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IT Capability Maturity Framework by the Innovation Value Institute (IVI)

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Credit: The IT Capability Maturity Framework™ (IT-CMF™) - Executive Overview - By Innovation Value Institute (IVI)

Contents:

Macro Capabilities

The IT-CMF is a blueprint for incremental improvement across four macro-capabilities:

  • Managing IT like a Business
  • Managing the IT Budget
  • Managing the IT Capability
  • Managing IT for Business Value

There are five maturity levels:

  • Initial
  • Basic
  • Intermediate
  • Advanced
  • Optimizing

Table of macro-capabilties and maturity levels:

Maturity Levels Managing IT like a Business Managing the IT Budget Managing the IT Capability Managing IT for Business Value
Initial Unmanaged Unmanaged Unmanaged Unmanaged
Basic Cost centre Predictable performance Technology supplier Total cost of ownership
Intermediate Service centre Systemic cost reduction Technology expert ROI and business case
Advanced Investment centre Expanded funding options Strategic business partner Options and portfolio management
Optimizing Value centre Budget amplification Corporate core competency Optimized value

Managing IT like a Business

  1. Initial - Unmanaged

  • There is no IT strategy

  • There are no defined IT processes

  1. Basic - Cost Centre - IT is a cost centre

  • Asset and cost centre systems are in place

  • IT is focused exclusively on technology and process

  • Some IT processes have been documented

  1. Intermediate - Service Centre - IT is oriented to customers and service

  • Chargeback and cost accounting systems are in place

  • Service delivery and management practices are implemented

  1. Advanced - Investment Centre - IT is focused on service and usage excellence

  • IT customer and supplier relationship management are excellent

  • Funding mechanisms are flexible

  • IT uses dynamic resource allocation

  1. Optimizing - Value Centre - IT is a value centre and publishes value statements regularly

  • IT and business values are highly aligned

  • The IT organization uses balanced score cards to drive continuous improvement

  • The IT organization is strongly entrepreneurial

Managing the IT Budget

  1. Initial - Unmanaged - Financial performance is erratic

  • The IT budget has no clear owner

  • IT spend is invisible and fragmented

  • IT funding is not aligned with long-term business value

  1. Basic - Predictable Financial Performance

  • A defined IT budget exists

  • IT tracks performance against periodic financial and spending plans

  • Variance between actual and planned spend remains within a specified control limit

  1. Intermediate - Systematic Cost Reduction - Systematic cost reduction processes are in place

  • IT unit costs are trended and reduced annually

  • A dynamic baseline IT budget approach is in place

  1. Advanced - Expanded Funding Options - IT has attracted multiple sources of funding

  • Cost savings are shifted to strategic investments or to the bottom line

  • The IT budget is in compliance with governance and with IT usage principles

  • The IT budget is aligned with long-term business value

  1. Optimizing - Budget Amplification - A stable IT budget supports the growth demands of the company

  • Budget allocations are balanced across appropriate portfolios that are based on value performance

  • IT intensity is actively managed and compared against other key corporate spending categories

  • Budget is driven by long-term organization and business roadmaps

Managing the IT Capability

  1. Initial - Unmanaged - Users purchase and maintain IT systems

  • There is no formal IT presence

  • There is no integration of IT systems

  1. Basic - Utility or Technology Supplier

  • There is growing respect for the IT organization

  • The company views IT purely as a cost centre

  • IT is a cost to be continuously reduced

  1. Intermediate - Technical Expert - IT has a track record for delivering quality services that are reliable

  • The IT organization is sought out as a source of technical expertise

  • IT provides a reliable utility IT service that is benchmarked on performance and cost

  1. Advanced - Strategic Business Partner - IT leadership is integrated with business leadership

  • IT delivers solutions that provide value in specific business areas

  • IT delivers key competitive capabilities in targeted areas

  • IT leaders understand the business and proactively propose solutions to key opportunities and problems

  1. Optimizing - Strategic Core Competency - IT enables information and/or execution superiority over competition

  • A steady stream of solutions provides competitive advantage

  • IT is recognized as a differentiating core competency

Managing IT for Business Value

  1. Initial - Unmanaged - Decisions are based on cost, not value

  • There is no comprehension or measure of the value IT provides

  • Total cost of ownership is rampantly escalating

  1. Basic - Total Cost of Ownership - IT computes total cost of ownership for major assets

  • IT tracks total cost of ownership regularly to ensure there is continuous cost reduction

  • IT computes total cost of ownership for the full life cycle

  1. Intermediate - Simple Return-on Investment and Business Case Disciplines

  • There is a disciplined use and review of business cases

  • IT has in place either investment governance or a business value programme

  • IT uses multi-metric analysis of business cases to determine best quality investments

  1. Advanced - Portfolio and Options Management

  • IT has a proactive portfolio management programme

  • IT uses an options management approach to pick and manage speculative IT investments

  • IT weighs risk and value-at-risk as key components of business cases

  1. Optimizing - Optimized Investment Return

  • IT performs sophisticated investment and portfolio analysis in order to optimize investments and spend

  • Returns from IT-enabled investments are equal to or greater than returns from other investment types in the company

  • Historical data enables accurate predictions of the value of future investments