Managing IT for Business Value<br />Introduction to the Innovation Value Institute<br />
Introduction<br />Who are we?<br />The innovation Value Institute – a consortium of leading players interested in improvin...
IT value management is a key topic for CIOs<br />... with a tangible opportunity<br />Important issue for CIOs ... <br />B...
CIOs lack a framework for describing business contribution<br />Business value<br />IT process frameworks<br />Financial v...
How to implement best in class security?
How to manage a data center?
How to deploy virtualization?
What is the average return from your IT investments?
What is the cumulative return from your IT investments?</li></li></ul><li>IVI is focused on realizing more business value ...
IVI formed to create integrating framework – creating new approaches, leveraging existing standards and addressing "value"...
Initial focus -  developing Capability Maturity Framework<br />What<br /><ul><li>Develop an integrating framework that ena...
To understand opportunity and value of increasing maturity
To bridge structural gaps in other assessment frameworks</li></ul>How<br /><ul><li>Working groups with input from consorti...
Reviewing material with Technical Committee for Consortium
Testing and validating findings over time</li></ul>When and where<br /><ul><li>V1.0 available and ready for assessments
Output initially for Consortium members for testing, then to wider audience</li></li></ul><li>IT Capability Maturity Frame...
State-of-the-art practices and outcomes
Benefits from IT investments quantified and communicated
Practices and outcomes well above industry average
IT/business interaction forma-lized for all critical processes
Transparent investment decisions
Delivering basic IT services
Some IT/business interactions formalized
No formal processes
Ad-hoc management of IT</li></ul>Optimising<br />High<br />Advanced<br />Intermediate<br />Maturity<br />Basic<br />Initia...
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IVI Presentation to AIM Ireland meeting on IT-CMF. 15 June 2011. Part 1

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  1. 1. Managing IT for Business Value<br />Introduction to the Innovation Value Institute<br />
  2. 2. Introduction<br />Who are we?<br />The innovation Value Institute – a consortium of leading players interested in improving the business value that IT delivers<br />What are we developing?<br />Developing an industry standard for managing IT for business value, the IT capability Maturity Framework (IT-CMF)<br />The framework covers 33 critical processes to run an IT organisations, built on foundational learning in IT transformation at Intel, refined by academic and industry input<br />Includes maturity curves, assessment tools, practices, outcomes and metrics to increase maturity level, case studies and illustrations of best practices<br />
  3. 3. IT value management is a key topic for CIOs<br />... with a tangible opportunity<br />Important issue for CIOs ... <br />Budget flexibility coupled with strategic IT alignment leads to 50% greater IT payoffs2<br />Improving management practices alongside IT investment drives 20% higher IT yields3<br />% of respondents1<br />Growing evidence of an important gap in the IT industry<br />Source: Industry surveys<br />1. CIO Insight Survey 2. CRTO research 3. LSE, IVI Survey<br />
  4. 4. CIOs lack a framework for describing business contribution<br />Business value<br />IT process frameworks<br />Financial value delivered<br />Cash flow<br />ROI<br />EVA<br />ROCE<br />ROE<br />NPV<br />?<br />Operational value of IT<br />Customer<br />Supplier<br />Managerial<br />Employee<br />Partner<br />Societal<br /><ul><li>How to deploy service oriented architecture?
  5. 5. How to implement best in class security?
  6. 6. How to manage a data center?
  7. 7. How to deploy virtualization?
  8. 8. What is the average return from your IT investments?
