IT Strategic Capabilities - Mary Stacey

IT Strategic Capabilities

Aligning Strategy, Capabilities, Services, & People

Context

Aligning Strategic Capabilities

In a recent engagement, we partnered with the
In a recent engagement, we partnered with the
Executive VP and CIO of an 80M IT organization
Executive VP and CIO of an 80M IT organization
Bus. Strategy &
Bus. Strategy & to design and execute a strategic capabilities
to design and execute a strategic capabilities
Bus. Capabilities
Bus. Capabilities strategy.
strategy.

IT Strategy We worked with the twenty member leadership
We worked with the twenty member leadership
IT Strategy
team to develop a customized framework and
team to develop a customized framework and
A
A implement an approach to evolve and leverage
implement an approach to evolve and leverage
S
L Strategic
Strategic capabilities at three levels of alignment: business
capabilities at three levels of alignment: business
Capabilities S
I Capabilities strategy, service delivery, and people
strategy, service delivery, and people
R E
G development.
development.
S
N Major Services
Major Services S
The following slides provide a high level view of
The following slides provide a high level view of
the strategy, the process, and the outcomes.
the strategy, the process, and the outcomes.
Service Level
Service Level
Capabilities
Capabilities

Key People Skills
Key People Skills

EVOLVE
© Context Management Consulting Inc. 2007
© Context Management Consulting Inc. 2007 All Rights Reserved 2

Strategic Context

IT Vision, Guiding Principles and Strategic Focus
The vision for IT…

“A collaborative team that delivers and enhances the company’s
“A collaborative team that delivers and enhances the company’s Refreshed
business capabilities through innovation and thought leadership”
business capabilities through innovation and thought leadership” 05-07

...is guided by our strategy & guiding principles…

IT Strategy
Company Vision Company Strategy

Strategic People Financial Operational
Partnership Management Excellence
We will be at the table Focus on building Strive to optimize Our operational
with the business in leadership and operational costs and excellence is the door
the strategic planning capabilities for higher undertake projects to credibility and we
and decision-making value IT services. with appropriate are committed to
process. returns. continuous
improvement of our
processes & services.

The 2003 IT Strategy was about developing our capabilities to support the company’s business strategy and
managing costs through renewal and standardization of our technical environment


Strategic Context

IT Strategic Framework

BUSINESS & IT PLANNING

PEOPLE PROCESS

• Leadership Programs • Governance Framework
• Capabilities Alignment • Process Improvement

TECHNOLOGY
• Business-Driven
Initiatives
• Integrated Business
and IT Renewal Plan

IT STRATEGY

IT strategic capabilities are a ‘complex bundle’ of services, skills, and tools (processes
and technologies) that support the development, deployment, and management of IT
assets consistent with business strategies.

IT Capabilities StrategyModel
Strategic Capabilities

IT Strategic Capabilities Model
IT Strategy Business Strategy

IT Capabilities Strategy

Reporting Sourcing Managed
Strategy
Sustainability Services

Stewardship Management
Opportunity
Mining
Internal
Integration Services
Team
Currency &
Alignment

Evolution
Evolve Growth
Career
Skills Mobility

Tools &
Resources Centres of
Excellence

© Context Management Consulting Inc. 2007 All Rights Reserved

Evolving IT capabilities to convert IT investments into business value 5

Context
Capabilities Principles

IT Capabilities Guiding Principles
Sound management of strategic capabilities enables IT investments to be
Sound management of strategic capabilities enables IT investments to be
successfully converted into business value across the Enterprise
successfully converted into business value across the Enterprise
IT exists in an increasingly complex retail environment. Focus is key. A capabilities strategy creates focus,
simplifies complexity, and enables IT to continuously adapt with speed and agility.
IT strategic capabilities are dynamic and evolve to keep pace with longer term business strategies. They
are simultaneously current and future focused, yet should not be too closely aligned with current business
priorities.
As a strategic partner IT must focus on business outcomes. Technology needs to be placed in a business
outcome context. As much as possible, capabilities should be defined using business language.

