Quint Wellington Redwood ©2007Quint Wellington Redwood ©2007
Integrate2010, June 24th 2010
Marius Sluijters,
VP Service Delivery
The end of the Traditional IT Organization or
…. or how to “outorganize” the competition”
Quint Wellington Redwood ©2007
Topics
Quint Wellington Redwood Today’s IT/business environment Organizing IT: History lessons Organizing IT: Today’s organizational trends The future of Business/IT- alignment: SGFtm and DSO Questions & Discussion
Quint Wellington Redwood ©2007
Introducing Quint Wellington Redwood Global independent management consulting firm
specialized in IT related organizational challenges Established in1992, based in 18 countries 200 Consultants Thought leadership and practice leadership in IT:
strategy sourcing service management
Creating business excellence by offering consultancy, education and measurement services
15,000 people trained annually
Quint Wellington Redwood ©2007
Today’s Business/IT environmentUniversal trends/developments
Individualization Globalization Virtualization
And… at an ever increasing pace !
Quint Wellington Redwood ©2007
Today’s IT/business environment
Quint Wellington Redwood ©2007
What is your strategy?
Then amiracleoccurs
IN
OUT
“Good work . . . but I think we need just a little more detail right here”
Quint Wellington Redwood ©2007
Centralize/concentrate
Decentralize/deconcentrate
Make Buy
Organizing ITHistory lessons
Make or buy Centralize or decentralize Concentrate or deconcentrate Professionalize Commercialize
Quint Wellington Redwood ©2007
From the 70’s……Fully Centralized
Holding
DV 1 DV 2 DV n
IT
Hidden organizations Central systems/applications Central decision making Central budgets
The introduction of the
minicomputer !
Quint Wellington Redwood ©2007
…. into the future …Federation
Collaborative IT organizations Shared systems/applications Group decision making Dynamic budgets
IT
IT IT IT
Holding
B 1 B 2 B n
The Introduction of…..?
Quint Wellington Redwood ©2007
Service
Management
Shared
Services
(Out)-
sourcing
Organizing ITToday’s organizational trends
Quint Wellington Redwood ©2007
Today’s state of art: Service ManagementThe symbiosis of Business & IT
The business is IT and
IT is the business
Quint Wellington Redwood ©2007
Today’s state of art: Service ManagementPutting the business back in the middle
availability
performance level
cost
IT Business
required business services
Delivered atagreed upon:
business alignment
business alignment
Quint Wellington Redwood ©2007
Today’s state of art: Shared servicesProfessionalize, Share & Commercialize
Delivery and support costs are reduced in a shared services environment through:
Fewer, more productive staff; Greater infrastructure and software standardization
allowing more efficient purchasing; Lower software licensing costs; Reduced management overhead;
Quality is improved through: Better service management processes (e.g. incident,
change, configuration, service level management); Faster response to change requests and incidents from
single, centralised service support team.
Quint Wellington Redwood ©2007
Today’s state of art:Shared Services, current
Commercialize
Pro
fess
ion
aliz
e
Quint Wellington Redwood ©2007
Today’s state of art:Shared services, direction
Commercialize
Pro
fess
ion
aliz
e
Quint Wellington Redwood ©2007
Today’s state of art: OutsourcingThe solution ?
• 53% Infrastructure• 17% IT helpdesk• 15% Application management• 15% Application development
Quint Wellington Redwood ©2007
44 % of the IT outsourcing contracts are being renegotiated within a year;
90% within 3 years.
Buy into market
Profit outsourcer
Today’s state of art: OutsourcingOr the problem ?
Quint Wellington Redwood ©2007
The future of IT business alignmentThe Sourcing Governance Framework
BundlingSupply
BundlingSupply
• Manage suppliers• Ensure delivery of contracted (Quality
of) services at contracted costs
• Manage suppliers• Ensure delivery of contracted (Quality
of) services at contracted costs
BundlingdemandBundlingdemand
• Manage definition and prioritization ofbusiness requirements and demands
• Manage definition and prioritization ofbusiness requirements and demands
Support Business Processes with IT
Secure benefits
Quint Wellington Redwood ©2007
The future of IT/Business alignmentBasic SGFtm operation
CustomerCustomer
SGFSGFSupplier(s)Supplier(s)
Market
best
practices
Market
best
practices
interface interface
Service delivery
contracts
benchmark
A situation in which:• The customer organization has captured its IT demand
• In contracts with selected IT suppliers
• Who deliver IT services to the customer organization.
