IT Capability - Revision history

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← Older revision		Revision as of 22:05, 26 May 2024
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	== See Also ==		== See Also ==
	*[[IT Capability Maturity Framework (IT-CMF)]]		*[[IT Capability Maturity Framework (IT-CMF)]]
		+	*[[IT Governance]]: Discussing the framework that ensures IT investments support business objectives through alignment and value delivery.
		+	*[[Enterprise Architecture]] (EA): Exploring how organizations structure IT systems and processes to align with business goals.
		+	*[[IT Infrastructure]]: Covering the composite hardware, software, network resources, and services required for the existence, operation, and management of an enterprise IT environment.
		+	*[[IT Service Management (ITSM)]]: Discussing the activities involved in designing, creating, delivering, supporting, and managing the lifecycle of IT services.
		+	*[[Business IT Alignment]]: Exploring strategies that ensure the technology implementations and the business strategy and goals are in sync.
		+	*[[Digital Transformation (DX)]]: Discussing the integration of digital technology into all areas of a business, fundamentally changing how businesses operate and deliver value to customers.
		+	*[[IT Roadmap\|Technology Roadmapping]]: Exploring the planning technique for identifying, evaluating, and selecting strategic options for technology investments.
		+	*[[IS Strategy\|Information Systems Strategy]]: Discussing how strategic management of information systems supports organizational strategies and objectives.
		+	*[[Cloud Computing]]: Exploring how the use of cloud resources can enhance IT capabilities by providing scalable and efficient IT solutions.
		+	*[[Cyber Security]]: Covering the strategies and techniques used to protect the IT environment and the data it contains from cyber threats, an essential component of IT capability.

← Older revision		Revision as of 16:00, 11 August 2023
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	This capability can be, and is usually, attributed to the IT function within an organization. More appropriately, it should be attributed to the organization as a whole because no function within an organization is an island. Each gain from the other and, in turn, enriches them. This value “bleed” from one function to another cannot be quantified meaningfully. However, it exists. It can be positive or negative. When the organization plays as a team, i.e., the functions collaborate, positive value passes between functions. In this case, the organization’s capability is greater than the sum of its parts. The functions are better off together. Conversely, when the organization does not play as a team, i.e., is dysfunctional, the value bleed is negative. In this case, the organization’s capability is less than the sum of its parts. It follows that the functions are better off not being with each other! The net of this phenomenon is that no function within an organization would create the same value within another organization. For example, suppose an IT organization is moved from one company to another. In that case, it will deliver more or less but never the same value as it was created in the original company. This is true of any team. You may have noticed that a player is successful or more successful on one team versus the other.		This capability can be, and is usually, attributed to the IT function within an organization. More appropriately, it should be attributed to the organization as a whole because no function within an organization is an island. Each gain from the other and, in turn, enriches them. This value “bleed” from one function to another cannot be quantified meaningfully. However, it exists. It can be positive or negative. When the organization plays as a team, i.e., the functions collaborate, positive value passes between functions. In this case, the organization’s capability is greater than the sum of its parts. The functions are better off together. Conversely, when the organization does not play as a team, i.e., is dysfunctional, the value bleed is negative. In this case, the organization’s capability is less than the sum of its parts. It follows that the functions are better off not being with each other! The net of this phenomenon is that no function within an organization would create the same value within another organization. For example, suppose an IT organization is moved from one company to another. In that case, it will deliver more or less but never the same value as it was created in the original company. This is true of any team. You may have noticed that a player is successful or more successful on one team versus the other.
		+
		+	IT capability, a measure of an organization's proficiency in leveraging technology to achieve business objectives, is deeply intertwined with the expertise and guidance of the Chief Information Officer (CIO). Beyond the mere deployment of technological resources, IT capability encompasses the integration, optimization, and strategic use of technology to drive innovation and competitive advantage. At the forefront of this endeavor is the [[Chief Information Officer (CIO)\|CIO]], who crafts a roadmap that melds technological potential with business goals. In an evolving digital landscape, the differentiation between an organization's IT capability and its core operational success has become almost indistinguishable. As a result, the role of the CIO in sculpting and enhancing this capability is paramount. Their strategic decisions, insights into emerging technologies, and leadership in fostering IT agility and resilience often determine the height of the organization's IT capability and, by extension, its market position.

