IT needs to focus on business capabilities, says Forrester

An approach that has reduced costs and streamlined business at pharma company Pfizer

Much of the talk at the Forrester IT Forum EMEA has been around reducing the gap between IT and the business, and this was the theme of the first keynote session today.

Chairman of the Board and CEO of Forrester research George F Colony said this morning that closing this gap is best done by focusing on a company’s ‘capabilities’ and creating IT functions around those. ‘Capabilities’ has been the buzzword of the day.

Colony explained that IT departments are generally faced with numerous projects that may overlap or even hinder each other; he tipped a handful of coffee beans onto the stage to demonstrate the many and disparate nature of projects that IT departments are presented with.

Capabilities on the other hand are presented to the IT department in a different way and could be represented by six or seven golf balls – in that they are fewer, larger and encompass more elements of the business. Colony had only one golf ball to hand.

A capabilities model would look at a company’s product development, marketing, inventory and end user sales – in short, everything the company does.

It would break each of these down into individual capabilities that would look at processes, business functions, business goals and key metrics for each function. Then the technology team would sort its work according to which capability it is serving.

This was a model recently adopted by pharmaceutical company Pfizer, which has subsequently reduced overlap and cost and integrated its technology systems.

In a subsequent key note speech Alex Cullen Vice president and research director Forrester research also argued for the capabilities approach. “It may seem much too simple, but it is around these simple models that business and IT can come together.”

He added: “Companies that have implemented this model have seen tangible business results in less than six months.”