Tag Archives: CIO

Establish Your IT Business Management Office (ITBMO) To Run IT Like a Business

Khalid HakimBy Khalid Hakim

We hear a lot about (and maybe have interacted with) Project Management Offices (PMOs), and possibly about Service Management Offices (SMOs), but IT Business Management Office (ITBMO) sounds like a new buzz word in today’s modern IT business taxonomy. PMOs typically focus on the management and governance of IT projects, while SMOs are responsible for the governance and management of IT services and the processes to ensure effective service delivery. ITBMOs, however, go beyond this to the next IT business maturity level to address business and finance partnership with IT to help IT organizations transform into services-based, business-oriented, and value-focused organizations.

ITBMOHave you ever asked yourself of how you can make your CFO happy? How you can support your corporate financial goals and aspects of a balanced scorecard? How you respond to “IT is always expensive” perception? Have you thought of challenges related to quantifying value your consumers get of IT services? Are you challenged to view IT costs by services you deliver? Or even budgeting and forecasting by IT services? Can you tell on the spot what your unit cost of a service is? What about demand driven IT? Do you feel that you are always over capacity with low utilization of services? What about leveraging marketing power to promote your IT services? How you can commoditize and brand your IT services? And many other questions and thoughts that keep CIOs awake at night.

(I can hear you thinking)

We have been hearing about “transformation” and “running IT like a business” quite frequently nowadays. As a matter of fact, these are becoming overused terms without real meaning of what they actually imply. Imagine that you are the CEO of a new wood furniture manufacturing business. Obviously, the main functions that you could initially think about are Product Management (who turns logs into useful products), Sales and Marketing (who promotes and sells to consumers), and Finance (who manages the financial aspect of the organization). The question is: why can’t we apply the same discipline to IT organizations? Similar to Product Management, IT organizations deliver services, and therefore we have Service Management and Service Owners/Managers. We are only missing two things here to run IT like a Business: a strong service-based financial operating model and the Services Sales/Marketing sense to help promote and consume IT services in the best valuable manner to consumers.

This is what the ITBMO brings to the table: a stronger partnership between IT, Business, and Finance to accelerate transforming your organization into a business-oriented, service-based, and value-focused one. Initially, you can think of the ITBMO as a virtual group or committee that has champions from various IT/Business functions. This virtual team paints the IT business vision and defines its mission on how to run IT like a business to deliver more value to business in the most economical way.

IT Business Management Office (ITBMO)

Figure : IT Business Management Office (ITBMO)

As shown in figure 1, the ITBMO supports 6 functions/towers to ensure stronger partnership throughout the IT service and project management lifecycle. These are:

  • Service Management Office (SMO): the entity (or any similar) within an organization responsible for the delivery and management of IT services. This includes the pure ITSM process management and ownership and delivery along with the ongoing management of IT services.
  • Project Management Office (PMO): the entity responsible for project management and governance
  • IT Finance: the function that takes care of the financial aspect of IT, which could be part of IT or Finance. This typically includes IT budgeting, accounting, pricing and cost optimization.
  • Services Sales & Marketing: a new (or maybe existing) function that will be improved and strengthened as part of the ITBMO establishment.
  • Business/IT Alignment: any existing functionality (such as Customer Relationship Managers or Account Managers) that ensures ongoing alignment between IT and Business.
  • Governance, Risk, and Compliance (GRC): the function (or multiple functions) responsible for organizational change, developing IT policy and governance strategy, IT risk evaluation and mitigation and compliance.

A champion from each function (could be multiple champions based on the organization scale and size) contributes to the core operations of the ITBMO to achieve the value-focused vision. The ITBMO runs in consultative and supporting mode, but depending on the IT organization’s authority, decision making process and power, and delegation factors, the ITBMO could be an authoritative entity within the organization.

Standing Up an ITBMO

Figure 2: Standing Up an ITBMO

Figure 2 shows the six steps required to standup a successful ITBMO within your organization:

  1. Develop Vision/Mission: thinking of why you need an ITBMO in the first place is your first step. What is the challenge you are trying to overcome or opportunity you want to introduce? Thinking collectively in a short/long term vision and drafting a mission statement of what this ITBMO actually does are your foundational steps towards a value-focused organization.
  2. Build and Position the Organizational Structure: figure out what roles are needed and who needs to be onboard and whether this is a virtual team of representatives or dedicated and how it fits the organizational structure and reporting lines
  3. Develop Process Interactions: fully understand your existing processes interactions within the functions that will be supported by the ITBMO, and figure out where you want the ITBMO to help, support, and interject to accelerate value realization
  4. Develop RACI Chart: translate your discovered process interactions and help areas expected into a roles and responsibilities chart (i.e. RACI). This will expose the areas of improvement and will help build a short and long term improvement roadmap across all supported functions to achieve the desired vision.
  5. Establish Value Measures and KPIs: quantifying IT value is one of the challenging tasks IT management confronts. This step defines a very high level value measurement framework or methodology along with the success factors and measures that a CIO or CFO can judge the success of ITBMO thru. VMware vRealize Business is the technology that will be used as a platform to define those value measures and KPIs and help making informed decisions.
  6. Build ITBMO Ongoing Operations: build your ITBMO ongoing operations guide by identifying which RACI responsibilities will be performed