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 IT Capability comprises the following components:
-*IT Strategy
+*[[IT Strategy (Information Technology Strategy)|IT Strategy]]
 *IT Processes and Metrics
 * IT Organization

@@ Line 15: / Line 15: @@
 IT Capability comprises the following components:
-*IT Strategy
+*[[IT Strategy (Information Technology Strategy)|IT Strategy]]
 *IT Processes and Metrics
 * IT Organization

@@ Line 1: / Line 1: @@
 '''IT Capability''' (information technology capability) refers to an organization’s ability to identify IT to meet business needs, to deploy IT to improve business processes in a cost-effective manner, and to provide long-term maintenance and support for IT-based systems (Karimi et al., 2007). It is the ability to leverage different IT resources for intangible benefits.<ref>[https://www.igi-global.com/dictionary/it-capability/15834 What is IT Capability-IGI-Global]</ref>
-Information Technology (IT) Capability is an organization’s ability, by virtue of its IT assets and know-how, to create [[Business Value]].
+Information Technology (IT) Capability is an organization’s ability, by virtue of its IT assets and know-how, to create Business Value.
 This capability can be, and is usually, attributed to the IT function within an organization. More appropriately it should be attributed to the organization as a whole because no function within an organization is an island. Each gain from the other and in turn enriches them. This value “bleed” from one function to another cannot be quantified in a meaningful way, however, it exists. It can be positive or negative. When the organization plays as a team i.e. the functions collaborate, positive value passes between functions. In this case, the organization’s capability is greater than the sum of its parts. The functions are better off together. Conversely, when the organization does not play as a team i.e. is dysfunctional, then the value bleed is negative. In this case, the organization’s capability is less than the sum of its parts. It follows then that the functions are better off not being with each other! The net of this phenomenon is that no function within an organization would create the same value within another organization. For example, if an IT organization is moved from one company to another, it will deliver more or less but never the same value as it was created in the original company. This is true of any team. You may have noticed that a player is successful or more successful on one team versus the other.
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 Every organization's needs are different: Some need IT to focus on delivering the latest and greatest applications, while others need IT to create a robust infrastructure. Let's accept one fact: IT is a service provider and the firm and its employees are its customers. IT must enable the business and ensure that its customers are satisfied with the basic services (for example, keeping servers and email up and running, providing help-desk support) and that all [[IT Operations (Information Technology Operations)|IT operations]] are efficient and cost-effective. Creating a strategic IT vision requires determining the IT organization's various customer segments and business needs. Generally, customers need a set of capabilities across a range of functions. Typically these capabilities fall into three main areas. Each of these areas must be optimized by the IT organization:
 *IT operational excellence. Critical capabilities that allow IT assets to be managed to take information systems to higher levels of effectiveness and cost efficiency. The objective is to create low-cost, flexible support for the enterprise.
-*Business enablement and process improvement. The ability to transform or improve core [[Business Process|business processes]] within the organization. The goal of core-value and IT-enabling processes is to take value chains and business operations to world-class levels. The measure of success does not cost reduction, but improvements to key business processes.
+*Business enablement and process improvement. The ability to transform or improve core business processes within the organization. The goal of core-value and IT-enabling processes is to take value chains and business operations to world-class levels. The measure of success does not cost reduction, but improvements to key business processes.
 *IT innovation. Solutions developed with the business to help achieve breakthrough innovation to improve competitiveness. Initiatives move beyond improving processes to helping create competitive strategies and transforming market dynamics, repositioning a company against its competitors or allowing it to enter markets where it did not previously compete.
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 Principle at platform may expose potential capability gaps, such as in a lack of data in the forms the business unit will require or insufficient IT skills to support data analytics. These will need to be addressed.
-*3. Design the operations and technology architecture. Rather than develop IT features in an ad hoc manner as requirements emerge, managers need to establish capabilities-based IT principles. These will guide and govern IT architecture, its evolving design, and the way features are built and operated. From a firm-wide perspective, companies must develop recommendations for a target-state technology solution that encompasses each IT capability. Here, the selection of systems architecture becomes critical to ensure flexibility and meet evolving business needs. As part of creating durable, multi-user capabilities, [[Chief Information Officer (CIO)|IT managers]] must carefully design specs for the final application, determine how the data are going to be manipulated and decide what overarching infrastructure will accommodate it. For example, in most organizations, master customer data are scattered over diverse applications and databases. To support the financial institution's business requirements and to simplify the environment for sales force-various customer systems will need to be integrated into one universal content-management system. In