Connecting IT Value, IT Competence, and Enterprise IT Capabilities
Strategic IT Management is based on a holistic set of seven overarching enterprise IT capabilities necessary to produce superior business value and response to turbulence and uncertainty. As we will describe in the next section, these enterprise IT capabilities are not themselves the processes or methodologies of IT competencies. Rather, they are the areas of enterprise IT capability—engaging both business and IT—to apply those processes or methodologies successfully and holistically. And “successfully” means achieving the basic goals for applying IT in the business: superior business value, and superior response to turbulence and uncertainty.
Taken together, Strategic IT Management results in a systemic capability to manage and apply IT throughout the enterprise for superior business value and superior response to turbulence and uncertainty.
We adopt the term enterprise IT capability with guidance from Hagel and Brown, as they said about their terminology: “We use capability rather than competence because the latter tends to mean technology and production skills. Capabilities are the recurring mobilization of resources for the delivery of distinctive value in excess of cost.”1 They’re talking broadly about strategic management and competitive success and specifically about dynamic specialization, a product of the kind of turbulence we’ve been describing. The point is that this is exactly what’s necessary: the holistic ability for an enterprise to mobilize the (IT) resources to deliver distinctive value from the use of information and IT.
The Enterprise IT Capability for Strategic Thinking and Action about IT in the Business
Planning & Innovation. An enterprise requires the capability for business and IT (together) to define the future of the business and its use of information and IT.
This capability requires the ability to establish strategies, products/services, and business models; to describe the turbulence and uncertainty affecting the business; to forecast its requirements or means for reacting to uncertainty; to understand competitive and performance requirements; and to respond to its requirements and uncertainty with viable plans, goals, and roadmaps for all its IT, as well as to do so successfully in conditions of turbulence.
The Enterprise IT Capabilities to Deliver Value through Information and IT
Service & Resource Optimization. An enterprise requires the capability to optimize the sourcing, development, and application of all its IT services and resources, from all sources: internal IT, business-unit IT activities, sourcers, and “do-it-yourself” IT activities.
Development & Transformation. An enterprise requires the capability develop, implement, and apply information and IT capabilities to change and transform business with superior returns.
Information & Intelligence. An enterprise requires the capability to acquire, manage, analyze, and apply its vast information resources in all relevant enterprise areas.