  9. 9. What is the cumulative return from your IT investments?</li></li></ul><li>IVI is focused on realizing more business value from IT<br />"IVI's vision is to transform organizations to consistently realise IT value from IT investment and practices...<br />... through researching, developing and disseminating an empirically proven and industry validated IT best practice model.<br />IVI's mission is to develop a unifying approach for managing the delivery (or realisation) of Information Technology investments ...<br />... and to validate that these approaches have a broad applicability across different industriesand contexts."<br />-Innovation Value Institute<br />Provide new perspectives on value-based IT management<br />Develop an end-to-end view of IT processes and capabilities<br />Develop a roadmap to help CIOs select strategies andimprove capabilities<br />Collect best practice case studies across industries, understand key value drivers<br />Consortium of leading industry, consulting, not-for-profit and academic organisations<br />
  10. 10. IVI formed to create integrating framework – creating new approaches, leveraging existing standards and addressing "value" gap<br />Steering patrons<br />www.ivi.ie<br />IVI has 55+ members from leading industry, consulting,<br />not-for-profit and academic organisations.<br />
  11. 11. Initial focus - developing Capability Maturity Framework<br />What<br /><ul><li>Develop an integrating framework that enables CIOs and business management to deliver more value from IT investments and practices</li></ul>Why<br /><ul><li>To assess current practices
  12. 12. To understand opportunity and value of increasing maturity
  13. 13. To bridge structural gaps in other assessment frameworks</li></ul>How<br /><ul><li>Working groups with input from consortium members, academics and company experience
  14. 14. Reviewing material with Technical Committee for Consortium
  15. 15. Testing and validating findings over time</li></ul>When and where<br /><ul><li>V1.0 available and ready for assessments
  16. 16. Output initially for Consortium members for testing, then to wider audience</li></li></ul><li>IT Capability Maturity Framework (IT-CMF) is based on five maturity levels to assess and optimize value of IT<br /><ul><li>Value-centric IT management
  17. 17. State-of-the-art practices and outcomes
  18. 18. Benefits from IT investments quantified and communicated
  19. 19. Practices and outcomes well above industry average
  20. 20. IT/business interaction forma-lized for all critical processes
  21. 21. Transparent investment decisions
  22. 22. Delivering basic IT services
  23. 23. Some IT/business interactions formalized
  24. 24. No formal processes
  25. 25. Ad-hoc management of IT</li></ul>Optimising<br />High<br />Advanced<br />Intermediate<br />Maturity<br />Basic<br />Initial<br />Low<br />IT-CMF offers concise management roadmapto optimize business value from IT investment<br />
  26. 26. IT-CMF is based on previous groundworkby Intel<br />The IT-CMF built on proven foundation<br /><ul><li>Based on a framework by Intel
  27. 27. Initially developed as part of the Intel’s IT transformation
  28. 28. Reviewed and tested with 200+ IT Executives
  29. 29. ... structured into 4 macro-processes for value-oriented IT management
  30. 30. Subdivided into 32 core processes
  31. 31. Providing broad coverage for all aspects of managing IT</li></ul>Managing IT like a business<br />Managing IT for business value<br />Managingthe<br />IT budget<br />Managing the IT capability<br />IT-CMF Macro Processes<br />
  32. 32. High-level impact of maturity is detailed by each of the 32 individual critical processes<br />Managing the<br />IT capability<br />Managing the<br />IT budget<br />Managing IT like a business<br />Managing IT for business value<br />Value Centre<br />5<br />Sustainable Economic Model<br />Corporate Core Competency<br />Optimised Value<br />Optimising<br />Investment Centre<br />4<br />Expanded Funding Options<br />Strategic Business Partner<br />Options and Portfolio Management<br />Advanced<br />3<br />Service Centre<br />Systemic Cost Reduction<br />Technology Expert<br />ROI & Business Case<br />Intermediate<br />2<br />Cost Centre<br />Predictable Performance<br />Technology Supplier<br />TCO<br />Basic<br />1<br />Beginning<br />Initial<br />Design Pattern – Generically Reusable Solution<br />
