Bridging the Old and the New Worlds of ITA New IT Operating Model Emerges

David FavelleNovember 2013

All Slides Copyright © 2013 ValueFlowIT

TechnologyStruggling to keep upGrowing complexityManaging the old world and the new separatelyMissing opportunities…

Current State of Play

Business Competitive cadence increasingProliferation of technology optionsRelentless cost pressures

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What are some leading companies doing about it?

Adopting Continuous Delivery(thank you Thoughtworks)

Building in resilience(thank you NetFlix)

Relentlessly automating(Ummm….”we’re not worthy” ;-])

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Maybe there is something different we should be doing in Enterprise IT …

In 2013 and beyond, can we really afford these tradeoffs?

Good news is…There are emerging ways of doing things

Better, Faster AND Cheaper

Today’s topics1. LeanStartup2. Digital Strategy Framework3. Pace Layering4. DevOps5. Scaled Agile6. Service Design Thinking7. Social Business 8. COBIT 59. Weaving this into an IT Operating Model

The Minimum Viable Product Concept drives an Innovation “Fast Lane”

http://tinyurl.com/n7yjumu A recent webinar with Eric Ries and friends:

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Digital Strategy Framework to Organise & Focus Digital Program

Digital Capabilities

BusinessModel

Digitally-Modified Business• Product/Service augmentation• Transitioning physical to digital• Digital wrappers

New Digital Business• Digital products• Reshaping organisational boundaries

Digital globalisation• Enterprise Integration• Redistribution decision authority• Shared digital services

Operational Process

Process Digitization• Performance improvement• New features• New automation

Performance Management• Operational transparency• Data driven decision making

Digital Analytics• Operations Dashboards• Periodical Scorecards• Customer feedback• Employee Feedback

PeopleInnovation

Worker Enablement• Working anywhere anytime• Right device for context• Right information for context• New digital tools

Knowledge Management• Communities of practice• Information leverage• External communities & repositories

Virtual teams• Collaboration tools• Engaging external expertise• Cross boundary utilisation• Coaching & QA

Client Engagement

Client insights• Analytics based segmentation• Socially informed knowledge• Service experience enhancement

Top line growth• Digitally enhanced selling• Augment service offering• Predictive marketing• Streamlined customer processes

Client touch points• Customer service• Cross channel coherence• Self service

• Business and IT Integration• Solution delivery

• Unified Data and Processes• Analytics capability

Adapted from MIT Sloan Digital Strategy Framework:http://www.capgemini.com/resources/digital-transformation-a-roadmap-for-billiondollar-organizations

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A new way of looking at the portfolio…

Source: Gartner 2011

The “Steady Lane” driven by major product upgrades and major business transformation

System of Record

Customer Product Suppliers Orders

The “Medium Lane” driven by business plans and ability to absorb Change into the business i.e. internal cadenceSystem of Differentiation

Customer Service Processes & systems

R&D and Product developmentProcesses & systems Configurator

The “Fast Lane” driven by market cadence and requiring a rapid release cycle

System of Innovation

Facebook presence

iPhone App

Open innovation submission box

Product review service

Recommendations engine

Sentiment analysis service

Droid App

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DevOps: ITSM Fast Lane or “keeping up with Agile!”

Development(Software

Engineering)

Quality Assurance

(QA)

Technology Operations

DevOps

Improved quality of software developments 63%

More frequent software releases

63%

Improved visibility into ITprocess and requirements 61%

Culture changecollaboration/ cooperation 55%

More responsive to business need 55%

More agile development 51%

Improved quality of code 38%

More agile change management process

45%

Organisations implementing DevOps have seen these Benefits:

https://puppetlabs.com/2013-state-of-devops-infographic

Toward the Agile Enterprise

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Where the rubber meets the road!

http://www.youtube.com/watch?v=pCaroLfl__4 Dean Leffingwell

Service Design Thinking: Make it all about the end user…http://thisisservicedesignthinking.com/

How does the Social Media shift impact IT Management?

A move toward personal Digital & Social technologies drives up business and user expectations and capabilities for engaging IT Socially and for integration of Social in day to day business processes.

IT has been slow to adopt social but could quickly adopt this new channel for an more integrated and real team user engagement

COBIT 5: Integrated Management & Governance Models

13Source: COBIT® 5, figure 15. © 2012 ISACA® All rights reserved.

http://www.isaca.org/COBIT/Pages/Product-Family.aspx

We now have guidance well understood by audit and compliance stakeholders on how to integrate governance and management across the full technology lifecycle

COBIT 5 Process Model: Speak the language of compliance

14Source: COBIT® 5, figure 16. © 2012 ISACA® All rights reserved.

