating services
improving efficency
Enhancement relationships,
focused on improving service
delivery to users and improved
responsivess to requirements
Transformational
relationships, focused at
creating new business
opportunities.
Culture Risk Averse
Control
Internal focus
………….
………….
………….
Opportunity driven
Empowerment
External focus
Role of the CIO CIO is manager of resources
(assets, people, budget)
CIO is business leader that
enables change through IT
Business strategy
alignment
Reactive to business strategy In conformance to business
strategy
Partner in business strategy
Knowledge Knowledge of IT Knowledge of the users and
their work
Knowledge of the business,
market and customers
How the ITExcellence Framework was build
BlinkLane used several bestpractices from IT capability maturity models like eSCM, CMMI, IT Service
CMM and ACMM to develop the basis for its ITExcellence framework. For each process area,
measures for maturity were defined, using the familiar maturity scale of (1=ad hoc, 2=repeatable,
3=defined, 4=managed, 5=optimized). By adding personal compentences, cultural aspects and other
supporting capabilities, the complete framework was created. The next step was to create a relation
between strategy and these capabilities. To do so, BlinkLane defined the Three Strategic Orientations
for IT Excellence. All these Strategic Orientations have a maturity model of their own, representing the
extent to which it is adding value. Then a relationship between the Strategic Orientation and the
ITExcellence framework was made, defining what capabilities are needed to successfully execute one
of the Three Strategic Orientations. The last step in creating the ITExcellence Framework was the
definition of the Key Performance Indicators. Based on the experience of the partners of BlinkLane, a
set of Key Perfomance Indicators where created that make sense towards measuring IT and Business
Performance.
Strategic Orientations and Maturity
Each Strategic Orientation has its own maturity
curve. Meaning that an IT organization can be
inmature or mature based on its own orientation to
add value. So high mature IT organizations will
deliver higher value than inmature IT
organizations.
Using the afore mentioned ITExcellence
Framework, Blinklane has linked the five levels of
maturity for each orientation, to the capability
elements:
• Maturity of each individual process
• Type and level of personal competence
• Organization culture aspect
This means that we have created a deep insight in
the needed specific maturity of capabilities and the
ability to improve maximum business value.
Automated Scans and Monitoring
Part of the BlinkLane Consulting services uses a
set of scan-tools to assess the capabilities of IT
organizations and online monitoring of
improvements including performance indicators.
These tools enable organizations to monitor the
progress they make, in creating business value
starting from one of the three strategic
orientations.
What is value?
You could argue that a pure focus on cost reduction is something different than adding business value.
We feel that value for a business is determined by the business strategy of the organization. If the goal
of an organization is to reduce costs, than reducing costs in IT and with IT, is adding value for the
business. If the goal of an organization is to grow by opening new markets, a unisided focus on cost
reduction with IT, is not sufficient to add significant value. So value for that organization needs
something different. This is the reason we have defined different ways (or orientations) to add value,
related to the business strategy and the role of IT contributing to that strategy.