  33. 33. IT-CMF details 4 Macro Processes to manage IT organizations for business value<br />
  34. 34. CP Body of Knowledge<br />Proxy for CP effectiveness & value – as maturity improves<br />Policy directives<br />A collection of policies, templates, standards, tools, and proven artefacts for maturity advancement<br />
  35. 35. Best practices and case studies of how companies improved maturity<br />Practices<br />Level-by-level assessment questions to determine a company’s strengths and weaknesses<br />Assessment<br />Tool<br />5<br />4<br />Five-level maturity curve framework and supporting evidence<br />Maturity Curve<br />3<br />2<br />Collection of whitepapers, academic journals, books, and consortium-submitted content<br />1<br />ReferenceMaterials<br />Proposed industry standard definition for a set of capabilities<br />Process <br />Definition<br />“ ”<br />Standardised materials provided for value-centric assessments of each critical process<br />Standard set of materials provided for each of the 32 critical processes<br />Evidence and anecdotes of value delivered to companies who increased maturity<br />$<br />Value of maturity<br />Business value perspective<br />Assessments can be run efficiently and with low overhead through use of standardized tools and documents<br />
  36. 36. Content developed using robust process Broad Input, validation, and QA<br />Initial background research<br />Working<br />Group<br />Adjust content, <br />develop key insights<br />Final approval<br />Validate & Test<br />1<br />2<br />3<br />5<br />6<br />Develop prose<br />4<br />Technical review / QA<br />
  37. 37. Objective maturity assessment of IT management practices, identifying both gaps and potential over investments<br />Managing IT for business value<br />Managing the<br />IT capability<br />Managing the<br />IT budget<br />Managing IT like a business<br />5<br />Risk of competitive disadvantage due to below below-average maturity?<br />Risk of competitive disadvantage due to <br />over-investment?<br />4<br />Industry Average<br />3<br />The company’s<br />current maturity level<br />2<br />1<br />ITG<br />BPM<br />BP<br />SP<br />DSM<br />CFP<br />RM<br />AA<br />ODP<br />SRC<br />IM<br />SAI<br />FF<br />BGM<br />PPP<br />BOP<br />EAM<br />UTM<br />PAM<br />ICM<br />RAM<br />RDE<br />SD<br />SRP<br />TIM<br />UED<br />PPM<br />SUM<br />CAM<br />TCO<br />BAR<br />PM<br />Can be applied across all IT functions <br />or in a selected set of areas<br />
  38. 38. Very positive reactions to the work so farFrom contributing organisations<br />IVI is working on topics of great importance to our business, where innovation in IT is a way of life, and managing value is critical to our success. ... I see materials here that I can bring back to my organisation immediately, today.<br />The industry is looking to the IVI industry consortium to lead the way in researching the challenges facing IT today. I have great faith in the value of this approach to the field of IS management.<br />This consortium is a great way to see how other industries have solved the problems we’re tackling. I think there is tremendous value in participating, and contributing to IVI.<br />I have no doubt of the value of IVI... when I look at the output we have produced. The return has been incrediblecompared to the investment I have made.<br />Valuable <br />content<br />Industry<br />thought<br />leadership<br />Learning &<br />development<br />Return on <br />investment<br />
  39. 39. Benefits of IVI membership<br />Content<br /><ul><li>Framework for assessing IT maturity
  40. 40. Leading practices, industry trends, "hot topics"
  41. 41. Assessment tools, "health check"
  42. 42. Better understanding of value/return from increasing maturity</li></ul>Relationships<br /><ul><li>Extended network of leading organisations, with broad and deep experience in IT
  43. 43. Network of key opinion leaders, academics</li></ul>Marketing<br /><ul><li>Be seen as contributing to leading industry thought</li></ul>Staff development<br /><ul><li>Platform to develop expertise, networks, lead content development
  44. 44. Approaches/tools for collaborative development</li></li></ul><li>Using IT CMF and IVI<br />Oil and Gas comparisons<br /><ul><li>Top 6 assessed. Dropped COBIT in favour of IT CMF
  45. 45. Chose 6 CP’s.
