We had one of our IT directors from the enterprise technology services group today talking about how our IT infrastruture evolves throughout the years and what kind of issues and opportunities that we are facing in terms of aligning business and IT to achieve our business goals. It was really an informative presentation and was enlightening for us to hear how our business profit doubles in value every 5 years with information technology as one of the biggest drivers.
Then I read this article in McKinsey Quarterly about an interview with the CIO of Shell on how Shell as an international giant in the oil/gas industry has conducted huge IT transformation to better assist to achieve their business targets. A lot of the information seems to correspond to what I just heard in the presentation and I was really excited that our IT organization is heading towards the right path based on the success of the Shell story.
So I'll try to sum up what I've learnt from the presentation, with references to the McKinsey article as well.
A general concept of the IT transformation is to run IT as a business.
In the good old days, IT orgs didn't really have that much of a say in the enterprise wide decision making process, and they were usually managed in a very decentralized structure. Groups were formed flat, resources were unevenly allocated, standardized processes and procedures were not established hence similar IT processes could be conducted in very different fashions across the whole company.
So for instance, we used to have different IT App/Dev and Support teams under each lines of business, and they were each only responsible for apps within that line they belong to. Since we have such an complex IT infrastructure including mainframe, Wintel, Unix and Smalltalk etc., you would often see that in one division there are a whole bunch of Cobol programmers sitting around without too much work load (oh yeah we do have legacy cobol systems...) whereas in another division programmers with similar skillsets are busy dealing with increasing number of system reviews coming in and out of their inventory. Also, since in this flat organization structure, IT folks actually report to business, when it comes to aligning IT with business goals as a whole, there could be a lot of conflicting opinions among different IT groups under different business lines ----- after all, it's their own business leader who writes up their PEs.
Another example would be, some groups are adhering strictly to the change management process in making elevates into our production environment while in some of the "shadowed" areas people make ad hoc/unauthorized changes that touch the prod environment that remain undetected, which, would be possible to lead to out of compliance situations.
With our IT two dot O project, based on the ITIL V3 model, we are gathering all resources in similar categories but from different business lines into one big pool, assigning project managers and resource managers to coordinate and allocate resources among various projects in an optimal way. IT control also is coming up with new, or reinforcing existing standards/guidelines for key IT processes so that from a holistic view, people in different divisions would be following the universal procedures with only a small portion of customization placed where necessary.
Running IT as a business also relies heavily on whether there's a solid IT governance process within the company.
Quoted from the presenation, "we are a company that's known for innovation". Well, we certainly benefited a great deal from the wonderful ideas that our people have come up with, but when they took a closer look at our project prioritization list, people were shocked: 3500+ IT projects are lying in line in our IT governance pipeline, some of which are in active mode, some are CBAed or POCed, some are.......just lying there forgotten. And the same mess also existed in our application inventory: 1000+ tools for App/Dev alone, 100+ new, unauthoized apps detected in the enterprise IT environment, and multiple versions of the same application (some of which are tooooold and already unsupported by vendors) exist in PC as well as server environments.
The consequences are obvious: High IT costs/overheads resulting from various perspectives such as apps clean-up, software license true-up, old legacy system maintenance/support, etc., and it also goes back to the same issue mentioned before: inconsistency across the enterprise.
There's this concept called "Shadow IT", which refers to those processes/apps/"things" that people do to finish their job but outside of the standard IT processes. That's also a huge/direct consequence of the above issues, and it's a very hot topic in today's IT governance arena.
So with all the above issues and efforts explained, the bottom line is, that, IT is an essential component for making strategic business decisions and IT's job is to help make the business more productive and more competitive. Therefore IT needs to be managed in the same fashion as how any business is conducted. And alignment of business and IT means more collabrotive efforts across different functions in the company and more communications as well.
Those days when people used to think that "applications are designed by our own IT department hence the cost is 0" are definitely behind us. Think IT in the way we think business.
Then I read this article in McKinsey Quarterly about an interview with the CIO of Shell on how Shell as an international giant in the oil/gas industry has conducted huge IT transformation to better assist to achieve their business targets. A lot of the information seems to correspond to what I just heard in the presentation and I was really excited that our IT organization is heading towards the right path based on the success of the Shell story.
So I'll try to sum up what I've learnt from the presentation, with references to the McKinsey article as well.
A general concept of the IT transformation is to run IT as a business.
In the good old days, IT orgs didn't really have that much of a say in the enterprise wide decision making process, and they were usually managed in a very decentralized structure. Groups were formed flat, resources were unevenly allocated, standardized processes and procedures were not established hence similar IT processes could be conducted in very different fashions across the whole company.
So for instance, we used to have different IT App/Dev and Support teams under each lines of business, and they were each only responsible for apps within that line they belong to. Since we have such an complex IT infrastructure including mainframe, Wintel, Unix and Smalltalk etc., you would often see that in one division there are a whole bunch of Cobol programmers sitting around without too much work load (oh yeah we do have legacy cobol systems...) whereas in another division programmers with similar skillsets are busy dealing with increasing number of system reviews coming in and out of their inventory. Also, since in this flat organization structure, IT folks actually report to business, when it comes to aligning IT with business goals as a whole, there could be a lot of conflicting opinions among different IT groups under different business lines ----- after all, it's their own business leader who writes up their PEs.
Another example would be, some groups are adhering strictly to the change management process in making elevates into our production environment while in some of the "shadowed" areas people make ad hoc/unauthorized changes that touch the prod environment that remain undetected, which, would be possible to lead to out of compliance situations.
With our IT two dot O project, based on the ITIL V3 model, we are gathering all resources in similar categories but from different business lines into one big pool, assigning project managers and resource managers to coordinate and allocate resources among various projects in an optimal way. IT control also is coming up with new, or reinforcing existing standards/guidelines for key IT processes so that from a holistic view, people in different divisions would be following the universal procedures with only a small portion of customization placed where necessary.
Running IT as a business also relies heavily on whether there's a solid IT governance process within the company.
Quoted from the presenation, "we are a company that's known for innovation". Well, we certainly benefited a great deal from the wonderful ideas that our people have come up with, but when they took a closer look at our project prioritization list, people were shocked: 3500+ IT projects are lying in line in our IT governance pipeline, some of which are in active mode, some are CBAed or POCed, some are.......just lying there forgotten. And the same mess also existed in our application inventory: 1000+ tools for App/Dev alone, 100+ new, unauthoized apps detected in the enterprise IT environment, and multiple versions of the same application (some of which are tooooold and already unsupported by vendors) exist in PC as well as server environments.
The consequences are obvious: High IT costs/overheads resulting from various perspectives such as apps clean-up, software license true-up, old legacy system maintenance/support, etc., and it also goes back to the same issue mentioned before: inconsistency across the enterprise.
There's this concept called "Shadow IT", which refers to those processes/apps/"things" that people do to finish their job but outside of the standard IT processes. That's also a huge/direct consequence of the above issues, and it's a very hot topic in today's IT governance arena.
So with all the above issues and efforts explained, the bottom line is, that, IT is an essential component for making strategic business decisions and IT's job is to help make the business more productive and more competitive. Therefore IT needs to be managed in the same fashion as how any business is conducted. And alignment of business and IT means more collabrotive efforts across different functions in the company and more communications as well.
Those days when people used to think that "applications are designed by our own IT department hence the cost is 0" are definitely behind us. Think IT in the way we think business.
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