So, you might now be thinking about the value an ITBMO can bring into your organization and how you could best leverage such a powerful business unity:

  • Establish business horizon within your IT and implement a model to help run IT like a business
  • Ensure tighter partnership between IT, business, and finance. This partnership is key to IT success like any other business.
  • Enable your organization explore more improvement opportunities and build a maturity improvement roadmap to run IT like a business
  • Help accelerate your transformation journey not just to a trusted service provider, but to a strategic business partner
  • Create new virtual business roles within your organization and help accelerate this transformation journey
  • Help your IT organization make better and strategic use of VMware vRealize Business to drive the cost optimization and value realization strategy and goals
  • Empower your IT to deliver on the desired quality, at the right cost by creating tighter alignment and accountability between IT, Business, and Finance
  • Elevate and strategize your IT conversations with service consumers, stakeholders, and executives to support IT and business transformation journeys

And if you’re heading to VMworld, don’t miss this session (OPT 5075) on Tuesday 9/1 at 5:30pm!

6 Steps to Establish Your IT Business Management Office (ITBMO) with VMware vRealize Business

VMworld 2015While many smart IT organizations have started their transformation journey to service-oriented and consumer-centric providers, there are still some key gaps that need to be addressed to ensure the effectiveness and efficiency of this transformation and therefore to yield the expected value. These gaps are related to the IT financial operating model and how modernized it is to cope with technology & cloud evolution along with the business speed. The IT Business Management Office (ITBMO) is revolutionizing the way IT leaders demonstrate business value to the enterprise. The ITBMO could be a virtual committee to ensure stronger partnership between IT, Business and Finance together to drive an organization towards faster value realization and maturation. Khalid Hakim, global IT operations, financial and business management architect, and Jason Nienaber, IT Business Management Director at VMware will shed light on this new business practice using VMware vRealize Business to move your IT organization to the next level in maturity and position it as a strategic partner to your business consumers and line of businesses.

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Khalid Hakim is an operations architect with the VMware Operations Transformation global practice. You can follow him on Twitter @KhalidHakim47.

Exclusive Report: CIOs on Innovation and the Software Defined Enterprise

By Laurent Finck, VMware Advisory Services Lead, South EMEA

Laurent FinckAs the software defined enterprise becomes an inevitability, rather than a possibility, how can CIOs move their departments from the Industrial Age of IT to the Digital Age of IT?

Report

Download the full report

In preparation for the upcoming VMware EMEA CIO Summit in October 2014, we spoke to eight CIOs about their top priorities in managing the changing expectations for their role in light of business digitalization. Business digitalization is both an opportunity and a risk for companies – successful digitalization could increase revenue, while failed digitalization could mean a loss of momentum and market share. As a result, CEOs are turning their attention toward IT departments, and the work of the CIO.

Given this increased level of exposure, we asked these CIOs for their perspectives on the highest priority changes that need to occur within IT departments to keep up with the delivery and operational changes required to support business digitalization. They offered their insights on the importance of data management, refreshing IT governance, and adjusting their strategy to pivot toward service brokerage.

The future of IT requires more agility, scalability and service quality. To meet these demands, the CIOs delved into how the software defined enterprise frees up internal resources that once supported infrastructure to refocus on cloud, application and enterprise architecture. Shifts in culture and operations will be required to stay aligned with the needs of the business and the priorities of other departments that will require a high level of responsiveness and flexibility.

Download the full report for more CIO insights into the changing state of IT and the challenges and opportunities ahead.


Laurent Finck leads the VMware Advisory Services team in Southern Europe, a team of strategy consultants who help CIOs and IT organizations understand how VMware solutions can help them better serve their business needs. Prior to VMware, Laurent has been an IT strategy consultant at Accenture and Gartner, where he focused on IT organizations and IT transformation efforts, and then leveraged this experience to design and deploy go-to-market strategies for large IT vendors, on an international basis.

Reflections on IDC’s Worldwide CIO Agenda 2014 Top 10 Predictions

By Paul Chapman

Paul Chapman-crioAs I read through IDC’s Worldwide CIO Agenda 2014 Top 10 Predictions, I was reminded that in the world of IT, one thing is certain: change. The roles of the CIO and the IT organization overall continue to evolve and increase in complexity at the rapid pace of technology evolution. The IDC report tackles this complexity, presenting areas of focus and solid guidance around critical topics. Here are a few key topics that caught my eye.

