Buzzword: IT Capability
What is IT Capability? If you want to understand why some IT organizations create more value than others, it is imperative to understand this buzzword.
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 gains 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 creating 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 is comprised of four sub components or elements. IT’s overall capability is not the sum total but the synthesis of capabilities of its underlying elements.
IT Capability comprises of the following components:
- IT Strategy
- IT Processes and Metrics
- IT Organization
- Knowledge/ “know-how”
An organization creates value by utilizing a unique combination and configuration of these components
This paper describes a holistic framework to connect strategy, processes, people, and technology to create business results. This "organizational alignment" provides a mechanism for complementary capabilities that combine to create unprecedented busi... SWOT analysis which has been used for strategic assessment of organizations has limitations - lack of quantification and a before and after view of the situation. Consequently, the author proposes a framework to rectify these limitations and create a... This presentation proposes a framework and methodology to drive value using IT capabilities. It discusses an IT strategic capabilities maturity model, and a step by step approach to evolving IT capability to maturity levels that deliver superior busi... This comprehensive guide and toolkit takes a holistic view of organizational performance and proposes a framework to create capabilities to drive it. Often, we miss the forest for the trees by focusing on only one aspect or capability of performance ... This short and sweet presentation proposes a capability driven IT transformation methodology - understand what your business does, what is needs, why is needs it, and then understand the impact of each action before implementing it. The result? Succe... This excellent presentation discusses a capability driven approach to business IT alignment. This approach - and related artifacts - were used at a mid-sized company.
This report presents the findings of a panel constituted to assess the current state of information technology capability, measure the results of an IT strategy implementation, and make recommendations on the future direction of IT - governance, p... Silos drive an unfocused, inefficient, and ineffective IT investments. The authors make the case for an integrated, strategy driven - capability driven - information technology strategy that aligns business needs - the demand side - with IT capabilit... This report describes the results of an audit of the key drivers of IT capability - IT Strategy, IT Governance, Enterprise Architecture etc. - to analyze their ability to deliver business results and make an assessment of the actual results delivered... Use this template to create an IT strategic plan for your organization - aligning business with IT strategy. IT Strategy Template can be downloaded for free by CIO Index members. This presentation discusses four models or frameworks for strategy development that answer a simple question: How do companies create and sustain competitive advantage? Excellent discussion on the basis for strategy development and provides insights... This paper introduces a framework to assess and develop internal capability for technology outsourcing - what organizational and managerial capabilities are need to undertake effective outsourcing of technology including intellectual capital transfe...
Posted on 05/19/2009 by