 I have got 40 min or so. I'm going to go reasonably fast, so I've got a few things to cover, but quite a lot of it is more getting you familiar with some ideas. I'm going to start though with a critic. This is a bit unfair for not being an IT person, but a critic of the IT function. Recent bit of work done, published in July this year by McKinsey cymaintrach arddangos iawn, i'r ffunctiwnol i ddeudio fynd i diwethaf i iawn. Yn y cyfans i wneud iawn, y cyfans i wneud wirthog yn ei wneud iawn yn cael ei ffinol, niew hirno gyd bob nhw. Yna, rhywf yn cyfべethaf trwy'r rhai wneud iawn yn ei wneud iawn yn cael ei ffunctiwnol i wneud iawn, yn cyfans i wneud iawn yn cyrnynghig o'r wybodaeth yn cael ei wneud iawn. Rydyn ni'n credu fallenes ond rydw i'n raddai'ch cyfraniadau roble'r llwyddau yn oed yn y llwysoedd cyfnodol, y dyfodol, y dyfodol, y dyfodol, y dyfodol, y dyfodol, y dyfodol, y dyfodol. Felly, os ydych yn mynd i am ddim o'n credu y cyfnodol i'w ei yw'r hynod yn mwyaf i'w angen i'w sy'n bwysig iawn ar y cwrs. Mae'r cyfrifod ti'n rhaid i gael y ddweud i ddweud yr unrhyw gyrsfawr yw rhaid i gael mwy o modelu yn IT. Maen nhw'n ddweud ymddir i IT yn ddiwedd, yn ddweud o'r modelu ymddiadol o modelu ymddiadol yn y top two-cwrs o phwyr wrth gwrs ar y ddweud ymddiadol. Dyna'r ffrwng i'r modelu ofynu yn ddweud i'r modelu ofynu, maen nhw'n ddweud i'r modelu ofynu i'r modelu ofynu, some of the poor performance ratings. So I think the reason for showing that was not to put me above the challenges that you are facing, but rather to explain that this is a topic. This IT operating model is a topic worthy of real deep thought. I'm going to do then is to talk about what is an operating model, I'm then going to offer some perspectives on what I think are the challenges when you're trying to design an IT operating model and at the end I'm going to offer kind of a one slide thought on where I think some of the solution may lie. So what is an operating model and how do you design one? For most of us the operating model is the engine of an organisation whether it's a business or a charity or an IT function that enables that organisation to deliver value to its stakeholders. So it's the work that you do in the organisation and the technology that you use and the processes that you use to create and deliver some value to stakeholders. Now in practice it's a little bit more complicated than that because most people who use the term operating model include the employees and the suppliers as part of the operating model but exclude the customers and the value proposition, the offer that you give to the customers and obviously the owners as not part of the operating model. So for most people the bigger blue circle is really what we mean by operating model and the way I'm going to define it will also include employees and suppliers as part of the operating model which of course means you're starting, good starting point is to think about the stakeholders and think about which of those stakeholders are customers and which of them are employees and suppliers and that isn't always an easy task as you may have people who are both customers and employees and so you may have to consider them to be wearing two different hats. What are the pieces of the operating model? So if I use a mnemonic polyism and starting with processes, the work that needs to be done to deliver the value to the customers. So that's my definition of the P. Then there's the people who do that work and the organization that they live in and the structures and the cultures and the decision rights and so on who are doing the work. There are then the locations where that work is done, where are those people located and where are their equipment and support located. There is the information solutions that are needed to support the work and sometimes the information solutions are the work and so there's an issue there. There is suppliers who will feed inputs into the work and then there's a management system for running the work and the people and continuously improving it and reformulating it. So for me this is the operating model and this book has a pretty picture of a operating model canvas and the title is operating model canvas which captures these six elements in a canvas format which enables you to capture very high level thoughts on a single page so that you can kind of produce a one page operating model. I'm going to take you through this in a little bit more detail. So first is the work that needs to be done to deliver value to the customer or beneficiary. Very important when you're doing operating model work is who are the customers and beneficiaries, what is it that we're trying to do for them and what do we have to do in order to make them happy, in order to create a smiley face at the end of the value chain or value stream or high level process whatever language you want to use here or service delivery chain. Then there is the people who are going to do that work and the organisation that they live in, the structure that they live in, who reports to whom, what decision writes each department and each individual may have, what process ownerships exist and even things like people models and cultures, all of that is part of the organisation box in the canvas. The information box is the place for thinking about the information solutions that are needed to support the processes that are delivering the work and of course, as I pointed out, some of those processes will be an information step in their own right. Suppliers, the supplier box is for thinking about the types of suppliers that you need and the sort of relationship that you should have with those suppliers, whether you need a collaborative relationship or whether you can have a transactional relationship or whether you need a joint venture, a partnership in some form. The locations box is about the where, where is the work to be done. There are some connections here with Togaf, but I haven't been influenced by, or I'm more and more thinking of the Zachman framework, the connections here, but I haven't been influenced by that in putting