Responsibility for IT is moving to the Business: What does it mean for the CIO?

by Denis Desjardins

Probably the most disruptive trend affecting IT is the responsibility for IT is moving to the business. Primary drivers of this are the prevalence of technology in business services and solutions as well as business manager’s growing comfort level with technology.   WGroup sees this as an important inflection point for CIOs requiring attention.  If the trend is not dealt with effectively there is a potential for a loss of control of critical IT functions.  In turn, there could be a major impact on the enterprise from a risk and performance perspective.

In response to this trend WGroup recommends significant changes to the IT management model and operational processes.  These changes are mainly focused on governance, service management, innovation and sourcing. 

While all this change is happening, it is important however, that certain aspects of the traditional IT responsibility base should not change.  The following core responsibilities should remain centralized and under the purview of IT and the CIO:

  • Security – Development and enforcement of information security policies, principles and frameworks.  Maintenance of system security privileges and the associated tool set, periodic audit of access privileges.
  • Architectural Standards – Development, maintenance and communication of acceptable operating environments and technology standards.  Oversight of the exception process.
  • Infrastructure Services Management – Including management of the wide area network and telecommunications, corporate data centers whether insourced (management) or outsourced (oversight) and end-user computing services.
  • Data Management – Coordination of data management processes, oversight of data lifecycle activities, arbitration of business-related data issues, and management of the data tool set.

Centralization of these functions within a highly skilled organization serves to protect the enterprise’s assets from undue risk while leveraging volume and scale to provide the most efficient computing environment.  It is the CIOs responsibility to make senior management aware of the trend and promote the required changes to the management model.  By being proactive, the CIO demonstrates an appreciation for the pace and need for change while maintaining a complementary appreciation for the well-being of the business.

Click here for more on disruptive trends and the changing role of the CIO in our strategy brief, ReThink IT

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Multi-supplier Governance Is Now a Top Management Concern

by Eric Liang

IT and business services are increasingly being fulfilled across a network of suppliers. As companies become more experienced with outsourcing they start to seek best-in-class suppliers to deliver services, whether within the same function (e.g. , IT infrastructure), across multiple functions (e.g.,  Finance, HR, IT) or across multiple geographic areas.   The upside of this is that you gain much broader knowledge and expertise from across the industry, while keeping all the suppliers on their toes.  The downside?  They don’t always play nice together like a perfect team.

To get the most out of a multi-supplier environment requires:

  • Coordination and transparency of decision-making across all suppliers
  • Multi-supplier governance being made a top priority of the retained IT staff’s competency and management focus
  • Clearly and consistently defined supplier roles and responsibilities within a service delivery process, including the use of formal cross-supplier procedures (CSPs) and Operational Level Agreements (OLAs)
  • Mechanisms to track and ensure that all services and underlying supplier activities contribute to the Business Value of IT investments
  • An organizational culture and atmosphere conducive to supplier collaboration in service delivery, while providing defined areas for competition.  They should feel secure enough to share innovation ideas while their IP is protected from competitors
  • Ensuring accountability for decisions and outcomes across all suppliers during service delivery.  Granular, service component-level metrics plus end-to-end service level commitments with shared penalties and rewards are the key

The best way to meet these requirements is by establishing a Multi-supplier Governance Model that provides the organization with a  framework and discipline. By establishing this model, you can expect to enhance overall service quality rather quickly:

  • Service suppliers will start viewing themselves as members of an interrelated eco-system.  They will start working with each other on a first name basis without client intervention
  • Service customers’ experience improves drastically, as end-to-end accountability and performance management are promoted.  Services will be optimized globally, not just locally
  • Suppliers will bring added value to the entire IT service delivery chain via collaboration and joint innovation
  • Overhead on IT governance will be lowered via institutionalizing and streamlining the interaction among suppliers – organized meeting cadences, planned participants, agenda, focused point-of-contact etc.
  • Business risk is reduced by end-to-end services that actually meet business needs (rather than just meeting IT contractual commitments).  There will be faster incident and problem response and resolution times
  • Near real-time reporting and dashboards reflecting true cross-supplier performance becomes possible

To learn more about Governance and Relationship Management Click here to read our Strategy Brief

 

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