IT Capability Assessment (identifying capability gaps)

Business - IT Alignment Series

An IT capability defines what the IT function does to support the business. IT capabilities for a specific business are defined by identifying and mapping the business’ capabilities to the IT capabilities required to enable or support these businesses capabilities. The process of aligning IT capabilities to business needs was discussed in detail in a previous post.

For the IT function to be able to effectively support the business, IT capabilities need to be at the required level of maturity to add value and contribute to realizing business objectives. When IT capabilities are not at the required level of maturity or when the organization does not have a sense of the level of maturity of IT capabilities, the business may experience one or more of the following:

• Key technology activities needed to support the business are not performed. When performed, these activities are not at the level of expertise required by the business, resulting in sub-optimal business support.

• Inconsistent performance of the IT function in the delivery of tasks.

• Resources needed to perform technology activities are either limited or not available.

• The performance of the IT function is difficult to measure and manage.

• Lack of insight into technology capability gaps imply that technology budgets may not be directed at areas of need.

In order to avoid these challenges, the organization needs to ensure that IT capabilities are at the required level. The way to do this is through an IT capability assessment. An IT capability assessment is a diagnostic aimed at identifying technology capability gaps. Technology capability gaps are a function of the current state of technology capabilities within an organization and the level at which technology capabilities are required to be at in order to effectively support the business.

How to identify technology capability gaps

• Identify IT capabilities required to support the business: the first step in determining IT capability gaps is to determine the IT capabilities needed by the business. This is done by identifying business capabilities, and defining and mapping IT capabilities required to support and enable these business capabilities.

• Determine IT capability maturity targets: once IT capabilities are identified, the next step is to determine the level of maturity at which these IT capabilities need to be at some point within the strategy cycle in order to effectively support the business. This is usually influenced by the business strategy, and will be different from business to business.

• Determine current IT capability maturity levels: after target maturity levels are defined across IT capability areas, the next step is to define the current level of maturity of each IT capability. The difference between the current and target IT capability maturity level is the IT capability gap.

Virtro’s IT capability maturity level definition

In order to define IT capability gaps, IT capability maturity levels need to be clearly defined. As part of Virtro’s IT Capability Maturity Framework, we have defined IT capability maturity levels to guide organizations in conducting IT capability assessments and determining IT capability gaps. 

Virtro’s IT capability maturity level definition.

There are five IT capability maturity levels within Virtro’s IT Capability Maturity Framework. IT capabilities can be Absent, Basic, Intermediate, Leading or Optimizing. The maturity level definition is used to determine the current level of maturity, validate the target or desired level of maturity and determine capability gaps.

Closing IT capability gaps

After identifying IT capability gaps, the next logical step is to close these gaps in order to position IT to effectively support the business. Capability gaps are typically closed by executing initiatives or projects, and these are scheduled within the IT implementation roadmap for the strategic cycle. An IT implementation roadmap should contain the following:

• Title of project or initiative,

• Owner of project or initiative,

• High-level activities,

• Dependencies or related projects/ initiatives,

• Estimated duration, and

• Estimated cost

It is good practice to conduct IT capability assessments after a strategic review i.e. annual planning, mid-term review, new strategy definition, etc. This is important for at least two reasons:

• There tends to be an update to business imperatives after a strategic review. While this may not have an impact on business capabilities, it might result in process changes with attendant impact on technology enablement.

• As the strategy is being executed, it is important to validate that IT capabilities are on track to reach the desired levels of maturity as at when due.

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Virtro enables digital transformation by helping municipalities and SMBs develop strategy-aligned IT capability maps, determine IT capability gaps and develop IT Strategy documents.  Contact us to discuss or schedule a free consultation.

If you are wondering about how well your business and IT are aligned, consider taking Virtro's free, high-level Business - IT Alignment Assessment.

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