ORGANIZING DATA AND

TECHNOLOGYWHITE PAPER

DEFINING THE MULTIMODALORGANIZATION

Digital technology is an integral part of products and services. Almost every business activity is designed using tech­nology and more and more business activities are fully digitized. This tech­nology has become of paramount impor­tance for enterprises because it enables creation of business value through data and fundamental redesign of business models and processes. The growing scale and diversity in the application of tech­nology makes it necessary to organize technology and data in new ways. Whether it is the popularity of agile development using Scrum and DevOps, the recent publications of Gartner on Bimodal technology or the interest in knowing how Spotify, Uber, AirBnB, Amazon, Zappos, Alibaba and Netflix have organized themselves, we see a serious interest in revisiting the way we organize technology when technology is crucial for your business.

In this paper we explain key concepts of organizing technology and data based on the business value of business activities. Not all business activities are similar. Therefore it is necessary to be strict and prescriptive at one time, and agile and disruptive at another. Some technology and data activities need to be centrally organized; others can be decentrally

PREFACEORGANIZING OF DATA AND TECHNOLOGY

organized and an integral part of the business. In this white paper we call that the multimodal organization.

Anderson MacGyver supports its custom­ers in finding and creating better ways of organizing technology and data. Not in a one-size-fits-all manner but driven by the role technology plays for a business activity. We expect this white paper to be an inspiration to you and we will support you in finding some new fundamental concepts and insights to get ready for the digital economy and future. •

Edwin WieringaGuild lead Multimodal Organization

CONTENTS PREFACE 1

AUTHORS 2

1. INTRODUCTION 3

2. BUSINESS DOMAINS 6

3. SUBCULTURES 14

4. TECHNOLOGY 20

5. MAPPING SUBCULTURES AND TECHNOLOGY SERVICES 24 ON BUSINESS ACTIVITIES

6. THE MULTIMODAL TECHNOLOGY ORGANIZATION 26

7. CONCLUSIONS 32

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GERARD WIJERSDr.ir. Gerard Wijers is co-founder and managing director of Anderson MacGyver. Anderson MacGyver is focused on maxi­mizing the business value of technology and data for their customers through management and consultancy assign­ments in the area of technology strategy and program and change management. Gerard is an experienced boardroom technology advisor with an extensive background in technology strategy, innovation, governance, application and service portfolio analysis, sourcing and transformation of technology organiza­tions. He has over 25 years of experience in strategic technology advisory, and is part­time faculty member at Antwerpen Management School on Business Information Management, and core teacher at Nyenrode Business University on Organization and Value of IT. Before starting Anderson MacGyver, Gerard has been a partner with KPMG, managing director at EquaTerra and Morgan Chambers and managing director at Ordina and ID Research. He holds a PhD degree (cum laude) from Delft University of Technology in the area of technology strategy. •

AUTHORS CHAPTER 1INTRODUCTION

Technology and data are an indispensa­ble strategic part of the business activi­ties of any organization. Technology is an integral part of final products or services, such as electronic banking, shops, cars and consumer devices. Moreover, tech­nology also ensures that new information and knowledge is derived from the large amount of data that we capture nowa­days or acquire from external sources. Instead of entering data by a keyboard, more and more data are available via sensors: real time and with high reliabil­ity. This creates opportunities for new services but also for improvement of internal processes. The management focus shifts from the inside ­ ensuring proper control of technology resources ­ to the outside: how can we create more value for our customers through the use of technology and data. Examples are a smart thermostat, a service to tune the energy consumption on the price of the energy spot market; or a medical treat­ment in which a doctor guides you through an app on your mobile phone.

As a result of globalization, e­business, cloud and other technological innova­tions, new technology­enabled ways of running the business come into place. technology is being used directly by customers and partners, and organiza­

tions face social opinions on their prod­ucts, services, data and technology usage. The role of data has changed dramatically in only a few years time. Organizations are in a digital transformation and more data driven. This impacts the way data and technology has to be organized.

THE TECHNOLOGY DEFINITION

Technology (‘science of craft’, from Greek τέχνη, techne, ‘art, skill, cunning of hand’; and -λογία, -logia [2]) is the collection of techniques, skills, methods, and process-es used in the production of goods or services or in the accomplishment of objectives, such as scientific investiga-tion. Technology can be the knowledge of techniques, processes, and the like, or it can be embedded in machines to allow for operation without detailed knowledge of their workings. Systems (e. g. machines) applying technology by taking an input, changing it according to the system’s use, and then producing an outcome are referred to as technology systems or technological systems (https://en.wikipe-dia.org/wiki/Technology dd 2020-02-04). In this whitepaper technology is related to technology with an IT component such as apps, applications, databases, hardware, devices etc.

ALBERT SPROKHOLTDrs. Albert Sprokholt is principal consul­tant at Anderson MacGyver in the field of strategy, governance, information management, architecture and sourcing of technology and technology services. He has over 30 years of technology experience in various sectors such as logistics, manufacturing, technical services, financial services, utilities and government. He worked as CIO managing complex technology organi-zations (Bührmann­Tetterode and AEGON) and was executive member of the board of Morgan Chambers and the European Executive Committee of EquaTerra.

He is lecturer at Nyenrode Business University, the Academy for Information Management and the Antwerp Management School on technology services, governance and sourcing. He is currently working on a dissertation on the subject of the governability of technology services. He is arbiter for the SGOA (Stichting Geschillen Oplossing Automatisering) and at the NAI (Nederland Arbitrage Instituut). •

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1.1

EVOLUTION OF INTERNAL IT ORGANIZATIONS TOWARDS MULTIMODAL ORGANIZATIONS

Over the last decades, internal IT organi­zations have strongly evolved. In the past, reliability, control and efficiency were core values for many IT organizations. They were typically centralized for scarcity of resources and expertise. IT organizations grew by starting to manage their processes and became smart in sourcing and managing their demand. IT organizations have evolved in culture and structure from hierarchical market­oriented (demand/supply) into a multimodal structure driven by creating business value and enabling a culture for innovation and agility, see Figure 1. IT organizations have become ambidex­trous in the way they balance stability and agility to create business value in an optimal way. This is known as bimodal IT as introduced by Gartner (Aron and Schulte, 2015). Gartner defines two essential modes for an IT organization: mode 1 for IT centric, focused on price performance and control, mode 2 for agile and focused on business and reve­nue. Each mode needs its own subcul­ture: the Operator culture for mode 1

and the Innovator culture for mode 2. On top of that, Gartner advises a Guardian culture to control and govern IT.

