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The Reorganization of IT

MikeA shift in IT is placing a bigger focus on meeting the needs of the business – and a cooperative relationship between the business units and IT. Many CIOs are addressing this shift with a reorganization of the IT department.

According to “IT Reorgs on the Horizon,” from CIO magazine, 65 percent of IT organizations are centralized, 27 percent are federated and 7 percent are totally decentralized. In a centralized organization, CIOs control the IT budget and technology assets, while in a federated organization, IT decisions and assets are divided among the business units.

With an increased focus on addressing the needs of the business units, more CIOs are looking towards the federated approach, placing some members of IT directly into the business units they are serving.

But, that’s not the only change CIOs are considering: changes to the organizational chart of IT are also taking place. Most (38 percent) IT departments organize their staff under VPs for technology areas, many prefer organization by business function (currently at 27 percent), but organization by business process is on the rise (18 percent) – and a study from IDF Enterprise, “Future State of the IT Organization,” asserts that CIOs consider this the best model for the future.  

The organization of the future IT department could be quite different than it currently stands – much more integrated into the business. Our Business Value of IT offering supports the notion that IT must work more cohesively with the business to provide a valuable impact, so this seems like a natural shift in the right direction.

You can access the article here.

Do you think this potential shift in IT is necessary? What recommendations would you make for CIOs looking to reorganize?


Mike Harris
DCG President

Written by Michael D. Harris at 05:00

IT-Business Integration

At DCG, one of the most valuable improvements we recommend for an IT department is to focus on IT as part of the business as a whole. For the business to run efficiently and effectively and maximize revenue, it is important to minimize process bottlenecks.  People-related processes these day are almost invariably based on IT processes, so if IT processes are not smoothly integrated then bottlenecks in the business processes are inevitable.

A recent article from Baseline magazine echoed the importance of this and also noted that a lot of IT departments are “out of sync” when it comes to business integration:

  • Only 16 percent of companies say they have full levels of integration among business systems.
  • Sixty-four percent of businesses do not have a formal process for evaluating their CRM data-integration progress.
  • Sales/operations/marketing departments are responsible for nearly half of all planned IT systems investments this year.

IT touches every aspect of a business, making it that much more important for it to integrate with the business.  But integrating with the business is not enough; IT has to take responsibility for integrating within the business itself. Understandably, this isn’t easy when IT has historically been functioning on its own terms and when so many other departments now have a stake in IT – it’s hard to know where to start.

Our IT Governance Solution represents our current approach to the challenge of governance at the business-IT interface, providing guidance on the steps IT should take to reduce risk, set priorities and foster conversation regarding IT project investments between the business and IT management.

Additionally, our IT-CMF Fast Track Executive Assessment provides an evaluation of your IT organization’s ability to create business value from IT.

It’s evident that IT needs to see itself as part of the bigger picture. What are you doing to achieve that vision?

 

Mike Harris
DCG President

Written by Michael D. Harris at 05:00

IT Cost Management: Out of the Ivory Tower and into the Fire!

IVI

IT Cost Management should be more than making sure your checks don’t bounce when you buy the latest technologies; it should be a competitive weapon. That was the basis for the ½ day workshop I conducted at the IT Financial Management Conference in Savannah on July 9th. Joining me was Catherine Crowley, Innovation Value Institute Researcher and my co-presenter.

During the workshop, we reviewed the fundamental financial building blocks of the IT Capability Maturity Framework (IT-CMF), a heavily researched framework that focuses on the business value of IT. At DCG ,we are outcome-oriented and technique agnostic - we care about getting results for our clients. We have found the IT-CMF to be a unique, holistic approach for a CIO to align IT investments with business value.

Based on the written feedback forms from participating IT finance practitioners, those actually managing IT finances for corporations both large and small, IT Cost Management, as assessed by IT-CMF, can add business value. Furthermore, five management level professionals expressed interest in signing up their companies for IVI-led Validation Workshops - the next step in the process of delivering greater business value. These workshops exercise the assessment methods of IT Cost Management and provide real insight into these corporations' IT finance functions.

IT-CMF is applicable for any organization, and the inherent IT finance diagnostic capabilities of an assessment can help an organization start the internal discussion on how to make IT a competitive weapon. After all, no one has money to burn, least of all IT.

