BT 450 Information Management   IT  GOVERNANCE
ALIGNMENT GAP 65% 10% Said “ ineffective communication  of business strategy and goals between business management and IT ...
Symptoms of Strategic Alignment Problems <ul><li>Business IT Understanding and Rapport </li></ul><ul><li>Competitive Decli...
Strategic Fit BUSINESS   Business Strategy IT   IT Strategy Business Scope Distinctive competencies Business Governance Te...
General governance control model Plan Ref: IT Governance Institute, COBIT Management Guidelines Do Check Correct
50% Percentage of IT executives who say their board of directors provides adequate oversight of their company’s IT activit...
Effective IT Governance: <ul><li>Links to corporate and key asset governance </li></ul><ul><li>Focus investments to create...
The Digital Obstacles <ul><li>We’re  doing too well/poorly financially  (there is no sense of urgency) </li></ul><ul><li>C...
<ul><li>What  are the key decisions that must be made? </li></ul><ul><li>*(Purpose) </li></ul><ul><li>Who   will make thes...
Who sets the strategic technological direction???  1 OF 3 CORPORATE EXECUTIVE MANAGEMENT TEAM DECISION EXECUTIVE IT MANAGE...
Ref: Optimize Research  10 20 30 40 50 60 Midlevel IT Management Line-of-business managers who need technology for busines...
Which of the following steps do you believe would significantly improve IT/business alignment at your company?  3 of 3 Giv...
IT GOVERNANCE ARCHETYPES Note: Some governance styles inspired by Tom Davenport, Information Ecology. Oxford University Pr...
KEY PLAYERS IN IT GOVERNANCE ARCHETYPES Source : IT Governance: How Top Performers Manage IT Decision Rights for Superior ...
Why is IT Governance an Issue? <ul><li>Does anyone discuss Finance Governance, Marketing Governance,  or HR Governance? </...
40% Of CIO's use a portfolio management approach to IT projects (CIO INSIGHT) 53% Of CIO's say their IT project prioritiza...
Rarely does everyone always agree regarding what is the right thing to do, or how to do it Why a Governance Process
IT Governance – Why? <ul><li>Insufficient  resources  to meet commitments </li></ul><ul><li>Unreliable delivery  schedules...
How involved is IT in the development of corporate strategy?  Total IT Execs Business Execs Very involved Involved in many...
How well is IT’s own strategic plan understood across the company?  Total IT Execs Business Execs Well or generally unders...
Reasons for Not Implementing Formal IT Governance Processes Base: 46 CEO’s and CIO's surveyed as part of  wider study; mul...
IT Governance - What? <ul><ul><li>Resource allocation </li></ul></ul><ul><ul><li>Business initiative evaluation (include r...
Stagnation  IT capability exceeds business need IT and business aligned Innovation Stagnation deliberate policy Stagnation...
<ul><li>Governance   Alternatives </li></ul><ul><li>Budget </li></ul><ul><li>Career crossover </li></ul><ul><li>CIO-CEO </...
Source: IT Governance: How Top Performers Manage IT Decision Rights for Superior Results. P. Weill & J. Ross, Harvard Busi...
Typical Strategy Calendar Q1 Q2 Q3 Q4 Strategy update: CEO and executive team clarify vision. Senior executives have no co...
Who sits on the IT advisory panel ? SIM 20 40 60 80 100 %  of  panel  members CIO CFO Executive VP or general manager Othe...
THE WAY TO IMPROVE ALIGNMENT  IT leaders sit down with business leaders to discuss  how technology can best benefit corpor...
Three types of governance mechanisms Executive or Senior Management committee IT leadership committee comprising IT execut...
Steering Committee Critical Success Factors <ul><li>Bureaucracy </li></ul><ul><li>Career building </li></ul><ul><li>Commun...
The First Barrier to Large Committees 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 45 41 43 51 47 49 53 55 1800 ...
Forms of Governance & Leadership Roles HOW STANDARDS ARE DEFINED REF : Sloan Management Review, Winter 2000 Storck Hill Le...
IT CHQ Influence on  IT BU-Related Decisions Sets policies and  shapes many decisions Sets policies and guides some decisi...
Repository Governance  State Farm Insurance <ul><li>Data policy (e.g., Standards, SLA’s) </li></ul><ul><li>Business opport...
PRIORITIZING PROJECT PORTFOLIO <ul><li>Consider all projects  </li></ul><ul><li>Group projects based on: </li></ul><ul><ul...
EXAMPLE PORTFOLIO ASSESSMENT Consensus via: Delphi or Scenario Planning “ MUST  DO” 10 0.80 0.50 66.25 Foxtrot 5 0.75 0.60...
Scenario Planning Grid <ul><li>Discussions and consensus </li></ul><ul><li>Scoring method </li></ul><ul><li>Directional de...
Three Types of Risks <ul><li>Risks that the project will  fail </li></ul><ul><li>Risk of  not doing the project </li></ul>...
Early forms of Risk Management Don’t believe e.g., Be Bad Do Believe  e.g., Be Good God Exists God  Does Not Exist Ref: Pa...
? The Four Levels of Residual Uncertainty 1 A clear enough future <ul><li>A single view of the future </li></ul>2 Alternat...
To Evaluate risk of failure, answer these four questions:   <ul><li>What is the probability the project will be  competed ...
Do-ability versus Financial Value Assessment Ref: The Executives Guide to Information Technology by Baschab & Jon Piot Low...
Ref: The Strategy Focused Organization, R. Kaplan, D. Norton Risk Profiling <ul><li>Sources of  Market Risk </li></ul><ul>...
Risk Level Criteria REF: SIM, SEATTLE STATE GOVERNMENT
<ul><li>Governance Metrics </li></ul><ul><li>GE:  Coffins & Halo’s </li></ul><ul><li>Avon: </li></ul><ul><li>Red </li></ul...
Closing the Strategy- to-Performance Gap <ul><li>Keep it simple, make it concrete </li></ul><ul><li>Debate assumptions, no...
There is no “silver bullet”… It takes a combination of “things” to make it a success!!!
Climbing the Strategic Alignment Maturity Model Climbing the Strategic Alignment Maturity Model Business Strategy IT Strat...
These are the KPAs associated with each level: An organization is not considered to be at a given level until it has satis...
SEI People Capability Maturity Model 1.Initial 2.Repeatable 3.Defined 4.Managed 5.Optimizing Compensation Training Perform...
Reporting/ · · · · · · - · - - - Inter - Education, Cross - IT BUSINESS ALIGNMENT MATURITY CRITERIA PARTNERSHIP <ul><li>Bu...
- · Education, Cross - IT BUSINESS ALIGNMENT MATURITY CRITERIA SKILLS COMMUNICATIONS COMPETENCY/VALUE MEASUREMENTS GOVERNA...
· Education, Cross - IT BUSINESS ALIGNMENT MATURITY CRITERIA SKILLS COMPETENCY / VALUE MEASUREMENTS GOVERNANCE SCOPE &  AR...
Education, Cross - IT BUSINESS ALIGNMENT MATURITY CRITERIA SKILLS SCOPE &  ARCHITECTURE COMMUNICATIONS COMPETENCY/VALUE ME...
IT BUSINESS ALIGNMENT MATURITY CRITERIA COMMUNICATIONS COMPETENCY/VALUE MEASUREMENTS PARTNERSHIP <ul><li>Business Percepti...
IT BUSINESS ALIGNMENT MATURITY CRITERIA COMMUNICATIONS COMPETENCY/VALUE MEASUREMENTS SCOPE & ARCHITECTURE <ul><li>Traditio...
IT BUSINESS ALIGNMENT MATURITY CRITERIA SCOPE &  ARCHITECTURE COMMUNICATIONS COMPETENCY/VALUE MEASUREMENTS SKILLS <ul><li>...
Reporting/ · · · · · · - · - - - Inter - Education, Cross - IT BUSINESS ALIGNMENT MATURITY CRITERIA PARTNERSHIP <ul><li>Bu...