Our consultants design modern technol­ogy (IT) organizations. For this, we use, among other things, the Cameron and Quinn (2006) model on culture and lead­ership to develop multimodal IT organiza­tions. Proper organization of IT requires that there is an optimal connection between the demands of the business and digital technology not only in the technology solution but also in the organ­izational solution. Technology and data are an integral part of the business and the way technology is organized should be a reflection of this. Different organiza­tional solutions and subcultures have to be distinguished. Bimodal IT still carries too much the premise that technology should be organized as one central IT organization with two different flavors.

1.2

DEFINING A MULTIMODAL ORGANIZATION

In this white paper we introduce the concept of multimodality: a more granular approach to the organization of technology based on the characteristics

of specific business domains, its subcul­tures and its technology solution:

∙ Business domain: the characteristics of a business domain that is using technol­ogy for its own activities or for its output in the form of information, products and services: is it value or cost driven, is it specific or generic?∙ Subculture: when technology is an integral part of the business domain, the organization of technology should fit the subculture of the business domain it supports and the way that business can best be supported by technology∙ Technology: the way digital technology should preferably be applied to support a specific business domain

Three conceptual frameworks are used. The Operating Model Canvas (see Anderson MacGyver’s white paper) is used to determine the business domains and their characteristics. For subculture characteristics the Competing Values Framework of Cameron and Quinn (2006) is used and for technology Anderson MacGyver typology for characterizing technology. •

IT OPERATIONS (1970 – 1990)

TECHNOLOGY FOCUSED

GET THE JOB DONE

WE ARE THE EXPERT

IT MANAGEMENT (1990 – 2000)

OPERATIONS UNDER CONTROL

IT PROCESSES (ITIL)

INTERNAL ORIENTATION

DEMAND AND SUPPLY (2000 – 2010)

OUTSOURCING

COST = VOLUME X UNIT PRICE

DEMAND UNITS FOCUSED ON

CHANGE

BUSINESS VALUE (2010 - ...)

BUSINESS KNOWLEDGE

VALUE OF TECHNOLOGY

AND DATA

IN PRODUCTS AND SERVICES

MULTIMODAL ORGANIZATION

FIGURE 1 ORGANIZING OF DATA AND TECHNOLOGY

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CHAPTER 2BUSINESS DOMAINS

A business domain is a set of coherent business activities. Business domains are the building blocks for organizing including the organization of technology. Examples of business domains are: sales, purchasing, logistics, finance, control, et cetera.

2.1

DEFINITION OF BUSINESS ACTIVITIES

A business activity is something an actor (human, system, machine) does by using resources (capacity, capital, expertise, data) in order to achieve a certain result (product, service, profit, information). Execution of a business activity requires resources and information. The way business activities are performed changes over time: actors learn and specialize, new technologies become available. Business activities can be interlinked forming activity chains. Business activities can also be about the coordination and integration of other business activities in the organizations or between business partners, making arrangements through procedures, processes and systems in order to act more effectively.

‘How’ is not part of the definition of a business activity. Using such a definition gives ample room for discussing all kinds of solutions to perform a business activ­ity taking into account the needs of customers, resources available and the context in which the activity operates, without being hindered by for example a specific operating process. The defini­tion of activity allows for diversity and innovation with respect to how the activ­ity is executed. So, there are many ways to cut a sheet of paper: the business activity is cutting the sheet; how this is done, by which process and with what kind of tools are used is indifferent. Digitization of a business activity implies executing the activity preferably without human interference. The activity, however, is still there.

2.2

THE STRATEGIC VALUE OF BUSINESS ACTIVITIES

Porter based his Value Chain Model on business domains and activities. From a strategic perspective, an organization has two basic options: value creation through differentiation or cost optimiza­tion through standardization:

∙ Value creation can be achieved by reducing the non­tangible cost for the customer through increased flexibility, ease of use or lowering the cost for transactions, or by improving the perfor­mance of the processes for the customer through reduction of throughput times, transaction time/cost, higher flexibility, or by the delivery of additional services and data. Value, however, is created by the customer in using the service. ∙ Cost optimization can be achieved by cost savings or greater economies of scale through standardization, or by using commoditized services.

With respect to activities it can be said that value-add activities, if executed well contribute to the perception of value by the customer. These value­add activities have in most cases an external focus. Customers expect that cost-focused activities are effectively and efficiently organized. These activities can also influence customer satisfaction, especially when not performed correctly.

SPECIFIC BUSINESS ACTIVITIES

Based on customer specifications

Specific way of working

Specific technology

Strong integration with other activities

Location bound

Time critical ­ dependency

Frequency of changes in activity

Specific legislation and guidelines

Uniqueness of business activity: one of a kind

GENERIC BUSINESS ACTIVITIES

Based on common business practice

Operated by most organizations

Standard technology

Loosely coupled

Location independent

Expertise is externally available

Low diversity

Execution has no specific demands

Supported by generic systems

TABLE 1 CHARACTERISTICS OF GENERIC AND SPECIFIC BUSINESS ACTIVITIES

These activities then become real dissat­isfiers, e.g. incorrect shipments, invoic­ing. Also, many internal activities have a cost­focus as they are not directly focused on interacting with customers.

2.3 SPECIFICITY OF BUSINESS ACTIVITIES

The level of specificity of a business activity is an important measure to determine how a business activity should be organized and supported. The more

specific a business activity is, the more an organization must invest in its own resources, expertise and data to perform this business activity. If a business activ­ity is considered to be generic, then the activity could be performed by others as well. Therefor a distinction is made between specific and generic business activities. The characteristics are shown in Table 1.