Learn more about our IT Finance Diagnostic Workshop.

Tony Timbol
Vice President

Written by Tony Timbol at 05:00
Categories :

5 Tips to Help your CIO Succeed

Tony TImbolCIOs have a hard time these days. Not only are they expected to keep IT effectively running at a low cost every month, they are also expected to become business strategists, innovators and new service/product designers. No wonder many can't keep up!

I recently read a report that offered four reasons CIOs get fired, and they seem obvious:

  1. Security breaches – Letting strangers into your system is never a good thing, especially when those strangers can then access proprietary or sensitive company information.
  2. Project boondoggles – Large project failures don't just affect IT, they affect the entire business, draining money and lowering morale.
  3. Disaster recovery failures – IT hiccups are unavoidable, but there should be a plan in place for a stress-free and smooth recovery.
  4. System collapse – A total system collapse has a grave effect on the business that cannot be overlooked; the ability to scale system performance is a necessity.


So, how can you help your CIO avoid these issues (which affect your job too!)? You can:

  1. Help him identify the issues listed above before it's too late, running regular drills and “surprise” simulated outages to test procedures and training.
  2. Help him implement portfolio and project governance and measurement practices that manage projects and programs using an Agile approach to reduce project size and achieve noticeable results.
  3. Help him learn about the IT-CMF framework, an IT capability assessment tool designed to match IT investment to business value. It will help him assess his team, prioritize initiatives and talk strategically with his counterparts, the CEO and the board.
  4. Help him identify team members who have a negative effect on company morale and productivity, implementing isolation strategies to minimize their potential damage.
  5. Buy him a beer every now and then! Establish a relationship with your CIO so that the lines of communication are open and potential issues and opportunities can be easily addressed.

What would you add to this list?


Tony Timbol
Vice President

Written by Tony Timbol at 05:00

The ITFMA Conference

ITFMA

IT Budget Management, to be a competitive weapon, has to do more than just calculate Total Cost of Ownership and other measures, important as they are. IT Budget Management has to connect to the other financial capabilities of the business to produce and realize true business value. Really, what is the point of budget management if it does not help you compete in the marketplace? Otherwise, it’s just recordkeeping.

The IT Capability Maturity Framework (IT-CMF) provides a unique focus on business value when it comes to managing the IT budget. The IT-CMF provides complete and comprehensive coverage of all IT capabilities in a business, and the IT Financial Management Association (ITFMA) thinks so as well.

DCG and the Innovation Value Institute (IVI) are co-teaching a workshop on July 9th, at the ITFMA Conference in Savannah, GA. It is designed to help IT finance professionals understand what value their IT Budget Management activities and capabilities could contribute to the business to help it succeed.

To date, the IT-CMF has engaged with more than 350 CIOs and senior IT executives in organizations across more than 20 countries – all with the same goal of realizing greater value from their IT investments. Leading members of the IVI include Intel, Chevron, BP, Ernst & Young, SAP and National University of Ireland, Maynooth.

The half-day workshop simulates a full IT Budget Management Assessment from the IVI regarding key financial capabilities, level of maturity, integration, and what benefits could be contributed to the business. The key financial capabilities that will be reviewed, including their best practices, outcomes and metrics, include:

  • Total Cost of Ownership (TCO)
  • Accounting and Allocation (AA)
  • Budget Oversight and Performance Analysis (BOP)
  • Budget Management (BGM)
  • Funding and Financing (FF)
  • Portfolio Planning and Prioritization (PPP)
  • Benefits Assessment and Realization (BAR)

Also, workshop participants will be given the opportunity to become research volunteers with the IVI in refining IT best practices within the IT-CMF. Catherine Crowley, Research Fellow at the IVI and my co-presenter, will be discussing this option with the workshop participants.

I hope to see you in Savannah! If you won’t be attending but would like more information about the workshop topic, please let me know in the comments. I’d be happy to provide that information!

Read our news release to learn more about the conference.


Tony Timbol
Vice President

Written by Tony Timbol at 05:00
Categories :

"It's frustrating that there are so many failed software projects when I know from personal experience that it's possible to do so much better - and we can help." 
- Mike Harris, DCG Owner

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