The IT Organization and Governance Model beyond 2014: - What is happening around you? - What is more important than ever influencing IT? - What does that mean for your IT strategy? - How to derive your Lean IT Organization and Governance Model from your updated IT strategy? - How to implement your Lean IT Organization and Governance Model?

1. 11
Organizing IT beyond 2014
ENSEAD Advisory
IT Strategy, Architecture, and Governance
Version 2.1
www.ensead.com| info@ensead.com | +31 (0) 487-502238

2. Disclaimer
While every precaution has been taken in the preparation of this deck, ENSEAD
Advisory assumes no responsibility for errors or omissions, or for damages resulting
from the use of the information contained herein. The opinions expressed herein are
subject to change without notice.
Trademarks
SAP® is a registered trademark of SAP AG, Germany. The use of general descriptive
names, registered names, trademarks, etc. in this publication does not imply, even in
absence of a specific statement, that such names are exempt from the relevant
protective laws and regulations and therefore free for general use.
2

3. To know how to organize IT
is to know what happens around you.

4. So…
what is happening around us?
4

5. What happens around us: Board-level
Executive Board members today are:
• Increasingly IT savvy
• Starting to give direction to IT, and
• Expecting the IT department to be
able to swiftly adapt
Source: McKinsey & Company, 2013
5

6. What happens around us: Board-level (2)
Here’s some of the questions Board members are told to ask or think
about when it comes to IT:
• How about our competitive position
• How to use IT and exceed customer expectations
• Do our business plans reflect the full potential of IT to improve
business performance
• Are IT investments aligned with business opportunities and threats
• How will IT improve business agility
• Do we have the right capabilities to deliver value from IT
• Are we comfortable with our level of IT risk
6
Source: McKinsey & Company, 2013

7. The one question that really counts for the Board
Will it help us make more
or spend less ?
7

8. What happens around us: business trends
2014 and beyond
• Business no longer needs an IT department (they
think); anything is available as-a-service
• Boundaries between suppliers / partners are
destroyed; supply chains are renovated because of
automated response to demand, 3D printing, open
data,…
• Business demand ‘throw-away IT’ e.g. for viral
marketing, using temporary sites, social media,
apps, …
• Business processes are reinvented due to ‘smart
machines’, process intelligence, intelligent business
operations
• Competing on analytics becomes daily practice:
using unusual data sources in nontraditional ways
8
Source: Gartner, December 2013

9. What happens around us: IT Governance trends
• Business process outsourcing (BPO) / BPaas
• Shared Service Center (SSC) / (Global) Business-integrated
service company
• Pace-layered application management. Differentiating
between
o Systems of Record
o Systems of Differentiation
o Systems of Innovation
• Sourcing strategies are moving constantly
o Off/near/on-shoring
o Out/insourcing
• Lean IT
• ‘IT’ people outside the IT department
9
Source: Gartner, December 2013

10. Well, do you see a need to bring your IT organization to the
…or do you believe you can just keep
on doing things as you do today?
10
level …
next

11. Questions IT Leadership are to ask
themselves when organizing IT
• Are we ready for receiving more direction on IT from the Board
along with their high expectations on delivery?
• Why is an internal IT dept still required? Can we answer that
question?
• Do we know what IT trends are going to ‘hit’ us and are we ready for
them? Better yet: can we advise the business on how new technology
can help sell more, operate cheaper, or can we even come up with a
complete new business model?
• How long before a global shared service center, a business-integrated
service company or business process outsourcing will be
decided upon by the higher-ups?
11

12. Questions IT Leadership are to ask
themselves: where does IT need to be?
12

13. Once those IT strategy questions have been answered…
…ask yourself if you have the right IT
organization and governance model
in place to turn strategy into action.
13

14. IT strategy drives the IT organization and
governance model
“Successfully implementing an IT strategy requires an
organization and governance model tailored to the IT
strategy.”
14
McKinsey & Company, 2014