this way, branches and contact centers will be able to access a real-time, 360-degree customer view from one readily accessible place. This not only pushes data to customer-facing employees when they need it, it facilitates customer-focused service, segment-specific marketing and sales analytics. On a daily basis, for example, such a platform could push customer feedback gathered from surveys directly to a call-center representative to follow up and resolve problems. When aggregated by the IT customer interface system to reflect the experiences of the hundreds of customers who required call-center service, the feedback can be used by supervisors and managers for front-line training or to elevate issues that may need higher-level attention. Finally, the platform would also enable market analysts to sort the feedback by customer segment in order to identify opportunities to improve service delivery to high-value targets or spot opportunities to cross-sell other products.
+*3. Design the operations and technology architecture. Rather than develop IT features in an ad hoc manner as requirements emerge, managers need to establish capabilities-based IT principles. These will guide and govern IT architecture, its evolving design, and the way features are built and operated. From a firm-wide perspective, companies must develop recommendations for a target-state technology solution that encompasses each IT capability. Here, the selection of systems architecture becomes critical to ensure flexibility and meet evolving business needs. As part of creating durable, multi-user capabilities, IT managers must carefully design specs for the final application, determine how the data are going to be manipulated and decide what overarching infrastructure will accommodate it. For example, in most organizations, master customer data are scattered over diverse applications and databases. To support the financial institution's business requirements and to simplify the environment for sales force-various customer systems will need to be integrated into one universal content-management system. In this way, branches and contact centers will be able to access a real-time, 360-degree customer view from one readily accessible place. This not only pushes data to customer-facing employees when they need it, it facilitates customer-focused service, segment-specific marketing and sales analytics. On a daily basis, for example, such a platform could push customer feedback gathered from surveys directly to a call-center representative to follow up and resolve problems. When aggregated by the IT customer interface system to reflect the experiences of the hundreds of customers who required call-center service, the feedback can be used by supervisors and managers for front-line training or to elevate issues that may need higher-level attention. Finally, the platform would also enable market analysts to sort the feedback by customer segment in order to identify opportunities to improve service delivery to high-value targets or spot opportunities to cross-sell other products.
-*4. Develop the [[IT Roadmap]]. [[Business IT Alignment|Aligning IT with business objectives]] requires not only a capabilities-based goal but a roadmap to get there. To create one, managers must work together to identify key IT investment needs that will close the alignment gaps, and then bundle them into IT investment themes. Following an acquisition, for example, a top priority will be to improve IT connectivity and efficiency across the merged companies. Thus, integrating the two organizations' systems ties into the business imperative to get a more granular view of all customers and how they rate the services they receive. Meanwhile, organizational capabilities needing an immediate upgrade might be to consolidate finance, data warehouse, and human resources functions. Most leading firms sequence their IT investments. They develop a three- or five-year transformation roadmap for IT initiatives based on their strategic relevance, urgency, and ease of completion. They also build an investment plan based on the estimated cost to accomplish these IT initiatives and the return that investment is expected to yield.
+*4. Develop the IT Roadmap. Aligning IT with business objectives requires not only a capabilities-based goal but a roadmap to get there. To create one, managers must work together to identify key IT investment needs that will close the alignment gaps, and then bundle them into IT investment themes. Following an acquisition, for example, a top priority will be to improve IT connectivity and efficiency across the merged companies. Thus, integrating the two organizations' systems ties into the business imperative to get a more granular view of all customers and how they rate the services they receive. Meanwhile, organizational capabilities needing an immediate upgrade might be to consolidate finance, data warehouse, and human resources functions. Most leading firms sequence their IT investments. They develop a three- or five-year transformation roadmap for IT initiatives based on their strategic relevance, urgency, and ease of completion. They also build an investment plan based on the estimated cost to accomplish these IT initiatives and the return that investment is expected to yield.
 *5. Reallocate IT spending as business priorities evolve. Periodically, companies need to reassess whether their technology investments remain aligned to business priorities by applying a business lens to IT costs. Sometimes it is necessary to refocus the project portfolio on the most critical capabilities, reallocate IT budgets accordingly and capture the savings. Frequent assessment of all projects against the IT strategy can identify significant amounts of unaligned IT costs early on that can be reallocated to new business priorities. For instance, IT capabilities may need to be revised as business needs change, creating opportunities to serve new customer segments. Other capabilities might begin to rise in priority, as well, such as the need to accommodate high-volume customer surveys, develop a capacity to mine verbatim feedback, and begin channeling the feedback to front-line employees.

