I believe that the major inflexion point comes at the middle of Level 2. The things you have to do to get from Level 1 to Level 2 are quite different from the things you must do to get from Level 2 to Level 3. The Business-IT Maturity model is a learning curve and the middle of Level 2 is the steepest part of the curve. The good news – progress in that middle space can be fast. The bad news – it’s literally an uphill struggle, fraught with ambiguities and elusive shifts in IT’s role and direction that IT professionals typically don’t like.
If getting from L1 to L2 is about bringing order to the chaos – simplifying IT infrastructure, centralizing control over IT spending and standards, establishing credibility for project results and service performance, implementing strong process disciplines – then the L2 to L3 journey is about living with complexity, fostering self-service, decentralizing control and empowering the network. If Level 1 to 2 is internally focused, and IT-driven, then Level 2 to 3 flips to external focus and business-driven.
The mid-point between L2 and L3 (I estimate that about 70% of businesses in North America are here today) is a point of discontinuity. Consider learning to crawl, then to walk, and then to run. Once you can crawl, it’s no use trying to crawl faster and hoping to walk! It’s no good trying to learn how to run by walking faster. The movements are different, require different skills and bring different muscles to bear. Similarly, the good and important disciplines you’ve introduced such as consistent project management, ITIL processes and CMMI based improvement programs that helped you get to mid-L2 will not get you to L3, and may actually impede progress. All those disciplines are optimized for traditional transactional systems solutions and applications – the stuff of Level 1 and 2, not for collaborative, web based and groupware solutions – the focus of Level 3.
It is important to remind ourselves that as a maturity model, this is cumulative – the Level 1 and 2 demand never goes away, so the processes and disciplines needed to be effective in managing and satisfying those types of demand are important to sustain. However, in order to stimulate demand for Level 3 capabilities, and to satisfy that demand, new disciplines must be learned, and some older disciplines must be applied with a careful hand. An example – the Level 1 to Level 2 shift typically requires a far more rigorous approach to business cases, often achieved through sophisticated templates and NPV analyses. Now, imagine this Level 3 scenario: A business executive comes into work one morning bubbling with an idea she had in the shower about a novel way to incorporate RFID into the companies supply chain. She calls her friendly IT relationship manager and explains the idea. He says, “That’s great! Now, here’s the business case template. You have to figure out the lifecycle costs and value, and complete these 12 pages of project definition. Let’s meet in a couple of weeks, and we can go through this.” Two weeks later, the executive, with no idea how to estimate the value of an innovative business capability, and daunted by the 12 page template, decides maybe the idea was not that great after all, and drops it!
The problem here is that getting from Level 1 to 2 requires a more disciplined and consistent approach to framing, prioritizing, and driving transactional solutions. If those same methods are applied to the more innovative possibilities that are the focus for Level 3, they will die on the vine. The Level 2 to 3 journey requires more of a “portfolio” based approach – portfolio management for all IT investments, and a portfolio of project and program prioritization and approval methods, each suited to the types of investment being considered – infrastructure, transactional, information, and innovative, for example.