Wednesday, April 8, 2020

Use IT Architecture as a Practical Tool to Improve Organizational Maturity

IT value-based management needs to be driven by concepts like collaborative value or collective advantage, useful tools like IT architecture, and effective measures such as multi-layer ROIs,

Due to the pervasive technology update and information penetration, businesses today not just use IT as a digital extension, but leverage IT across the company to maximize the business value.

IT architecture has two purposes: one is to support the “maintenance” by describing how IT should be in its current states to “keep the lights on” efficiently; the other is to describe how IT enables business change, especially the large scale digital transformation when the well-defined vision is implemented and in the various stepping stages on the way to reach the higher level of organizational maturity.

Perform “As-Is” study, at the same time, understand the business value and future business goal of IT organization: IT architecture is the visualization of IT strategy that describes how to encompass organizations from “as-is” state to future state. Making an objective IT assessment helps IT management diagnose the early signal for dysfunctional operation, take a critical look at IT strengths and weaknesses, and assess all things that matter to improve overall IT performance.

More specifically, IT assessment needs to include techniques such as pure health check techniques, customer feedback, business partner relationship analysis, cost estimation, and those can be applied to give a holistic picture of what is working or not. Making an objective IT organizational strength assessment by leveraging business/IT architecture allows IT budget, resources, and talent aligned with the business strategies/ objectives to improve IT effectiveness, and helps IT organization refined to the point that it is nimble for adapting to changing business demands in a timely fashion.

Gap analysis and IT investment calculation: There are natural frictions between different functions of the company, thus, it is important to make a gap analysis between business and IT, the current state and future state of IT, capability evaluation (capability gap in the context of future need, or capability dependency or business capability reliance on technology capability, etc,), investment calculation, etc. Why should the business invest in what you are proposing? Each organization has specific measurable goals and objectives they have to hit through investing in IT. IT leaders can use IT architecture as a useful tool to create an abstraction for conveying to the business the value of change by making wise IT investment.

IT investment is often one of the most costly investments for running a contemporary business. Traditional IT organizations are perceived as the cost center. CIOs need to show the value of IT with Return on investment and tell the business management how well an IT investment repays the company. You should not spend to meet a quota, nor should you avoid spending to stay within a quota. You should spend it to make a return. It’s about spending the money right and getting the right business results. Regardless of the analysis and design, architecture purity, and numerous spreadsheets of proven tangible and intangible benefits, IT leaders might be also interested in a summary of the IT ROI and TCO - as a business case for change.

Leverage IT Architecture to create a decent IT-enabled business capability map and use that to frame activities/artifacts: IT Architecture is a high-level diagram describing the key IT-enabled business capabilities and flows, helps IT management create an organizational strategy-capability mapping and make a road map that sets goals for strengthening the strength and building differentiated IT-enabled business competency, The important architecture components (Components = different artifacts) include such as capabilities, functions, processes, roles, events, rules, data, services, processes, goals, objectives, events, performance, market, risk, resource, etc. The IT architecture is used as a collaboration instrument to create a decent capability map. The value is not in the technology itself but in how to use it, having clearly understood how your business works and what their goals and strategy are.

Capabilities may include dependencies - one is part of another or depends on another. The value of capability maps is the ability to identify capability patterns of the enterprise, offer insight to senior management in developing focus on what they truly do well and make holistic investment decisions. Then, you can use the capability map to drive IT portfolio management which is a collection of programs and projects that are designed to help the organization achieve its targeted performance, guide management to refocus on what is truly a core competency and use that to frame activities/artifacts.

IT plays a critical role in driving changes and leading digital transformation.IT value-based management needs to be driven by concepts like collaborative value or collective advantage, useful tools like IT architecture, and effective measures such as multi-layer ROIs, for improving the growth capacity and maturity of the business and rebrand IT as the trustful business partner.


Post a Comment