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Specific business activities have a drive for further diversification and innovation. Examples are tailor-made products and services requiring specific capabilities or expertise, or activities requiring vast upfront investments like health services, or specific business-to-business services integrating the activities of two or more companies. Specific and special­ized business activities can typically be found in the interaction between organi­zations or in the communication with consumers, but also in public organiza­tions executing specific legislation like the IRS, social services, et cetera.

2.4

CLASSIFYING BUSINESS ACTIVITIES

Business activities are characterized by the extent to whether they focus on value creation or cost optimization, and the level of specificity (distinctiveness) compared to similar activities of other organizations. Figure 2 depicts these aspects in the Business Activity Model. The horizontal axis determines whether the business activity focuses on cost optimization or value creation. The verti­cal axis indicates the specificity level of the business activity from low to high.

The quadrants show four different types of business activities, each with their own distinctive characteristics:

∙ Distinct represent business activities creating distinct products and services for customers.

∙ Special represents specific or critical business activities with no direct contri­bution to the value creation for custom­ers, like technical maintenance of equipment or specific infrastructure (for example time critical), specific IT, process engineering, or activities inte­grating different business activities.

∙ Common represents business activities that are not specific and mainly cost-driven like supportive activities such as financial administration, human resources and facility management.

∙ Value-add represents business activi­ties creating value to customer without having a significant difference compared to the competitor’s activities. Examples are competitive financial services offered by banks, ticket services for travelling and hotel rooms.

The distinction between types of busi­ness activities support to organize and

focus business activities and also to structure information and technology needs. Business activities which primar­ily have an innovative nature are organ­ized differently compared to ‘Common’ activities. Also, not every activity needs to be specific in an organization that is highly innovative. The Business Model Canvas (Osterwalder, 2010) provides focus to ‘key activities’: concentrate on those business activities that make a critical difference in the market place. However, the model of Osterwalder does not take other non­key activities into account. It more or less assumes that these activities are just there and in a good shape.

SPECIAL• Goal oriented • Teamwork, projects• Solution focused• Flexibility• Expertise• Capability development • Cooperation with suppliers/ customers

DISTINCT• Vision oriented• Collaboration• Innovative outputs• Transformation• Short life cycle• External capabilities• Agile teams• Ambiguity • High risk

VALUE-ADD• Value, effectiveness • Coordination • Competitive• Customer focussed• Value improvement• Productivity /

Profitability • Process driven• Organizational

networks • Value chain

COMMON• Efficiency• Hierarchical - top down• Mature• Product focused• Processes for effectiveness• Driven by plans, roles and responsibilities• Contracts

HIGH

LOW

COST / EFFICIENCY

SPECIFICITY

STRATEGIC FOCUS

VALUEFIGURE 2 BUSINESS ACTIVITY MODEL

SPECIAL DISTINCT

COMMON VALUE-ADD

BUSINESSACTIVITY

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Table 2 provides an overview of the key attributes for organizational aspects (rows) of a type of business activity (columns). Each column shows the organizational and technological qualities of a solution that fits that specific type of business activity.

2.5

EXAMPLES

White paper Operating Model Canvas explains the theory and the use of the Operating Model Canvas (OMC). In essence the OMC shows all business activities of an organization broken down into primary activities, supportive activi­ties and firm infrastructure (based on Porter’s Value Chain Model). The OMC has an extension towards the context of the organization: it includes the stakeholders in the delivery chain like customers, busi­ness partners and suppliers, and the services that are exchanged between them. The governance and control activi­ties are also showed in the OMC. The OMC can be used for many purposes. One of those is how to organize data and tech­nology considering the characteristics of the business activities or business domains.

Figure 3 is a simplified example of an OMC. In this example we highlight the characteristics for one business activity for each of the four quadrants: Distinct, Special, Common and Value­add. We use a conceptual model of a company in the parcel delivery sector as a reference. Competition in this business is intense where many companies are offering simi­lar services. Please note that this analy­sis is a simplified and modified example for explanatory purposes only.

The business activity ‘Service’ is classi­fied as ‘Distinct’, since specific solutions are built for addressing the specific needs of different customer groups. The services offered to customers are constantly changing and a mix of existing and bespoke solutions addressing specific needs. The activity is agile and driven by the dynamics and changing needs of specific customer groups. The business activity ‘Planning and Scheduling’ is labeled as ‘Special’. This activity is based on route schemes for collecting parcels, the sorting equip­ment, storage needs, delivery requests for receivers and so on and therefore very specific. Effective planning of logistics and delivery is key for customer satisfac­tion, but also for controlling the contribu­tion margin. It is managed by a team of

highly skilled and knowledgeable plan­ning experts using a set of planning tools and bespoke software. The supportive activity ‘Personnel Administration’ is considered as a ‘Common’ activity with no specific requirements compared to the HR activity of other companies with similar business activities. The business activity ‘Marketing and Relation Management’ is labeled as ‘Value­add’. The activity has to create value to customers when prospecting and selling to its customers, trying to sell highly competitive and stretching services to meet customer demands. The activity as such is to a large extend comparable with other companies. However, the main purpose of this activity is different: the activity has to create customer value. •

Strategic orientation

Output/result

Operation/process

Sourcing

Governance

Leadership

Financial

COMMON

• Internal focus• Generic• Non-distinctive activity

• Well defined results • Stable requirements • Uniformity• Market conformity

• Standards• Procedures• Automated• Cost reduction

• Often outsourced • Contract & SLA’s • Pay-as-you-go• Reliability

• Standard processes• Efficiency• Continuous improvement • Policies & standards

• Top down – hierarchical • Self Governance• Roles & responsibilities • Enforcing

• Cost-driven• Cost/performance • Justification

SPECIAL

• Internal focus• Specific• Low on direct added value • Flexibility

• Problem solving• Result oriented• Facilitation; integration • Effectiveness

• Specific expertise• Cooperation• Opportunity selection • Cohesion

• Outsourced for capacity • Flexibility, scalability• Expertise• Reputation

• Project management• Tasks• Team• Capability development

• Project management • Participative• Team• Coaching

• Operated as cost centre • Cost optimization• Capacity• Utilization

VALUE-ADD

• Generic key activity• External focus• Value, customer driven • Excellence

• Result, goal oriented • Value delivery• Value improvement • Contribution

• Effective• Alignment• Customer value/ satisfaction • Business domain expertise

• Best practice solutions• Contract & SLA’s• Transactional / pay as you go • Adapt to supplier process

