The right setup of ORG/IT leads to corporate success

The core task of the IT (or better ORG / IT) function still is to provide appropriate solutions for the company in terms of high delivery capacity, controllability and budget feasibility. Close interaction of organizational and technical issues becomes ever more important: there is hardly any “IT issue”, that doesn’t have to answer essential questions from a technical perspective already in the beginning, with a view on business models, processes, products and individual functionalities. At the end of the day, not every problem requires a technical solution in the form of an application, but changed processes or employee resources are also to be evaluated as options.

The goal of tangible support and development of business segments by ORG and IT solutions can only be achieved if the ORG / IT function is able to assign three different roles in the company in a competent way and with the approval of the decision makers:

• Active driver for an adequate development of the organization and IT landscape
• Provision and operation of organizational and technical solutions as an overall responsible service provider
• Overarching management body with overall responsibility for ensuring service and budget feasibility (i.e. costs).

The ORG / IT function acts as a “sandwich” between the specialized area and provider: as a central interface to the specialized area—for gathering and implementing new requirements in solutions and services as well as a central interface to the service providers in order to ensure an efficient management of the provision and operation of solutions by the service providers.

“Getting things underway”—Clear design principles

Regardless of the organizational structure of the ORG / IT function—be it with a separation of “change” and “run”, with focus on and separation of different business models or with a service portfolio “from one single source”—six central design principles are to be taken into consideration.

• Close interaction of specialized, ORG and IT know-how: The responsibility for using and developing ORG and IT solutions as well as standardizing solutions determines the close interaction of specialized, organizational and IT skills within a unit and the respective teams.
• Early integration in the strategy process: Most decisions with subsequent cost implications are already made at an early stage of the strategy and planning process. An early and joint discussion of possible implications for ORG and IT with experts is decisive for the development of ideal solutions.
• (Internal) focus on the plan / design: Specific customer / group-oriented units for active consulting / supporting and providing ORG and IT solutions—with a clear and distinct customer interface (“one face to the customer”) as well as a merger of responsibilities for “plan”, “design“ and “build” (providing solutions).
• Sourcing of “build” and “run”: Sourcing of value creation components “build” (e.g. application development) and “run” (production, operation) to external service providers to the greatest possible extent. A specialized sourcing (BPO) can and should realize service and cost benefits and help decrease internal complexity—beyond ORG / IT.
• Enhancing ORG development: Setup of a vibrant ORG function with focus on innovative strength and productivity of the company as well as on optimizing the use of solutions and processes. Here, initiative and overarching incentives are key for the further development of the bank. Optimizing the use of core processes (according to the defined standards) can facilitate this process.
• Extending responsibilities and power of management: Active management of services, resources and costs requires the expansion of overarching management competences and thus the pooling / extension of management processes and enhancing the service provider management

RAP4: “Manage ORG / IT” clearly defined

Six processes of “Manage ORG / IT” are to be mentioned for successfully assuming a strong ORG / IT role: “R” represents the requirement management, “A” the architecture management and “P” the project portfolio management, process management, productivity management and provider management.
“R” and “A” create transparency about the needs and develop solutions at the customer interface. Architectural illustrations, which serve as a binding medium for defining solutions and the medium-term further development of ORG / IT solutions form the basis.
The resulting medium-term planning is then followed by the project portfolio management, that ensures the implementation within the planning requirements and covers all dimensions for a successful “change the bank”. An active process and productivity management enable the implementation and constant improvement of ORG solutions. The provider management ensures the delivery of agreed results in “run” and “change” at the interface to service provision by external service providers.
These processes enable the ORG / IT function to develop the management power to design the bank from “end to end”—as a neutral expert, sparring partner and coordinator, but also as a decision maker in the provision and operation process.
The demanded “management power” role leads to unease in one or another bank. To be frank: ORG / IT should not decide on commission which solutions could be relevant for the specialized area or which projects could be implemented in theory. The bank, however, needs a body that merges the partial interests of the different business models and specialized areas into an overall optimum for the bank—on condition of (budget) feasibility. An ideal ORG / IT setup makes the conflict within ORG / IT visible, e.g. between the management team and the units responsible for specialized areas.
The alternative “ORG / IT as service provider” is more feasible at first glance, as “the specialized areas wanted it that way.” This positioning comprises, however, significant complexity and cost risks and quickly reaches its limits of feasibility.

At eye level

The role of IT ( better ORG / IT) has to further change in the banks. On the one hand, the organizational view is to be merged even closer with the former IT services in the future service portfolio. On the other hand, the formula RAP4 is to assign competent and tangible roles in the bank. The “management” suffix in the relevant processes already shows that a pure service provider role isn’t sufficient for these disciplines. ORG / IT has, apart from its mandate as a central ORG / IT service provider, to not only develop management power but to also become an active driver for the bank.
The name history of many ORG / IT units from “IT function” to “ORG / IT function” to “organizational and provider management” shows that this development has already been understood in many banks. “The will is there, but …” the missing mandate for this assignment, the expandable competence of ORG / IT and not least the discipline at decision maker level still impede a successful implementation of ORG / IT as “recognized partner at eye level”.