Juha Huovinen
Nov 15, 2010
Posted in category: 2010 Member Articles

Recognize the Four Categories of ICT Management

ICT Management can be divided into four categories according to how business minded they are. It is essential to have capabilities and expectations in balance.

RECOGNIZE YOUR CATEGORY

Category I: Knowledge Area
Information and Communications technology (ICT) requires specific skills in certain knowledge areas and the individuals responsible have these tasks included in their job descriptions. In some cases the tasks are not even written into the job description; however the individuals that perform these ICT tasks can be recognized. ICT can be identified as it’s own department, the ICT department, and it may have a named leader (typically an ICT Manager). Taking benefit of ICT technologies may even be very advanced, assuming the individuals are knowledgeable, they are sufficiently guided and they receive feedback from the business on their work.

Category II: Support Function
The Support function has sovereignty. Sovereignty means in this case that the ICT area has a defined area where it can manage it’s internal operations. A well managed support function is driven by the business, but the ICT operations themselves are managed independently. Support function is responsible for it’s own budget and is directly or indirectly represented in the Top Executive Management team of the company. The main objective of a support function is to ensure the ICT services are meeting business needs, are reliable and cost effective.

Category III: Management Function
Management function is at the same level as other business areas, and it strives to develop the competiveness of the business with ICT. It is common to include the development of processes in this function. The governance methods are typically clear and developed in order to ensure that the function remains efficient and results oriented amongst all business issues. The Management function has a seat in the Top Executive Management team.

Category IV: Business Function
ICT services are a key element of the company’s products or services offerings and a part of the income can be identified directly to it. The function is therefore a real profit center and it also carries a part of the business risk. ICT management can only become a business function in especially ICT intensive businesses. Incorporating ICT alone does not mean that it would automatically become abusiness function, the other criterias of this category must also be met.

SET YOUR EXPECTATIONS RIGHT!

It is of utmost importance to understand the functional areas for two reasons. 1) it helps to set the objectives correctly and 2) it helps to understand what you can expect from ICT.

Category I: Knowledge Area Is Not a Development Organization
It is fully acceptable for ICT to be ‘just’ a knowledge area, if it is not expected to develop and renew the company’s critical IT systems. It will take care of all of the tasks it is assigned. It is worth noting that projects and programs are not routine tasks and you cannot expect ICT to be able to manage them. If you expect this type of ICT organization to renew for instance an ERP system, the company’s management has made a critical miss-judgment. Managing a program would almost certainly be problematic. For a small company the knowledge areacategory is often sufficient.

Category II: Support Function Contributes with ICT Services and Solutions
In midsize and large companies development is continuous and therefore ICT Management should be at least at the level of support function. In this case the question is where can you find the appropriate leadership and experience to manage it all? The Management has to have a true capability to manage this function. It requires strategic thinking, management of operations, leadership skills and the ability for ensure business alignment. ICT should be able to manage projects, but you cannot expect business development from it. In an ERP project ICT can be expected to manage the program’s technical part, as long as the business manages the processes and new business models and the program’s overall management.

Category III: Management Function Develops Business
In order to be a Management function ICT needs to be a highly developed specialist organization. What you could expect from a support function’sleadership is expected from all the key positions in the Management function. To create such a specialist organization is a long process and demands significant financial investment and strong support from the top leadership. It is very hard to create a Management function in a company which does not have other developed specialist organizations. When an ICT is a Management function, it is also capable of delivering challenging business development programs.

Category IV: Business Function Delivers Revenue
The management capability of a business function is typically somewhere between a support function and a management function. There is also a strong emphasis on service oriented skills to deliver end customer value.

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