3.4

Strategy and Operating Model

IT Strategy is a consistent set of plans and guidelines on how IT supports business strategy and objectives. As IT includes many relatively long-term elements such as architecture and enterprise applications, the IT Strategy typically looks ahead three to five years in order to give sufficient perspective on changes. The IT Strategy is complemented by an Annual Execution Plan that gives a short-term perspective on strategy and business objectives.

The IT Operating Model defines how IT creates value for the business all the way from decision-making to user experience. It illustrates how the decision-making in Enterprise Development drives solution and service development, and results in efficient services with a superb user experience. The key is to design business-focused “value streams” that operate according to the best practices and controls set by Strategy and Governance. Centralized service operations promotes efficiency and cost savings.

The dynamics of the IT Operating Model are

  1. Unified practices, skillsets and procedures. Creating operating models that facilitate and promote the use of best practices will reduce risks and increase transparency. It will also lead to synergies across business units or domains while enabling measurability. (Control)
  2. Business-focused solutions. Solutions need to be developed in entities that correspond to business structure. By selecting the correct partners and solutions, IT becomes agile and fast in its ability to meet expectations and change requests from the business. (Flexibility)
  3. Centralized service operations. IT-related assets and services should be purchased in large volumes to serve shared needs between business domains. However, striving for economies of scale must not override meeting business domain needs. (Efficiency)

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Figure 3.4.1 The IT Operating Model increases digitalization and reduces operating costs.

 

The IT Operating Model splits value creation into four management areas. Governance and Sourcing are led by the CIO Office. Demand brings the business orientation and is managed by Business Relationship Managers. Development is carried out under the control of the Development Management Office (DMO). The Service Owners are responsible for the user experience by managing the overall service delivery. In shared services and consolidated operations, the emphasis is on cost-efficiency, while in solution development, the focus is on maintaining a fit to the business purpose.

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