15. When organizing IT beyond 2014 IT leadership
needs to look at Lean IT to be able to respond to
swiftly to continuously changing circumstances
“IT is the next frontier for the application of Lean in
business. This powerful methodology has significant
impact without being capital intensive“
© 2014 – ENSEAD Advisory 15
Source: McKinsey & Company, 2011

16. Lean IT organizations deliver substantial
benefits across timeliness, quality, and
productivity
• IT executives often struggle to gather data
needed to fine-tune productivity and
performance.
• Lean approaches can provide a framework to
standardize IT work practices, balance
workflows, and monitor progress.
• Lean can relieve capacity constraints by
prioritizing and routing incoming work and by
minimizing interruptions.
• Applied across specialized IT environments,
lean can give leaders clearer performance data
and a better way to communicate with the
business.
© 2014 – ENSEAD Advisory 16
Source: McKinsey & Company, 2011

17. New IT landscape reality demands for a lean
approach to organizing IT
17

18. Which leads to the concept of Lean IT
Agile Teams are centered
around a specific domain
© 2014 – ENSEAD Advisory

19. Once you know where-to-go, how can you
succesfully implement changes to
an IT organization?

20. How to implement changes to an IT
organization successfully
• Step 1: Build the case for change
• Step 2: Create a guiding coalition
• Step 3: Shape vision and strategies
• Step 4: Mobilize commitment
• Step 5: Align tools and structures
• Step 6: Create and reinforce wins
• Step 7: Monitor progress
• Step 8: Sustain results
20
Source: change-management.com

21. Typical obstacles for implementing change:
Change Readiness Indicators
Indicator Underlying question
Leadership style How is leadership perceived by teams?
21
Loyalty
How loyal are team members towards
leaders?
Trust Do the teams trust their leaders?
Organizational commitment Do teams feel their opinion matters?
Core values
Do teams believe the organization has
execution power?
Change minded
How supportive are the teams when it comes
to change
Knowledge management How do teams share their knowledge?
Communication How informed do teams feel?
Source: change-management.com

22. Change Readiness Indicator rating
Rating Explanation
22
Strong enabler SE
Really helps to change an organization
successfully and must be leveraged
Enabler E
Helps to change an organization successfully
and must be leveraged
Neutral N Not of much help, but no showstopper either
Blocker B
Point of attention when wanting to change an
organization, must be addressed
Strong blocker SB
Sever showstopper when wanting to change an
organization, must be addressed carefully

23. Change Readiness Assessment
23
Indicator S
E
E N B S
B
Underlying question
Leadership style
How is leadership perceived by
teams?
Loyalty
How loyal are team members
towards leaders?
Trust Do the teams trust their leaders?
Organizational
commitment
Do teams feel their opinion matters?
Core values
Do teams believe the organization
has execution power?
Change minded
How supportive are the teams when
it comes to change
Knowledge management
How do teams share their
knowledge?
Communication How informed do teams feel?
Source: change-management.com

24. The outcome of the Change Readiness Assessment
should be used to define your Organizational
Change Management (OCM) Strategy and Plans.
24

25. Key take away’s for organizing IT beyond
2014
• Understand what is happening around you
• Responding to change at lowest possible cost and highest possible
quality is more important than ever
• Adjust your IT Strategy accordingly
• Derive your IT Organization and Governance Model from your IT
strategy adopting Lean practices
• Prepare and execute your Organizational Change Management
Strategy and Plans
© 2014 – ENSEAD Advisory 25

26. FOR ANY FURTHER QUESTIONS YOU
CAN CONTACT ENSEAD ADVISORY
26
INFO@ENSEAD.COM

27. Best-positioned to help you get and stay in control over the
IT Solution & Services Lifecycle.
Impossible is an opinion.
www.ensead.com
IT Strategy, Architecture, and Governance
27 www.ensead.com | info@ensead.com | +31 (0) 487-502238