Capabilities are dispersed across the IT organization in services, skills, and tools and need robust
integration processes to ensure they remain current and aligned.

A Capabilities Model is an integrating mechanism that guides stewardship (strategic leadership and
governance), management, and growth of IT capabilities.
Organizations need a full view of capabilities (strategic capabilities, major services, key skills) so that they
can be used effectively at the strategic, operational/service, and employee levels.

Capabilities stewardship is more tied to business strategy and IT planning cycles. Capabilities management
is most tied to operational cycles and service delivery. Capabilities growth is more tied to HR performance
and development cycles.

Well defined capabilities create a common language between the business and IT. The business
understands what IT is doing, and this builds credibility.
A capabilities strategy well communicated in IT drives an understanding of the business agenda to the front
lines of the IT organization, so that every employee understands how what they do on a day-to-day basis
contributes value to the business.


Reporting
Sustainability

Stewardship Guiding Principles Opportunity
Stewardship
Mining

Currency &
Alignment

• Stewardship involves both the strategic leadership & governance of IT
capabilities.
• Strategic leadership of IT capabilities encompasses the Enterprise, and
supports business growth through Enterprise opportunity mining.
• Capabilities governance is an integral component of the Enterprise
Governance Framework.
• An annual strategic capabilities refresh is carried out to ensure currency and
alignment to corporate strategy.
• IT capabilities are sustained and evolved through clear ownership and
dynamic integration processes.

Ensure that capabilities are current and business aligned. Find opportunities to create efficiencies.
Ensure that capabilities are current and business aligned. Find opportunities to create efficiencies.
Build processes to ensure capabilities are sustainable.
Build processes to ensure capabilities are sustainable.
Measure and report how well IT capabilities support business growth and productivity.
Measure and report how well IT capabilities support business growth and productivity.


Sourcing
Capabilities Principles Strategy
Managed
Services

Management Guiding Principles Management

Internal
Services

• If IT does not have a full view of its capabilities, it cannot effectively manage
them.
• Management of IT capabilities ensures effective deployment and delivery of
services.
• IT delivers strategic capabilities to the business through a combination of
internal and external sourcing.
• A sourcing strategy guides decision making about what services are
sourced internally and externally—and how they work together.
• Sourcing conversations are ‘business as usual’—services are continually re-
visited as part of the annual refresh process.
• Well integrated services provide a seamless customer experience.
• Capabilities management supports business productivity by mining for
synergies and efficiencies.

Develop a sourcing strategy that supports business growth and productivity
Implement a managed services plan. Implement an internal services plan.



Growth
Growth Guiding Principles Evolve
Skills
Career
Mobility

Tools &
Centres of
Resources
Excellence

• Capabilities growth is about growing services to the desired level of maturity
• Maturity assessments provide a strategic focus for growing services, which
are later evaluated through governance metrics and reporting processes
• Capabilities growth also about creating a balanced opportunity for
employees to contribute value in exchange for the opportunity to develop
their skills and career.
• IT is committed to growing services that support its strategic capabilities,
and investing in Centres of Excellence across the Enterprise.
• To evolve their skills and enhance career mobility employees need high-
quality jobs, tools and resources.

Assess and grow services. Evolve Skills. Invest in Tools & Resources. Build Centres of
Assess and grow services. Evolve Skills. Invest in Tools & Resources. Build Centres of
Excellence. Enhance Career Mobility.
Excellence. Enhance Career Mobility.