Addressing the Skills Gap
While IDC’s first prediction regarding a need for CIOs to focus on innovation and business strategy isn’t news, it reinforces a truth we as IT executives know all too well. The difficulty in shifting from technology services to business strategy and services stems directly from the skills gap. In my organization, I see us trying to move people from deep technical roles into data analytics roles, and it’s not something they gravitate towards. For example, a network engineer is not necessarily the best person to do network forensics. The focus on business services will happen gradually, as new skills are recruited or trained into mature organizations.

The skills gap shows up as an important theme in the report, which says, not surprisingly, that new skills are required for these new cloud-related jobs. I equate the situation today to placing an ad for an Oracle database administrator 25 years ago. You wouldn’t be able to find one because they didn’t exist. We need to create new roles, like cloud services administrators. At VMware, we are developing a college grad program where we immediately put new hires into new types of roles to help seed the acceleration.

A Need for Mobile Services
That leads directly into the report’s call for a rapid shift to ensure support for the “ubiquitous mobile and socially connected lifestyle.” IDC suggests that within the next 12 months organizations “create a portfolio of mobile services for inclusion in the IT service catalog.” This is bigger and broader than mobile. It’s imperative that every organization builds a holistic strategy around end-user computing. IT may place more heavy emphasis on technology but this is really about organizational change management. New generations of employees embrace change much faster then previous digital transients; they adapt much faster, they consume technology differently, and their expectations are different.

New Cloud Security Concerns
IDC also predicts increased exposure to risk through cloud adoption in an attempt to reduce IT costs. Of course, security is always a major concern, but we have to keep in mind the distinction between private and public cloud options. On the public side, cloud services companies’ reputations depend on their ability to provide the best security available. Many organizations worry too much about doubling-down on security when the service provider has it covered more fully than most companies could do themselves internally.

On the flip side, some companies will never move to public cloud because of security and IP protection concerns. That doesn’t prevent them from taking a similar internal private cloud approach. You can take the same kinds of capabilities, flexibility, and agility from a public cloud and build your own internal private cloud. This way you can control the security.

Outsourced Enterprise Architecture?
On the topic of employing consultants to support enterprise architecture, I’m not necessarily sold. I think enterprise architecture will change drastically in the coming years, and what we build today may be obsolete fairly quickly. I see enterprise architecture shifting to a central focus around the network and the data center. We’re moving so much compute into massive data centers and they all have to be connected together; performance and quality of service have to be the focus. Architecture will need to have a heavy focus on networking and physical location. You can’t just push everything out to the cloud and expect them to perform—you need to know where things are and have the right tools and forensics is place to proactively manage quality of service.

Budgets Shift to LOB
When it comes to shifting budget to the lines of business (LOB) for third-platform investments, this typically means the IT organization processes do not get the LOB what they need fast enough. This shift isn’t necessarily a bad thing. Investments in some business processes are better off using an external provider. IT should manage the crown jewels: the cash register, the strategic things that differentiate you in the market place, and the things that need strong protection. Finance has to play a bigger role to say it’s okay for people outside of IT to buy services independently. I think it’s a good thing as long as IT embraces it and partners to deliver, instead of resisting and trying to control it. At the end of the day, the company is paying for all of it. At VMware we embrace this model and partner with our LOB leaders and come up with the right decisions together.

I highly recommend reviewing the IDC paper—there are interesting new insights alongside some core points that bear repeating.

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Paul Chapman is Vice President, Global Infrastructure & Cloud Operations at VMware. You can follow him on Twitter @PaulChapmanVM

CIOs Need to Restructure to Deliver Today’s Innovations

No doubt you’ve heard the argument that CIOs are merely technology brokers who “don’t matter” in the world of digital business. We all know that the opposite is true: CIOs who understand the intersection of business and technology matter more than ever. What also matters is that you understand when it’s time to change your organization to meet the needs of the business.

infoweek coverTake a moment to check out this InformationWeek report, which provides practical advice on when and why to restructure, what guiding principles apply, how to get help, and where it pays to take some calculated risks.

Related: Infographic distills 2014 Strategic CIO Survey results

Look Back to Move Forward – Top 3 Infographics from 2013

As any good strategist knows, you must first assess past actions to successfully plan for the future. So in the midst of 2014 planning, we decided to take a step back and revisit a few of our top posts for the year.

The Accelerate Advisory Services team prides itself on helping to clarify and simplify complicated IT initiatives, focusing in on key goals and eliminating inefficiencies. So it makes sense that three of our most popular posts this year included infographics that break down big topics into concise, clear insights (that happen to look good, too).

Take a minute to check them out—it’s a quick look at this year’s trends, which history tells us are likely to influence the next.