All About Vertical IT Teams: Part I
Read on to learn why IT tactical and operational goals should be aligned with more short-term business goals that serve the long-term strategy and how to achieve this.
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Traditional IT organizational structures that have central or enterprise-wide teams each addressing different aspects of a Big Data implementation are not efficient. While enterprise-wide organizations make sense for IT services that could be commoditized (i.e., desktop/laptop support, telephony support, etc.), Big Data implementations are effective when they are closely associated with business goals.
In fact, there are numerous examples of business teams organizing their own technology teams independent of traditional enterprise IT so that they could be Agile in generating the predictive and streaming analytics that they need. This helps business teams speed up their response to market and customer trends with more agility and accuracy, yet enterprise IT is eliminated from the corporate value chain. Why is it that in many cases enterprise IT is incapable of responding to business needs with the required urgency and agility?
One reason could be that while commodity IT services are well documented and don’t require a significant level of creativity, Big Data (and now “Fast Data” – low-latency streaming big data in real-time) requires specialization in specific business and technology areas and do require a substantially higher level of creativity that is difficult to provide at an enterprise level. In addition to these factors, data security and privacy challenges facing Big Data and Fast Data elevates the level of complexity and make it hard to be agile and responsive to business needs at an enterprise level.
Also, in many cases, enterprise IT comprises multiple silos that through their history have become more interested in preserving their own existence rather than contributing to the overall business goals of the corporation. Of course, there are enterprise IT organizations that are effective, yet even in those cases, they are focused on more generic services that are characterized as IT commodity. How could enterprise IT overcome these agility and organizational hurdles and be highly effective in responding to business needs so that it continues to generate value and stay relevant?
Start With Identifying Core Business Services
Interestingly enough, enterprise IT relevance does not start with IT; rather, it starts on the business side. As part and parcel of enterprise business architecture, core business services should be identified. These are services that are deemed as strategic for the business. Usually, such services are tied to revenue generation for the firm and help define its position in the marketplace.
For example, key services in financial services include new customer registration for wealth management, banking services, and portfolio management. In the healthcare industry, core services include new customer enrollment, personalized patient services including historical medical data, online interaction with primary care provider, online appointment advisory, and online prescription refill. If the business architecture and its core services are not defined, IT leadership could partner with business and help define the business architecture.
In almost all cases, core business services in one way or another include interaction with customers that would invariably benefit from Big Data, Fast Data, IOT and customers’ digital experience. Business strategy, including long-term and short-term goals, will be defined around such services. Key decisions need to be made regarding what services to keep and grow and what services to eliminate. IT leadership could play a role in such decision making by including the technology variables. For example, by looking at technology trends, strategic decisions could be made on core services that could see dramatic changes.
This process helps define business goals and the corresponding IT goals. It paves the way for IT to be aligned with business and to reorganize around business goals. It is important to note that while IT strategy should be aligned with business strategic goals and has long-term character (three to five years), IT tactical and operational goals should be aligned with more short-term business goals that serve the long-term strategy. Tactical and operational goals should go through an ongoing iterative process in the continuum of technological progress.
Organizing Around Business Goals
If creating effective Big Data (or Fast Data) technology organizations requires organizing IT around specific business goals, then where is a good place to start? Experience tells us that one very effective way is to organize specialized IT teams tied to core business services. The wrong way to go about this is to create an enterprise-wide business relationship management organization. If enterprise IT lacks agility in addressing business needs, enterprise business relationship management (BRM) will have the same drawbacks for the same reasons. Enterprise BRM will face the pitfall of becoming yet another silo out of touch with the realities of business, preoccupied with self-preservation or immobilized by bureaucracy.
To reorganize around core business services goals, IT teams need to be structured as vertical teams tied to these specific core business services. The vertical teams are then aligned with the business teams that own these services. Considering the immediate and long-term impact of Big Dat or Fast Data and IOT, the future of such services will be tied to technologies that enable the business to take full advantage of these transformative changes. The vertical IT teams make the realization of the business goals their own performance goals. This way, the services owned by IT vertical teams are invariably linked to business core services.
Stay tuned for Part II, in which we'll delve deeper into how vertical IT teams are organized.
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