January 22, 2012
Think of a medieval fortress: It was originally used for a small army, it has walls nine meters thick, and it’s surrounded by buildings hundreds of years old. Upon entering, you are confronted with the concept of eternity.
This fortress is located in the smallest state on earth — though it is also perhaps the best-known state in the world. The business housed within the fortress is what many might classify as a SME but with with complexity of a large enterprise, holy but busy, centralized but truly global — its work spans hundreds of countries with hundreds of currencies and hundreds of languages — and it serves very special and demanding clients.
Have a clue yet of where we are?
Zoom on Italy, then zoom on Rome, then zoom on Vatican City, and you can’t miss the round tower (Torrione Sisto V) where the Vatican Bank, or Istituto per le Opere di Religione (IOR ), is located. You won’t be allowed in if you are not a client, an employee, or part of a religious congregation. Change comes hard to institutions this steeped in tradition. To give you a clue, IOR’s previous managing director spent his entire career at IOR — 60 years — and retired at the age of 80. We all know it’s the soft and cultural aspects of transformation that are the hardest part for any organization.
Nevertheless, IOR has been going through a major change since 2008, working to replace its legacy IT system with a modern BT one. The new BT system brings more flexibility for the business, richer business functionality, and greater integration and development capabilities. Enabling fast change is the key driver for IOR’s IT transformation program from IT into BT.
- Adopted the renovation of the entire IT system as the foundation for the transformation.
- Worked to seal strong partnerships with business leaders.
- Carefully dosed smart, tactical business changes across multiple iterations.
- Took a right-sourcing approach to the "internal -0r-external" and “build-or-buy” questions to maximize customer value.
- Used service-oriented architecture (SOA) and open source as the new system’s technology enablers.
- Chose flavors of Agile and Lean as AD&D’s core principles.
IOR has renovated about 60% of its overall system; its transformation is still a work in progress. Next steps of the transformation deal with implementing more IT governance, revamping strategic planning and budgeting processes, communicating value, and increasing the use of Agile practices to span the entire life cycle.
Some of this case study’s lessons might seem more obviously applicable to a small-to-midsize enterprise; however, IOR uncovered many good practices that any size company should consider when embarking on a long-term transformation:
- Identify a disruptive opportunity to base the transformation program on.
- Gain top-down commitment, and ensure that there are change agents in the ranks.
- Gain trust from the business first (if you don’t have it already), and nurture it.
- Use standard metrics as a starting point, but also define custom business metrics.
- Focus more on getting things done than on politics
If you are a small business, some of best practices IOR used to address the change management issues it faced will be easier to implement at your firm. So don’t hide behind complex change management issues as an excuse for not innovating; just make it happen! If IOR did it, you can too!
What best practices have you uncovered when making a successful AD&D and even IT change aimed at achieving greater business agility?
- application development & delivery
- business transformation & organizational change management
- open source