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When Operational Technology and Information Technology Collide

What happens when business units acquire or develop new technologies that support more efficient business practices, without the involvement of the IT department?   What may start as a good idea, and not initially seen in the domain of 'traditional' IT, may very quickly result in islands of technology with all of the characteristics of taditional IT - but owned and supported by the operational business unit.


For example, I recently helped a client in the utility industry that had developed innovative technologies that would drive tremendous value to their consumers, the industry and their own top line.  However, these technologies included infrastructure, applications and networks that overlapped those systems that were in managed by the IT department.   This situation had resulted in organizational silos; political tensions; and waste due to duplicated processes with a negative impact on the company bottom line.

CHALLENGES
  • Little integration between corporate IT and business technology strategies.
  • Multiple accountabilities and responsibilities around technology
  • Corporate IT not seen as agile enough to adapt to maturing systems that support new business technologies.
  • IT change request process perceived by business as too slow and bureaucratic
  • Potential loss of intellectual capital and tribal knowledge due to losses in personnel through retirements and natural attrition.
  • Lack of consistent project management discipline across technology projects.
  • Security responsibilities split between IT and business units. At the same time, higher risk exists to system via more access points to new wireless networks.


KEY OPERATING PRINCIPLES


We quickly determined that we needed to establish a framework which the C-suite could agree on, before any solution could be found.  These key operating principles were:

  • Corporate CIO is responsibile for establishing a technology governance model that should standardize technology policies, practices and procedures and communicate openly and often with the business.
  • Corporate CIO needs to have overall oversight accountability for all technologies.
  • The IT organization needs to be strategically and tactically aligned with business requirements to be flexible and responsive to changing needs.
  • Business unit leadership needs to be accountable for support of operations-specific applications and should be closely aligned to the corporate CIO
  • Technology infrastructure needs to be centrally managed throughout the company to help ensure standardization.
  • Technology security (cyber and access) needs to be centrally managed across company.
BUSINESS IMPACT TO WAYS OF WORKING


Without going into the details of the solution for this specific client, it sufices to note that the above design framework had a real impact on the "ways of working" across the organization.  Any organizational tranformation initiative would include some or all of the areas below:
  • On Technology Governance. Establishment of clear levels of accountability and enforcement of technology standards and policies, as well as strong relationship between corporate and business technology groups.
  • On Project Governance. Establishment of strong working relationship with project managers across the company, in order to standardize project methodologies and tools, as well as develop the standards for project management across the company. If possible, leverage and build on existing project management and process standards.
  • On Portfolio Management. Development of processes to support project and application portfolio management; assessment and implement tools to support these processes; establishment of procedures to make this work across the company.
  • On IT Change Request Management. Migration of the current change request processes under a single group with all associated communications and clear, simple working procedures to ensure complaince while ensuring speed of change.
RISKS TO NOT CHANGING.
If this sounds like a lot of work, here are the risks of not making any changes.
  • ‘Islands of technology’ will make integration of newer technologies with enterprise systems difficult.
  • Multiple technology strategies – not aligned to business strategy - continued waste due to duplication of processes.
  • No single accountablity around technology standards and policies - means no technology standards and policies.
  • Limited visibility across company of technology projects may result in poor leverage of learnings and benefits and higher implementation costs.
  • Multiple views and approaches to applying cyber security policies across company hieghtens risk to systems.
  • Multiple views of technology across company will limit decision making at all levels of organization.

2 comments:

Marc said...

I think IT should be involved in all technological decisions. More often than not, IT Department are the only personnel who have a deep understanding of the business's systems as a whole. This big picture understanding is necessary to make productive technological decisions.

Manny said...

Marc - you are correct. But fixing a situation where a business unit has developed their island of technology with a psuedo IT organization, is a complex situation to resolve. This happens when there is no cohesive IT governance in place in the organization. I hope that you found my article helpful.