Strategy
Approach

High Level Approach
2007 2008 2009

The IT Capabilities Model & Capabilities Refresh Framework will guide activity. They will provide support
for establishing priorities, identifying integration points, and continuously evolving IT’s ability to effectively manage
its capabilities.
Work will be undertaken in a continuous assess-evolve-align process that is focused on longer term
business strategies. Capabilities will evolve in many ways as a result of strategic imperatives, annual
processes, deliverables from strategy projects, and employee development.
Capabilities initiatives are:
Networked. This strategy will be implemented as a network of activities across the 3 IT spheres. For example
while Enterprise IT is refining capabilities governance processes, IT Shared Services will be implementing a
sourcing strategy, and Retail IT will be establishing a Centre of Excellence.
Integrated. Networks of activity require strong linkages. Sustainable growth of IT capabilities will depend on the
extent to which efforts are meaningfully integrated from a strategy-to-skill perspective, as well as though sound
governance, management and development processes.
Innovative. “In order to be seen as innovative IT must break the status quo by radically transforming the way
tasks, processes, and interactions occur.” (Forrester) The next phase of capabilities work will challenge
stakeholders to look at IT’s relationship to the business differently, and transform the way they think about IT
capabilities.


Approach

2007-2010 Detailed Approach

Context
Management
Strategy
Definition
Capabilities IT Strategy Refresh
Assessment
Stewardship Org Design
IT Capabilities
Strategy Management Evolution & Skills
Internal Growth Development
IT Services Capabilities
Sourcing & Integration Program
Centres of
Strategy Managed Execution
Excellence
Managed Services Business Risk Program RFP Issuance
Services Case Assess- Definition & Vendor(s)
Approach Analysis ment & Design Selection

Assessment Infrastructure
Benchmarking (Enterprise Architecture
Analysis Governance) Assessment


2007 Assessment
Introduction

Engagement Timeline*

April May June June June June July

Leadership
Team
Director Individual Review
Workshop 1 Review
Leadership Results Business Director
Team SBU
Consolidation Stakeholders Engagement Engagement
& Pre-Work Review In Results
Results
Director Individual
Workshop 2 Review Check
Results
Against
Other Data
Sourcing Decisions
& Managed Services
Results for Final Capabilities
Services with Implications &
Final Services, &
OUTCOME Descriptors Gaps
Review Mandates
Internal Growth Plan
& CoE Identification

* does not include skills refresh


Results Assessment Results
2007

2007-10 Strategic Capabilities and Major Services
Business Strategy

IT Strategic Capabilities
Business &
Change Enterprise IT Value & Risk Information Relationship
Technology Portfolio
Leadership Planning Management Management Management
Management

Major Services

Measurement & Data Strategic
Strategy & Business & IT
Innovation Reporting Partner
Planning Consulting Management
Management

Solution IT Policy & Operational
Transformation Lifecycle Knowledge
Integration & Standards Vendor
Services Management Management
Delivery Governance Management

People Competitive Project Leadership Compliance Collaboration
Development Intelligence & Management Management Services

Organizational Enterprise
Change Enterprise Service Delivery IT Security
Architecture Information &
Management & Management Standards
Analytics

IT Resource
Management Customer Support

Capabilities
Management


2007-10 Capabilities
Results

Change Leadership Services
Change
Leadership

Leverage new technologies to support business growth and productivity,
Innovation and mine opportunities for enterprise synergies in technology

Transformation Drive business process improvements through leveraging IT’s business
Services knowledge and incorporating advancements in technology

People Develop and execute plans and programs to build IT’s functional team
Development customer focus, leadership, and other people capabilities at all levels

Organizational
Lead the planning and support the execution of organizational change
Change strategies that result from solution delivery initiatives
Management

IT Resource Manage IT resource capacity (human, processing power, memory, etc.) to
Management meet current and future business requirements in a cost-effective manner

Capabilities Manage IT’s strategic capabilities and services to ensure the effective
Management deployment, delivery and growth of services


Results

Enterprise Planning Services

Enterprise
Planning

Strategy & Develop a strategic vision and practical implementation plan for IT investments
Planning to achieve enterprise business objectives and goals

