Chapter 17
Developing IT
Capabilities
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-1
IT Capability Management
Terminology
Capability – ability to marshal
resources to affect a predetermined
outcome.
Competency – the degree of
proficiency in marshalling resources
to affect a predetermined outcome.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-2
IT Capability Management
Terminology Continued
Processes – well-defined activities
within capabilities.
Procedures and Methods – How-to
or step-by-step instructions for
implementing a process.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-3
Three Enduring Challenges of
IT
(Feeny and Wilcox, 1998)
Uniting Business and IT Vision
Delivering IT Services
Designing and IT Architecture
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-4
IT Capabilities needed to
meet the Enduring Challenges
Leadership
Informal buying
Business system
thinking
Contract
facilitation
Relationship
thinking
Contract
monitoring
Architecture
planning
Vendor
development
© 2012 Pearson Prentice Hall
17-5
Converting IT Capabilities
into Organizational Value
Strategies are needed to build IT
Capabilities.
IT Capabilities must be identified,
developed, and managed.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-6
Framework for Developing
Key IT Capabilities
Figure 17.1
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-7
Step 1: Create a Capability
Management Office
Create a set of activities, structures
policies, and governance principles.
The Capability Management Office
should be the focal point for
capability development and
management.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-8
CMO Management Activities
Define and assign responsibility for
all capabilities.
Develop strategies for the
development of these capabilities.
Ensure that adequate resources and
funding are provided to develop
them.
Secure software support for these
activities.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-9
CMO Management Activities
Continued
Adopt a continuous capability
improvement approach.
Develop organizational training
plans.
Report the status of organizational
capability performance.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-10
Step 2: Identify Essential
Capabilities Aligned with Business
Goals
Capabilities should not be aligned to
current business practices only.
Identifying capabilities is an
introspective analysis of key
activities that IT must execute
effectively.
Capabilities should be described in
business terms.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-11
Step 3: Subdivide IT
Capabilities into Key Processes
The result of this step should be sets
of well-defined activities that can be
measured and managed.
Consider an outside-in approach to
capabilities management such as Six
Sigma, ISO, CMM, or CobiT
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-12
IT Capability Wheel
Figure 17.2
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-13
Competencies and
Processes
Table 17.1
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-14
Step 4: Assess the Maturity
Level of IT Capabilities
Level 1 (initial): Software
development follows few rules. The
project may go from one crisis to the
next.
Level 2 (repeatable): Software
development processes are
repeatable. Some basic project
management used to track schedule
and cost.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-15
Step 4: Assess the Maturity Level
of IT Capabilities Continued
Level 3 (defined): Software
development across the organization
uses the same rules and events for
project management. Same
processes used even under schedule
pressure.
Level 4 (managed): Software
development controlled using
precise measures. Adjustments to
projects are made without a loss in
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-16
Step 4: Assess the Maturity Level
of IT Capabilities Continued
Level 5 (optimizing): Quantitative
feedback from previous projects is
used to improve project
management.
Maturity levels must be effective in
driving continuous improvement.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-17
IT Capability Progress and
Performance Chart
Table 17.2
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-18
Step 5: Link IT Skills to IT
Capabilities
Skills such as (1) business, (2)
technical and (3) interpersonal
Willcocks, 1998) are mapped to IT
capabilities.
(Feeny and
Mapping is used by companies to
identify the levels for each role that
is needed.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-19
Conclusion
Improvement of IT capabilities and
processes will result in enhanced IT
investment benefits.
When IT departments identify and
develop those capabilities and
processes that are vital to the
business to advance maturity levels,
then the rewards may be dramatic.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-20
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-21
Chapter 17
Developing IT
Capabilities
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-1
IT Capability Management
Terminology
Capability – ability to marshal
resources to affect a predetermined
outcome.
Competency – the degree of
proficiency in marshalling resources
to affect a predetermined outcome.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-2
IT Capability Management
Terminology Continued
Processes – well-defined activities
within capabilities.