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 ===See Also===
 *[[IT Capability Maturity Framework (IT-CMF)]]
 ===References===

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 '''IT Capability''' (information technology capability) refers to an organization’s ability to identify IT to meet business needs, to deploy IT to improve business processes in a cost-effective manner, and to provide long-term maintenance and support for IT-based systems (Karimi et al., 2007). It is the ability to leverage different IT resources for intangible benefits.<ref>[https://www.igi-global.com/dictionary/it-capability/15834 What is IT Capability-IGI-Global]</ref>
-Information Technology (IT) Capability is an organization’s ability, by virtue of its IT assets and know-how, to create [[business value]].
+Information Technology (IT) Capability is an organization’s ability, by virtue of its IT assets and know-how, to create [[Business Value]].
 This capability can be, and is usually, attributed to the IT function within an organization. More appropriately it should be attributed to the organization as a whole because no function within an organization is an island. Each gain from the other and in turn enriches them. This value “bleed” from one function to another cannot be quantified in a meaningful way, however, it exists. It can be positive or negative. When the organization plays as a team i.e. the functions collaborate, positive value passes between functions. In this case, the organization’s capability is greater than the sum of its parts. The functions are better off together. Conversely, when the organization does not play as a team i.e. is dysfunctional, then the value bleed is negative. In this case, the organization’s capability is less than the sum of its parts. It follows then that the functions are better off not being with each other! The net of this phenomenon is that no function within an organization would create the same value within another organization. For example, if an IT organization is moved from one company to another, it will deliver more or less but never the same value as it was created in the original company. This is true of any team. You may have noticed that a player is successful or more successful on one team versus the other.
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 '''Mapping IT Capabilities to Business Capabilities'''<ref>[http://futureofcio.blogspot.com/2013/06/how-to-map-it-capabilities-to-business.html How to Map IT Capabilities to Business Capabilities-Pearl Zhu]</ref><br />
-From a strategy perspective, the [[business capability]] analysis is based on the current definition of functions instead of an organizational structure, as the organizational structure is quite dynamic and frequent changes, which may create a chaotic process model, use the value chain or the supply/demand governance model to map the business capability.
+From a strategy perspective, the [[Business Capability]] analysis is based on the current definition of functions instead of an organizational structure, as the organizational structure is quite dynamic and frequent changes, which may create a chaotic process model, use the value chain or the supply/demand governance model to map the business capability.
 *A pragmatic approach is to look at this from a 'value streams' perspective:
 **1) Identify major business value streams (end-to-end processes that deliver customer value).