Manage the evolutionary lifecycle of technology components, from
Lifecycle introduction to disposal across all applications and infrastructure domains to
Management achieve high-level productivity, stability and cost effectiveness

Competitive Collect and understand relevant technology best practices, directions and
Intelligence trends as input to Strategy & Planning and Lifecycle Management

Provide future-focused, business enabling technology leadership for the
Enterprise
enterprise through the development of strategies and the establishment of
Architecture principles, rules and guidelines


Results

Business & Technology Portfolio Management Services

Business &
Technology Portfolio
Management

Business & IT Collaborate with the business and IT to advise on, and leverage technology
Consulting investments and IT services for current and future solutions

Solution
Design, develop and implement people, process, and technology solutions in
Integration & response to business and technology needs
Delivery

Project
Plan and deliver programs and projects, through project leadership and
Leadership management
& Management

Deliver operational services and support through monitoring and managing
Service Delivery
the technical environment, leveraging problem, incident, change, and
& Management service management and BCP/DRP strategies

Customer
Provide front-line support directly to our customers
Support


Results

IT Value & Risk Management Services

IT Value & Risk
Management

Measurement Enable IT to support the business by reporting on IT’s performance and
& Reporting business value realization

IT Policy &
Develop and deliver the policies, frameworks, standards and processes
Standards necessary to govern IT
Governance

Compliance
Enable, monitor and manage policy, standards and regulatory compliance
Management

Define the information protection standards and sustaining processes required
IT Security
for the protection of information assets and for ensuring compliance with
Standards regulations


Results

Information Management Services

Information
Management

Facilitate data ownership, manage enterprise data integration and stewardship,
Data
and provide tools, knowledge, and resources required to ensure consistent data
Management quality and use

Provide the tools, processes, and skills necessary for the identification and
Knowledge
distribution & application of knowledge across the enterprise to support
Management performance and competitive advantage

Collaboration Provide strategies, tools and processes to enable collaboration across the
Services organization and among vendors, stores, suppliers, and customers

Enterprise
Provide the technology, processes, and resources to transform enterprise data
Information into actionable business information
& Analytics


Results

Relationship Management Services

Relationship
Management

Develop mutually beneficial alliances with services and technology providers
Strategic
to extend IT’s core competencies, execute strategy, and manage vendor
Partner relationships, from identification and selection, through contract creation,
Management negotiation, and management

Operational
Manage, coordinate, monitor and integrate vendor provided services to
Vendor ensure seamless delivery of IT capabilities to our clients
Management


Application ofResults
Applying the Results

Distribution of Services
Almost half of the identified services are common to Corporate IT and Retail IT. Service
growth and evolution should be coordinated across both groups.

Corporate IT Services Common Services Retail IT Services
Enterprise Architecture (EP) Innovation (CL) Organizational Change Management (CL)
Service Delivery & Management (BT) Transformation Services (CL) Project Leadership & Management (BT)
Data Management (IM) People Development (CL)
Knowledge Management (IM) IT Resource Management (CL)
Collaboration Services (IM) Capabilities Management (CL)
Enterprise Information & Analytics (IM) Strategy & Planning (EP)
Strategic Partner Management (RM) Lifecycle Management (EP) Strategic Capabilities
CL - Change Leadership
Operational Vendor Mngmt. (RM) Competitive Intelligence (EP)
EP - Enterprise Planning
Measurement & Reporting (VR) Business & IT Consulting (BT) BT – Bus. & Tech. Portfolio Mngmt.
IT Policy & Standards Governance (VR) Solution Integration & Delivery (BT) VR - IT Value & Risk Management
(VR)
Compliance Management (VR) Customer Support (BT) IM - Information Management
RM - Relationship Management
IT Security Standards (VR)


Application of Results

Services Maturity Levels
A rough assessment of service maturity levels shows that 9 services are at the low maturity
level, requiring investment in growth and development.

