Assessment of Core Competencies
Let's make some assumptions about where you are today and where you're likely to be tomorrow. These assumptions will help you think about IT products and services acquisition as well as organizational structures:
Business processes necessary to sustain profitability and growth must be flexible and adaptive; "entrenched" or "traditional" processes will not sustain profitability or market share ... organizations pay "lip service" to the value of thinking "outside the box," but seldom actively encourage or reward it.
Initiatives like "business process engineering," "total quality management," "process improvement" and similar attempts to change organizational processes for higher profits and greater market share, play out as expense reduction efforts - not as strategic initiatives that provide long-term vision ... there is very little evidence that these efforts have long-term payoff, except as "political" processes that create the impression - both inside and outside of the organization - that there is a logical process at work.
Because of the evolution of the technology field itself, many organizations are now staffed with professionals who have a "bottom-up" view of the nature and purpose of information and software systems.
Efforts to re-tool and re-train IT professionals have not proven cost-effective: in fact, the amount of time, effort and money spent on retooling and retraining has seldom - if ever - resulted in measurable returns on the investments ... the effort necessary to reach these professionals is disproportionate to the return.
The basic discipline necessary to convert business requirements into applications can only be practiced in organizations with repetitive missions, with professionals trained in the discipline, and in organizations deeply committed to rewarding disciplinarians and punishing violators.
Process improvement that lasts and has a measurable impact is fundamental and can be found in generic disciplines like design and engineering ... not in fads like "BPR," "TQM," or other evangelical movements that ultimately trace their discipline to design and engineering.
Those who create and market information technology exploit this chaos to their own competitive advantage by selling "silver bullets" to IT managers vulnerable to promises that are seldom - if ever - kept.
IT costs will continue to grow disproportionately to profitability ... the market forces that will drive this ratio include increased employee acquisition, support and retention costs, increased costs of doing business due to increasing regulation, and the costs connected with maintaining huge corporate technology infrastructures.
In light of these realities, you have a number of organizational options available to you. You can continue to support (read: care and feed) a large in-house IT staff - and organize accordingly - or you can begin the transition to a more creative IT products and services acquisition strategy that will require you to make some significant organizational changes.
As your business evolves it's essential that you undertake a brutally candid assessment of your core competencies today and - especially - what they should be tomorrow, and then begin to define the organizational structures that will exploit the "right" competencies.
Acquisition & Support Requirements
So what do you need?
The bottom line is simple: if you haven't conducted any alignment assessments then you cannot organize effectively. If you've organized before you've made these assessments then you're already non-aligned, since it's impossible to cost-effectively map your IT requirements around a pre-defined organizational structure before you know the requirements!
The core competency process discussed above will help a lot here. Asking tough questions about what you need to do - and should do - will help you determine your IT requirements and help you, in turn, map your acquisition and organizational options. This is no time for the faint of heart. You must candidly assess what you should do and then define your organizational structure.
Optimal Organizational Structures
One of the steps you can take that will help you transition from perhaps where you are today to where you might very well need to go tomorrow will be explored in Part 2 on Friday. It describes an approach to organizational alignment that builds from the above assumptions about your situation and current and future core competencies.
Steve Andriole is the Thomas G. Labrecque Professor of Business at Villanova University where he conducts applied research in business and technology alignment. He is also the founder & CTO of TechVestCo, a new-economy consortium that focuses on optimizing investments in information technology. He can be reached at firstname.lastname@example.org.