Technology is now a significant contributor to business operations and many companies desire to capitalize on it to achieve value for their businesses. In this context, the Run, Grow, Transform (RGT) model, offers important background regarding the way organizations allocate technology budgets. The model suggests that organizations should shift from thinking based on budgets to thinking based on portfolios.
The current paper discusses how organizations can use the RGT model to plan and align their technology and business strategy and how the model can be used to assess the current and define future state of an organization’s enterprise architecture
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Discuss how the Run-Grow-Transform (RGT) model can be used to help plan and align the technology and business strategy of the organization?
Majority of organizations today fail to implement their business strategies successfully due to poor implementation. Additionally, most IT projects in organizations fail or fail to attain their intended business goals. The main issues include an attempt to implement different approaches to achieve various outcomes simultaneously such as streamlining processes, increasing customer satisfaction, and upgrading the IT resources contribute to this failure. Firms also spend over 50 percent of the IT budgets for maintaining IT systems or operating the business and leave the rest for transformation or growth domains (George, 2018). Companies cannot tolerate leaning towards a single side that does not contribute to innovation and business growth. The lack of alignment between business and IT significantly contributes to the inability of an organization to obtain value from investing in IT.
The emergence of cloud computing also means that IT should now focus on driving growth and innovation. In such situations, the RGT model can be used to help a firm to plan and support its technology and business strategy by developing a portfolio approach in which the organization allocates budget between the various investments types that focus on running the business, growing the business, and transforming the business (George, 2018). The outcome of this is that IT will now be considered as a strategic enabler of business value and competences. The model can focus on performing essential enterprise events that are indirectly connected to a specific business segment. The model helps in quantifying, estimating, and communicating the required budget to maintain existing IT systems and the required investment to launch digital transformation. Firms can use the model to streamline the process of developing clear representations of the way each investment will impact their financial and operational outcomes.
Organizations, for instance, can use the run segment to identify the general daily costs of operating the IT infrastructure such as cyber-security tools, system and network infrastructure, and employee workstations. These costs focus only on ensuring predictable functionality and consistent business performance without contributing to business based initiatives. The Grow segment can be used to assess the organization’s IT resources that help in improving and developing internal systems to align with the business strategy and growth. The objective is to improve the performance and current capabilities of the business in the market to sustain the long term competitiveness of the organization. The model can focus on addressing the cost of business expansion or growth. For instance, costs directed at upgrading client applications can offer new ways of creating sale leads and increasing profits. Additionally, organizations can use the transform segment to adapt changing demands in the market by implementing better systems and workflow innovations. Transformative innovations would allow an organization to enter new markets, develop attractive value propositions, and attract new customers as the segment deals with the expenses of the required costs to change the business nature.
The model helps organizations to understand and control their technology investment. Heavily relying on a single category can lead to the deferment of the other categories. It is, therefore, vital to balance the investment reasonably. George (2018) recommends that the organization shares the budget adequately in a 50/50 fashion where the run category gets half of the budget while the other two categories get the remaining half.
How can it be used to help assess the current state and then define the future state of an organization's enterprise architecture?
Enterprise architecture supports the alignment of all IT programs into a consistent and efficient path. The four architecture domains in enterprise architecture represent key-value elements. Architecture mainly focuses on services. These services, however, rely on technologies and assets that usually have long lifecycles. The architecture value elements focus on different customers. For instance, Business sponsors require application services; the IT application group requires infrastructure such as network, storage, and hosting services; both the infrastructure and application service segments require IT assets such as software licenses and physical capacity (Ronan, 2015). Additionally, procurement support firms and IT service segment must be assured that the various technologies are appropriate for the enterprise. The entire enterprise architecture lifecycle exists for a purpose and benefits different groups.
The various IT assets require investments and management to achieve the highest value from investing in enterprise architecture. Managing these assets is an optimal way of categorizing, capturing, and communicating the value of enterprise architecture. Achieving value entails identifying possible risks, determining the potential for their occurrence and the severity of consequences; and ensuring the right balance between reward and risk (Ronan, 2015). The Run, Grow and Transform model can help an organization to create an EA portfolio by developing an EA roadmap that defines the different categories of investment and risk levels (ProductPlan, 2020). The model can focus on identifying critical EA portfolio elements and attributes such as the required process and capability investments and their attributes, the required technology assets and their attributes, the required human capital and their attributes, and the required project investments and their attributes (ProductPlan, 2020). Organizations can then use the gathered information to develop an EA roadmap that includes a strategic summary of all the required components and their attributes. For instance, an organization can use the roadmap to determine EA architecture requirements based on specific user needs and business strategy; create EA priorities; and determine EA updates and new configurations. It can also be used in managing EA service levels and support.
References
George, S. (2018, December 8). Align IT Functions With Business Strategy Using the Run-Grow- Transform Model . Www.Gartner.Com. https://www.gartner.com/smarterwithgartner/align-it-functions-with-business-strategy- using-the-run-grow-transform-model/
ProductPlan. (2020). Enterprise Architecture Roadmap | Definition and Overview . Www.Productplan.Com. https://www.productplan.com/glossary/enterprise-architecture- roadmap/
Ronan, S. (2015, March 2). Why You Need a Strategic IT Roadmap . CIO. https://www.cio.com/article/2889361/why-you-need-a-strategic-it-roadmap.html
