The 'new' organizational effectiveness

Any enterprise is organized or divided around hierarchy and specialisation.

Departments are increasingly getting profit loss responsibility, employees are increasingly measured by their KPI's (Key Performance Indicators).

These are good practices in the way that they add control per single entity but are counter productive to cooperation and learning across organisational boundaries.

In many of the companies I have worked as a project manager I notice:

• the absence of a feedback loop in any decision making process
• the absence of cross department and cross enterprise cooperation
• the absence of implementing lessons learned

It is rare to find companies that perform well on these practices because they hit the wall of the hierarchy and specialisation.

Why do I think it’s a relevant issue?

1. Because cooperation (across disciplines, departments and companies) is the basis for the business model of the 21th century.
2. Because it's the difference between good and great, between on and above customer expectations, between surviving with life long frustrations and outgrowing old pains and thereby outperforming competition.

Examples aplenty, on organisational and also on the projectlevel. I have mentioned a good example in one of my previous blogs (the case of ING direct in the US). Read the book "from good to great". I am sure there is some outstanding book out there about Network economies.

Looking at the relation between Sales and Delivery in any commercial organisation intuitively that tells me that formalising feedback and lessons learned is no easy step.

Looking at the relationships between e.g. the business analyst and the developers in many a project team it tells me that feedback and lessons learned is no easy step

Looking at the preconceptions many marketeers (or any business department on that matter) have on techies or IT people and vice versa means that cooperation is not going to happen spontaneously.

Source image: http://www.theinterpretersfriend.com/misc/humr/serious.html

Integrated Business & IT Project Management.

In most cases IT is not the end goal but a means to support the business strategy and business goals. Projects should be managed explicitly from this insight and therefore could better realize the potential of IT for the Business. The approach of good Business & IT Project Management" is therefore based on the following goals:

• exhaustive and clear setup of the project governance on the Business side
  
• flexible and transparent setup of the IT projects
• continuous but efficient feedback between the Business & IT.

Additionally it is advised to identify and realize 20% of the effort that realizes 80% of the benefits. This approach contributes to the control and predictability of the projects without diminishing quality and added value.

Integrated Business & IT Project Management.

Increased competition drives management simultaneously to more innovation and cost reduction in operations. Offering innovative, added value services to their customers becomes a must. Such services are mostly realized by better integration of business processes. IT must keep up the pace with this development (or ideally be ahead of it).

Example: more and more back office business logic and company data is being pulled into the front office systems to allow 'cleaner' sales order entry and better customer service in the Points of Sale. The data or information in all corporate databases must become ubiquitous, in other words if the Business wants to serve the customer better it must 'self-evidently' be able to get hold of all information anywhere, anytime and anyplace.

SOX compliance regulation is another force that puts complementary demands to the integration of Business processes and IT systems.

Result: there are more links between the IT systems, the business processes and IT systems are more tightly coupled, business processes are becoming more integrated in the Supply Chain, the governance and stakeholder structure is becoming more complex.

Phenomenon. Almost every (innovation) project initiated by the Business becomes a chain-project with involvement of Business and IT stakeholders across the entire Supply Chain. From experience I learned that these chain-projects are considerable more challenging to manage and control.

Conclusion. The higher occurrence of chain-projects and growing dependency between Business and IT can be viewed as two challenges that face Project Management. The profession Project Management must adjust and evolve to transform these challenges into success. I practice project management that puts cooperation between Business and IT central and where the multitude of stakeholders gets managed effectively.

Image: name of the photogenic dog is Pepper, picture taken in Varsenare Belgium.

Questions seeking answer

Should IT Service Providers and IT departments:

• inject the enterprise (or software) architect in the sales process
• first invest in business and IT alignment (pre-sales) before selling solutions (sales)
• formalize the feedback loop of lessons learned between delivery and sales
• be building business skills in IT staff or push IT skills in business staff?