An Organizational Culture for Strategic Decisions
Governing the IT organization helps emphasize the role of making strategic decisions that support the business
Services-based organizations are constantly being challenged to stay abreast of industry practices and one step ahead of the business. As a result, the art of strategic decision making has become an even more vital attribute of a good manager than ever before. But what makes a decision strategic? Consider the following characteristics:
- The decision’s organizational scope may typically be broader than a singular operational unit and can address challenges impacting IT or the IT business customer interface.
- The time horizon for the impact of the decision can go well beyond the current budget cycle.
- The decision itself may influence or provide direction for other operational or tactical decisions.
- The decision can support or underpin broad enterprise strategies.
These key decisions can be guided by a documented approach to IT governance, which should accomplish the following three critical management objectives:
- Assure that the correct strategic decisions are made by the organization.
- Provide feedback that the strategic decisions are being carried through.
- Make sure that the organization is not placed at undue risk as a result of its decisions.
7 strategic decision areas
To help achieve these objectives, managers should consider seven critical decision areas that are essential for IT governance.
IT guiding principles are statements that offer direction for where the organization is headed and are underpinned by its culture. They also form the basis for actions or decisions, regardless of changes in strategy, goals, management, and so on.
Decisions made to substantiate the enterprise architecture can provide a blueprint for organizational services solutions. Not only are technical considerations and directions laid out in the enterprise architecture, but so are the key relationships within services, between services, and for IT-to-business services. These decisions may evolve over time as the business adjusts to changing internal needs and external requirements.
As services evolve, they can span both applications and infrastructure. In addition, information technology service management (ITSM) processes offer coordination across all IT units. There is an emerging need to adapt organizational structures that can simplify collaboration across technology silos to support services and help ensure process coordination.
IT operating models
An IT operating model offers a logical representation of the IT value chain process architecture. This model provides executive-level management with a tool to launch and communicate why key organizational processes exist, establish overall measurement, and develop a framework to troubleshoot operational challenges or set improvement priorities.
Service portfolio management model
The service portfolio management model (SPMM) defines how a services organization chooses to manage the services within its services portfolio. The model can be characterized by the what and the how of ITSM. The what consists of the services that are part of the service portfolio—whether they are in the pipeline or currently documented in the services catalog. The how includes the ITSM processes and other practices that are employed to manage the services.
The services strategy area can be thought of as the confluence of other decisions, and it creates a central planning focus for the organization. The strategy defines changes that should be made to the SPMM and services portfolio to help ensure that IT continues to meet, or exceed, the ongoing needs of the business, including support of business strategies and goals. The services strategy decision process considers all informational inputs and develops a forward-looking approach to help address four gaps: strategic, value, demand, and services delivery.
Services portfolio management is the rationalizing decision discipline that can sort through all proposed strategic, tactical, or operational services improvement or development initiatives. This discipline helps determine the optimal subset of all proposals that best apply scarce enterprise resources to maximize investment return for the organization.
A framework for the organizational culture
These key strategic decision areas come together to influence the organizational culture, and they can affect other decisions or actions in the services organization (see figure).
An IT governance framework within the organizational culture
Unfortunately, a practice around strategic decision making is still not at the forefront of all organizations. IT governance helps put the focus on strategic decisions. Best-practice frameworks such as the IT Infrastructure Library (ITIL) and COBIT 5 provide guidance on how to make these decisions and show how they interact to help today’s managers. This guidance helps in not only making critical decisions day in and day out, but also helps position IT as a mature and model corporate citizen.
How does your organization handle strategic decisions? Please share your answer in the comments.