CIOs often talk about their âIT operating modelâ. This overly complex term describes the basic activities necessary for the functioning of an IT organization.
Computing does not exist in a vacuum. It addresses specific business needs with operational responsibilities related to revenues, costs and risks. An IT operating model helps ensure that IT maintains operational excellence, delivers the right services to stakeholders, and supports overall corporate direction and strategy.
Gartner defines the IT operating model as follows:
An operating model is the model of how value will be created and delivered to target customers. An operating model brings the economic model to life; it executes the business model. An information and technology (I&T) operations model represents how an organization orchestrates its I&T capabilities to achieve its strategic objectives. A business operating model describes how the business configures its capabilities to perform its actions to deliver business results as defined in the business model.
Whatever your definition, an operating model helps the CIO prioritize investments of time and money to achieve maximum impact for the organization.
Each IT operating model should include three points:
- The organization’s business strategy and performance objectives
- Customer expectations and leverage points that create value for customers
- Tools and technologies that allow the company to achieve its objectives and generate value
To explore the practical role of IT in creating value for a large organization and its customers, I asked the CIO at HPE, Rashmi Kumar, to join me on episode number 721 of the CXOTalk Conversation Series with people who shape our world.
The conversation with Rashmi includes a discussion of CIO innovation and a deep dive into the role of women in tech.
How should CIOs bring the customer perspective?
There are frameworks and training that companies can use. I started with TQM (total quality improvement). I worked at Toyota, so I looked at Kaizen, six sigma in many places, and now it’s design thinking. All of these executives speak from the voice of the customer and the value flow maps. Understand where you bring value to customers.
As CIOs, we need to put customers first and not let technology drive implementation decisions. Let your customers drive the technology.
I work a lot with the startup ecosystem, business coaching. This is also what I tell them. Don’t try to solve a technological problem. Try to resolve a customer problem.
The product / market fit, which Andreessen talks about, is important for us as CIOs to keep our mindset agile. Think like an entrepreneur to blow up our businesses – most of the time I work for traditional businesses – into this next generation of businesses that we are competing with right now.
What is your IT planning process?
I grew up in the world of architecture, so I spend time building a vision, strategy and roadmaps. I am classically trained to start in a business value chain.
Find out how we serve businesses. The approach is not unique to a tech company. I worked in the public services. I worked in financial services. I worked in entertainment.
In every business today, the way customers want to consume services is changing at an unprecedented rate.
- If you are looking at entertainment, it has become about content. It’s not about DVDs or cinemas and things like that anymore.
- If you look at a car, now it’s a mobility issue. It’s not a car problem.
- If you look at utilities, they build data flow with electron flow, and business models change.
When we think about what we need in our people, in our resources to get there, start with how a company serves its customers. This is what I call the value chain. Take it to the next level and understand the capabilities we have made possible by technology. Where do we see gaping holes?
The other layer of complexity that brings this two-dimensional problem very quickly becomes a three-dimensional problem because now you have different business units that, through the same value chain, provide the same set of services. How to bring homogeneity?
It sounds difficult, but the next step is prioritization. What are the key areas of the value chain where you need to accelerate technological transformation to achieve maximum customer value? If you get this framework right, you can create a heat map to guide your prioritization decisions.
Then comes the funding. Many CIOs make their decisions based on funding decisions. This is not the right way to go, because you aren’t spending those precious dollars (given to you by your stakeholder) on solving the right problems if you don’t have the framework in mind to do so.
What about the IT operating model?
[Many CIOs] spend a lot of time building, maintaining and supporting applications, but very little time in architecture teams and the CIO team office.
These two components of the CIO organization operating model are critical to ensuring that they have the right relationship with your operating organization and your application building organization. It becomes even more important in the future of an agile workforce and IT (where we are going) or product organization (where we are going) because we have to think about those products, as well. than the feature set and enhancements we want, through a bigger, longer-term roadmap goal.
How to reconcile the short and the long term? It is important. Have a strong architecture team that interacts with your business leaders, getting them to think quarterly – at least a year if not two years – then ask the office of the CIO portfolio management team to make the decisions about it. investment thanks to an architectural contribution. These are machines that are not easy, but we have more success if they work.