• Strategy• Best market practice• Generic business process • Process driven

• Cooperation• Influencer• Achievement of targets• Purposing

• Profit centre• Productivity• Financial contribution • Transaction costs

DISTINCT

• Visionary, continuity • Strategic key activity • Differentiation• Growth

• New customer services • Green fields• New resources• Unique solutions

• Short business cycles/ flow • Experiments• Transformation• Program

• External expertise• Collaboration with supplier • Projects• Dependency & trust

• Vision• Agility, adaptive• Learning process • Interactive design

• Empowering• Entrepreneurial • Innovative• Network

• Value• Budget • Program

TABLE 2 KEY ATTRIBUTES PER BUSINESS ACTIVITY TYPE

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VALUE-ADDCOMMONSPECIALDISTINCT

SUPPORTING BUSINESS ACTIVITIES

STRATEGY PLANNING CONTROL

CUSTOMERSEGMENTS

PARTNER NETWORK

EXTERNAL STAKE-

HOLDERS

INBOUNDLOGISTICS

PLANNING & SCHEDULING

MARKETING & RELATION MAMAGEMENT

PRIMARY BUSINESS ACTIVITIES

FACILITYMANAGEMENT

HUMAN RESOURCES

FINANCEPROCURE-MENT

PRODUCTION OUTBOUNDLOGISTICS

SERVICE

EQUIPMENTMANAGE-

MENT

SALES

CHANNELS VALUEPROPOSITIONS

FIGURE 3A SIMPLIFIED EXAMPLE SHOWING THE DIFFERENT NATURE OF BUSINESS DOMAINS AND BUSINESS ACTIVITIES IN AN ORGANIZATION

IT

‘The characteristics of a business activity determines how it should be organized and supported.’

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CHAPTER 3 SUBCULTURES

Organizations are social units of people, structured and managed to meet a need or to pursue collective goals. All organi­zations have a management structure which determines relationships between the different activities and its employees. They make subdivisions and assign roles, responsibilities and authorities to carry out different tasks. Organizations are open systems and affect and are affected by their environment. This is demon­strated by two important capabilities the business requires of modern IT organiza­tions:

∙ Agility: the ability of an organization to identify, capture and respond to opportu­nities in the marketplace more quickly than peers do∙ High performance: achieving better results than peers do by constantly adapting to business needs, using oppor­tunities for improvement and by creating customer value.

It is difficult to meet such demands with traditional, centrally organized and standardized technology departments. Other modes for organizing data and technology are necessary: flexible, agile, collaborative, innovative but also effi­cient, controlled and stable. CIOs are challenged with highly contrasting

requirements and therefore need multi­ple organizational modes to govern data and technology conforming to the specific characteristics of the different business domains.

3.1

LEADERSHIP AND CULTURE TYPES

Organizing is not only about the structur­ing of tasks and activities, and defining roles, functions and responsibilities. Performance of organizations depends also on culture and leadership. Leader­ship styles should fit the challenges of an organization or a business domain: marketing needs a different type of lead­ership than an administration. Culture influences the way people collaborate and achieve results: activities that are stable, predictable and run for efficiency will require a different culture and leader­ship style than activities that are ambigu­ous and depending on out-of-the-box thinking. Therefore: common, standard­ized technology services will be organ­ized differently than distinct and inno vative, digital services developed in close collaboration with third parties and users.

ADHOCRACY• Orientation: CREATIVE• Leader Type: Innovator Entrepreneur Visionary• Value Drivers: Innovative outputs Transformation Agility• Theory of Effectiveness: Innovativeness, vision, and new resources produce effectiveness

MARKET• Orientation: COMPETING• Leader Type: Hard driver Competitor Producer• Value Drivers: Market Share Goal achievement Profitability• Theory of Effectiveness: Aggressively competing and customer focus produce effectiveness

HIERARCHY• Orientation: CONTROLLING• Leader Type: Coordinator Monitor, Organizer• Value Drivers: Efficiency Timeliness Consistency and uniformity• Theory of Effectiveness: Control and efficiency with capable processes produce effectiveness

HIGH

LOW

INTERNAL

DYNAMICS

ORIENTATION EXTERNAL

CLAN ADHOCRACY

HIERARCHY MARKET

FIGURE 4 KEY ATTRIBUTES PER BUSINESS ACTIVITY TYPECULTURE & LEADERSHIP MODEL BASED ON COMPETING VALUES FRAMEWORK OF CAMERON & QUINN (2006)

CLAN• Orientation: COLLABORATIVE• Leader Type: Facilitator, Mentor Team builder• Value Drivers: Commitment Communication Development• Theory of Effectiveness: Human development and participation produce effectiveness

CULTURE&

LEADERSHIP

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3.2

EXAMPLES

Using our example of the parcel delivery company as depicted in Figure 6 (?), the culture type for the business activity ‘Governance’ represents the dominant culture for the organization as a whole. At this level the mission and vision are set, as well as the value system of the organization. Top­level management is the carrier of the companies’ culture and leadership style. In our example of the parcel delivery business the dominant

Cameron and Quinn (2006) developed the Competing Values Framework classifying organizational culture as well as leader­ship style. We refer to this framework as Culture & Leadership Model. The model has two dimensions, see Figure 4: a horizontal axis from ‘Internal focus and Integration’ to ‘External focus and Differentiation’ and a vertical axis from ‘Flexibility and Discretion’ to ‘Stability and Control’. The two axes form four quad­rants, each representing a specific organizational culture and leadership style.

Examples for the ‘Adhocracy’ quadrant are start-ups and green fields, but also innovation labs, experimental groups in existing organizations, or transforma­tional projects. ‘Clans’ are found in non-profit organizations, public sector, or professional units like technology or technical maintenance in commercial organizations providing internal special­ized services to primary business activi­ties. ‘Hierarchies’ are organizations that produce large­scale homogeneous prod­ucts like telco’s, food & retail chains. ‘Markets’ can be web shops and organiza­tions combining multiple distribution channels offering highly competitive services to customers.