this together because I came at this problem from a business perspective of operating models and have become more interested recently in the challenge of IT operating models. The last bit is the management system, which kind of underpins these top five, these core pieces, which is the calendar of meetings that you need to design to do the strategic planning for the organisation, to do the budgeting for the organisation, to do the performance appraisal and approval and management of the organisation, to do continuous improvement and things like that, as well as the scorecard that you use to measure the performance of your organisation. And those are the topics in management system. So these are the six pieces that I think are important to have aligned, aligned obviously with the strategy and aligned with each other to have an effective operating model. The book and the inside of the book is designed to be accessible and easy to use. Let me make a connection with the business model canvas because I think this is relevant because the business model canvas is quite, was very widely used and is in some of the open group materials as well. The operating model is really, and I'm going to assume, I'm not going to talk through this, I'm going to assume that you have some understanding of this tool. And its operating model canvas is very much trying to be in the same genre as the business model canvas. The operating model is the left-hand side, the back-end, the how of the business model canvas. So if you just take the pictures, then the picture of an operating model canvas can be slotted in instead of the pieces in the business model canvas. Instead of key partners, key activities and key resources, you can slot in processes, organisation, IT, or information, location and suppliers as being the five pieces of the operating model canvas. Again, with the management system piece, to some degree actually managing the whole business model canvas, not just the operating model canvas, underlying the whole combination of canvases, including the financial model. So this is intended to be a build on the business model canvas tool. And rather like Eve and Alex did a book on the front end, a customer model with a value proposition design book, expanding the ideas there. This is an attempt to expand the ideas at the back end of the business model canvas. How do you create an operating model canvas? So let's say you wanted to use this in your organisation, whether it's for the IT or for some other part of the organisation that you're providing IT services to that you wanted to understand and help the people think about. And my advice always is to start with the work that needs to be done to deliver the value proposition. So clearly you have to find out what is the value proposition. Who is the customer of this part of the organisation? What are we trying to do for that customer? What will make that customer or beneficiary happy? And what are the work steps at a high level that are going to need to be done to make that smiley face at the end of the arrow? And it's a simple sort of manufacturing type example. You're going to design some stuff. You may have to purchase some stuff. You may have to do some manufacturing or transform it into something. You're going to be selling and servicing it. And at the end, you're hoping to have a happy customer. And if it's a customer outside the organisation, then you're going to know that customer's happy because they're going to be paying you good money for your support. If it's an internal organisation, it's always slightly harder to know whether you are really delivering to the customer beneficiary what they want because you don't necessarily have the monetary measure to know if they're getting what they want. You then add to the canvas. Literally, if there's posted notes to get up on a flip chart, you know, have an argument about what are the different steps. Keep it at a high level. Don't have more than five or six or seven because you need to be able to keep it all in your mind at once. And anyway, you haven't got a lot of space deliberately. The great benefit of things like canvases is you're limited in space so you can't get too complex. You can only capture the highest level thoughts. You then add on to that other stuff that is most important in your mind to the value proposition. So in this example, the proposition is low cost. So we're trying to do something and we're trying to do it low cost in our competitors. So then you're kind of working around the canvas thinking about what is it that we have to do? How do we have to do it? What do we have to do particularly well in order to achieve that low cost objective? So in this case, in the information box, it would probably be we're going to need standard packages because if we're trying to be low cost, we're not going to have a lot of bespoke, complicated software. We're probably going to have a functional organisation structure because functional structures are normally lower cost than matrix structures or divisionalised structures. We're almost certainly going to outsource components to people who've got better economies of scale than we have. We're going to probably be operating in low cost operations in low-rent areas where we've got low people cost or low building costs. So there's a connection here between the value proposition. What are we trying to do and the canvas, how the elements of the how are we trying to do it? And the benefit of having this all on one page is you can start to see the connections and you can get disconnects. So you can end up with in the organisation box, we want really high quality people and then in the location box we want really cheap locations and then you start to think, well, is this going to work? How do we get high quality people in cheap locations because often the two high quality people are going to want to be in Amsterdam or London or somewhere, they're not going to be that happy to be in Indonesia maybe. So you can start to see some of the disconnects that might cause you trouble with the finalisation of your