Procedures and Methods – How-to
or step-by-step instructions for
implementing a process.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-3
Three Enduring Challenges of
IT
(Feeny and Wilcox, 1998)
Uniting Business and IT Vision
Delivering IT Services
Designing and IT Architecture
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-4
IT Capabilities needed to
meet the Enduring Challenges
Leadership
Informal buying
Business system
thinking
Contract
facilitation
Relationship
thinking
Contract
monitoring
Architecture
planning
Vendor
development
© 2012 Pearson Prentice Hall
17-5
Converting IT Capabilities
into Organizational Value
Strategies are needed to build IT
Capabilities.
IT Capabilities must be identified,
developed, and managed.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-6
Framework for Developing
Key IT Capabilities
Figure 17.1
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-7
Step 1: Create a Capability
Management Office
Create a set of activities, structures
policies, and governance principles.
The Capability Management Office
should be the focal point for
capability development and
management.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-8
CMO Management Activities
Define and assign responsibility for
all capabilities.
Develop strategies for the
development of these capabilities.
Ensure that adequate resources and
funding are provided to develop
them.
Secure software support for these
activities.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-9
CMO Management Activities
Continued
Adopt a continuous capability
improvement approach.
Develop organizational training
plans.
Report the status of organizational
capability performance.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-10
Step 2: Identify Essential
Capabilities Aligned with Business
Goals
Capabilities should not be aligned to
current business practices only.
Identifying capabilities is an
introspective analysis of key
activities that IT must execute
effectively.
Capabilities should be described in
business terms.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-11
Step 3: Subdivide IT
Capabilities into Key Processes
The result of this step should be sets
of well-defined activities that can be
measured and managed.
Consider an outside-in approach to
capabilities management such as Six
Sigma, ISO, CMM, or CobiT
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-12
IT Capability Wheel
Figure 17.2
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-13
Competencies and
Processes
Table 17.1
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-14
Step 4: Assess the Maturity
Level of IT Capabilities
Level 1 (initial): Software
development follows few rules. The
project may go from one crisis to the
next.
Level 2 (repeatable): Software
development processes are
repeatable. Some basic project
management used to track schedule
and cost.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-15
Step 4: Assess the Maturity Level
of IT Capabilities Continued
Level 3 (defined): Software
development across the organization
uses the same rules and events for
project management. Same
processes used even under schedule
pressure.
Level 4 (managed): Software
development controlled using
precise measures. Adjustments to
projects are made without a loss in
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-16
Step 4: Assess the Maturity Level
of IT Capabilities Continued
Level 5 (optimizing): Quantitative
feedback from previous projects is
used to improve project
management.
Maturity levels must be effective in
driving continuous improvement.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-17
IT Capability Progress and
Performance Chart
Table 17.2
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-18
Step 5: Link IT Skills to IT
Capabilities
Skills such as (1) business, (2)
technical and (3) interpersonal
Willcocks, 1998) are mapped to IT
capabilities.
(Feeny and
Mapping is used by companies to
identify the levels for each role that
is needed.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-19
Conclusion
Improvement of IT capabilities and
processes will result in enhanced IT
investment benefits.
When IT departments identify and
develop those capabilities and
processes that are vital to the
business to advance maturity levels,
then the rewards may be dramatic.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-20
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
17-21
Chapter 18
Building Better IT
Leaders from the Bottom
Up
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
18-1
Leadership Is Everyone’s
Job
“Effective leadership has enormous
benefits. To realize these benefits,
leadership qualities should be explicitly
recognized, reinforced, and rewarded
at all levels of the IT organization.”
(McKeen
and Smith, 2003)
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
18-2
Why Is the IT Organization a
Hierarchy?
Little Pressure to
Change
Organization that
IT is a Part of is
Hierarchical
Senior Executives
have Difficulty
Relinquishing
Control
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
18-3
Transformational IT
Leadership Requires …
Top-Line Focus – New technologies
and applications drive the enterprise
to differentiation and transformation
strategies to deliver top line growth.