The axes of the Culture & Leadership Model differ slightly from the axes of Business Activity type model. One can argue that low specificity allows for stability and control, and that high specificity comes with flexibility and discretion. For the labels on horizontal axes a similar reasoning can be followed: value creation implies an external focus making a difference for customers; cost optimization requires scaling, uniformity and a primarily internal focus. The labels of the axes of both models are not the same but congruent. Therefore, this organiza­tional model can be of great value for analyzing culture and leadership types for business domains. It also gives direction on the characteristics that might fit best for each type of business activity.

The Culture & Leadership Model can be used in combination with the Business Activity Model since the labels of the axes of both models are congruent. This has to be done with care because congruent does not mean that these axes are the same. In general terms ‘Adhocracy’ is congruent to ‘Distinct’, ‘Clan’ to ‘Special’, ‘Hierarchy’ to ‘Common’ and ‘Market’ to ‘Value­add’, see Figure 5. The application of the

Culture & Leadership Model on the Business Activity Model demonstrates that different business activity types require different leadership styles.

management style is therefore hierarchi­cal. However, when there is a strategic need for innovation or strong market orientation, the Culture & Leadership Model shows that there is a need for a different culture and leadership style. Moreover, it becomes clear that bureau­cratic and hierarchical organizations face great challenges when they are confronted with large changes in their environment and as a consequence the need to make the organization more agile.

The business activity ‘Service’ has been classified as ‘Distinct’ and needs a culture

that can be characterized as an adhoc­racy: creative, visionary, agile, innovative outputs. ‘Planning and Scheduling’ can be typified as a ‘Clan’ culture: collaborative, team, facilitating, committed, skilled and capable. A ‘Common’ activity like ‘Personnel Administration’ has the char­acteristics of controlling, procedural, efficiency and uniformity. The ‘Value-add’ business activity ‘Marketing and Relation Management’ is competitive, performing, profit and market share driven. The conclusion is that our example organiza­tion has multiple subcultures in its business domains. •

VALUE-ADDCOMMONSPECIALDISTINCT

ADHO-CRACY CLAN

HIER-ARCHY MARKET

CULTURETYPE

BUSINESSACTIVITYTYPE

FIGURE 5 CONGRUENT TYPOLOGIES FOR BUSINESS ACTIVITIES AND ORGANIZATIONAL CULTURE & LEADERSHIP

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SUPPORTING BUSINESS ACTIVITIES

STRATEGY PLANNING CONTROL

CUSTOMERSEGMENTS

PARTNER NETWORK

EXTERNAL STAKE-

HOLDERS

INBOUNDLOGISTICS

PLANNING & SCHEDULING

MARKETING & RELATION MAMAGEMENT

PRIMARY BUSINESS ACTIVITIES

FACILITYMANAGEMENT

HUMAN RESOURCES

FINANCEPROCURE-MENT

PRODUCTION OUTBOUNDLOGISTICS

SERVICE

EQUIPMENTMANAGE-

MENT

SALES

CHANNELS VALUEPROPOSITIONS

FIGURE 6OPERATING MODEL CANVAS SHOWING THE TYPE OF BUSINESS ACTIVITY WITH THE ASSOCIATED SUBCULTURE & LEADERSHIP

IT

ADHO-CRACY CLAN HIER-

ARCHY MARKET

‘An organization has multiple subcultures with a dominant corporate culture.’

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CHAPTER 4 TECHNOLOGY AND DATA

Allocation and governance of company resources differ based on the business activity type. ‘Value­add’ activities will receive more resources and expertise and probably more board involvement than ‘Common’ activities fulfilling effi­ciently the basic needs for the organiza­tion. Thus, technology and data have to be managed differently based on the business activity type they are support­ing; since there are differences in objec­tives, resource allocation, capabilities, governance, relationships with third parties, treatment of risks, and sourcing. The business domain determines the technology focus. Anderson MacGyver has defined a Technology Model. The model has two dimensions, see Figure 7. The horzontal axis classifies if technology should have a cost or value focus. The vertical axis classifies whether the technology should support a high or low specificity. Technology used in ‘Value­add’ activities have to primarily deliver that value to the customers or the user. Technology in ‘Common’ business activity should be cost-efficient, standardized and be opti­mized from a cost perspective. In this case the technology is often applied for internal processes or for the enabling and integration with other technologies. The Technology Model fits the Business

Activity Type Model. The horizontal and vertical axes of both models are the same, see figure 8. The conclusion is that the technology for a certain business domain should optimally support the requirements of that business domain. This is as such not very particular. However, if organization consciously decide what technology focus is needed for a certain business activity, then this enables an effective steering mechanism to give focus during implementation, for the acceptance of new technology, supplier governance and the required results.

4.1

EXAMPLES

We return to our example of the parcel delivery company. In Figure 9 the tech­nology is matched with the type of the business activity. The parcel company has chosen to primarily use ‘Value­add’ technology to support its business activities. However, for an internal business domain such as ‘Personnel Administration’ technology is imple­mented in a cost effective and standard

manner (with limited to no customization) based on a common SaaS HRM platform. For ‘Planning and Scheduling’ the ‘Special’ technology type is used to fulfill the specific requirements of the installed equipment for collecting and sorting parcels and the need for specific solu­tions to integrate and exchange data in real time with other systems. Technology specialists of the parcel company work closely together with external specialists to deliver the technology services for this business activity.

