Adaptive CIOs must organize to support their firm’s value, sourcing, and structure

CIOs should lay down the foundation for success to build an adaptive operating model within their IT organizations.
Written by Forrester Research, Contributor

CIOs must adopt an adaptive operating model -- being agile will not be enough to succeed in the future. The IT organization's capabilities, structures, governance, and leadership must support the firm's capacity to reconfigure underlying business concepts, including dramatically rethinking its core mission, its primary value proposition, its core competencies, the markets or industries in which it competes, and its end customers.

The journey to adaptive is long and arduous, but CIOs can lay down today the foundation for success tomorrow. Forrester outlines the four key enterprise characteristics that frame what CIOs should do within their IT organizations to build an adaptive IT operating model. They should:

  • Define IT's operating principles from the outside in: CIOs must think of who the firm serves — customers, partners, and employees -- and how the firm delivers value to them. Using this outside-in perspective, IT must become customer-led and improve the experience of the customers, partners, and employees.
  • Adopt adaptive, employee-empowering governance models: Command-and-control governance creates a major barrier to speed and agility. To remove or overcome these barriers, firms are pushing decisions into the hands of empowered operating units and employees so that decisions are made closer to where the work gets done. CIOs must implement structures and processes that match or lead this transformation for their firm.
  • Source non-core IT business capabilities from ecosystem partners: To support both speed and innovative new capabilities, CIOs should both support their firm's move to ecosystem partners as well as develop their own ecosystem partnerships. This ecosystem sourcing approach also gives the IT organization more bandwidth to focus on core capabilities.
  • Match IT's operating model structure to address their firm's distributed structure: CIOs must establish one or more operating models to parallel the distribution of their firm's operating model. IT best supports firms with business units in multiple locations with local IT structures. The operating needs of these local business units will define which services need to be local and which need to be centralized.

By Gordon Barnett, Principal Analyst

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This post originally appeared here.

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