Strong IT leadership teams are
needed to take on roles to influence
business leaders.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
18-4
Transformational IT Leadership
Requires … Continued
Credibility – IT must consistently
deliver on results. IT must
demonstrate the skills and
competencies to deliver what it says
it will do.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
18-5
Transformational IT Leadership
Requires … Continued
Impact – IT staff must have stronger
organizational perspectives,
decision-making, entrepreneurialism,
and risk-assessment capabilities at
lower levels because even small IT
decisions can have a major impact
on the organization.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
18-6
Transformational IT Leadership
Requires … Continued
Flexibility – IT staff and
organizations are expected to be
responsive to changing business
needs. IT staffs must be proactive,
have strong technical skills and the
ability to quickly act in the best
interests of the organization when
the need arises.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
18-7
Transformational IT Leadership
Requires … Continued
Complexity – IT is expected to offer
change and innovation leadership,
low-cost services and lead the way
through ever changing new
technology opportunities.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
18-8
Transformational IT Leadership
Requires … Continued
New Technology – Staffs are
increasingly mobile and their
interactions with their managers are
mediated by technology. New
technologies change how
information is acquired and
disseminated, how communication
takes place, how people are
influenced and decisions made.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
18-9
What Makes a Good IT
Leader?
●
Personal Mastery
●
●
●
Leadership Skill Mastery
●
●
●
Self-knowledge
Adapt to different situations
Awareness of individuals
approaches to work
Risk Assessment & Problem Solving
Collaboration & Communication
Motivation & Team Building
Coaching & Mentoring
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
18-10
What Makes a Good IT
Leader? Continued
Business
Understan
ding
Organizatio
nal
Understan
ding
• Strategic Vision
• Solid Understanding of
Current Operations
• Solid Understanding of
Fute Direction
• Ability to Execute Enterprise
Transformation
• Ability to Integrate
Technology with People &
Processes
• Political Savvy & Effective
Use of Governance
Structures
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
18-11
What Makes a Good IT
Leader? Continued
Creating a
Supportiv
e Working
Environme
nt
Effective
Use of
Resources
• Create an Environment
of Trust
• Create an Environment
of Accountability
• Create an Environment
of Empowerment
• Ability to Concentrate on
Biggest Payoff Areas
• Recognize where
Resources Should Not be
Used
• Enhance People’s
Abilities
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
18-12
What Makes a Good IT
Leader? Continued
Flexibility
of
Approach
Ability to
Gain
Business
Attention
• Know where and how to
exercise leadership
• Adjust style to suit the
situation
• Ability to articulate
contributions in business
terms
• Ability to interact with
business leaders
• Ability to educate and guide
business leaders in the use
of technology
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
18-13
Flexible Leadership
Styles
(Roberts and Mingay, 2004)
Commanding –
“Do What I Tell
You”
Pacesetting –
“Do as I Do Now”
Visionary –
“Come with Me”
© 2012 Pearson Prentice Hall
Affiliate – “People
come First”
Coaching – “Try
This”
Democratic –
“What do You
Think”
18-14
Effective Leadership
Development Requires…
Figure 18.1
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
18-15
Elements of a Supportive
Environment Include
Well articulated and instantiated
values
A climate of trust
Empowerment
Clear and frequent communication
Accountability
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
18-16
Process & Practices
Activities such as planning,
budgeting, conflict resolution,
service delivery, and financial
reviews should be well defined and
documented
Establish job rotations and
mentoring programs
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
18-17
Formal Training
Can be internally developed or
externally purchased
Requires a time commitment to
ensure staff can take advantage of
training
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
18-18
IT Value Proposition Leadership
Development Rubric
What is the value?
Who will deliver the value?
When will the value be realized?
How will the value be delivered?
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
18-19
Conclusion
Senior IT leaders must make IT
leadership development a priority if
IT is going to contribute to business
strategy.
Management must take a
comprehensive approach to
integrate culture, behavior,
processes, and training to deliver
business value.
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
18-20
© 2012 Pearson Education, Inc. Publishing as Prentice Hall
18-21
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