Strategic  Alignment Maturity Summary <ul><li>Initial/Ad-Hoc process </li></ul><ul><li>Committed process </li></ul><ul><li...
Strategic  Alignment Maturity Summary <ul><li>Initial/Ad-Hoc process </li></ul>Level 1 <ul><li>COMMUNICATIONS :  Business/...
<ul><li>WHERE IS THE ORGANIZATION  STRONG/WEAK? </li></ul><ul><li>WHERE IS THERE DISAGREEMENT? </li></ul><ul><li>WHAT ARE ...
Perceived Comfort Level of the 6 Criteria  (Factor Analysis) <ul><li>Governance </li></ul><ul><li>Scope & Architecture  </...
Strategic Alignment Maturity % of Respondents
 
Strategic  Alignment Maturity Summary <ul><li>Initial/Ad-Hoc process </li></ul><ul><li>Committed process </li></ul><ul><li...
Answer the following questions regarding Air Products: <ul><li>What is the main focus of the case (Abstract)? </li></ul><u...
1 . Administrative Structure Processes Skills IT Architecture Processes IT Infrastructure Organizational Infrastructure Sk...
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  1. 1. BT 450 Information Management IT GOVERNANCE
  2. 2. ALIGNMENT GAP 65% 10% Said “ ineffective communication of business strategy and goals between business management and IT management” is a significant or moderate challenge Reported that their companies have been “extremely successful” at aligning IT plans with corporate strategies Ref: Deloitte Consulting, New York, and IDG Research Services, Framingham, Mass.
  3. 3. Symptoms of Strategic Alignment Problems <ul><li>Business IT Understanding and Rapport </li></ul><ul><li>Competitive Decline </li></ul><ul><li>Fired IT Manager(s) </li></ul><ul><li>High Turnover of IT Professionals </li></ul><ul><li>Inappropriate Resources (HR , $$) </li></ul><ul><li>IT Reorganizations </li></ul><ul><li>Lack of Executive Interest in IT (Champion,Sponsor) </li></ul><ul><li>Lack of Vision / Strategy </li></ul><ul><li>No Communication </li></ul><ul><li>Ongoing Conflicts </li></ul><ul><li>Outsource </li></ul><ul><li>Productivity Decrease </li></ul><ul><li>Projects </li></ul><ul><ul><li>Not Used </li></ul></ul><ul><ul><li>Canceled </li></ul></ul><ul><ul><li>Late </li></ul></ul><ul><ul><li>Value questionable </li></ul></ul><ul><li>Redundancies in systems development </li></ul><ul><li>Systemic Competencies </li></ul><ul><li>Systems integration difficult (e.g., standards, politics) </li></ul><ul><li>Unhappy Users/Complaints </li></ul>LONG LIST ABOUT SYMPTOMS OF ALIGNMENT PROBLEMS
  4. 4. Strategic Fit BUSINESS Business Strategy IT IT Strategy Business Scope Distinctive competencies Business Governance Technology Scope Systemic competencies Functional Integration Organizational Infrastructure The Strategic Alignment Model IT Governance <ul><li>Internal decisions </li></ul><ul><li>Strategic Partners </li></ul><ul><li>Regulation </li></ul>Administrative Structure Processes Skills IT Architecture Processes Skills IT Infrastructure
  5. 5. General governance control model Plan Ref: IT Governance Institute, COBIT Management Guidelines Do Check Correct
  6. 6. 50% Percentage of IT executives who say their board of directors provides adequate oversight of their company’s IT activities. REF: CIO INSIGHT
  7. 7. Effective IT Governance: <ul><li>Links to corporate and key asset governance </li></ul><ul><li>Focus investments to create foundation for business execution </li></ul><ul><li>Recognizes leadership has limited bandwidth </li></ul><ul><li>Learns from good corporate and financial governance </li></ul><ul><li>Firms with superior IT governance also had more than 20% higher profits </li></ul><ul><li>38% could accurately describe IT governance </li></ul><ul><li>IT Governance can/should be explained on one page </li></ul><ul><li>Top performing enterprises (or BUs) govern IT differently </li></ul><ul><li>Design governance at both enterprise and BU levels </li></ul><ul><li>Good governance can simultaneously empower and ensure compliance </li></ul><ul><li>to enterprise vision but what vision </li></ul>Source: IT Governance: How Top Performers Manage IT Decision Rights for Superior Results. P. Weill & J. Ross, Harvard Business School Press, 2004.
  8. 8. The Digital Obstacles <ul><li>We’re doing too well/poorly financially (there is no sense of urgency) </li></ul><ul><li>Change is too difficult , and no one has the appetite for this much change </li></ul><ul><li>We have too many other priorities </li></ul><ul><li>We’re in the midst of a turnaround and can’t focus on digital </li></ul><ul><li>We don’t know how to do it </li></ul><ul><li>Its not our current business plan </li></ul><ul><li>Its not in our budget </li></ul><ul><li>Its not part of our vision </li></ul><ul><li>We don’t want to alienate our existing customers </li></ul><ul><li>We don’t want to upset our sales and distribution channels </li></ul><ul><li>Our customers aren't digital-ready </li></ul><ul><li>Our employees aren't digital-ready </li></ul><ul><li>We cant afford to spend money on the digital infrastructure </li></ul><ul><li>Our management team isn't digital-savvy </li></ul><ul><li>We’re already too late . </li></ul>CHANGE MANAGEMENT TOPICS THAT RELATE TO IT GOVERNANCE!!!
  9. 9. <ul><li>What are the key decisions that must be made? </li></ul><ul><li>*(Purpose) </li></ul><ul><li>Who will make these decisions? </li></ul><ul><li>*(Power) </li></ul><ul><li>Why will they make them? </li></ul><ul><li>*(Alignment) </li></ul><ul><li>How will they make them? </li></ul><ul><li>*(Decision Process) </li></ul>IT Governance is a Process and set of Metrics/Controls focusing on:
  10. 10. Who sets the strategic technological direction??? 1 OF 3 CORPORATE EXECUTIVE MANAGEMENT TEAM DECISION EXECUTIVE IT MANAGEMENT OTHER OTHER IT MANAGEMENT BOARD OF DIRECTORS IT EXECUTIVES SAID BUSINESS EXECUTIVES SAID SOURCE : INFOWORLD TRUE VALUE OF IT STUDY DISJOINT 28% 47% 11% 9% 5% 59% 22% 10% 7% 2%
  11. 11. Ref: Optimize Research 10 20 30 40 50 60 Midlevel IT Management Line-of-business managers who need technology for business processes Mixed Committee Top Corporate Management Top IT executives, such as the CIO Who has ultimate authority for setting budget priorities for your company’s IT spending? 2 OF 3 % of respondents Business management or staff IT management or staff DISJOINT
  12. 12. Which of the following steps do you believe would significantly improve IT/business alignment at your company? 3 of 3 Give IT MANAGEMENT more control and authority over decisions involving how information technology is used to support business goals. IT EXECUTIVES BUSINESS EXECUTIVES Give BUSINESS MANAGEMENT more control and authority over decisions involving how information technology is used to support business goals. IT EXECUTIVES BUSINESS EXECUTIVES 62% 45% 38% 55% Ref: CIO Insight DISJOINT