  46. 46. Critical message for some in results</li></ul>Hospitals benchmarking<br /><ul><li>Comparing IT effectiveness and impact at different levels of capability</li></ul>CIO dept. skills management<br /><ul><li>Accurate distribution of CIO -1 responsibilities. Supported with training and assessments</li></ul>Specific assessment focus<br /><ul><li>Sanofi Aventis – Innovation management
  47. 47. P&G Enterprise architecture management</li></li></ul><li>Key current focus - objectives<br />Content<br /><ul><li>Continue to build content for our members
  48. 48. Add case studies and use cases.
  49. 49. Add industry benchmarking and general applications</li></ul>Build a ‘Knowledge Exchange’<br /><ul><li>Support self service by members talouring content to need</li></ul>Marketing<br /><ul><li>Build the awareness needed to increase membership and IT CMF adoption</li></ul>Adoption Journey<br /><ul><li>Support our member’s as they understand how to gradually use and embed IT CMF</li></li></ul><li>IVI<br />ICT Professional Services from IVI<br />Organisational service<br />From IVI<br />IVI supporting the organisation and the Individual<br />IVI provide a range of services to support IT CMF successful adoption<br />IVI provide a range of support services and certification for ICT management professionals<br />The objective is to provide training and education to ICT professionals, utilizing <br />the IVI knowledge-base, and provide a University recognised accreditation<br />
  50. 50. IVI Knowledge base<br />Innovation Value Institute<br /> Education<br />The accumulation of knowledge on IT for business value:-<br /><ul><li>IT CMF
  51. 51. Multiple assessment database
  52. 52. Industry specific
  53. 53. BVD’s
  54. 54. Case studies
  55. 55. Other frameworks connected in.</li></ul> Assessment and analysis<br /> Business Collaboration<br />The core objective is the continued accumulation of this knowledge base<br />
  56. 56. The IVI Demand Services<br />Possibilities:-<br /><ul><li>Assessing ICT overall Capability and planning for improvement
  57. 57. Leveraging the ‘Cloud transition’ effectively
  58. 58. Optimizing Enterprise Architecture for Business value
  59. 59. Maximizing Innovation Management within ICT and it’s contribution to the overall business
  60. 60. Leveraging mobility and Social media technology
  61. 61. Optimum digitalization of the organisation’s processes for consistency and productivity
  62. 62. Managing the effective use of ITIL across the ICT organisation
  63. 63. Structuring and measuring ICT for maximum business alignment and business value
  64. 64. Managing the effective use of CMMI across the ICT organisation
  65. 65. Assessing for, and planning optimum Service Management
  66. 66. Assessing for, and planning optimum Shared Services Center management
  67. 67. Collaborating with, and learning from your industry vertical
  68. 68. Data Centre optimization</li></li></ul><li>For each IVI service:-<br />IVI develop and track the following:-<br />Develop a framework for each and track progression – responsibility –<br />Content maturity – ‘hard core’, POM’s POM’s+, etc. (this is building the CP’s up effectively<br />Marketing material (this is where the ‘collection and inventory’ of existing material is important). Build from the web site video through case studies, and conferences, etc<br />Build education through the 5 levels and build lo touch delivery<br />Detailed and validating case studies, and use cases<br />Conferences and out reach effort<br />COP’s as appropriate coordinated through IVI<br />Documentation available, (digital mostly, but chargeable)<br />Delivery capability – lo touch through hi touch, exploiting partners and direct.<br />All releases through TC (the appropriate version)<br />
  69. 69. Backup slides<br />
  70. 70. Glossary of acronyms <br />ABR = Accelerated Background Research<br />CIO = Chief Information Officer<br />CMM = (SEI) Capability Maturity Model<br />EVA = Economic Value added<br />IT-CMF = Information Technology-Capability Maturity Framework<br />IVI = Innovation Value Institute<br />IVIC = Innovation Value Institute Consortium<br />NPV = Net Present Value <br />NUI = National University of Ireland<br />ROCE = Return on Capital Employed<br />ROE = Return on Equity<br />ROI = Return On Investment<br />SEI = Software Engineering Institute of Carnegie Mellon University<br />TCO = Total Cost of Ownership<br />WG = Working Group<br />
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