13 June 2012

Make the IT function service-oriented

Recently I read an article on the on-line version of Forbes by Mark Settle, CIO of BMC Software (thanks to @marthaheller for highlighting the article). Mark was proposing an IT operating model which he calls "Broker/Integrate/Orchestrate" as a replacement for a more traditional approach he refers to as "Plan/Build/Run". The article is well written but I think Mark creates an artificial gulf between these two ways of looking at IT and neglects another useful alternative: an operating model based upon a portfolio of services.

Broker/Integrate/Orchestrate and Plan/Build/Run are both functional models of IT which emphasise an internal view of the functions that an IT department performs. A service-based operating model emphasises the external view of what the IT department provides to service consumers whether they are staff within the business, end-customers or other stakeholders.

"Service" gets used a lot in different contexts so for this blog I am using the word in the sense of "providing a valuable capability to satisfy a need" (or for something more formal see this from The Open Group). In this context "service" is not about cloud computing (IaaS, Pass, SaaS) or architecture (Service Oriented Architecture) but these may be among the catalogue of valuable things that IT provides. "Service" should not be confused with "subservient". Organising IT around "services" does not mean giving up any kind of control or influence. If you have been through security screening at an airport, made an insurance claim or dealt with the tax authorities you will know that consumers of these services do not get everything their own way. There are clear expectations and rules of engagement. "Service" in the context of the IT operating model should also exhibit this balance.

A service-based operating model for IT draws attention to capabilities which are provided through IT and reduces the emphasis on how these are sourced. It also draws attention to the value and importance of what IT contributes rather than the mechanics of how it is done. An top-level example is illustrated below.
A service-based operating model has a direct impact on communication and decision making.
  • Strategy execution: Using services helps to provide clarity about what IT is and is not going to do in support of the enterprise strategy.
  • Capacity planning: The operating model establishes a clear line of sight across the whole IT value chain and builds a bridge between demand in service terms and supply in terms of people, assets and products.
  • Stakeholder engagement: The model provides a practical framework for governance and other kinds of stakeholder engagement which general business executives and IT professionals can grasp.
In addition there are often indirect and subtle implications in the way people behave in response to the operating model. Do you recognise these characterisations?

The next blog post in this series looks at the organisation structure for this operating model and future blogs will expand upon how a service-based operating model can be put into practice. In the meantime please add a comment to this blog or use the twitter button below to let me know what you think.

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  1. Richard,

    Resource/Project/Service oriented are not mutually exclusive. Many or most IT organizations align the management of their resources closely with the services they provide. While we seldom encourage organizations to align their (ITSM tool) categorizations or service catalog with their current organizational structure (though we do periodically align those concepts with each other), we do in general see at least a correlation.

    I have seldom seen a Project-oriented IT organization in practice. Usually some PM or PMO capabilities are matrix-ed into a more traditional functional & technical structure.

    I am excited to read more of your posts in the future in general, and I am interested to read more about your thoughts on the service-based operating model in particular.

  2. Greg, Thanks for the comments and I will try address these fully in the next post. In the meantime here are some initial thoughts.

    You are right that the different orientations are not mutually exclusive. You can look at any organisation from a perspective of people, project and services. There are also many more perspectives such as business unit, technology, funding and sourcing. I am promoting the idea that service should have a high profile or even dominate when thinking about the overall operating model.

    You are much more positive than I am about the general state of organisation in the field of IT. Most functions I have worked with have almost exclusively looked at their organisation in terms of internal IT posts but the whole IT operating model (which touches other parts of the enterprise and the supply chain) is neglected. Starting with a service focus helps in covering this wider picture which is one of the reason I like the approach.

    I haven't seen an IT function purely organised arounds projects but I have seen some where projects dominate the way the function operates. You will see in other blog posts that I think there are some issues with how we deal with IT and projects currently.

  3. Hi Richard,

    Again, thanks for sharing your insight. I would be interested in hearing your thoughts on the implication (if any) of this service portfolio based approach on the structure of the IT department and hows its members interact with their peers (business partners, stakeholders etc.).

    Omar Halabieh

    1. Omar,

      Thanks. I will try to cover this in the follow up post.



  4. The first in a series of follow up posts can be found here: http://cioportfolio.blogspot.co.uk/2012/07/organising-service-oriented-it-function.html

  5. Richard,

    This is an interesting subject to discuss. Here is my take on the Service Oriented IT Operating Model, where service portflio is one part of it: http://architechllc.blogspot.com/


    1. Yan,

      Thank you for sharing the link. I will take a look at your model.




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