Quint Wellington Redwood ©2007
Elements ofSuccess
The 5 key elements of success are : 1. Right Services -The customer organization receives the IT services
they need, functionally, technologically and financially
2. Right Suppliers - Services are obtained from the most capable suppliers,
3. Right Price - Service are obtained against best possible prices and conditions (in the market)
4. Right Contracts - Contracts fit services and situations in terms of contract duration, flexibility, KPI and management effort
5. Right Relationships - Stakeholder perception of services live up to (realistic) expectations
CustomerCustomerSGFSGF Supplier(s)Supplier(s)
Market
best
practices
Market
best
practices
interface interface
Service delivery
contracts
benchmark
Quint Wellington Redwood ©2007
Supplier
B (via IT)
Supplier
B (via IT)
External Direct supplier
C
External Direct supplier
C
BoardBoard
SupportSupport
Supplier
A (via IT)
Supplier
A (via IT)Business ABusiness A
Business BBusiness B
Business CBusiness C
IT
Department
IT
DepartmentSupply
Supply
Supply
Demand
The Future of IT/Business alignmentInnovating your IT organization
Quint Wellington Redwood ©2007
Supplier
B
Supplier
B
External Direct Supplier
C
External Direct Supplier
C
BoardBoard
SupportSupport
Supplier
A
Supplier
ABusiness ABusiness A
Business BBusiness B
Business CBusiness C
IT
Department
IT
Department
Supply
Supply
Supply
Demand
The Future of IT/Business alignmentThe Demand Supply Organization
Quint Wellington Redwood ©2007
HR and Financial Management
Architecture and Strategy
IS Innovation Management
IS integration and control
Demand Management (service portfolio)
Supply Management (Contract portfolio)
Architecture
Financial Mgt
Procurement
Contract Mgt
Auditing
Cost ControlService Level Mgt
Sourcing Strategy
Relation Mgt
HR
Long term IT plan
Serv.Portfolio Mgt
Service Delivery mgt
Requirements Mgt
Information Policy
Business and IS Innovation
Business and IS Support
IT Strategy
Application innovation
IT Infra innovation
Application Mgt.
IT infra Mgt
Service Design
Service Build & testProject Mgt
ASL
ITIL
Client Strategy
Compliance
Information Mgt
Information policy
Functional Mgt
Governance/DSO IS SupplyBusiness Demand
The Future of IT/Business alignmentThe DSO based on SGF
Quint Wellington Redwood ©2007
Implementing DSO: New Capabilities needed
Profiles are different:
New type of activities:
Requirements management
Market analysis
Managing, not doing
Commercial and legal knowledge
More business-like relationships (with former
colleagues)
Governance
Quint Wellington Redwood ©2007
4 Clusters of Capabilities
Business Knowledge Knowledge of business strategy
and business context Knowledge and experience in
business processes
Organization and Management
Financial management, Management of change, Project- and program
management Knowledge of supplier markets Auditing
Management of the Business interface and IT
Information and demand management
Business analysis and applications
IT standards en architecture Knowledge of IT processes and
IT security
Sourcing Relationship management Procurement and negotiation
skills, Knowledge of and experience in
contract management, Result based management Knowledge of supplier markets Auditing
Quint Wellington Redwood ©2007
The future of Business/IT alignmentBenefits of SGF & DSO Financial
Economies of scale in IT procurement (5 to10%) Organizational Efficiency (possible FTE reduction) Bundled competencies and specialization result in better
negotiation results Control
Transparency of supplier performance and cost (can be a prerequisite for outsourcing to external suppliers)
Tight coupling of policy and execution through performance management
Auditable processes (compliance requirements) Quality of service
Execution power in the realization of standardization policies Critical test and clear specification of business demand Bundled competencies and specialization result in adequate and
focused supplier management
Quint Wellington Redwood ©2007
Discussion…..
…. Questions
