A Discussion on IT Operating Models

What exactly is meant by the term IT Operating Model?

The term Operating Model simply describes the different facets of how things get done (processes), how resources are organised (structure), how decisions are made (governance), what tools (and systems) are used, how performance is measured and people rewarded.

Is it the same as IT organisational design?

No. Organisational design focuses on structure and roles. Whilst this is an important facet, there are others that make up the complete model.

Then isn’t it about process and process management?

Partly, but processes are just one – some say central – facet of an Operating Model. Over the past 25 years there have been considerable developments in process thinking and how significant performance improvements can be achieved if an end-to-end perspective is taken.  Initially it was quality circles and then process redesign/ reengineering and today the focus is on Lean and Six Sigma. In IT the CMMI process maturity model emerged and is widely practised.

Do all IT organisations have an Operating Model?

Yes, and many have more than one that are not necessarily joined up! The question is: how many should there be and to what extent are they designed so that all the facets work together to deliver the desired outcomes?

What’s the difference between IT Operating Model and IT Strategy?

If the Operating Model defines HOW the IT organisation operates, then IT Strategy defines WHAT it delivers, or plans to deliver. Obviously they are closely connected as the WHAT defines the context for the HOW and the HOW identifies the WHAT. For example, if the IT Strategy is to migrate from legacy in-house developed applications to integrated package-based solutions or move to cloud computing, then the Operating Model needs to be very different. Equally if the HOW does not have the processes and accountabilities to facilitate innovation, the WHAT would not contain sources of new business value.

Isn’t it simply a matter of implementing ITIL and CobiT?

Whilst frameworks like ITIL and CobiT can help, the reality is that one size does not fit all, so it can be dangerous to implement such frameworks without first understanding the requirements of the redesigned Operating Model in terms of its target outcomes and performance. The Operating Model can then be redesigned/changed to meet these needs – drawing upon best practice frameworks like ITIL and CobiT.

But what about people?

People are extremely important for two reasons. Firstly, in order for people to perform and develop to their best ability they need and deserve to work within an Operating Model that performs and is not broken. An individual’s performance is significantly influenced by how the Operating Model operates. Secondly, experience and expertise need to be incorporated in the design, implementation and management of the redesigned Operating Model.

What does contemporary thinking mean?

Simply that it reflects today’s – as opposed to yesterday’s – practice. It is modern thinking, but not bleeding edge.

And design principles?

These are the choices we can take in designing an Operating Model. To be a principle there must be an equally valid alternative. For example, service delivery is based upon a predefined catalogue as opposed to responding to every user request.

So what’s an agile Operating Model?

Simply one that is adaptable to change. One that is capable of anticipating when changes are needed – before it becomes a problem – and is able to implement those changes quickly and at minimum cost, applying contemporary Operating Model design principles.

Surely there’s more to running an IT organisation than changing the Operating Models?

Of course there is, but the Operating Model provides the context within which people can work effectively and add value.  Without question it’s one of the conditions of being a successful CIO.

I welcome your thoughts.

David Trafford

Formicio Insight Article: A Discussion on IT Operating Models

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