  13. 13. IT GOVERNANCE ARCHETYPES Note: Some governance styles inspired by Tom Davenport, Information Ecology. Oxford University Press. Different parts of the organization work better with different archetypes. Each individual user . Anarchy IT executives and one other group (e.g., CxO or BU leaders). IT Duopoly Shared by C level executives and at least one other business group (e.g.,CxO and BU leaders) – may also include IT executives. Equivalent of the center and states working together. Federal Business unit leaders , key process owners or their delegates. Feudal Individuals or groups of IT executives . IT monarchy A group of, or individual business executives (i.e. CxOs). Includes committees comprised of senior business executives (may include CIO). Excludes IT executives acting independently. Business Monarchy
  14. 14. KEY PLAYERS IN IT GOVERNANCE ARCHETYPES Source : IT Governance: How Top Performers Manage IT Decision Rights for Superior Results, P. Weill & J. Ross <ul><li>Which is most effective & why? </li></ul><ul><li>Remember: </li></ul><ul><ul><li>Governance focuses on Decisions </li></ul></ul><ul><ul><li>Organization focuses on Reporting </li></ul></ul>Use next week. Business Monarchy IT Monarchy Feudal Federal (CxO+ Unit) Anarchy Corporate IT and/or Business Unit IT Business Unit Leaders or Key Business Process Owners CxO Level Execs IT Duopoly (IT Execs+one other group either either
  15. 15. Why is IT Governance an Issue? <ul><li>Does anyone discuss Finance Governance, Marketing Governance, or HR Governance? </li></ul><ul><li>How many CIO’s are part of the most senior executive committees? How many CFO’s? How many product executives? How many manufacturing executives? What are their roles? </li></ul><ul><li>Two Countervailing forces exist today: </li></ul><ul><ul><li>Growing recognition that IT has become an integral part of the business </li></ul></ul><ul><ul><li>Inadequate performance by IT organizations and CIO’s </li></ul></ul>
  16. 16. 40% Of CIO's use a portfolio management approach to IT projects (CIO INSIGHT) 53% Of CIO's say their IT project prioritization is politically driven (CIO INSIGHT) 58% Percent of CEOs and CIO's who have implemented, are implementing, or are considering an IT governance program. (IT GOVERNANCE INSTITUTE/PRICEWATERHOUSECOOPERS) 76% Percent of business leaders who are aware they have IT problems that could be resolved by implementing an IT governance framework. (IT GOVERNANCE INSTITUTE/PRICEWATERHOUSECOOPERS)
  17. 17. Rarely does everyone always agree regarding what is the right thing to do, or how to do it Why a Governance Process
  18. 18. IT Governance – Why? <ul><li>Insufficient resources to meet commitments </li></ul><ul><li>Unreliable delivery schedules resulting from insufficient staff & changes </li></ul><ul><li>Lack of focus on daily business operations due to utilizing IT operations and maintenance staff on projects </li></ul><ul><li>Reduced quality & demonstrable value of delivered projects </li></ul><ul><li>Potential for working on the wrong things </li></ul><ul><li>Business functions begin to move in their own IT direction to satisfy their own requirements with minimal or no IT support </li></ul><ul><li>Chaotic / non-standard infrastructure (IT & business) , resulting in poor operational maintainability </li></ul><ul><li>Enhance communications & relationships </li></ul><ul><li>Enable/drive business opportunities & strategies </li></ul>
  19. 19. How involved is IT in the development of corporate strategy? Total IT Execs Business Execs Very involved Involved in many discussions 35% 36 Somewhat Involved Not Involved 23 7 Ref : CIO Insight Balanced Scorecard 37% 32% 19% 6% 34% 26% 8% 38%
  20. 20. How well is IT’s own strategic plan understood across the company? Total IT Execs Business Execs Well or generally understood Somewhat understood or not at all 47% 52% Ref : CIO Insight Balanced Scorecard 50% 49% 55% 44%
  21. 21. Reasons for Not Implementing Formal IT Governance Processes Base: 46 CEO’s and CIO's surveyed as part of wider study; multiple responses allowed SOURCE: IT GOVERNANCE INSTITUTE, ROLLING MEADOWS, ILL., AND PRICEWATERHOUSECOOPERS, NEW YORK 29% Others 7% Too difficult to implement 11% Company is too small 11% No IT problems to fix 17% Formal solutions won’t work 20% Lack of required skills 28% Too expensive
  22. 22. IT Governance - What? <ul><ul><li>Resource allocation </li></ul></ul><ul><ul><li>Business initiative evaluation (include risk) </li></ul></ul><ul><ul><li>Project prioritization </li></ul></ul><ul><ul><li>Performance/value measurements and tracking </li></ul></ul><ul><ul><li>Cost determination and assignment </li></ul></ul><ul><ul><li>Facilitate IT-business relationship </li></ul></ul><ul><ul><li>Integration and Standards direction </li></ul></ul>
  23. 23. Stagnation IT capability exceeds business need IT and business aligned Innovation Stagnation deliberate policy Stagnation IT unable to innovate Stability Change Conservative IT Management Innovative Business orientation IT-Business Alignment Governance WHERE IS AIR PRODUCTS?
  24. 24. <ul><li>Governance Alternatives </li></ul><ul><li>Budget </li></ul><ul><li>Career crossover </li></ul><ul><li>CIO-CEO </li></ul><ul><li>Communicate / market / negotiate </li></ul><ul><li>Competitive enabler/driver </li></ul><ul><li>Education / cross-training </li></ul><ul><li>Liaison </li></ul><ul><li>Location </li></ul><ul><li>Organization </li></ul><ul><li>Partnership/Alliance Management </li></ul><ul><li>Process </li></ul><ul><li>Service Level Management </li></ul><ul><li>Shared risks, responsibilities, rewards/penalties </li></ul><ul><li>Steering committee: </li></ul><ul><ul><ul><li>strategic </li></ul></ul></ul><ul><ul><ul><li>tactical </li></ul></ul></ul><ul><ul><ul><li>operational </li></ul></ul></ul><ul><li>Value Measurement </li></ul>
  25. 25. Source: IT Governance: How Top Performers Manage IT Decision Rights for Superior Results. P. Weill & J. Ross, Harvard Business School Press, 2004. Corporate and Key Asset Governance Corporate Governance Shareholders Monitoring Stakeholders e.g., employees, customers, creditors Disclosure Board Senior Executive Team Desirable Behavior Key Assets Requiring Governance Human Assets Financial Assets Physical Assets Know-how & IP (Intellectual Property) Assets Information (& IT) Assets Relationship Assets Financial Governance Mechanisms IT Governance Mechanisms - Executive Committee - Budget Process - Capital Approval Process - Cash Flow Management <ul><li>Executive Committee - IT Steering Committee - Budget Process - IT Organization </li></ul><ul><li>Architecture Committee </li></ul><ul><li>Service Level Agreements </li></ul><ul><li>Process Teams with IT </li></ul>Strategy Finance: Usually most effective. What are their attributes/characteristics?
