CXO

Why you should shift from systems thinking to capability thinking

Viewing IT solely through a lens of systems and processes isn't always the best approach. Here's how to pivot your mindset toward capability thinking.

IT has long been focused on systems and processes. Wander into the average IT shop and you'll overhear people talking about a new systems or software implementation. You're as likely to find a process diagram on a cubicle wall as you are to find a Dilbert cartoon. Some organizations go so far as to explicitly call out systems as their domain of expertise, with "Information Systems" proudly displayed in email signatures and organizational charts. While it may seem like a question of semantics, viewing IT's role as delivering capabilities versus delivering systems can be a worthwhile shift.

Systems versus capabilities

At a basic level, a capability is nothing more than an ability to perform a function. This capability could be unique in the industry, or relatively rudimentary, and in some cases a seemingly simple capability requires all manner of supporting capabilities to successfully realize it. For example, Amazon has a capability for same-day package delivery in most areas, a feature that's easy to articulate and understand, but it provides a significant advantage over competitors that don't have the logistical prowess to match Amazon.

Generally speaking, most IT projects and policies start with a capability in mind. That capability might range from an ability to close financial reporting within a certain time frame to providing low-cost voice communications across geographies. However, most IT shops abandon this capability mindset once they select a suite of tools designed to deliver that capability. Suddenly, IT shifts from "providing a supply chain capability" to "we're an Oracle shop." Think of this like a carpenter going from saying "I'm a cabinet maker" to "I'm a Stanley 15-106A coping saw shop." Organizationally, you've shifted away from looking at the world in terms of delivering a new ability to your organization to supporting a tool.

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Why capabilities matter

Diehard systems thinkers might quip that they're just trying to maximize the value of their tool investment, which is certainly a laudable goal. However, they're shifting away from two critical facets of the most successful IT shops: being able to speak in the language of the rest of the company and being able to deliver at the right degree of fidelity.

By and large, your colleagues, customers, and suppliers don't think in terms of systems. They think in terms of the capabilities they need to achieve some end, which might range from paying invoices faster to delivering a new product or service. You're simply not operating on the same playing field when you view the world in terms of systems rather than the capability those systems are meant to deliver.

In a similar vein, different capabilities require different degrees of depth, delivery time, and cost—and the balance between the three may shift dramatically depending on market conditions, competitors, or strategic priorities. Amazon's competitors are scrambling to match its same-day shipping capability and often prioritizing delivery time of the capability, seeking a variety of conventional and unconventional solutions to deliver this capability with less regard for cost. When IT approaches the world from a systems perspective, its ability to deliver a capability at varying degrees of fidelity is severely limited. The market might demand a new capability that's delivered so quickly, existing systems might be the wrong tool for the job. In this case, systems-focused shops often prove so inflexible that business leaders buy the capability on the outside market, completely bypassing IT.

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Be the bridge

Obviously, systems play a key role in delivering any business capability, and it would be imprudent to cobble together a mismatch of technology for every new capability your organization requires. However, shifting to a capability mindset allows you to explain the trade-offs with your peers at their level. A requirement to deliver a particular capability at speed could compromise an existing capability of integrating between business units or suppliers. Articulating the compromises and risks to existing capabilities is far more effective than arguing the finer points of interfaces and integrations between systems.

During budgeting cycles, it's also highly effective to allocate budgets toward each capability IT maintains or is building. A significant investment in a particular software package looks like a massive cost that should be reduced or minimized, but an investment in a capability of rapid quarterly financial reporting might be a pittance compared to the alternative.

Tying IT investments back to the capabilities they deliver can also help extricate IT leaders from convoluted ROI and TCO discussions. Most business leaders intuitively know the value of a given capability, especially if it helps the company meet its strategic objectives and compete in the market.

While it can be difficult to abandon decades of systems-level thinking, viewing your shop as delivering critical capabilities can be a refreshing and beneficial shift. You'll spend less time justifying tool investments and more time talking about how IT can deliver and execute on the company's strategy.

Your thoughts

Is your organization too focused on tools and systems or does it approach IT and business planning from the perspective of capabilities? Share your advice and opinions with fellow TechRepublic members in the discussion below.

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Image: iStock/ipopba

About Patrick Gray

Patrick Gray works for a global Fortune 500 consulting and IT services company and is the author of Breakthrough IT: Supercharging Organizational Value through Technology as well as the companion e-book The Breakthrough CIO's Companion. He has spent ...

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