“Wait, wait, wait…before we talk about all these projects, shouldn’t we talk about our operating model? Are we really as diversified as we think?”
I couldn’t believe my ears! I looked across the table at the EVP who had just spoken. He was the newest member of our IT steering team and he was talking about business operating models. I nearly jumped out of my seat! “ENTERPRISE ARCHITECTURE AS STRATEGY!!!! You’ve read the book!??!” To say I was stunned was an understatement. This EVP had barely shown an interest in anything to do with technology or IT. The only reason he was even added to the steering team was because the partners wanted him to take a more active role in other areas of the business, obviously grooming him for bigger and better things. He, almost sheepishly, replied, “I saw it in the airport bookstore coming back from Phoenix yesterday and bought a copy. I’m not done reading it yet, but the first few chapters sure made a lot of sense.”
I know I was stammering all over myself as I explained we had used that book as the foundation for building our IT Strategic Plan two years earlier. We HAD discussed and defined our operating model, we had designed core diagram, we were progressing across the stages of Enterprise Architecture Maturity. I excitedly whipped out the core diagram and began to explain the projects we were discussing in context of the diagram. You could literally see the lights going on for him.
The book we were discussing, “Enterprise Architecture as Strategy”, by Jeanne Ross, Peter Weill and David Robinson, has become my “bible” for guiding IT. While that discussion took place at a previous stop in my career, we used the same framework for developing the strategic plan here at Goodwill. In fact, it is the next step in our story. Last month, we discussed having a vision. Just like building a building, to turn that vision into reality you need an architect.
Now, I will confess, I took a somewhat different approach than described in the book. The authors recommend (and I would tend to agree given different circumstances) the leaders of the business spend time defining the operating model and discussing the core diagram. Honestly, I didn’t think our leadership was ready for that type of exercise, nor did I think we had time, I was brought in to produce results and I didn’t think my boss would wait for six months while we worked through the process. Not to mention, I really take offense to the hidden implications that IT is not “the business” and that we don’t understand, “the business”. Would it be more effective to go through the process as a leadership team, absolutely. But, like in the example above, it took two years before “the business” was ready to tackle something like is described in the book.
The approach I took was to have my team read the book, then go through the process of defining the operating model and designing the core diagram. We didn’t do it in a complete vacuum. We had countless conversations with the division heads and leaders about their specific business units. What came of this process was something just short of amazing.
Without covering too much of the material in the book (you HAVE read it, haven’t you?), there are four basic operating models of a business: Diversification; Coordination; Unification; and Replication. These are defined on a pair of axis: low to high process standardization and low to high process integration. Think about our Goodwill organization. We had four main business units. Everybody knows and loves Goodwill Retail, but we also had Commercial Services (B2B Contract Manufacturing, Warehousing and Distribution), Education (we owned an operated a charter high school), and Community Initiatives (think mission: disability services, senior services, job placement).
Wow! Those are pretty disparate business units to say the least! Very little process standardization, very little process integration. Must be the diversification operating model. But wait, digging under the surface just a bit, we found an interesting set of services. For lack of a better term, we called them “Wrap Around Services” on our Core Diagram. These services touched all of the business units, they were our link. More on that later!
Even with that revelation, we were still a business, who at its core, was diversified. Yet, the IT department was a centralized department, made up of generalists. Our systems approach was an ERP model versus a best of breed. Those did not seem to reconcile with what we now knew was our business model. As we continued to develop our strategic plan we began to examine all of our assumptions. Should we decentralize IT? Should we have specialists assigned to each business unit? Should we consider a best of breed approach?
Given the size of our department and the size of our company, we still believed there were efficiencies to be gained by keeping the department centralized. What we developed instead was a model that aligned the structure of the department to that of the business. The support model would follow the traditional Tiered Support Model, with Tier I providing that first level of support. Tier II functions would be still be filled by generalists. However, when a ticket was escalated to Tier III, those roles would be specific to a business Division (still staffed centrally, but with domain specific expertise).
This organizational architecture was then continued in our systems architecture. Although we were an ERP shop, we knew our plan must allow for deviation from the ERP model, if not complete abandonment, if the business case dictated it.
As our strategic plan began to take shape it became clearer that the business operating model and its core diagram and impacts throughout our department, impacting everything from people, and processes, to system.
It is very interesting to note that today, five years later, those wrap around services are at the very core of what we do. We have taken an holistic approach to helping our clients improve their economic self sufficiency. We may have a mother in our Nurse-Family Partnership program who needs her high school diploma. We have ten high schools in our geographic territory. We may have a student in our high schools that need a job. We have over 3,000 jobs in our various business units. When you extend these needs beyond the individual to the family it is easy to see how we have evolved from a diversification business model to a coordination business model. This transformation then feeds a transformation in our organization and eventually our underlying systems.
Next month: To Amplify Your Value Stop Doing “CF” Projects!
The series, “Amplify Your Value” explores our five year plan to move from an ad hoc reactionary IT department to a Value-add revenue generating partner. #AmplifyYourValue
We could not have made this journey without the support of several partners, including, but not limited to: Bluelock, Level 3 (TWTelecom), Lifeline Data Centers, Netfor, and CDW. (mentions of partner companies should be considered my personal endorsement based on our experience and on our projects and should NOT be considered an endorsement by my company or its affiliates).
Jeffrey Ton is the SVP of Corporate Connectivity and Chief Information Officer for Goodwill Industries of Central Indiana, providing vision and leadership in the continued development and implementation of the enterprise-wide information technology and marketing portfolios, including applications, information & data management, infrastructure, security and telecommunications.
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