  26. 26. Typical Strategy Calendar Q1 Q2 Q3 Q4 Strategy update: CEO and executive team clarify vision. Senior executives have no consistent way to describe strategy. Two-thirds of HR and IT organizations are not aligned with strategy. Line-of-business and support-unit leaders conduct strategic planning. 60% of companies do not link budgets to strategy CFO oversees budgeting HR coordinates personal goal setting, incentives, and personal development. 70% of middle managers do not have strategy-linked incentive pay. 95% of the workforce does not understand the strategy. The vast majority of executive teams spend less than one hour per month discussing strategy. Top executives conduct monthly management reviews. Corporate communications unit disseminates information. Chief knowledge officer oversees knowledge sharing. Governance process is necessary = deficiencies in old management process Ref: Harvard Business Review by Robert S. Kaplan and David P. Norton
  27. 27. Who sits on the IT advisory panel ? SIM 20 40 60 80 100 % of panel members CIO CFO Executive VP or general manager Other executive management President Chief operating officer CEO Chief marketing officer Chief technology officer IS or networking management Business - unit heads Other
  28. 28. THE WAY TO IMPROVE ALIGNMENT IT leaders sit down with business leaders to discuss how technology can best benefit corporate goals . In tandem, the IT and business leaders formulate a strategic plan that includes projects, schedules and budgets. The plan is presented to a cross-functional senior management team, which compiles proposals from the various business/IT teams. The proposals are reviewed and prioritized using portfolio process. Senior management releases the final strategic plan. Because projects are assigned to the people who proposed them, the IT/business partners are much more likely to champion their initiatives. Business sponsor is identified Projects are reviewed monthly to ensure they stay on track. 1 2 3 4 5
  29. 29. Three types of governance mechanisms Executive or Senior Management committee IT leadership committee comprising IT executives Process teams with IT members Business/IT relationship managers IT council comprising business & IT executives Architecture committee Capital approval committee Governance Mechanism Percent Use Tracking of IT projects & resources consumed Service level agreements Formally tracking business value of IT Chargeback arrangements Work with managers who don’t follow the rules Senior management announcements Office of CIO or office of IT governance Web-based portals and intranets for IT DECISION-MAKING STRUCTURES: ALIGNMENT PROCESSES: COMMUNICATION APPROACHES: 3.5 + 3.8 + 3.4 3.9 + 3.7 3.1 3.1 3.4 + 3.2 2.9 + 2.8 3.2 2.9 3.6 2.9 CIO Ranked Effectiveness “1” (ineffective) to “5” (highly effective) 0 10 20 30 40 50 60 70 80 90 100 Ref: MIT Sloan-CISR-Weill
  30. 30. Steering Committee Critical Success Factors <ul><li>Bureaucracy </li></ul><ul><li>Career building </li></ul><ul><li>Communication </li></ul><ul><li>Complex decisions </li></ul><ul><li>Influence/ empowerment </li></ul><ul><li>Low hanging fruits/quick hits </li></ul><ul><li>Marketing </li></ul><ul><li>Objectives/measurements </li></ul><ul><li>Ownership/Accountability </li></ul><ul><li>Priorities (80 -20 rule) </li></ul><ul><li>Relationships </li></ul><ul><li>Right participants </li></ul><ul><li>Share risks </li></ul><ul><li>Structure, facilitator </li></ul>
  31. 31. The First Barrier to Large Committees 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 45 41 43 51 47 49 53 55 1800 1600 1400 1200 1000 800 600 400 200 0 Number of People Number of Handshakes
  32. 32. Forms of Governance & Leadership Roles HOW STANDARDS ARE DEFINED REF : Sloan Management Review, Winter 2000 Storck Hill Leadership Role Thick Matrix Thin Matrix Strategic Community Corporate Headquarters Designing and mandating strategy Providing guidance Defining strategy, providing sponsorship, & facilitating the community Business Unit Manager Ensuring compliance with corporate mandates Interpreting corporate advisories & making decisions Sharing knowledge among business units & providing feedback to CHQ
  33. 33. IT CHQ Influence on IT BU-Related Decisions Sets policies and shapes many decisions Sets policies and guides some decisions Sets some policies and reviews BU proposals Minimal influence Ref: Organizing for Global Competitiveness: The Role of Corporate Head quarters and its Leadership in Organizational Integration WHAT DO YOU THINK??? 11% 16% 39% 34%
  34. 34. Repository Governance State Farm Insurance <ul><li>Data policy (e.g., Standards, SLA’s) </li></ul><ul><li>Business opportunities </li></ul><ul><li>Roles and responsibilities </li></ul><ul><li>Usage of data </li></ul><ul><li>Enterprise data vs data for the enterprise </li></ul><ul><li>Information quality </li></ul>
  35. 35. PRIORITIZING PROJECT PORTFOLIO <ul><li>Consider all projects </li></ul><ul><li>Group projects based on: </li></ul><ul><ul><li>Necessity, Opportunity, Desirability </li></ul></ul><ul><ul><li>Risk </li></ul></ul><ul><ul><li>Resource demands </li></ul></ul><ul><ul><li>Anticipated return </li></ul></ul><ul><li>Prioritize projects </li></ul>
  36. 36. EXAMPLE PORTFOLIO ASSESSMENT Consensus via: Delphi or Scenario Planning “ MUST DO” 10 0.80 0.50 66.25 Foxtrot 5 0.75 0.60 50 Echo 1 1.00 1.00 3 Delta 2 0.75 0.75 8.62 Gamma 5 0.80 0.50 63.75 Beta 3 0.50 0.80 30 Alpha Development Cost Probability of Business Success Probability of Technical Success Return on Option Project Name
  37. 37. Scenario Planning Grid <ul><li>Discussions and consensus </li></ul><ul><li>Scoring method </li></ul><ul><li>Directional decision rules </li></ul>High Priority ! Medium Priority Low Priority High Medium Low High Medium Low Impact on Firm Probability of Occurrence
  38. 38. Three Types of Risks <ul><li>Risks that the project will fail </li></ul><ul><li>Risk of not doing the project </li></ul><ul><li>Risk that it is the wrong project </li></ul><ul><li>for what is trying to be achieved </li></ul>
  39. 39. Early forms of Risk Management Don’t believe e.g., Be Bad Do Believe e.g., Be Good God Exists God Does Not Exist Ref: Pascal, while trying to figure out whether one should live a pious life devoted to faith or a sybaritic life devoted to din was able tot tease out the base elements of any risk analysis – outcomes (what actually happens); actions (what one does in anticipation of those outcomes); and consequences (the impact of one’s actions); Go to Hell Go to Heaven No Consequence No Consequence
  40. 40. ? The Four Levels of Residual Uncertainty 1 A clear enough future <ul><li>A single view of the future </li></ul>2 Alternate futures <ul><li>A limited set of possible future outcomes, one of which will occur </li></ul>3 A range of futures <ul><li>A range of possible future outcomes </li></ul>4 True ambiguity <ul><li>Not even a range of possible future outcomes </li></ul><ul><li>Traditional tools: </li></ul><ul><li>- Porter’s Five Forces </li></ul><ul><li>- market research </li></ul><ul><li>- cost benchmarks </li></ul><ul><li>- SWOT analysis </li></ul><ul><li>- core competencies </li></ul><ul><li>- discounted cash flow/NPV </li></ul><ul><li>Traditional tools plus: </li></ul><ul><li>- decision or event trees </li></ul><ul><li>- scenario-planning </li></ul><ul><li>- game theory </li></ul><ul><li>Traditional tools plus: </li></ul><ul><li>- scenario-planning </li></ul><ul><li>- game theory </li></ul><ul><li>- Market research </li></ul><ul><li>- System dynamics </li></ul><ul><li>- Black-Scholes </li></ul><ul><li>Working backward </li></ul><ul><li>to what you would </li></ul><ul><li>have to believe to </li></ul><ul><li>support a given </li></ul><ul><li>strategy: </li></ul><ul><li>- analogies & </li></ul><ul><li>reference cases </li></ul><ul><li>- management </li></ul><ul><li>simulators </li></ul>ROI POTENTIAL A B C
  41. 41. To Evaluate risk of failure, answer these four questions: <ul><li>What is the probability the project will be competed on time ? </li></ul><ul><li>Will it be completed within budget ? </li></ul><ul><li>Could it be impacted by an internal issue (over which company has control)? </li></ul><ul><li>Could it be impacted by an external issue (over which the company has little or no control)? </li></ul>Ref: Information Systems Management in Practice by Barbara C.McNarlin &Ralph H.Sprague Jr.
  42. 42. Do-ability versus Financial Value Assessment Ref: The Executives Guide to Information Technology by Baschab & Jon Piot Low Hanging Fruit Gems Re-evaluate Difficult Projects HIGH FINANCIAL VALUE LOW LOW HIGH DO-ABILITY
  43. 43. Ref: The Strategy Focused Organization, R. Kaplan, D. Norton Risk Profiling <ul><li>Sources of Market Risk </li></ul><ul><li>Market size and scope </li></ul><ul><li>Definition of customer base </li></ul><ul><li>Knowledge of customer needs </li></ul><ul><li>Distribution channels </li></ul><ul><li>Regulatory environment </li></ul><ul><li>Intellectual property regimes </li></ul><ul><li>Competitor's position & reaction </li></ul><ul><li>Sources of Technology Risk </li></ul><ul><li>Technical Feasibility </li></ul><ul><li>Uncertain standards </li></ul><ul><li>Physical dangers </li></ul><ul><li>Product liability </li></ul><ul><li>Supply of materials </li></ul><ul><li>Manufacturability </li></ul><ul><li>Sources of Organizational Risk </li></ul><ul><li>Fit with capabilities </li></ul><ul><li>Cost </li></ul><ul><li>Speed of organizational change </li></ul><ul><li>Dependence on new organization </li></ul><ul><li>Dependence on external partners </li></ul><ul><li>Quality & Availability of personnel </li></ul><ul><li>Burn rate Vs. cash and capital </li></ul>Technology Risk Market Risk Organizational Risk High High High Low Low None
  44. 44. Risk Level Criteria REF: SIM, SEATTLE STATE GOVERNMENT
  45. 45. <ul><li>Governance Metrics </li></ul><ul><li>GE: Coffins & Halo’s </li></ul><ul><li>Avon: </li></ul><ul><li>Red </li></ul><ul><li>Yellow </li></ul><ul><li>Green </li></ul>
  46. 46. Closing the Strategy- to-Performance Gap <ul><li>Keep it simple, make it concrete </li></ul><ul><li>Debate assumptions, not forecasts </li></ul><ul><li>Use a rigorous framework, speak a common language </li></ul><ul><li>Discuss resource deployments early </li></ul><ul><li>Clearly identify priorities </li></ul><ul><li>Continuously monitor performance </li></ul><ul><li>Reward and develop execution capabilities </li></ul>Harvard Business Review
  47. 47. There is no “silver bullet”… It takes a combination of “things” to make it a success!!!
