The collaboration between IT and the business is crucial to ensuring the overall success of the company. It sounds obvious, but this collaboration often does not fully work, or the relationship is unbalanced. This is particularly evident in how critical IT platforms and applications are developed and maintained.
Close collaboration between the IT department and the business units creates a good foundation for effective strategy execution, building the innovation muscle and establishing temporary competitive advantages (sustainable competitive advantages only exist in rare cases (e.g. patents).
ITOM and BOM
A structured approach to this collaboration is to understand and integrate the IT Operating Model (ITOM) and the Business Operating Model (BOM) in a strong governance model, where roles and responsibilities for all critical IT platforms and applications are clearly described for both sides.
Typically, four roles must be identified, which must align roles and responsibilities in a collaboration model:
1 Business System Owner (Business – management level)
2 Business System Manager (Business – operational level)
3 IT System Owner (IT – management level)
4 IT System Manager (IT – operational level)
A figure illustrating the collaboration between IT and the Business at the meta-level can be drawn in several ways (search Gartner and ITOM). The overall mandate for IT is “Operation and Stability”, and for the Business, it is “Agility and Speed”. This is where conflicts can arise and where the Business often wins, as short-term considerations are allowed to outweigh long-term development and governance considerations. However, this will enable problems to accumulate in the IT architecture in the form of built-in inappropriate dependencies, which can lead to operational disruptions, poor data quality, sluggish systems and the possibility of security vulnerabilities.
IT Operating Model:
This model describes how the IT department operates internally and externally. It includes the structure, processes and resources that control IT operations. The model focuses on IT strategy, governance, service delivery and technological innovations. It creates a framework for how the IT department supports business goals and drives technological growth.
Business Operating Model:
The Business Operating Model defines the overall strategy and structure of the company, the selection of primary back-end applications (ERP, CRM, SCM, FSM, etc.), customer-facing front-end applications, and productivity and collaboration applications for the organization. It also covers business processes, customer segments, value chains, and products. It describes how the company creates and delivers value to its stakeholders and how the business units work together to achieve these goals.
Coherence and Interaction
To achieve successful collaboration between IT and the business, it is necessary to integrate the IT Operating Model and the Business Operating Model.
Here are some areas where this interaction is crucial:
Strategic Coordination:
Ensure that the IT strategy is consistent with the company’s overall goals. IT projects and initiatives should support the business strategy and help meet key objectives.
Communication and Governance:
Establish clear communication channels and governance structures that connect IT and the business units. This ensures that decision-making, project prioritization, and resource allocation are coherent and reflect IT and business goals.
Process Integration:
Ensures that IT processes and business processes are tightly integrated. This includes efficient data and information exchange, consistent workflow, and minimal department overlap.
Culture and Collaboration:
Build a culture of collaboration and shared responsibility between IT and business units. This promotes understanding each other’s roles, which can increase productivity and efficiency.
Innovation and Growth:
IT and the business should jointly identify and pursue opportunities for innovation and growth. Technological innovation can drive new business models, products, and services, creating competitive advantages.
Governance Agreement between IT and Business
A classic method for creating a good governance structure and collaboration platform for IT and the Business is establishing a governance agreement constructed over a common framework. This framework has, on the one hand, some customers of IT services (the Business) and, on the other hand, some suppliers of IT services (IT). In both cases, we are talking about both internal and external actors.
Then, some framework conditions must always be considered: general (legislation), good practice and industry-specific. This is the outer framework. At the centre of the framework, we find two main tasks: identification of development opportunities and operation and support. To be able to deliver IT services, suppliers and contracts must be under control.
Suppliers and contracts must be under control to provide firm IT services. To meet the wishes of the business, there must be control over the dialogue about needs and improvement requests (mapping of changes to the system landscape) and establishing some well-functioning collaboration forums. Some cross-functional services supplement all of this.
There are, of course, several elements in a framework for a management agreement, but these are the main principles.
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© Lars Kirstein | lk@izara.com
