This is first of a series of follow ups to my blog post about a service-oriented operating model for IT. These posts are based upon some of my insights and experience of putting this model into practice and I hope they will either help you develop your own thinking or provoke you to share your own ideas. In these follow up posts I am going to cover: engaging the rest of the organisation mapping out the IT value chain developing the IT bill of materials designing the IT organisation structure aligning funding and resources implementing the change. Most of the comments and reactions to the original blog post concern organisation so I am going to start there although, logically, it is the fourth step.
The app store concept has become an accepted feature of consumer electronics remarkably quickly. When Don Tapscott and Anthony Williams were writing about producer/consumers in Wikinomics in 2006 major corporations like Apple and Sony were trying to block their customers efforts to open up their devices and add new functions. It was another two years before Apple added their app store into their ecosystem and yet now it is hard to remember not having access to thousands of applications on your smart phone. The app store user experience quickly caught the imagination of other sectors. When I wrote about the UK public sector IT strategy in 2011 (link to article on PA Consulting site) Apple’s success had already made a big impact and, perhaps, the concept is now poised to disrupt corporate IT in the same way. Or maybe not!
There is quite a lot written about IT consolidation and centralisation. Best practice in business operations includes concepts such as having a “single source of the truth” to help understand and serve customers or make key business decisions. These sorts of concepts imply some centrally managed shared IT. Enterprise architects strive to understand, model and design business structures and supporting IT spanning whole enterprises. IT concepts and technologies such as Service Oriented Architecture and Cloud Computing are justified on the principles of maximising scale and re-use. Procurement specialists seek to rationalise suppliers and consolidate purchases for all categories of spend including IT products and services. Suppliers offer price and other inducements for sole supplier status. For a long time ERP suppliers have promoted their ability to provide a single, integrated solution to the needs of large businesses. For relatively small organisations a single, enterprise-wide perspective on IT is quite realistic. For large organisations, particularly those which operate on a truly global scale, the reality is a lot more complex.
I am going to start this blog post with a quiz. Which of the following scenarios is the odd one out? A business services organisation did not recover all of the fees it was due because of poor quality customer data A telecommunications firm received a large licence charge from a major enterprise software vendor because they had unwittingly exceeded a key licence metric A transport business continued to provide maintenance services unnecessarily for buildings that it had sold off A government department delayed an expensive but critical applications upgrade in order to reverse engineer a business case for the project A utility company had no software support in place for an application because the two people who had the necessary experience took redundancy in a re-organisation. So which one did you pick?
I regularly see questions in the press and in social networks along the lines of: “What is the right amount to spend on IT?” Often the debate descends into variations of: “It depends.” For years I used to smile quietly to myself as I watched these debates. Why? Because I had the secret formula! Simply count the number of knowledge workers in the organisation (better still the number of full-time equivalents) and multiply by a unit price (until recently £4K - £5K) and you would be pretty much there. Oh, I know there is a lot to challenge with my formula but it was much quicker, easier and no less accurate than all the debate or a benchmark from one of the big analyst firms. Unfortunately, in recent years, my secret formula has stopped working so I turned to some of my trusted advisers to find out what had happened and help me fix it.