  48. 48. Climbing the Strategic Alignment Maturity Model Climbing the Strategic Alignment Maturity Model Business Strategy IT Strategy LEVEL 1 Initial Process LEVEL 2 Committed Process LEVEL 3 Established process LEVEL 4 Improved Process LEVEL 5 Optimized Process Alignment Gap
  49. 49. These are the KPAs associated with each level: An organization is not considered to be at a given level until it has satisfied the conditions for every K ey P rocess A rea through that level. The structure of the SEI CMM OPTIMIZING (5) INITIAL (1) MANAGED (4) DEFINED (3) REPEATABLE (2) Continuously Improving Process Predictable Process Standard, Consistent Process Disciplined Process <ul><li>DEFECT PREVENTION PROCESS </li></ul><ul><li>TECHNOLOGY CHANGE MANAGEMENT </li></ul><ul><li>PROCESS CHANGE MANAGEMENT </li></ul><ul><li>QUANTITATIVE PROCESS MANAGEMENT </li></ul><ul><li>SOFTWARE QUALITY MANAGEMENT </li></ul><ul><li>ORGANIZATION PROCESS FOCUS </li></ul><ul><li>ORGANIZATION PROCESS DEFINITION </li></ul><ul><li>TRAINING PROGRAM </li></ul><ul><li>INTEGRATED SOFTWARE MANAGEMENT </li></ul><ul><li>SOFTWARE PRODUCT ENGINEERING </li></ul><ul><li>INTERGROUP COORDINATION </li></ul><ul><li>PEER REVIEWS </li></ul><ul><li>REQUIREMENTS MANAGEMENT </li></ul><ul><li>SOFTWARE PROJECT PLANNING </li></ul><ul><li>SOFTWARE PROJECT TRACKING AND OVERSIGHT </li></ul><ul><li>SOFTWARE SUBCONTRACT MANAGEMENT </li></ul><ul><li>SOFTWARE QUALITY ASSURANCE </li></ul><ul><li>SOFTWARE CONFIGURATION MANAGEMENT </li></ul>
  50. 50. SEI People Capability Maturity Model 1.Initial 2.Repeatable 3.Defined 4.Managed 5.Optimizing Compensation Training Performance Management Staffing Communication Work Environment Participatory Culture Competency-Based Practices Career Development Competency Development Workforce Planning Knowledge and Skills Analysis Organizational Performance Alignment Organizational Competency Management Team-Based Practices Team Building Mentoring Continuous Workforce Innovation Coaching Personal Competency Development Continuously improve methods for developing personal and organizational Competence Quantitatively manage organizational growth in workforce capabilities and establish competency-based teams Identify core competencies and align workforce activities with them Instill basic discipline into workforce activities
  51. 51. Reporting/ · · · · · · - · - - - Inter - Education, Cross - IT BUSINESS ALIGNMENT MATURITY CRITERIA PARTNERSHIP <ul><li>Business Perception of IT Value </li></ul><ul><li>Role of IT in Strategic </li></ul>c Business Planning <ul><li>Shared Goals, Risk, </li></ul>Rewards/Penalties <ul><li>IT Program Management </li></ul><ul><li>Relationship/Trust Style </li></ul><ul><li>Business Sponsor/Champion </li></ul>SCOPE & ARCHITECTURE <ul><li>Traditional, Enabler/Driver, </li></ul>External <ul><li>Standards Articulation </li></ul><ul><li>Architectural Integration: </li></ul>- Functional Organization -Enterprise -Inter enterprise <ul><li>Architectural Transparency, </li></ul>Agility, Flexibility <ul><li>Manage Emerging Tech. </li></ul>SKILLS <ul><li>Innovation, Entrepreneurship </li></ul><ul><li>Cultural Locus of Power </li></ul><ul><li>Management Style </li></ul><ul><li>Change Readiness </li></ul><ul><li>Career cro </li></ul>ssover training <ul><li>Hiring and retaining </li></ul>by Business <ul><li>Liaison( </li></ul>COMMUNICATIONS <ul><li>Understanding of Business </li></ul>by IT <ul><li>Understanding of IT </li></ul><ul><li>Inter/Intra </li></ul>organizational Learning/Education <ul><li>Protocol Rigidity </li></ul><ul><li>Knowledge Sharing </li></ul>s) effectiveness COMPETENCY/VALUE MEASUREMENTS <ul><li>IT Metrics </li></ul><ul><li>Business Metrics </li></ul><ul><li>Balanced Metrics </li></ul><ul><li>Service Level Agreements </li></ul><ul><li>Benchmarking </li></ul><ul><li>Formal Assessments/Reviews </li></ul><ul><li>Continuous Improvement </li></ul>GOVERNANCE <ul><li>Business Strategic Planning </li></ul><ul><li>IT Strategic Planning </li></ul><ul><li>Organization Structure </li></ul><ul><li>IT Investment Management </li></ul><ul><li>Budgetary Control </li></ul><ul><li>Steering Committee(s) </li></ul><ul><li>Prioritization Process </li></ul>Interpersonal Environment <ul><li>Social, Political, Trusting </li></ul>
  52. 52. - · Education, Cross - IT BUSINESS ALIGNMENT MATURITY CRITERIA SKILLS COMMUNICATIONS COMPETENCY/VALUE MEASUREMENTS GOVERNANCE SCOPE & ARCHITECTURE <ul><li>Understanding of Business by IT </li></ul><ul><li>Understanding of IT by Business </li></ul><ul><li>Inter / Intra-organizational Learning / Education </li></ul><ul><li>Protocol rigidity </li></ul><ul><li>Knowledge Sharing </li></ul><ul><li>Liaison(s) effectiveness </li></ul><ul><li>Role of IT in Strategic </li></ul>PARTNERSHIP <ul><li>Business Perception of IT Value </li></ul>c Business Planning <ul><li>Shared Goals, Risk, </li></ul>Rewards/Penalties <ul><li>IT Program Management </li></ul><ul><li>Relationship/Trust Style </li></ul><ul><li>Business Sponsor/Champion </li></ul><ul><li>IT Metrics </li></ul><ul><li>Business Metrics </li></ul><ul><li>Balanced Metrics </li></ul><ul><li>Service Level Agreements </li></ul><ul><li>Benchmarking </li></ul><ul><li>Formal Assessments/Reviews </li></ul><ul><li>Continuous Improvement </li></ul><ul><li>Business Strategic Planning </li></ul><ul><li>IT Strategic Planning </li></ul><ul><li>Organization Structure </li></ul><ul><li>IT Investment Management </li></ul><ul><li>Budgetary Control </li></ul><ul><li>Steering Committee(s) </li></ul><ul><li>Prioritization Process </li></ul><ul><li>Career cro </li></ul><ul><li>Innovation, Entrepreneurship </li></ul><ul><li>Cultural Locus of Power </li></ul><ul><li>Management Style </li></ul><ul><li>Change Readiness </li></ul>ssover training <ul><li>Hiring and retaining </li></ul>Interpersonal Environment <ul><li>Social, Political, Trusting </li></ul><ul><li>Traditional, Enabler/Driver, </li></ul>External <ul><li>Standards Articulation </li></ul><ul><li>Architectural Integration: </li></ul>- Functional Organization -Enterprise -Inter enterprise <ul><li>Architectural Transparency, </li></ul>Agility, Flexibility <ul><li>Manage Emerging Tech. </li></ul>
