For at least the last 30 years, we’ve organized enterprise IT functions by functional disciplines (data center, infrastructure layer, security, application development and application maintenance, etc.). This model was remarkably effective and served enterprises well in driving high-quality capability at affordable or low costs. However, borrowing the famous catchphrase of many Monty Python comedy sketches … “now for something completely different” … we need to rethink this model and organize IT on a completely different basis.
Although the classic functional disciplines model is not yet a dinosaur, it doesn’t operate from the modern methodologies for procuring and managing technology and IT services to enable businesses to remain competitive. We’re in the midst of a sea change where business stakeholders’ expectations coupled with cloud technologies demand transforming the classic functional perspective.
In the classic functional disciplines model, IT focuses on how to perform those functionalities cost-effectively instead of focusing on the value for the customer/end user. Of course, cost, quality and reliability are still important; but these are now secondary issues and no longer dominant. The demands now are for business value and greater speed (in throughput and agility) at which IT can make changes to enable the business needs.
If we organize enterprise IT to better meet these demands, what would that completely different model look like? This model would have three prominent factors driving its effectiveness:
- It starts with a construct of organizing by service lines instead of functional disciplines. It might be employee onboarding, customer enrollment, recruitment, customer service, etc.
- It involves persistent teams that have end-to-end, cross-functional responsibility for focusing on how to be more responsive to the business and better serve its needs. This is a very different construct than having a functional team with a business liaison or a liaison team. The classic functional construct with a liaison works to make the functional structure better but doesn’t fundamentally change the IT team to be more responsive to business needs.
- It uses different criteria for measuring effectiveness, based on business value outcomes and speed rather than cost.
Taking your IT group down this path of reconceptualizing how to procure IT assets and services and managing and measuring it to be more effective, will yield huge benefits. At the top of the list:
- Tight alignment with business needs and outcomes
- More flexibility; business users can move more quickly to adopt functionality
- Users can scale their consumption to their usage
When contemplating this different construct, does it need to be an all-or-nothing transformation? No. Some organizations have shifted to this service-line orientation and divided all their IT into service lines and organized by services. But you can take key services and organize by service lines, and allow the remainder run in a shared-service functional organization. If you take this route, you no longer need to focus as much on the functional disciplines because they are standard, market-based components.
Instead, your focus in the new model is on the cross-functional teams. Today’s IT provides standard components (whether they be cloud, DevOps, outsourcing, or other constructs). The teams can assemble the optimal components, align them with the business needs and make them as responsive as possible. There is more value in assembling the components against the business value and responsiveness than there is in managing the functional disciplines of managing the individual components. Also, you can move more aggressively to a cloud world by using third-party providers.
This completely different service-lines construct fundamentally reshapes the enterprise philosophy on how to organize, procure, manage and measure IT. With this strategy, you’ll move your enterprise close to a modern, functionality-on-demand environment – exactly what the business wants.
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