operating model. I'm going to give you a couple of illustrations and then we're going to talk IT. This is my business school, which is Ashridge Business School, which is part of HALT, International Business School. And HALT has three schools, basically three different value propositions to three different customer types, undergraduates, postgraduate and executive. The core valued chain, the work that needs to be done to deliver a satisfied graduate at the end of these efforts is fairly similar but a little different in each of the schools. And at the very highest level, that's all you need to lay out in that middle arrow of if you're doing an operating model for HALT International Business School. Now, you then may add in a lot of other bits around those arrows, but we're not trying to make this over complex. So you can take a huge organisation and you can make it look simple on paper. Clearly, when you are laying out those value service delivery chains, value chains, one of the immediate things that you start to think about is should all the marketing be combined, should all the, across these different schools, should the housing of the students be combined across these business schools, across these different lines of business. And this way of laying out the work that needs to be done helps you start thinking about those choices. Should the teachers who are teaching on postgraduate report to the head of postgraduate or should they report to the head of teaching across all three schools? Big issue. And quite a few of them will teach in more than one school. So how do you deal with that? So simple can help you see the issues clearly and engage the decision makers in a way that they feel comfortable to be engaged. In this particular case, HALT has global and cutting edge as core value propositions for all of its schools. Hence, it's located in Dubb, Boston and London and so on. It has for undergraduates, the core value proposition that is employable, you're going to get a degree, but we want you to be more likely to get a job at the end of your degree than if you go to another school. And for the postgraduate and executive, then it's about thought leadership and practical. We're going to give you tools that will help you in the work that you do as well as being thought leading tools. And in order to deliver that, one can think about, it has the locations box obviously is going to be important. You're on one to be in four or five locations around the world. Associate faculty happens to be very critical because they're the people who bring in the practical experience into the classroom. And a chief academic officer is very important to make sure we have the thought leadership. And so you start to see some of the elements that are going to be critical to your operations. At this extraordinarily high level, we've only got 20 thoughts on a chart here, but we're already getting a sense of what's important in this business school. I'm going to show you a couple of other examples, but for timing reasons, I am going to skip right over them, so I'm just going to give you visual impressions before we get into the IT stuff. This is an HR function. Again, the visual impression should be here. There's quite a lot of stuff going on in that middle arrow. And then as you put other things on the canvas, you can start making connections and draw connecting lines and so on. And so it can be used in a very messy but creative way. Let me give you a quick IT function example. Again, I'm not going to spend long on this. This is a financial services group in the Americas, operating in a lot of different countries. This is about their central IT. And they very much have a sort of central set of work steps designed to produce a value proposition which is lower group-wide IT costs, decentralised service, and group-wide solutions, which you could argue are partly for standardisation and partly for lower costs. And they follow pretty much the IT for IT standard value chain model in their kind of posted notes down the central work to be done, processes arrow. I'm going to shove a lot of other posted notes on here. I'm not going to go through them all, but if we just were to take one, which is the, I don't know if this pointer will probably not shine out that far away. But if we take the lower group cost, wide cost thought, which is this red star, and then we're trying to follow through what posted notes are really important to delivering the lower cost, we start to make connections with what we're trying to do and the way we are operating to get it done. A different way of thinking about an IT function would be to break it up into its different types of services. I think David in the next presentation is going to talk about family, service families. And this is a similar thought. And here the service families are some kind of integrated enterprise service that we're offering. It's going to be a communications service we're offering, office system service we're offering. It'll be some digital support services we're offering. And what's the work steps for each of those? Who are the customers? And then how do we think about that middle arrow? And as you can see here, we've got sort of IT business partners at one end and sort of IT governance and security and so on at the other end as overlays around these kind of four different service streams. And I want to use this a little bit to discuss some of the challenges that I think there are in IT operating model design. So I'm going to skip over a couple of slides and then we're going to get into some of the challenges. These will be available in the materials afterwards. So what are the challenges when designing an IT operating model? And forgive me, I've never worked in an IT function so I may not have this right but I think I've got some outside in perspective that may be helpful to you. First, IT strategy is critical to inform what are the best ways of thinking about your families of services, what are the different service chains that we should be thinking about and the IT for IT standard just gives you kind of one