The business activity ‘Service’ is highly dynamic and focused to address customer demand and to integrate the exchange of information between the parcel company and its customers. Here, ‘Distinct’ technology is built and main­tained aiming to distinct the parcel company from its competitors in the eyes of its customers. The business domain ‘Marketing and Relationship Management’ makes use of best in class value­add software solutions that enable the parcel company to address the expectations of customers for swift and adequate support of their commercial needs. •

VALUE-ADDCOMMONSPECIALDISTINCT

VALUE-ADDCOMMONSPECIALDISTINCTBUSINESSACTIVITYTYPE

TECHNOLOGYTYPE

FIGURE 7 MATCHING BUSINESS ACTIVITIES AND TECHNOLOGY

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DISTINCT∙ Value/market driven innovation∙ Specificity of application∙ Easy of use and connectivity∙ Flexible∙ Design driven∙ Knowledge inhouse∙ Ownership in­house∙ Innovation by owner (in­house)

VALUE-ADD∙ Value­add Service driven∙ Technology supports the requirements of Business and market ∙ Adapt in­house processes∙ Stick to industry standards and best practice∙ Knowledge about the use in­house∙ Innovation by the market

COMMON∙ Product driven ∙ Applied to reduce costs ∙ Use of industry standards∙ Consider outsourcing ∙ Implement best practice∙ Supplier owns and knows the technology∙ Innovation by the market∙ Availability of substitutes

HIGH

LOW

COST / EFFICIENCY

SPECIFICITY

STRATEGYFOCUS

VALUE

SPECIAL DISTINCT

COMMON VALUE-ADD

TECHNOLOGY

SPECIAL∙ Problem driven∙ Project∙ Resources (cost­effective and efficient)∙ In­house capability for requirements, design, release∙ Knowledge in­house∙ Ownership in­house∙ Innovation by owner (in­house)

SUPPORTING BUSINESS ACTIVITIES

STRATEGY PLANNING CONTROL

CUSTOMERSEGMENTS

PARTNER NETWORK

EXTERNAL STAKE-

HOLDERS

OUTBOUNDLOGISTICS

PLANNING & SCHEDULING

MARKETING & RELATION MAMAGEMENT

PRIMARY BUSINESS ACTIVITIES

FACILITYMANAGEMENT

HUMAN RESOURCES

FINANCEPROCURE-MENT

PRODUCTION INBOUNDLOGISTICS

SERVICE

EQUIPMENTMANAGE-

MENT

SALES

CHANNELS VALUEPROPOSITIONS

FIGURE 9OPERATING MODEL CANVAS SHOWING THE TYPE OF BUSINESS ACTIVITY WITH THE ASSOCIATED SUBCULTURE & LEADERSHIP

IT

VALUE-ADDCOMMONSPECIALDISTINCT

FIGURE 8TECHNOLOGY MODEL

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SUPPORTING BUSINESS ACTIVITIES

STRATEGY PLANNING CONTROL

CUSTOMERSEGMENTS

PARTNER NETWORK

EXTERNAL STAKE-

HOLDERS

INBOUNDLOGISTICS

PLANNING & SCHEDULING

MARKETING & RELATION MAMAGEMENT

PRIMARY BUSINESS ACTIVITIES

FACILITYMANAGEMENT

HUMAN RESOURCES

FINANCEPROCURE-MENT

PRODUCTION OUTBOUNDLOGISTICS

SERVICE

EQUIPMENTMANAGE-

MENT

SALES

CHANNELS VALUEPROPOSITIONS

FIGURE 10OPERATING MODEL CANVAS SHOWING THE TYPE OF BUSINESS ACTIVITY WITH THE ASSOCIATED TECHNOLOGY AND SUBCULTURE & LEADERSHIP

IT

CHAPTER 5MAPPING SUBCULTURES AND TECHNOLOGY ON BUSINESS ACTIVITIES

The type of subculture and technology can both be mapped on the business activity. Our experience shows that in most cases the typology of a business domain, organization and technology are congruent. So, a business domain which is characterized as ‘Distinct’ has most likely the subculture of an ‘Adhocracy’ and require ‘Distinct’ technology. The last does not necessarily mean that all IT components should be custom: it might show that standard components are available on the market that can acceler­ate the development process in creating a unique business solution based on the use of standard components. Example of such a standard component is a develop­ment platform.

The value of the approach is that the model gives focus to the characteristics of different kind of activities, the corre­sponding technology and subcultures, helping to understand its implications for the use of technology but also for the organization and management of a busi­ness domain, technology and data. Based upon the examples discussed in the previous chapters Figure 10 provides the mapping of the three aspects for the parcel company example. •

VALUE-ADDCOMMONSPECIALDISTINCT

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CHAPTER 6THE MULTIMODAL ORGANIZATION

Assuming IT organizations are beyond the one size fits all phase, a multimodal organization organizes the required capabilities into diverse technology teams directly addressing the needs of a specific business domain. The number of technology teams depend on the purpose and the size of the business: more diversity will require more organi­zational teams. The capabilities needed within a team depend on the nature of the business itself, its subculture and the technology required to support that (specific) business domain.

So, dominantly technology is organized into business domain specific teams with specific characteristics for technology and organization. Bundling technology services with focus on the business into business domain specific teams, has a lot of advantages when closeness to the business activity is required, such as working with agile teams, special know how, specific performance requirements, criticality and continuous improvement. However, a strong overall central tech­nology governance function is required for coordination. This function defines and monitors standards and policies to govern goal setting, allocation of resources, architectures describing how technology services and systems are

working together, and data governance (remember the Guardian culture of Gartner as described in the beginning of this white paper).

A multimodal organization has to be organized, typically into three layers with a specific responsibility:

∙ A Leadership and Steering layer for the overall technology organization to lead and govern technology and data. This layer is organized at enterprise level under the C x O by activity domain, grouped by expertise and role. The main responsibility at this layer is to:

­ set a digital vision, digital agenda and digital strategy

- define priorities and investment selection

­ design an architecture to support the business activities and digital strategy

­ manage the key technology capabilities and sourcing

­ manage the cohesion and consistency across the organization

­ set policies and requirements with regard to compliance, security and continuity.

∙ An Execution layer that delivers the technology services to the business in

DIGITAL MISSION AND VISION, IT GOVERNANCEENTERPRISE ARCHITECTURE, POLICIES, SOURCING STRATEGY

IT CONTROL

BUSINESSSUBLAYER

PLATFORMITLAYER

BUSINESS ITSERVICES

ENABLING IT SERVICES

COMMON IT SERVICES

EXECUTIONLAYER

CONTROLLAYER

BUSINESS ITSERVICES

BUSINESS ITSERVICES

BUSINESS ITSERVICES

FIGURE 11 OVERVIEW OF THE ACTIVITIES WITHIN THE MULTIMODAL ORGANIZATION

LEADERSHIP & STEERING LAYER

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accordance to business requirements and related service requirements. Delivery of services includes the design, maintenance, sourcing management, production, performance, support, train­ing, continuous improvement and adap­tation of the services to change in business needs, in technology or in legis­lation. This layer can be split into two sub layers: a business focused layer and a platform technology layer.