  53. 53. · Education, Cross - IT BUSINESS ALIGNMENT MATURITY CRITERIA SKILLS COMPETENCY / VALUE MEASUREMENTS GOVERNANCE SCOPE & ARCHITECTURE <ul><li>IT Metrics </li></ul><ul><li>Business Metrics </li></ul><ul><li>Balanced Metrics </li></ul><ul><li>Service Level Agreements </li></ul><ul><li>Benchmarking </li></ul><ul><li>Formal Assessments / Reviews </li></ul><ul><li>Continuous Improvement </li></ul>COMMUNICATIONS <ul><li>Role of IT in Strategic </li></ul>PARTNERSHIP <ul><li>Business Perception of IT Value </li></ul>c Business Planning <ul><li>Shared Goals, Risk, </li></ul>Rewards/Penalties <ul><li>IT Program Management </li></ul><ul><li>Relationship/Trust Style </li></ul><ul><li>Business Sponsor/Champion </li></ul><ul><li>Business Strategic Planning </li></ul><ul><li>IT Strategic Planning </li></ul><ul><li>Organization Structure </li></ul><ul><li>IT Investment Management </li></ul><ul><li>Budgetary Control </li></ul><ul><li>Steering Committee(s) </li></ul><ul><li>Prioritization Process </li></ul><ul><li>Career cro </li></ul><ul><li>Innovation, Entrepreneurship </li></ul><ul><li>Cultural Locus of Power </li></ul><ul><li>Management Style </li></ul><ul><li>Change Readiness </li></ul>ssover training <ul><li>Hiring and retaining </li></ul>Interpersonal Environment <ul><li>Social, Political, Trusting </li></ul><ul><li>Traditional, Enabler/Driver, </li></ul>External <ul><li>Standards Articulation </li></ul><ul><li>Architectural Integration: </li></ul>- Functional Organization -Enterprise -Inter enterprise <ul><li>Architectural Transparency, </li></ul>Agility, Flexibility <ul><li>Manage Emerging Tech. </li></ul>Learning/Education <ul><li>Liaison(s) </li></ul><ul><li>Inter/Intra </li></ul><ul><li>Understanding of IT </li></ul><ul><li>Protocol Rigidity </li></ul>by Business <ul><li>Understanding of Business </li></ul>by IT organizational <ul><li>Knowledge Sharing </li></ul>effectiveness
  54. 54. Education, Cross - IT BUSINESS ALIGNMENT MATURITY CRITERIA SKILLS SCOPE & ARCHITECTURE COMMUNICATIONS COMPETENCY/VALUE MEASUREMENTS GOVERNANCE <ul><li>Business Strategic Planning </li></ul><ul><li>IT Strategic Planning </li></ul><ul><li>Organization Structure </li></ul><ul><li>Budgetary Control </li></ul><ul><li>IT Investment Management </li></ul><ul><li>Steering Committee(s) </li></ul><ul><li>Prioritization Process </li></ul><ul><li>Role of IT in Strategic </li></ul>PARTNERSHIP <ul><li>Business Perception of IT Value </li></ul>c Business Planning <ul><li>Shared Goals, Risk, </li></ul>Rewards/Penalties <ul><li>IT Program Management </li></ul><ul><li>Relationship/Trust Style </li></ul><ul><li>Business Sponsor/Champion </li></ul><ul><li>Career cro </li></ul><ul><li>Innovation, Entrepreneurship </li></ul><ul><li>Cultural Locus of Power </li></ul><ul><li>Management Style </li></ul><ul><li>Change Readiness </li></ul>ssover training <ul><li>Hiring and retaining </li></ul>Interpersonal Environment <ul><li>Social, Political, Trusting </li></ul><ul><li>Traditional, Enabler/Driver, </li></ul>External <ul><li>Standards Articulation </li></ul><ul><li>Architectural Integration: </li></ul>- Functional Organization -Enterprise -Inter enterprise <ul><li>Architectural Transparency, </li></ul>Agility, Flexibility <ul><li>Manage Emerging Tech. </li></ul>Learning/Education <ul><li>Liaison(s) </li></ul><ul><li>Inter/Intra </li></ul><ul><li>Understanding of IT </li></ul><ul><li>Protocol Rigidity </li></ul>by Business <ul><li>Understanding of Business </li></ul>by IT organizational <ul><li>Knowledge Sharing </li></ul>effectiveness <ul><li>IT Metrics </li></ul><ul><li>Business Metrics </li></ul><ul><li>Balanced Metrics </li></ul><ul><li>Service Level Agreements </li></ul><ul><li>Benchmarking </li></ul><ul><li>Formal Assessments/Reviews </li></ul><ul><li>Continuous Improvement </li></ul>
  55. 55. IT BUSINESS ALIGNMENT MATURITY CRITERIA COMMUNICATIONS COMPETENCY/VALUE MEASUREMENTS PARTNERSHIP <ul><li>Business Perception of IT Value </li></ul><ul><li>Role of IT in Strategic Business Planning </li></ul><ul><li>Shared Goals, Risk, Rewards/Penalties </li></ul><ul><li>IT Program Management </li></ul><ul><li>Relationship / Trust Style </li></ul><ul><li>Business Sponsor / Champion </li></ul>GOVERNANCE SKILLS SCOPE & ARCHITECTURE Learning/Education <ul><li>Liaison(s) </li></ul><ul><li>Inter/Intra </li></ul><ul><li>Understanding of IT </li></ul><ul><li>Protocol Rigidity </li></ul>by Business <ul><li>Understanding of Business </li></ul>by IT organizational <ul><li>Knowledge Sharing </li></ul>effectiveness <ul><li>IT Metrics </li></ul><ul><li>Business Metrics </li></ul><ul><li>Balanced Metrics </li></ul><ul><li>Service Level Agreements </li></ul><ul><li>Benchmarking </li></ul><ul><li>Formal Assessments/Reviews </li></ul><ul><li>Continuous Improvement </li></ul><ul><li>Business Strategic Planning </li></ul><ul><li>IT Strategic Planning </li></ul><ul><li>Organization Structure </li></ul><ul><li>IT Investment Management </li></ul><ul><li>Budgetary Control </li></ul><ul><li>Steering Committee(s) </li></ul><ul><li>Prioritization Process </li></ul><ul><li>Career cro </li></ul><ul><li>Innovation, Entrepreneurship </li></ul><ul><li>Cultural Locus of Power </li></ul><ul><li>Management Style </li></ul><ul><li>Change Readiness </li></ul>ssover training <ul><li>Hiring and retaining </li></ul>Interpersonal Environment <ul><li>Social, Political, Trusting </li></ul><ul><li>Traditional, Enabler/Driver, </li></ul>External <ul><li>Standards Articulation </li></ul><ul><li>Architectural Integration: </li></ul>- Functional Organization -Enterprise -Inter enterprise <ul><li>Architectural Transparency, </li></ul>Agility, Flexibility <ul><li>Manage Emerging Tech. </li></ul>
