“Architecture is not about installing infrastructure, but designing ways that information is stored and moved,” says Joe Spagnoletti, CIO of US LBM, a $3 billion specialty distributor of lumber, roofing, siding, and other building materials across 30 states. “When it comes to technology, we want to stay ahead of our competition, but not our technology partners,” he says.
To do this successfully requires “people who understand the business and what connects to what and where we can disintermediate competitors or change the way things work by connecting things together in ingenious ways,” Spagnoletti says. These people are the company’s architects.
The term IT transformation (ITX) embraces the understanding that information technology has moved beyond IT; it’s now embedded in the fabric of everything the enterprise delivers. IDC has found that 58% of IT spending on new digital transformation strategies is from outside the IT department budget. IT, as a department, is increasingly challenged to enable, guide and facilitate IT orchestration across the enterprise. This transformation requires the consistent, well-crafted framework afforded by strategic architecture.
When CIO Michael Mathias joined San Francisco-based Blue Shield of California, a $17.6 billion healthcare insurer, six years ago, satisfaction with its customer-facing portal of applications was minimal. Since then, these applications have been totally rebuilt — with two key changes. First, they were envisioned, designed, and created by cross-functional teams of primarily in-house Blue Shield IT and business experts, not an external service provider. Second, they were designed to function as plug-and-play components of a larger platform built on twin foundational principles of integration and interoperability.
“One of the big things we did is envision and get clarity up front about what we were trying to build and achieve. It makes a world of difference in what the end-product looks like, and what success looks like,” says Mathias. At the heart of this effort is a robust IT architecture function, which under Mathias has grown from a handful of professionals to 30 today.
To stay on top of the needs of the business, and to operate at the speed of the business, CIOs should establish an approach to enterprise architecture that balances business needs and risks with budget constraints in the development of prioritized realistic IT project roadmaps. This includes strategic transformation initiatives that require, or will benefit from, an architectural approach; architecture’s role is to provide assistance and structure, from strategic intentions through initiative planning and implementation.
Now, says Mathias, Blue Shield is investing heavily in data management, an area where architects are crucial. “We still have some vendor partners working with us, but we want to take more and more ownership of the intellectual property and capital,” he says. “We want to institutionalize that and not have it walk out the door.”
The key to this approach is in-house architecture.
For more strategies for IT transformation (ITX), check out IDC’s on-demand web conference, IT Org Transformation – 7 Strategies We Can Implement This Week.
Julia King, Adjunct Research Advisor, IDC’s IT Executive Programs (IEP) and Award-Winning Business and Technology Journalist
Martha Rounds, Research Director, IDC’s IT Executive Programs (IEP)