Published on February 16, 2014
IS Organisational Capabilities The source of sustained performance A Formicio point of view
The purpose of this slideshow is to share a point of view on the importance of developing IS Organisational Capabilities The advent of new digital technologies – such as social media, mobile, analytics and embedded devices – requires new and different capabilities that are not yet fully understood or appreciated Our point of view is based upon insights and experience that we have gained over time The aim is to inform and inspire In addition, the IT delivery model is changing to one that is more virtual and where the ecosystem is broadening and deepening in ways that require new and different capabilities to ensure delivery success IT leaders need to equip their organisation with the capabilities required to meet today’s challenges and realise tomorrow’s opportunities © 2014 Copyright Formicio Limited 1
Traditional approaches to developing capabilities have focused on training, process improvement and structure ? ? ? ? “Ladies and gentlemen – this is the redesigned process. Any questions?” Skills of individuals and maturity of processes do not in themselves lead to sustained performance Examples include: Use of best practice templates like ITIL, COBIT and TOGAF Process improvement with external accreditation Technical, service and leadership training Measurement and reporting Organisational redesign Governance Cultural change While necessary, they are not sufficient © 2014 Copyright Formicio Limited 2
An alternative approach is to focus on developing IS Organisational Capabilities Organisational capabilities consist of shared mental models; practices; common language, mindsets and beliefs; shared experiences and individual competencies IS organisational capabilities: Include everything that is needed to deliver an outcome of value Are not lost when key individuals leave Are different from business capabilities or IT capabilities Are developed through practise over time Determine how the organisation operates Organisations have capabilities, individuals have competencies © 2014 Copyright Formicio Limited 3
Organisational capabilities are like muscles – the more they are used the stronger they get The stronger organisational capabilities become the more they shape culture and establish organisational habits Examples of IS organisational capabilities include the ability to: Deliver reliable and secure IT services Manage the relationship with business colleagues Manage a balanced portfolio of investment programmes and projects Partner with external vendors and partners Lead digital business innovation Upgrade IT systems and infrastructure with no surprises Each organisational capability delivers distinctive outcomes of value © 2014 Copyright Formicio Limited 4
Having the right organisational capabilities in place is key to successful strategy implementation Existing organisational capabilities define an organisation’s current trajectory The ‘pull’ approach to strategy implementation creates a context where people can exercise their judgement and apply their experience to change their organisation’s trajectory Changing an IS organisation’s trajectory – away from its default future to a target future – requires different organisational capabilities Having the necessary organisational capabilities in place enables an IS organisation to ‘pull’ itself from the present to its target future © 2014 Copyright Formicio Limited 5
The potential contribution of organisational capabilities can be assessed in terms of their maturity Levels of Organisational Capability Maturity 5 = Transforming: leading transformation of the business function or enterprise, for greater business value 4 = Value-adding: making a significant contribution to business function or enterprise performance 3 = Sustained: self-sustaining, based upon shared language, frameworks and mental models 2 = Procedural: reliance on the application of procedures, manuals and training Maturity is an indicator of knowing how and when to act appropriately Lower levels of maturity signify a reliance on process and oversight Higher levels of maturity signify an instinctive ability to sense and respond to changing circumstances and cultural context The more mature an organisational capability, the greater its potential contribution to organisational success 1 = Ad hoc: not consistent and dependent upon a few individuals © 2014 Copyright Formicio Limited 6
IS organisational capabilities need to be managed as a portfolio The aim is to have a balanced portfolio of organisational capabilities that are aligned with strategy and actively managed as circumstances change IS organisational capabilities are one type of organisational asset Organisational assets should be managed as a portfolio Within the portfolio there are different asset classes, each defined by its contribution to strategy Asset classes include IS organisational capabilities that: – Change the organisation’s trajectory away from its default future – Sustain delivery of today’s services – Anchor the organisation to the present, preventing change © 2014 Copyright Formicio Limited 7
There are four ways of putting the necessary IS organisational capabilities in place Urgency High Partner Acquire The chosen approach is dependent upon two criteria – urgency and difficulty: Develop: through the application of bestpractice frameworks Develop Grow Low Low Difficulty High The time and effort needed to put new organisational capabilities in place is often severely underestimated Partner: with organisations that have the required capabilities and are willing to share them Acquire: through acquisition of other organisations with the required capabilities Grow: organically through recruitment of individuals experienced in the required capabilities © 2014 Copyright Formicio Limited 8
New organisational capabilities are difficult to understand and appreciate until they are experienced The challenge is that organisations – like individuals – don’t know what they don’t know until they experience it, which could be too late! An example of a new organisational capability, that is not yet understood or appreciated, is ‘being digital’ Being digital is different to traditional IT; it involves taking a different perspective on how the business can be digitally enabled and how digital enablement is provided Like all new organisational capabilities, being digital needs to be experienced before it can be truly understood © 2014 Copyright Formicio Limited 9
Our point of view on IS Organisational Capabilities revisited Organisational capabilities are rarely understood until experienced IS organisational capabilities: 1. Are the source of sustained performance 2. Determine how the IS organisation operates 3. Define an organisation’s trajectory 4. Are like muscles: the more they are used the stronger they get 5. Can ‘pull’ an IS organisation from its present to its target future 6. Can be assessed in terms of their maturity 7. Are an organisational asset that needs to be managed as a portfolio 8. Can be developed, acquired, grown or transferred through partnering © 2014 Copyright Formicio Limited 10
Five questions to ask if you’re involved in developing the capabilities of your IS organisation 1. What IS organisational capabilities need to be in place to change the current trajectory and pull the organisation to its target future? 2. What is the importance and, more importantly, the target contribution of each of these capabilities? 3. How could the contribution of these organisational capabilities be best improved? The important thing is not to stop questioning. Curiosity has its own reason for existing Albert Einstein, 1879-1955 4. Which organisational capabilities currently in place have the potential of anchoring the organisation to its current trajectory? 5. How could these ‘anchoring’ organisational capabilities be best weakened or eliminated? © 2014 Copyright Formicio Limited 11
The power that comes from having a shared point of view Having a shared point of view is a powerful tool for collective leadership. It can bring clarity and balance. It can create a context where everything makes sense, people know exactly who they are, what is needed and why they’re here. Effectiveness is maximal, yet actions seem minimal. Everything flows as it should. Developing a point of view takes time and effort, but the outcome will be worth it. The Formicio Team © 2014 Copyright Formicio Limited 12
This is an Insight presentation by Formicio We work with people who want to improve their organisation future by delivering transformational change Specifically we can help you: Explore alternative futures that are not only better, but achievable Establish the conditions for successful transformational change Develop capabilities needed to ‘pull’ your organisation into an improved future. One of our specialist areas is IT transformation © 2014 Copyright Formicio Limited 13
For further information contact ... David Trafford firstname.lastname@example.org Peter Boggis email@example.com +44 (0)20 7917 2993 www.formicio.com © 2014 Copyright Formicio Limited 14
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