Corporate IT Services Maturity CTR IT Services Maturity
Enterprise Architecture (EP) H Organizational Change Management (CL) L
Service Delivery & Management (BT) H Project Leadership & Management (BT) H
Data Management (IM) M
Knowledge Management (IM) L Common Services Maturity
Collaboration Services (IM) L Innovation (CL) L

Enterprise Information & Analytics (IM) M Transformation Services (CL) M
People Development (CL) H
Strategic Partner Management (RM) M
IT Resource Management (CL) M
Operational Vendor Management (RM) L
Capabilities Management (CL) M
Measurement & Reporting (VR) L
Strategy & Planning (EP) M
IT Policy & Standards Governance (VR) M
Lifecycle Management (EP) L
Compliance Management (VR) M
Competitive Intelligence (EP) L
IT Security Standards (VR) L
Business & IT Consulting (BT) H
Solution Integration & Delivery (BT) H
Customer Support (BT) H

Application of Results

How can we use the results?
Business & Be a Strategic Partner to the business.
IT Strategy

IT Capabilities Evolve IT capabilities to convert IT investments into business value
Strategy
Agenda:
Ensure that capabilities are current and business aligned (June, 2007)
Capabilities 2. Find opportunities to create Enterprise efficiencies
3. Build processes to ensure capabilities are sustainable
Stewardship 4. Measure and report how well IT capabilities support business growth and productivity.

2007 Strategic Capabilities Refresh

Sourcing Strategy

Capabilities Capabilities
Management Growth

Agenda: Agenda:
Develop a sourcing strategy that supports business 1. Implement an internal growth plan
growth and productivity (June, 2007) A. Assess the maturity of IT services
2. Implement a managed services plan B. Invest in Tools and Resources
3. Assign ownership for major services C. Build Centres of Excellence
4. Facilitate the integration team. D. Enhance Career Mobility

2007-10 Activity Streams

Phase 3 Integrating Infrastructure: Ensure Sustainable Evolution of IT Capabilities

IT Capabilities Strategy & Framework (Phase 3 in progress)
• Sub-set of CTC & IT Strategies; guides all capabilities plans and activities
Core Group (Phase 3 in progress)
• Executive sponsor, sustaining sponsors, Phase 3 director & consultants, HR & Communications advisors
Integration Team
• Integrate stewardship, management & growth activity streams and represent capabilities work to stakeholders

Capabilities Stewardship: Strategic Leadership and Governance
Currency & Alignment (Phase 3 in progress)
• Annual Strategic Capabilities Refresh
Opportunity Mining
• Optimizing enterprise synergies for growth and productivity
Sustainability
• Strategic focus and processes that create a capabilities culture, integrate capabilities activities, and support evolution and alignment
Reporting
• Metrics such as Customer Satisfaction Survey, Employee Satisfaction Survey; Capabilities Scorecard (maturity and sourcing information)

Capabilities Management: Manage Internally and Externally Sourced Capabilities, Services & Skills
Sourcing Strategy (Phase 3 in progress) Services & Skills Assessment (Phase 2)
• Principles, drivers, decision criteria, and approach for internal and external sourcing • Strategically align strategic capabilities, services, and skills
Managed Services (Phase 3 in progress)
• Manage externally sourced services
Internal Services
• Manage internally sourced services

Capabilities Growth: Support IT Employees as they Grow their Skills and Careers
Evolve Skills
• Focus on and investment in skills based on maturity assessment results, business-IT strategic agenda
Tools and Resources (Phase 2)
• Invest in growth ‘portals’ such as Canadian Tire University, IT Capabilities Directory, IT Capabilities Resource Centre, Career Development Guide
Centres of Excellence
• Invest in internal services based on results of opportunity mining, business-IT strategic agenda
Career Mobility (Phase 2) 23
• HR Career Development Guide, HR Performance Systems

IT Strategic Capabilities - Mary Stacey

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