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IT Operating Models: aligning strategy to operations

Advania - IT Operating models
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An IT Operating Model translates strategic intent into operational capabilities. It serves as the foundation for execution and provides a clear guide for the enterprise leadership team, line managers and operational teams. A well-defined and articulated operating model is the bridge between strategy and day-to-day operations that guides the team, provides the context, and enables behaviours that will realise the strategy and vision.

IT Operating models aren’t just reserved for large companies – regardless of size, all companies should have an operating model of some kind. In some cases, it might be brief or not very prescriptive, but should still exist and be maintained to help bridge the gap between the why and how.

IT organisations without an operating model of any shape at all run the risk that strategy won’t be realised, processes will not be optimised, and IT staff won’t be aligned to a common view of how the IT organisation should work to deliver business value.

Benefits of IT Operating Models

Defining an operating model will provide the blueprint of how to execute an IT strategy. Without a defined operating model, IT organisations could experience the following challenges:

  • Operational inefficiencies as people expend effort in areas not aligned with the strategic plan. An environment of busy people can further mask the reality that energy is lost to work that is not important.
  • Ambiguity around accountabilities, roles and responsibilities can slow down decision making. When these aren’t clear, there is duplication of work, or worse, slippage of critical tasks.
  • Low interaction and integration between IT teams and functional areas, as it is unclear to people how they should cross these implicit boundaries. These non-standardised approaches to processes and procedures can lead to the loss of valuable organisational learning and reduced usefulness of systems and data.
  • Increased or sustained operating risks due to the absence of clear principles, roles, responsibilities and processes. Without clear guidelines, employees can unknowingly conduct their work in a manner inconsistent with standards, and in ways that do not align to regulatory standards

IT Operating Models need to evolve along with the business model and strategy to guide how people produce the right results. The IT Operating Model serves as a blueprint for how resources are organised to get critical work done.

Benefits of implementing an IT Operating Model

Improved IT performance because of increased operational efficiency

When it’s clear who does what, duplication of work is diminished. This elimination of wasted effort allows time for innovation and improvements to user experience. Part and parcel with this are improved cost management because of better ability to understand processes, plan, and control the budget – all-around IT teams aligned around a single way to operate.

A well-articulated Operating Model also creates a baseline to improve upon whereby leaders understand clearly what is done today and therefore have a starting point to improve upon tomorrow.

Better connection with users by adapting to their changing needs

As IT services are introduced or changed, organisations that adopt these services are able to meet or exceed users changing needs. A clear operating model provides a framework by which to continually map and manage stakeholders.

Increased process integration across functional areas reducing duplication of effort

Through standardisation, IT organisational learning can be leveraged across the IT teams. Systems and data become transparent and more useful, and IT teams can better link their piece to the rest of the puzzle.

Improved coordination and decision-making

Operating models provide improved ability to plan and sequence initiatives, as dependencies across the IT organisation are better understood. IT stakeholders are able to transparently see where weakness in capabilities (people, process, or technology) exist, and work together to align with the strategy.

Better ability to grow and scale quickly

When the basics are written down, they’re easier to communicate to existing and new staff, and easier to review at critical junctures as IT organisations mature and become more complex.

Improved risk management

When there is a common understanding of roles, responsibilities, goals and processes, risks can be identified and mitigated earlier and more easily. In addition, with the right governance in place, risks can be escalated.

It takes work to develop and implement an operating model….

  • Assess your current state – understanding your current state is a critical first step to developing and documenting an Operating Model. Identify and interview key stakeholders and review process documentation regularly. This will then enable you to plan for future changes to the platform.
  • Get the right people at the table – regardless of whether an Operating Model will document the current state or bring about change, getting the right people at the table will expedite decisions with representation from across IT functions.
  • Define your design principles (how will the IT organisation need to work together to achieve our strategic goals?) – design principles articulate the parameters for the future state, set the context and are derived from an organisation’s strategic priorities and current state assessment. Design principles result in key statements to guide the development of the Operating Model document
  • Shape your future state – (what critical elements need to be included in the operating model?) regardless of the degree of change anticipated, it’s important to determine the key elements that need to be included as part of the documented Operating Model. You can then give weighting and attention to the elements that are most critical to IT operations. Development of the future state should happen through a series of workshops, each focussed on a different element of the Operating Model.
  • Implement it – strong implementation includes identifying initiatives that will help achieve the new goals, assigning accountability for them, planning and executing on these plans. This needs to be implemented through dedicated change management in line with a structured communications plan that can be disseminated throughout the organisation.

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