Introduction:

The most fundamental differences between the first and 2nd Generation I.T. Organizations are related to process maturity and the extend of separation between the Change side of the business and the Operations and Support side. This made the I.T. machine more manageable, more predictable, more approachable, and easier to interface with the business stakeholders and drivers of the company.

In the 3rd Generation, the role of the I.T. Organization changes fundamentally. It is no longer an organizational unit serving as a support function for the company’s business objectives. The I.T. Organization as we know it, mature or not, disappears. It is usurped into what the company does. The lines distinguishing I.T. from business, disappears.

This means that the 3rd Generation is not necessarily a progression from the 2nd Generation Organization as much as it is an alternative for Generation 1. In fact, it may be easier and provide a much higher return in a shorter timeframe, to merely replace Generation 1 with 3 from the outset.

In Generation 3, I.T. is dismantled by a mature business taking ownership of its own destiny through an integrated Portfolio of Programs and Projects staffed with business and I.T. implementers (mostly from vendors) as is required.

I.T. is no longer the partner helping its business customer towards its objectives. The business takes ownership of its own interests and the I.T. project organization is usurped into this function.

Similarly, the company recognizes that I.T. operations and support should be left to a vendor specializing in the execution of this as a core product or service. It actively seeks out commoditized industry recognized solutions and suppliers to execute this delivery more economically and efficiently, on its behalf. The company rather invests in core management capability to oversee these vendor relationships as part of the Operations or Financial Management function of the business. It no longer outsources what it doesn’t understand, but what it does understand

If you plan to go from Generation 1 to Generation 3 then the C.E.O. will have to be the Champion.  The C.I.O. can and should be championing Generation 1 to Generation 2 transformation.

In the Generation 3 I.T. Organization the biggest impact will be felt by the Chief Information Office (C.I.O.) or Vice President (V.P.) of Technology.

Where the 2nd Generation was concerned with change for the business, the Generation 3 is concerned with change in the business. As companies advance in their technology dependency, they will realize that there is no value in managing the fundamental driver of their business - their technology implementation and evolution - as a separate entity for what they do. It is fundamental to their business, and therefore should be their business. I.T. exists to enable process. If it doesn’t, it shouldn’t exist.

There will no longer be a case for managing Programs and Projects within an I.T. and business division. A business will incorporate the execution of its strategy and the determinant of its future ability to remain in business, into one entity, responsible for a portfolio of work. I.T., which will be increasingly vendor based, and business will work as one team. I.T. and business stakeholders will be seen as one by the outsider.

This entity will be lead by the new liberated Generation 3 “C.I.O” - the Chief Implementation Officer - and will be working alongside the C.O.O. or Chief Operating Officer of the current business. Both roles will report to the Chief Executive Officer (C.E.O.). One responsible for the now, and the other responsible for the to-be.

The Operate and Support side of the 3rd Generation I.T. Organization will also see changes. With the departure of the Change side of the business, Operate and Support will end up to be the only remaining classic I.T. services part of what used to be the 2nd Generation I.T. organization, but It will report into the C.O.O.. There may also be cases where it is lower in the organization. For example: Operate and support of maintenance management systems, would report to the Plant Manager.

The focus will remain to drive costs lower for the existing business operations. It will still serve a business customer base by operating, maintaining and managing eventualities within the current solution set . However, there will be a fundamental change:  The I.T. Operations and Support organization will have to gear itself to manage and coordinate a significant part of its delivery with an ever increasing vendor supplied list of products, solutions and services. Most, if not all of the I.T. Operations and Support work will end up being outsourced to, or sourced from specialist providers doing it cheaper, faster and simpler.

In Generation 3, business directly controls all the resources supporting its business. It  sources  from, or outsources the operations and support of its investments to specialist providers. This should not be news. We have already grown accustomed to our infrastructure services being provided by vendors. In future, we can expect the same for application and information processing services as more of what we currently call I.T becomes a commodity.

The Generation 3 I.T. Operations and Support organization will have to build and implement processes and frameworks for effective vendor management across an integrated set of solutions that are destined to be provided by multiple suppliers.

Liberating the C.I.O (Chief Information Officer) through Generation 3 allows him/her to facilitate business value through a larger technology partnership ecosystem by becoming the new C.I.O. (Chief Implementation Officer) He/she has the key responsibility of business strategy implementation, and overseeing the delivery of the future state of the Company.

If the C.I.O (Chief Information Officer) is not liberated and does not make the transitional journey towards becoming the “new” C.I.O (Chief Implementation Officer), then his role will be reduced to an operations oversight responsibility, merely overseeing vendors delivering services to his/her business stakeholders.