  56. 56. IT BUSINESS ALIGNMENT MATURITY CRITERIA COMMUNICATIONS COMPETENCY/VALUE MEASUREMENTS SCOPE & ARCHITECTURE <ul><li>Traditional, Enabler / Driver, External </li></ul><ul><li>Standards Articulation </li></ul><ul><li>Architectural Integration: </li></ul><ul><ul><li>Functional Organization </li></ul></ul><ul><ul><li>Enterprise </li></ul></ul><ul><ul><li>Inter enterprise </li></ul></ul><ul><li>Architectural Transparency, Agility, Flexibility </li></ul><ul><li>Manage Emerging Tech. </li></ul>GOVERNANCE SKILLS <ul><li>Role of IT in Strategic </li></ul>PARTNERSHIP <ul><li>Business Perception of IT Value </li></ul>c Business Planning <ul><li>Shared Goals, Risk, </li></ul>Rewards/Penalties <ul><li>IT Program Management </li></ul><ul><li>Relationship/Trust Style </li></ul><ul><li>Business Sponsor/Champion </li></ul>Learning/Education <ul><li>Liaison(s) </li></ul><ul><li>Inter/Intra </li></ul><ul><li>Understanding of IT </li></ul><ul><li>Protocol Rigidity </li></ul>by Business <ul><li>Understanding of Business </li></ul>by IT organizational <ul><li>Knowledge Sharing </li></ul>effectiveness <ul><li>IT Metrics </li></ul><ul><li>Business Metrics </li></ul><ul><li>Balanced Metrics </li></ul><ul><li>Service Level Agreements </li></ul><ul><li>Benchmarking </li></ul><ul><li>Formal Assessments/Reviews </li></ul><ul><li>Continuous Improvement </li></ul><ul><li>Business Strategic Planning </li></ul><ul><li>IT Strategic Planning </li></ul><ul><li>Organization Structure </li></ul><ul><li>IT Investment Management </li></ul><ul><li>Budgetary Control </li></ul><ul><li>Steering Committee(s) </li></ul><ul><li>Prioritization Process </li></ul><ul><li>Career cro </li></ul><ul><li>Innovation, Entrepreneurship </li></ul><ul><li>Cultural Locus of Power </li></ul><ul><li>Management Style </li></ul><ul><li>Change Readiness </li></ul>ssover training <ul><li>Hiring and retaining </li></ul>Interpersonal Environment <ul><li>Social, Political, Trusting </li></ul>
  57. 57. IT BUSINESS ALIGNMENT MATURITY CRITERIA SCOPE & ARCHITECTURE COMMUNICATIONS COMPETENCY/VALUE MEASUREMENTS SKILLS <ul><li>Innovation Entrepreneurship </li></ul><ul><li>Cultural Locus of Power </li></ul><ul><li>Management Style </li></ul><ul><li>Change Readiness </li></ul><ul><li>Career crossover training </li></ul><ul><li>Social, Political, Trusting </li></ul><ul><li>Interpersonal Environment </li></ul><ul><li>Hiring and retaining </li></ul>GOVERNANCE <ul><li>Role of IT in Strategic </li></ul>PARTNERSHIP <ul><li>Business Perception of IT Value </li></ul>c Business Planning <ul><li>Shared Goals, Risk, </li></ul>Rewards/Penalties <ul><li>IT Program Management </li></ul><ul><li>Relationship/Trust Style </li></ul><ul><li>Business Sponsor/Champion </li></ul><ul><li>Traditional, Enabler/Driver, </li></ul>External <ul><li>Standards Articulation </li></ul><ul><li>Architectural Integration: </li></ul>- Functional Organization -Enterprise -Inter enterprise <ul><li>Architectural Transparency, </li></ul>Agility, Flexibility <ul><li>Manage Emerging Tech. </li></ul>Learning/Education <ul><li>Liaison(s) </li></ul><ul><li>Inter/Intra </li></ul><ul><li>Understanding of IT </li></ul><ul><li>Protocol Rigidity </li></ul>by Business <ul><li>Understanding of Business </li></ul>by IT organizational <ul><li>Knowledge Sharing </li></ul>effectiveness <ul><li>IT Metrics </li></ul><ul><li>Business Metrics </li></ul><ul><li>Balanced Metrics </li></ul><ul><li>Service Level Agreements </li></ul><ul><li>Benchmarking </li></ul><ul><li>Formal Assessments/Reviews </li></ul><ul><li>Continuous Improvement </li></ul><ul><li>Business Strategic Planning </li></ul><ul><li>IT Strategic Planning </li></ul><ul><li>Organization Structure </li></ul><ul><li>IT Investment Management </li></ul><ul><li>Budgetary Control </li></ul><ul><li>Steering Committee(s) </li></ul><ul><li>Prioritization Process </li></ul>
  58. 58. Reporting/ · · · · · · - · - - - Inter - Education, Cross - IT BUSINESS ALIGNMENT MATURITY CRITERIA PARTNERSHIP <ul><li>Business Perception of IT Value </li></ul><ul><li>Role of IT in Strategic </li></ul>c Business Planning <ul><li>Shared Goals, Risk, </li></ul>Rewards/Penalties <ul><li>IT Program Management </li></ul><ul><li>Relationship/Trust Style </li></ul><ul><li>Business Sponsor/Champion </li></ul>SCOPE & ARCHITECTURE <ul><li>Traditional, Enabler/Driver, </li></ul>External <ul><li>Standards Articulation </li></ul><ul><li>Architectural Integration: </li></ul>- Functional Organization -Enterprise -Inter enterprise <ul><li>Architectural Transparency, </li></ul>Agility, Flexibility <ul><li>Manage Emerging Tech. </li></ul>SKILLS <ul><li>Innovation, Entrepreneurship </li></ul><ul><li>Cultural Locus of Power </li></ul><ul><li>Management Style </li></ul><ul><li>Change Readiness </li></ul><ul><li>Career cro </li></ul>ssover training <ul><li>Hiring and retaining </li></ul>by Business <ul><li>Liaison( </li></ul>COMMUNICATIONS <ul><li>Understanding of Business </li></ul>by IT <ul><li>Understanding of IT </li></ul><ul><li>Inter/Intra </li></ul>organizational Learning/Education <ul><li>Protocol Rigidity </li></ul><ul><li>Knowledge Sharing </li></ul>s) effectiveness COMPETENCY/VALUE MEASUREMENTS <ul><li>IT Metrics </li></ul><ul><li>Business Metrics </li></ul><ul><li>Balanced Metrics </li></ul><ul><li>Service Level Agreements </li></ul><ul><li>Benchmarking </li></ul><ul><li>Formal Assessments/Reviews </li></ul><ul><li>Continuous Improvement </li></ul>GOVERNANCE <ul><li>Business Strategic Planning </li></ul><ul><li>IT Strategic Planning </li></ul><ul><li>Organization Structure </li></ul><ul><li>IT Investment Management </li></ul><ul><li>Budgetary Control </li></ul><ul><li>Steering Committee(s) </li></ul><ul><li>Prioritization Process </li></ul>Interpersonal Environment <ul><li>Social, Political, Trusting </li></ul>
  59. 59. Strategic Alignment Maturity Summary <ul><li>Initial/Ad-Hoc process </li></ul><ul><li>Committed process </li></ul><ul><li>Established focused process </li></ul><ul><li>Improved/ managed process </li></ul><ul><li>Optimized process </li></ul>Level 2 Level 1 Level 3 Level 4 Level 5 <ul><li>COMMUNICATIONS: Business/IT lack understanding </li></ul><ul><li>COMPETENCY/VALUE: Some technical measurements </li></ul><ul><li>GOVERNANCE: No formal process,cost center, reactive priorities </li></ul><ul><li>PARTNERSHIP: Conflict; IT a cost of doing business </li></ul><ul><li>SCOPE & ARCHITECTURE: Traditional (e.g., acctng, email) </li></ul><ul><li>SKILLS: IT takes risk, little reward; Technical training </li></ul><ul><li>COMMUNICATIONS: Limited business/IT understanding </li></ul><ul><li>COMPETENCY/VALUE: Functional cost efficiency </li></ul><ul><li>GOVERNANCE: Tactical at Functional level,occasional responsive </li></ul><ul><li>PARTNERSHIP: IT emerging as an asset; Process enabler </li></ul><ul><li>SCOPE & ARCHITECTURE: Transaction (e.g., ESS, DSS) </li></ul><ul><li>SKILLS: Differs across functional organizations </li></ul><ul><li>COMMUNICATIONS: Good understanding; Emerging relaxed </li></ul><ul><li>COMPETENCY/VALUE: Some cost effectiveness; Dashboard established </li></ul><ul><li>GOVERNANCE: Relevant process across the organization </li></ul><ul><li>PARTNERSHIP: IT seen as an asset; Process driver;Conflict seen as creative </li></ul><ul><li>SCOPE & ARCHITECTURE: Integrated across the organization </li></ul><ul><li>SKILLS: Emerging value service provider;Balanced tech & business hiring </li></ul><ul><li>COMMUNICATIONS: Informal, pervasive </li></ul><ul><li>COMPETENCY/VALUE: Extended to external partners </li></ul><ul><li>GOVERNANCE: Integrated across the org & partners </li></ul><ul><li>PARTNERSHIP: IT-business co-adaptive/improvisational </li></ul><ul><li>SCOPE & ARCHITECTURE: Evolve with partners </li></ul><ul><li>SKILLS: Education/careers/rewards across the organization </li></ul><ul><li>COMMUNICATIONS: Bonding, unified </li></ul><ul><li>COMPETENCY/VALUE: Cost effective;Some partner value;Dashboard managed </li></ul><ul><li>GOVERNANCE: Managed across the organization </li></ul><ul><li>PARTNERSHIP: IT enables/drives business strategy </li></ul><ul><li>SCOPE & ARCHITECTURE: Integrated with partners </li></ul><ul><li>SKILLS: Shared risk & rewards </li></ul>