service chain but in practice you're going to have different service chains so actually how do we think about that and the IT strategy should inform that and if it doesn't then there's a dialogue there before you get into detailed operating model work. At the same time and actually working on the same issue is what are the value propositions that we are offering the organisation and how do we think about the different value propositions we're offering in terms of service delivery chains to deliver the value propositions unless IT strategy answers those two questions and of course lying behind that is the business strategy it's quite hard to design the operating model so in my experience from little I've been involved in IT IT strategy often doesn't actually give us a lot of clarity about those two issues in a way that will then inform good operating model design. Thinking about the families of services how to collect our different services into four or five or six families that we can think of as value delivery chains we can do that by customer type so we can think of services to the business divisions and services to corporate functions we can think about it by application type integrated applications and non-integrated applications or standard applications or bespoke applications because they're probably going to require a slightly different set of work steps depending on those application types we can think of it by service type which is sort of how I have laid out the chain in the visual we can think about it in terms of legacy versus new we can think about it in terms of strategic orientation and there's a tool here that I teach on my course but it's an old strategy tool which is about whether your operation is trying to be really innovative to get to be excellent through innovation whether it's trying to be excellent through being really close and intimate with the customer or the user or whether it's trying to be excellent by being operationally efficient of course a lot of IT is trying to be excellent by being operationally efficient but not all and so if we were to think about a lot of things that one's doing in the digital space you're trying to be excellent by being clever or by being really sensitive to the need of a particular constituency within the organisation and bespoke applications are really about customer intimacy now these different strategic orientations I know from organisation design work are often better managed in different silos because you need different kinds of people and different kinds of culture to be good at an innovation activity than a efficiency activity so is this a way of thinking about how we should structure the IT function a couple more things the digital issue is a big one Mackenzie just came out with a big article saying that that digital should not be separated from IT because it creates problems down the road if you do but how many different digital service chains should we be thinking about do you think about digital for the front end and digital for the back end as two different types of service or is it all one or the other ten what's the right way to think about this my point about where does it make sense to combine across service chains so should we put all the support together for all the service chains in one support team should we have all of the procurement bill together should we have all the plan together in terms of a strategy development or should we actually decentralise those into the service streams these are really important issues which will affect the way the IT operation runs and how effective it is and then there's the whole business partner point is it possible to find any human beings who are capable of being good business partners across this broad range of services and HR have a huge problem getting HR business partners to be competent across compensation and benefits and talent and organisation development and recruitment and other areas I'm sure that the same problem exists in IT so there is a bunch of quite interesting, intellectually challenging and important to performance issues that need to be wrestled with at a high level in your operating model thinking and then we can go on round and I'm running out of time here about these different other parts of the operating model canvas that raise some tricky operating model design issues behind each of these spaces on the canvas is some tooling, some frameworks and methods that you can use to explore your locations footprint there's a tool called the organisation modelling tool which is useful for helping you think about organisation structure decision grids for helping you think about decision authorities process grids for helping you think about process ownership supplier matrices for helping you think about the supplier relationships so each of these spaces on the canvas can be expanded out so that you don't have to rely just on the one page version you can then take each of those pieces and expand it into a couple of pages and end up with a ten page version but the thought here is do a lot of your thinking at the one or ten page level rather than the hundred or thousand page level because at that one or ten page level you can engage people you can engage your customers, you can engage your top team you're going to have plenty of disagreements but you're able to debate the big stuff and if you can get agreement about the big stuff you are then going to find it much easier to put together the detail in an aligned way my hunch, my thought and I've been sort of wrestling with this for a few months now and it's influenced by the work I've done in other functions other than IT my hunch is that there's a performance leap opportunity in the IT function if you structure less by plan, build, do or whatever the right terminology is and more by value service delivery chain, value chain and says thinking through what those are in my view is likely to be where some of the gold lies questions there's some stuff if you want to follow up any of my work there's my email address, my book website and my blog thank you Andrew