The guidance extends down to practitioner level in all aspects of IT process, policy, roles and measures

Bringing it all together

All of this non-proprietary (free!) thinking can be woven into a full lifecycle view that takes advantage of emerging frameworks

and technologies

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Let’s call this the

IT Operating Model

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Dimensions of an IT Operating Model

Automated Workflows, Controls & Reporting

Leadership & People

Strategy, Architecture & Governance

Measurement & Improvement

Service Brokerage& Partner Integration

Organisational Design

Business Engagement & Demand

Service Lifecycle (Phases & Processes)

IT Operating Model

The Operating Model for IT must incorporate many dimensions, in harmony as a “system” if IT is the deliver optimal value from the IT portfolio

Concept Design Build Transition Operate Improve

Feed

back

Lifecycle Phases

Line of Business Strategy

3 Service Portfolio speeds

Integrating the Dimensions: ValueFlow IT Multi-Speed Operating Model™

TransformDisruptive Innovations

Innovation

portfolio Fast Lane

ChangeBusiness

DifferentiationBusiness UnitPortfolios Medium Lane

Enterprise Portfolios

RenewalCorporate capabilities Steady Lane

Service Portfolio

Business D

emand

Service Pipeline Service Catalogue

Process Framework

Organisational Structure

IT Management platform & specialist tools

Governance Controls

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Line of Business Strategy

3 Service Portfolio speeds Concept Design Build Transition Operate Improve

Frameworks Across the ValueFlow IT Multi-Speed Operating Model™

TransformDisruptive Innovations

Innovation

portfolio

ChangeBusiness

DifferentiationBusiness UnitPortfolios

Enterprise Portfolios

RenewalCorporate capabilities

Service Portfolio

Business D

emand

Process Framework

Service Pipeline

Feed

back

Lifecycle Phases

Service Catalogue

Organisational Structure

IT Management platform & specialist tools

Governance Controls

Scaled Agile DevOps

ITIL

LeanAgile or SDLC

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Digital Strategy Open Innovation

SDLC or Agile

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Process Framework

Concept Transition

Improve

EngageInvestment Management

Demand Management

Relationship Management

Innovation Management

Strategise & PlanStrategy Generation

Service & Asset Portfolio Management

Architecture Management

Govern ITRisk & Compliance

Management

Performance Management

Operating Model Assurance

Problem Management

Requirements Definition

Options Analysis

Operate

IncidentManagement

RequestFulfillment

Service LevelManagement

EventManagement

AccessManagement

IT ContinuityManagement

SupplierManagement

SecurityManagement

AvailabilityManagement

CapacityManagement

FinancialManagement

AssetManagement

ReleaseManagement

ChangeManagementConfigurationManagement

TestingManagement

KnowledgeManagement

Service Reporting

ImprovementManagement

Design BuildExperience

Design

Solution Design

ITSM Design

WorkloadManagement

Development Management

Quality Assurance

Project/Programme Management

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Minimum Process System

Concept Transition

EngageInvestment Management

Demand Management

Relationship Management

Innovation Management

Strategise, Plan & ManageStrategy Generation

Service & Asset Portfolio Management

Architecture Management

Govern ITRisk & Compliance

Management

Portfolio Assurance

Operating Model Assurance

Requirements Definition

Options Analysis

Operate

IncidentManagement

RequestFulfillment

Service LevelManagement

EventManagement

AccessManagement

IT ContinuityManagement

SupplierManagement

SecurityManagement

AvailabilityManagement

CapacityManagement

FinancialManagement

AssetManagement

ReleaseManagement

ChangeManagementConfigurationManagement

TestingManagement

Design BuildExperience

Design

Solution Design

ITSM Design

WorkloadManagement

Development Management

Quality Assurance

Project/Programme Management

Improve

Problem Management

KnowledgeManagement

Service Reporting

ImprovementManagement

Tuning Operating Model for Multiple Speeds

1. Engage Business in Shaping demand1. What are the cadences?2. How can we organise by portfolio?3. Categorise by Pace layer and or risk

2. Align Strategy, Architecture and Governance1. Adapt controls to pace layers2. Integrate the pace layer approach into the

architectural thinking3. Bring multi-speed roadmaps into the strategy

3. Multi-speed Processes1. Tune workflows2. Tune governance controls3. Design across the lifecycle phases

4. Automation1. Automate as much as you can to ensure

visibility and standardisation

2. Align with process and compliance 3. Build automation in concert with process and

controls rather than after

5. Organisation1. Structure according to value, flow and risk2. Leadership is key in ensuring that the system is

not “gamed” and that staff are fully supported in their efforts

3. Don’t re-organise until you’ve figured out what problem you’re solving e.g. bottlenecks, focus

4. Consider cross-functional and self organising teams to drive value and throughput

6. Measurement:1. Throughput of each lane2. Bottlenecks/delays3. Customer satisfaction4. Costs and realisation of risk

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Key Takeaways

1. Better, faster, cheaper is possible. You can be “Cloud Like”

2. Take advantage of the eco-system of frameworks

3. A multi-speed approach is required to straddle the old and the new worlds

4. Your business context, cadence/rhythms, investment portfolios, sourcing models and current capabilities must drive how you go about it

Know with the flow…www.valueflowit.com.au

@DaveFavelle, @ValueFlowITinfo@ValueFlowIT.com.au

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Which part of the IT Operating model would you like to explore in more

detail ?