  60. 60. Strategic Alignment Maturity Summary <ul><li>Initial/Ad-Hoc process </li></ul>Level 1 <ul><li>COMMUNICATIONS : Business/IT lack understanding </li></ul><ul><li>COMPETENCY/VALUE : Some technical measurements </li></ul><ul><li>GOVERNANCE : No formal process,cost center, reactive priorities </li></ul><ul><li>PARTNERSHIP : Conflict; IT a cost of doing business </li></ul><ul><li>SCOPE & ARCHITECTURE : Traditional (e.g., acctng, email) </li></ul><ul><li>SKILLS : IT takes risk, little reward; Technical training </li></ul><ul><li>Optimized process </li></ul>Level 5 <ul><li>COMMUNICATIONS : Informal, pervasive </li></ul><ul><li>COMPETENCY/VALUE : Extended to external partners </li></ul><ul><li>GOVERNANCE : Integrated across the org & partners </li></ul><ul><li>PARTNERSHIP : IT-business co-adaptive/improvisational </li></ul><ul><li>SCOPE & ARCHITECTURE : Evolve with partners </li></ul><ul><li>SKILLS : Education/careers/rewards across the organization </li></ul>
  61. 61. <ul><li>WHERE IS THE ORGANIZATION STRONG/WEAK? </li></ul><ul><li>WHERE IS THERE DISAGREEMENT? </li></ul><ul><li>WHAT ARE THE IMPLICATIONS? </li></ul><ul><li>WHAT CAN BE DONE TO IMPROVE THE MATURITY LEVEL (PRESCRIPTIVE)? </li></ul><ul><li>IT OPENS THE DOOR TO DISCUSSING ALIGNMENT </li></ul>IT IS NOT JUST THE LEVEL OF MATURITY
  62. 62. Perceived Comfort Level of the 6 Criteria (Factor Analysis) <ul><li>Governance </li></ul><ul><li>Scope & Architecture </li></ul><ul><li>Partnership </li></ul><ul><li>Competency/Value </li></ul><ul><li>Skills </li></ul><ul><li>Communications </li></ul>Why do you think this is the case?
  63. 63. Strategic Alignment Maturity % of Respondents
  64. 65. Strategic Alignment Maturity Summary <ul><li>Initial/Ad-Hoc process </li></ul><ul><li>Committed process </li></ul><ul><li>Established focused process </li></ul><ul><li>Improved/ managed process </li></ul><ul><li>Optimized process </li></ul>Level 2 Level 1 Level 3 Level 4 Level 5 <ul><li>COMMUNICATIONS: Business/IT lack understanding </li></ul><ul><li>COMPETENCY/VALUE: Some technical measurements </li></ul><ul><li>GOVERNANCE: No formal process,cost center, reactive priorities </li></ul><ul><li>PARTNERSHIP: Conflict; IT a cost of doing business </li></ul><ul><li>SCOPE & ARCHITECTURE: Traditional (e.g., acctng, email) </li></ul><ul><li>SKILLS: IT takes risk, little reward; Technical training </li></ul><ul><li>COMMUNICATIONS: Limited business/IT understanding </li></ul><ul><li>COMPETENCY/VALUE: Functional cost efficiency </li></ul><ul><li>GOVERNANCE: Tactical at Functional level,occasional responsive </li></ul><ul><li>PARTNERSHIP: IT emerging as an asset; Process enabler </li></ul><ul><li>SCOPE & ARCHITECTURE: Transaction (e.g., ESS, DSS) </li></ul><ul><li>SKILLS: Differs across functional organizations </li></ul><ul><li>COMMUNICATIONS: Good understanding; Emerging relaxed </li></ul><ul><li>COMPETENCY/VALUE: Some cost effectiveness; Dashboard established </li></ul><ul><li>GOVERNANCE: Relevant process across the organization </li></ul><ul><li>PARTNERSHIP: IT seen as an asset; Process driver;Conflict seen as creative </li></ul><ul><li>SCOPE & ARCHITECTURE: Integrated across the organization </li></ul><ul><li>SKILLS: Emerging value service provider;Balanced tech & business hiring </li></ul><ul><li>COMMUNICATIONS: Informal, pervasive </li></ul><ul><li>COMPETENCY/VALUE: Extended to external partners </li></ul><ul><li>GOVERNANCE: Integrated across the org & partners </li></ul><ul><li>PARTNERSHIP: IT-business co-adaptive/improvisational </li></ul><ul><li>SCOPE & ARCHITECTURE: Evolve with partners </li></ul><ul><li>SKILLS: Education/careers/rewards across the organization </li></ul><ul><li>COMMUNICATIONS: Bonding, unified </li></ul><ul><li>COMPETENCY/VALUE: Cost effective;Some partner value;Dashboard managed </li></ul><ul><li>GOVERNANCE: Managed across the organization </li></ul><ul><li>PARTNERSHIP: IT enables/drives business strategy </li></ul><ul><li>SCOPE & ARCHITECTURE: Integrated with partners </li></ul><ul><li>SKILLS: Shared risk & rewards </li></ul>WHERE IS AIR PRODUCTS?
  65. 66. Answer the following questions regarding Air Products: <ul><li>What is the main focus of the case (Abstract)? </li></ul><ul><li>Who is the: </li></ul><ul><ul><ul><ul><ul><li>Sponsor? </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Champion(s)? </li></ul></ul></ul></ul></ul><ul><li>What is/are the major problem(s) they are trying to address? </li></ul><ul><li>What are the alternatives? </li></ul><ul><li>What is/are your specific recommendation(s)? </li></ul><ul><li>What are your specific next steps? </li></ul>
  66. 67. 1 . Administrative Structure Processes Skills IT Architecture Processes IT Infrastructure Organizational Infrastructure Skills <ul><li>Internal DECISIONS </li></ul><ul><ul><li>Decision Levels </li></ul></ul><ul><ul><li>Who </li></ul></ul><ul><ul><li>How </li></ul></ul><ul><ul><li>Risk Mgt. </li></ul></ul><ul><ul><li>CIO Role </li></ul></ul><ul><ul><li>Archetypes </li></ul></ul><ul><ul><li>Maturity Level </li></ul></ul><ul><li>Strategic Partners </li></ul><ul><li>Regulation </li></ul>Strategic Fit Business Scope Distinctive competencies Business Governance Technology Scope Systemic competencies 2. IT Governance <ul><li>REPORTING </li></ul><ul><li>Company Org. </li></ul><ul><li>IT Org. </li></ul><ul><li>CIO Reporting </li></ul>NEXT WEEK PRESENT: BUSINESS Business Strategy IT IT Strategy Functional Integration The Strategic Alignment Model
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