Friday, May 20, 2011
The Strategic Role of An IT Operating Model
Knowing The Question Is Half Way To The Answer
What is your customer’s #1 complaint about IT Services?
If you have similar challenges to the 100’s of organizations we at Pink Elephant have worked with over the last 20 years you may have heard these statements before.
- IT does not understand business priorities
- IT is too slow and unresponsive to new demands & requirements
- IT projects are always behind schedule and over budget
- IT strategy is focused on technology and not business objectives
- There is confusion on who to talk to for new services
Do any of these statements sound familiar?
If so then you are in a very large club.
So the question in this case is “What is the root causes of these statements?”
It is certainly not due to a lack of desire or effort to provide good customer service. In our experience most IT staff are trying hard to please their customers and in many cases burning the midnight oil on a regular basis. However they are frustrated that it does not seem to make a difference to overall customer satisfaction.
What we have observed is there are four prevailing views on how to handle this challenge.
- A belief that if we work hard enough and put in longer hours IT will be more appreciated and improve customer satisfaction levels
- We can outsource IT problem areas and constraints and give the problem to someone else to solve
- We can buy more tools to automate the problems away
- We can focus on individual process areas for targeted improvements using best practice frameworks
However, while each of these solutions may bring partial improvement none of them in isolation or as a collection fixes the systemic issues facing the end-to-end flow of demand / supply.
IT was Albert Einstein who defined Insanity as doing the same thing over and over and expecting different results!
So that means we need to step back and examine the overarching goal and the root cause for why we are not achieving that goal.
In short IT’s goal is to be a strategic business partner who’s primary reason for existence is to enable our customer’s desired outcomes and objectives. At a macro level we do this by taking in demand for new or modified services and efficiently and effectively supplying those demands based on business priority and direction.
In that context IT is like any factory where orders for goods and services are translated into results our customers want and are willing to pay for. Or according to ITIL “A means of delivering value to Customers by facilitating Outcomes Customers want to achieve without the ownership of specific Costs and Risks.”
So in order to do this well we need to understand the factory processes for turning demand into valued outcomes. In a classic manufacturing concept this means we need to intimately understand and map the flow of work on the factory floor regardless of which functions or suppliers are performing the interdependent tasks. To do this you need to understand the macro process flows that tie together capability areas related to customer engagement, pipeline, operations, Continual Improvement and Governance activities.
In manufacturing lingo understanding and measuring the speed to value generation is called: “Cycle Time”
“Cycle time which is also called average cycle time, flow time, and throughput time is the average time from release of a job at the beginning of the routing until it reaches an inventory point at the end of the routing.”
This macro process model of the IT shop floor is called an operating model and its definition and management is essential to plan, manage and tune the flow of productivity through the value chain. In fact going back to the concept of the Theory of Constraints I wrote on in the last article it is a critical step in determining the cycle time constraints and applying Lean thinking to Continual Service Improvement.
The development of an organization’s unique and tailored Operating Model based on best practice input from frameworks such as COBIT, ITIL, CMMi, TOGAF, ISO 27002, Etc.. is the very task that several of my fellow Pinker’s are assisting our customers with. Jack Probst and I recently developed the following Operating Model description to provide clarity about what an Operating Model is and how it is used as part of IT Governance.
Operating Model Definition
An organization’s operating model is an extension and deliverable of IT Governance. IT Governance is responsible for (defining, establishing and measuring) the enterprise IT (vision, strategy, policies, structures and capabilities) required to support business value generation and corporate governance requirements. The operating model provides the organizational guidance and structure to support value generation.
An operating model is a logical representation or blueprint of the IT value chain process architecture, agnostic to existing organizational structure and sourcing strategies. It’s provides a framework to identify and define the major activities, capabilities, process dependencies and critical success factors required to directly or indirectly convert customer requirements or requests into the expected service outcomes or deliverables.
The operating model initially provides an agreed framework against which to conduct a baseline gap assessment. Outputs of the initial operating model assessment supports strategic governance decisions related to:
- Organizational Structure, Governance and Process Ownership
- Enterprise Process / Capability improvement prioritization
- Creation of Management Dashboards and Key Performance Indicators
- Sourcing Strategy
- IT Management tool and automation requirements
Following the initial development of the Operating Model it provides the basis for Enterprise IT Continual Service Improvement and is reviewed and adjusted as required.
Here is an example of a high level structure of an operating model. Consider that the final product will be unique for each organization and include several levels of detail and abstraction documenting the detailed capability areas, goals, critical success factors, and roles.
In short the definition of an organization’s operational model provides Executive Leadership and Management with a critical tool to understand the root cause of challenges in the value chain and provides a visible model of understanding how and where to make improvements to solve the customer complaints.
Wikipedia Article On Operating Models:
For more on this subject I recently recorded a Practitioner Radio Show with Chris Dancy and provide additional links for reference: Practitioner Radio Episode 19 - The Strategic Role of An IT Operating Model
Troy’s and Jack’s Thoughts What Are Yours?
”Music is given to us with the sole purpose of establishing an order in things, including, and particularly, the coordination between man and time.”
Friday, May 06, 2011
Practitioner Radio Episode 9 - Event Management
Event, Incident or Crisis? When And What Does It Matter
Chris Dancy, Martin Erb and I discuss the vagaries of Event Management
- Practitioner Radio Episode 9 – Event Management
- Top Practitioner Radio Episode # 7 (Service Catalog)
- Guest “Martin Erb” Director Professional Services Pink Elephant
- Martin should be on money – the $50 dollar bill
- Event Management – Is It a Process?
- An ITIL Event is not where you hire the wedding singer
- An event cannot be planned but you can have a plan to react to the event
- The relationship between Problem and Event Management
- Event / Problem Management and Butterflies
- Events and Earthquakes
- Events versus Incidents (when something turns from desirable to un desirable)
- Thresholds Event -> Incident -> Crisis
- Event Technology – Event Collectors – Manager of Managers
- Event Management and Minority Report
- Event Management & Risk Management
- Business Criticality, IT Service Continuity, BIA’s
- Event Management and Self Healing / Autonomic Computing
- Culture Resistance / exposing your events
- Event Management Tools & Twelve O’Clock Blinkers
- Event Management integration with other processes (Incident, Problem, Change)
- Event Management, Security, Governance, Forensics
- Event Management = Altruistic Service Management
Martin’s Thunder Bolt Tip of The Day: No Unknown Events Are Permitted In Production.
Troy’s, Chris’s and Martin’s Thoughts What Are Yours?
”Early in life I had noticed that no event is ever correctly reported in a newspaper.” ~George Orwell
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