Maturity Model of an IT organization and outsourcing

The business-IT alignment challenge is moving into a new territory according to Mckinsey survey released in May 2007 entitled, The next frontier in IT strategy: A Mckinsey Survey.

According to Mckinsey, IT organizations naturally pass through three stages as they evolve toward reaching their full potential: Support, Business Collaboration and Innovation.

The first stage is to support the business via mastery of the basics of IT service delivery in a cost-effective and consistent manner. The next stage of the Mckinsey maturity model requires mastery of 'business collaboration'. Mckinsey states that 'collaboration' means that IT is pro-actively engaged in working with the business rather than responding reactively to events and crises as they occur.

Mckinsey reports that significant stage-two progress has been made in the past few years. 83% of of the 72 senior IT executives surveyed reported that they believe that they have mastered stage 2: business-IT collaboration.

The next Mckinsey stage is mastery of 'innovation' . That is, IT must help business identify new technologies that will help them drive corporate innovation to enable distinctive business processes to effectively compete.

It is very interesting find these results, but in my experience a lot of IT shops within organizations are stuck at stage 1 and just able to provide support and not business collaboration or innovation. Very often, we see re-orgs within the IT shops or the top management wanting to outsource all of IT because business looses faith in IT. Even though the goal maybe to reduce IT costs, but are they really reduced by outsourcing? Definitely not, but what these companies do obtain is more predictable and trustable IT shop (from a delivery standpoint).

'Innovation' is what some of the big outsourcing vendors are pitching. They claim to add strategic value through IT and a lot of organizations are buying into that. Does that mean that the inhouse IT shops have failed to do so? We will have to wait and see...