∙ An independent Control layer verifying the follow up on guidelines and princi­ples, goal achievements, compliancy, security, audits, securing know how, privacy and integrity, and reports to vari­ous stakeholders and the board. Control takes place at enterprise level as well as at lower levels like a business unit level. It is important that the different control levels are connected and organized in a such a manner that the reporting line is not mixed-up with the operational reporting lines. The ‘Control layer’ is responsible for validation of:

- the execution within the Execution layer complies with the objectives, guidelines and principles set by the Leadership and Steering layer

­ the know­how and business continuity are secured

­ the risks are under control by appropri­ate mitigation measures

- the planned benefits are obtained.

Conceptually the multimodal organiza­tion can be visualized as shown in figure 11. As stated above the Execution layer can be split into two different sub layers, each with different focus and different characteristics:

∙ Business layer with business technology teams focusing on technology clustered into business domains and supporting the primary or supporting business activ­ities. These teams can offer any kind of technology (Distinct, Special, Value­add and Common), however the actual tech­nology service fits the dominant type of business activity within the specific domain. For example: a business tech­nology team for Human Resources typi­cally delivers ‘common’ technology, whereas the business technology team for Marketing and Sales primarily provides ‘value­add’ technology. The online ‘Service’ team develop most prob­ably ‘Distinct’ technology services devel­oped in­house whether or not with the support of third parties or in using stand­ard components from the market creat­ing unique and distinct solutions.

∙ Platform technology layer with technol­ogy teams having an internal and supportive focus on the delivery of company­wide common infrastructure and common platform technology services (applications and data). Delivery of these services includes the continu­ous improvement and maintenance of these services, and the integration of technology and enterprise data manage­ment.

6.1 MULTIMODAL ORGANIZATION: DIFFERENT WAYS TO ORGANIZE TECHNOLOGY AND DATA

As stated before, the organization of technology at the Execution layer in figure 12 is best organized in a multi­modal way. As such, our view on a modern way to organize data and tech­nology differs fundamentally from the more traditional way of organizing

BUSINESSSUBLAYER

PLATFORMITLAYER

BUSINESS ITSERVICES

Business IT team supporting a distinct

domain for custom solutions or data

analytics.

ENTERPRISE DATA SERVICES

Enterprise Data Team providing data services for managing the data-backbone of the organization.

DIGITAL SERVICE PLATFORMS

Digital Platform Teams provide IT services based on business and industry IT platforms.

INFRA SERVICES

Infra Team provide commodity IT infrastructure services such as networks, hosting, workplace and mobile.

EXECUTION LAYER

BUSINESS ITSERVICES

Business IT team supporting a value add domain

using IT business solutions.

BUSINESS ITSERVICES

Business IT team supporting a special domain (e.g. technical maintenance)

using a specific business solution for technical

maintenance.

BUSINESS ITSERVICES

Business IT team supporting a common

business activity (e.g. like HR) using a commodity IT solution/service.

LEADERSHIP & STEERING LAYER

FIGURE 12 DIFFERENT MODALITIES FOR THE BUSINESS AND PLATFORM IT TEAMS

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technology (which was very much based upon the idea to organize everything according to standardized technology processes and a one size fits all model).

The business technology teams are pref­erably managed close to the business activity (functionally or hierarchically) in order to maintain short communication lines and enable effective knowledge sharing. The more business specific and the more business value is created, the more a business technology team should be managed by the business. However, if there is an opportunity for economies of scale or sharing of capabilities or plat­forms, it has to be validated if these services could be managed by a platform technology team supporting multiple business domains. In many cases common platforms or capabilities can be distinguished when analyzing the tech­nology services is part of a specific busi­ness technology domain. Connectivity, security and privacy, data management and integration of technology are usually the responsibility of the teams within the Platform technology layer. These activi­ties are for the common good of the entire organization and require central management and control in order to comply with the policies in place.

The CIO office and its capabilities can be organized under a CIO. The CIO office provides direction to the technology vision and strategy of the company by providing enterprise architecture and standards. The CIO office can be organ­ized partially as the responsibility of another C x O as well, when the center of gravity is at a specific strategic domain of the organization like Marketing or Business Development. The Leadership and Steering layer in the model is key for success: providing the right guidelines and controls on enterprise architecture and data management to make sure that integration of services can take place and company data can be managed according to the principle of ‘one version of truth’. The technology portfolio and the project portfolio are managed by the CIO office. The company is governed on a budget allocation mechanism (capacity allocation) which directs resources to business and platform technology.

SERVICEIT TEAM

Business IT team supporting the innovative multichannel

web service solution.Services include agile

continuous development, the adoption of innovative

ideas, learning from customer experiences, …

IT (specific) & Integration Services Team

e.g. Integration services, Digital platforms, Security, Data

management

Common IT Services Team

e.g. Connectivity, hosting, workplace and mobile

Common valuesDigital mission, vision, strategy

Enterprise ArchitectureBusiness, data, IT (application

and infrastructure) services and lifecycle management

IT GovernanceAccountability, portfolio mngt,

data governance

PoliciesCompliance, security,

continuity

Sourcing strategy Strategy and key capabilities

PLANNING AND SCHEDULING

IT TEAM

Business IT team supporting specific business solutions

for Planning and Scheduling. Services are partially

developed using market business solutions with

specific customizations and data integrations

HUMAN RESOURCESIT TEAM

IT team supporting HR as a common business using a

commodity HR SaaS solution/service. Service provider is

managed in a demand-supply manner focussing on service

performance and quality and P x Q.

MARKETING AND RELATIONSHIP IT TEAM

IT team supporting the value add Marketing and

Relationship domain using a CRM business solution.

