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A model for the Lean IT organization
Jun 25th, 2010 @ 03:21 am Mark P. McDonald
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In the late 1990s, CIOs asked about the shape of the IT organization in
the face of increased use of outsourcing, business process change and
what was called-user development. The response to those forces was
called a lite model of IS which became known as IS-Lite. (Gartner
LinkSubscription Required) (CIO Magazine Link)

Today, CIOs are asking the same question in the face of different forces.
Technology is going public, technology is becoming lighter weight, cloud
computing, business process outsourcing, software as a service and the
need for lean IT are changing the shape of IT again. The response we
have observed among leading IT organizations has evolved the IS lite
model into a Lean IT model. The figure below illustrates this evolution.

Leading CIOs see the move to a leaner IT structure as a natural response

to changing IT economics and new consumer-based technologies. A lean
IT organization is created through a process of addition by concentrating
on the resources in areas where IT expertise can add value. This is in
contrast to IS lite that was created by subtracting out the resources and
responsibilities taken over by outsourcing and the other forces. The
result is an organization that is diamond or arrow shaped from the
perspective that it has more mid-level resources as the bottom of the
traditional pyramid is resourced from either technology services or other
service providers. Building the lean model, shown below

The model above recognizes the potential of lighter weight technologies

such as the cloud and SaaS to handle a portion of IT responsibility.
Likewise the increasing capability of business process outsourcing either
via a contract or value network relationship changes other aspects of IT.
The question then becomes what should the major groups be within IT.
The model identifies these groups as:
A focused and professional service and vendor management
capability needed to handle complex multi-sourced partner
relationships.
An information and analytics center of excellence that houses the
deep skills and tools required increasing the strategic and
operational value of information.
A business process center of excellence reflecting ITs central role in
process improvement, including the implementation of six sigma
and lean thinking in the enterprise.
An agile development group responsible for bringing new
applications on line in response to specific business requirements
and needs that cannot be readily met by outsourced parties.
A CIO and technology leadership group responsible for the strategy,
execution, architecture, risk management and policy management.
The above model can be called lean from the perspective that it
concentrates the IT organization on the essential roles required to
provide value to the enterprise and its value network. Those groups
handle these activities, as they are best able to provide the service
without duplication or waste.

The implications for IT are interesting. Here are some initial thoughts.
While the IT organization will be smaller, it will be higher skilled and
therefore better compensated.
Increased professionalism with deeper skills and capability
provided in analytics and business process change.
The IT organization would be more responsive, delivering
short/sharp/focused projects in rapid cycle times.
Sourcing and vendor relationship would be recommended as a
professional competency and have a more formal and operational
role rather than being an extension of finance.
IT would become more executive focus in terms of creating results
through others than viewing itself completely responsible for
everything.
What are your thoughts? Is your IT organization getting lite-er, leaner or
more focused?
Related Posts
IT going public changing the IT Organization
Categories: CIO, IT Governance, Lean Thinking, Strategic planning,
Technology
Tags: 2011 Planning, CIO strategy, IT organization

1 Response

1.

nick
15 mos, 4 wks ago
With the drive for greater efficiency and cost reduction as well as if
required; the provision of a bespoke development following agile
methodologies for complex applications, IS Lite looks a workable
model. The need for highly skilled people may reduce opportunities
for newbies but i suppose there has to be new blood. Lean efficient
processes will underpin the success of something like this.

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