Services include continuous improvement of business

processes, and domain specific data management

CIO OFFICE

PLATFORM IT SERVICES

FIGURE 13 BUSINESS AND PLATFORM IT TEAM WORK TOGETHER (PARCEL COMPANY EXAMPLE)

The platform technology teams are in most cases organized under the respon­sibility of the CIO; however, the model allows for other options as well. Platform technology teams which focus on data, integration and specialty technology can also be organized in specific technology knowledge and expertise groups which may be based on co­sourcing models with suppliers. •

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CHAPTER 7CONCLUSIONS

Key in the multimodal organizational design is the positioning and organization of business technology teams and creat­ing the right business and IT leadership, culture, capabilities with the right focus on business and technology in such teams.

Anderson MacGyver uses the concepts and thinking behind the multimodal organization in various customer situa­tions and teach them in our lectures for Nyenrode Business School and the Antwerp School of Management. The concepts support a modern way of organizing technology and data that is specifically equipped to deal with the variety of requirements of today’s busi­ness. It actually gives technology and data back to its users, whilst having an eye on the necessity of coherence, knowledge sharing and leveraging econo­mies of scale between the different busi­ness domains.

The presented concepts use the charac­teristics of business activities as the foundation. So, everything finds its roots in the business and its requirements. It accounts for differences in subcultures and technology in line with the dynamics of the various business domains. The concepts support organizations in

providing a better understanding to enable good decision­making on invest­ments, setting priorities in terms of governance and control. It acknowledges the importance of strong leadership for making sure that coherence is main­tained. In practice, it also helps to achieve quick results and allows for agile approaches and provides a common understanding on how the organizational model works. •

‘The business activity drives the use of technology.’

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ANDERSON MACGYVER

Anderson MacGyver supports its clients in creating business value through estab­lishing digital strategies, implementing business focused and agile technology organizations and selecting the right ‘fit for purpose’ solutions and technology partners. By doing this we help our clients with their digital transformation.

Essential for the digital transformation is a clear roadmap to a future where companies use data and technology to create competitive advantage. Anderson MacGyver challenges the business strat­egy of clients and helps to define their strategic digital agenda.

NEW BUSINESS MODELS

Markets are changing rapidly, existing business models are under a lot of pres­sure and put to the test by radical new business models delivered by new digital organizations (e. g. ‘Uber’ or FinTechs). During the last decade the increasing pressure on efficiency has caused IT environments to become outdated resulting into business managers dissat­isfied with their internal IT organization. Smarter use of information becomes the key enabler of new business models.

PARTNERING WITH THE BUSINESS

At Anderson MacGyver we believe that IT organizations should primarily act as a business partner and should constantly think and act in terms of added value to the business and its clients. As a result, opportunities involving technology and information will be seized more effec­tively. No longer ‘IT and the business’, but working together in multimodal teams towards a single vision and strategic approach to the client.

DIGITAL TRANSFORMATION

Anderson MacGyver is dedicated to aiding clients in their transformation towards the digital future. A future in which organizations leverage data and technologies to create new opportunities and gain competitive advantage and possess the organizational adaptability to respond to and grow with the developing society and markets. Anderson MacGyver operates as a change agent throughout all stages of digital transformations.

ANDERSON MACGYVER AS A TEAM

Anderson MacGyver supports organiza­tions with its own authentic approach to realize the envisaged goals. We initiate innovation with true passion and together with our client we establish a challenging and exciting strategic digital agenda. With the resulting modern and focused organization, the business is ready to become leading in the digital world of tomorrow. We are committed to help our clients and apply the necessary changes to their organization.

We are recognized for the seniority, drive and experience of our teams, that are committed to make impact.

Applying our methodologies, based on latest scientific insights, we are passion­ate to initiate innovation and help our clients transform. •

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REFERENCES

Aron, D. A Bimodal Needs Three Subcultures (ID:G00273134). Retrieved from Gartner database, 9 January 2015.

Aron, D. and Schulte, A. Embed Bimodal in Your IT strategy to Achieve Sustainable Success. (ID:G00276530). Retrieved from Gartner database, 13 April 2015.

Axelsson, B. R., and Wynstra, F. Buying Business Services. Chichester: John Wiley, 2002.

Cameron, K.S. and Quinn, R.E. Diagnosing and Changing Organizational Culture [Book]. ­ San Francisco : Jossey­Bass, 2006.

Ford, D., Gadde, L.E., Håkansson, H., Snehoat, I. and Waluszeweski, A. Analysing Business Interaction. In: paper presented at the IMP Conference, Uppsala, 2008, http://www.impgroup.org/uploads/papers/6211.pdf.

Grönroos, Ch. Service Management and Marketing: A Customer Relationship Management Approach. John Wiley & Sons, 2000.

Kooijman, Ch. Influence of Organizational Culture on the Development of IT Organizations, Master Thesis, Technical University Delft, 2015.

Maes, R. and Sprokholt, A. Een typologie voor IT­dienstverlening. In: M&O (2013), nr. 4, p. 33­50.Osterwalder, A. and Pigneur, Y. Business Model Generation. John Wiley & Sons, 2010.

Porter, M.E. Competitive Advantage. The Free Press, 1985.Simon, M. De Strategische Functie Typologie. Deventer: Kluwer Bedrijfswetenschappen, 1990.

Sprokholt, A. Op ieder potje past een dekseltje: goede afweging van type dienstverlening geeft meerwaarde. Anderson MacGyver white paper 01, Anderson MacGyver, 2013.

Sprokholt A., Haijenga T.F. and Boersen H. Operating Model Canvas, White Paper 05, Anderson MacGyver, 2015.

Sprokholt, A. Techonomy vraagt om nieuwe bestur­ing IT, Boardroom IT, 2015.

Strikwerda, J. Bespiegelingen over governance, bestuur, management en organisatie in de 21ste eeuw, Koninklijke Van Gorcum 2014.

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‘We create value for our customers by stimulating them to innovate, by improving the way they operate and by enabling the change they need.’

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‘The growing scale and diversity in the application of technology makes it necessary to organize technology and data in new ways.’