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  • 1. Unlocking Value Delivering on the Promise of IT John Thorp, CMC, I.S.P., ITCP John_thorp Consulting Conference 2010 May 29th, 2010 Richmond, BC Val IT and slides copyright © 2006 IT Governance Institute. Used with permission. © 2010 The Thorp Network Inc.
  • 2. The Information Paradox
    • The value of IT is being increasingly questioned...
    … yet organizations continue to spend more and more on IT ? ? ?
  • 3. “ The failed promises of the Information Age add up to the longest-running disappointment in business history. On the other hand, information technology has produced an enormous transition, something that companies should be grappling with and studying every day.” Jack Welch World Economic Forum, Davos, 1997
  • 4.
    • Gartner – more than 600 billion $ thrown away annually on ill conceived or ill executed IT projects
    • Standish Group – 24% of projects fail outright, 44% are challenged and only 32% are successful
    • Other reviews and studies continue to confirm concerns
    The Reality 2000 2002 2004 Successful Failed Challenged 2006 2009 0% 20% 40% 60% 80% 100% 1998
    • 74% of IT projects from 1994 – 2002 failed to deliver expected value
    • MIT Sloan Management Review , 2007, D Shpilberg et al
    • In a 2007 survey of 1,125 professional worldwide 57% had positive outcomes in less than half their organizations IT initiatives
    • HP and Economist Intelligence Unit
  • 5. Evolution of Use of IT Investments are increasing and... ... complexity is increasing ! Efficiency - Run the business Effectiveness - Change the business Innovation -Change the rules Source: The Information Paradox Management of Information IT Business Transformation of Business Business IT IT Business Automation of Work
  • 6. A New Perspective IT Investments “ You can’t separate IT form the business ” Faisal Hoque Founder & Chair, BTM Institute Investments in IT-enabled Change
  • 7. The Fundamental Question
    • Are we maximizing the value of our investments in IT-enabled change such that:
      • we are getting optimal benefits ;
      • at an affordable cost ; and
      • with an acceptable level of risk ?
    Over the full economic life-cycle of the investment
  • 8.
    • “… ICT needs to be driven from the boardroom, not the backroom. Unless there is recognition at the highest levels that technology is critical to an organisation's ongoing success - and there is the drive and patience to pursue technology strategies from senior management - then the chances of a successful implementation of ICT are significantly lessened.”
    • Senator Helen Coonan, Australian Minister for Communications, Information Technology and the Arts
  • 9. Source: The Information Paradox Key Governance Questions Continually asking… Enterprise Value Management IT Governance of IT Business Governance of IT Enterprise Governance of IT
  • 10. A Definition…
    • Kubernán (gr): to steer a ship – the process of continually orienting and adjusting
    “ Managing an uncertain journey to an uncertain destination” “ any organisation is multifaceted, and the range of organisational variables is mind-boggling” John Roberts The Modern Firm
  • 11. The Good News
    • Enterprises that actively design their top-level IT governance arrangements make and implement better IT-related decisions
    • Gartner
    • Firms with focused strategies and above average IT Governance had more than 20% higher profits than other firms following the same strategies
    • Peter Weill and Jeannie W. Ross, IT Governance
    • Enterprises focused on converging their business and technology disciplines exhibited superior revenue growth and net margins relative to their industry groups and exhibited consistently greater rates of return than those of their competitors
    • BTM Institute
  • 12. IT Governance
    • Not a panacea – necessary but not sufficient
    • “ The term “IT governance” as used by the IT industry is a legacy of the separateness between business and IT”
    • Cliff Berg, Value-Driven IT
    • “ The focus of IT governance continues to be on the more operational IT issues with little appetite for tackling the business aspects of planning and managing how the business uses IT to create and sustain value”
    • ITGI sponsored UAMS Research, Exploring the relationship between enterprise benefits and IT governance practices COBIT 4.1 and Val IT 2.0 ., 2008
    • The way forward requires “The introduction of an IT management and governance framework that explicitly stimulates and facilitates collaboration and knowledge exchange across the business/IT divide from the Board downwards.”
    • Geoff Codd, The Drowning Director
  • 13. The Big Disconnect ©2010 The Thorp Network Inc.
    • Filtered information*
    • Selective hearing
    • Wishful thinking
    • Fear
    • Emotional overinvestment
    • Unrealistic stakeholder expectations
    *Source: Larry Bossidy, Ram Charan – Confronting Reality Strategy Management Project Management Operations Management
  • 14. Connecting the Dots Project Management ©2010 The Thorp Network Inc. Performance Management Strategy Management Project Management Operations Management Portfolio Management Programme Management Management of Change
  • 15. Completing the Picture Performance Management Portfolio Management Programme Management Project Management Management of Change ©2010 The Thorp Network Inc. Strategy Management Project Management Operations Management Mgmt Asset Ar c hi t ec t ur e Management
  • 16. Performance Management Portfolio Management Strategy Management Programme Management Project Management Operations Management Asset Mgmt Ar c hi t ec t ur e Management Strategic Enterprise Governance Management of Change ©2010 The Thorp Network Inc. Total Benefits – Total Costs VALUE RISK
  • 17. Performance Management Portfolio Management Strategy Management Programme Management Project Management Operations Management Asset Mgmt Ar c hi t ec t ur e Management Strategic Enterprise Governance Management of Change ©2010 The Thorp Network Inc. Direction & Steering Selection, monitoring and on-going adjustment to optimise enterprise business value Structuring the delivery of change around business outcomes Reliable delivery of capability to achieve business outcomes Quality, repeatable execution of the delivery of services, IT service and support Enterprise perspective on organisational assets and their relationships Managing organisational assets to maximise the selection, use, reuse and lifecycle of each Managing organizational and cultural change
  • 18. Performance Management Portfolio Management Strategy Management Programme Management Project Management Operations Management Asset Mgmt Ar c hi t ec t ur e Management Strategic Enterprise Governance Management of Change ©2010 The Thorp Network Inc.
    • Executive
    • Strategy Office
    • Executive
    • IT Exec Committee
    • Investment Decision Board
    • Value Mgt Office
    • Business Sponsor
    • Program Manager
    • Program Mgt Office
    • Project Mgr
    • Project Mgt Office
    • CIO
    • IT Leaders
    • IT Business Leaders
    Architecture Office
    • Asset Owners
    • Process Owners
    • Process Council
    • Change/Transformation Office
    • Change Working Group(s)
  • 19. Portfolio Management Programme Management Project Management P 3 M - Projects, Programmes, and Portfolios Source: The Information Paradox “ We believe [strategic program management] is the management construct best suited to enable better business engagement, value delivery and risk” Gartner Research, March 17, 2008 Programme – a structured grouping of projects designed to produce clearly identified business value Project – a structured set of activities concerned with delivering a defined capability based on an agreed schedule and budget Portfolio – a suite of business programmes managed to optimise overall enterprise value
  • 20. “ Business cases are generally viewed only as documents for gaining funding. Once approved they are put away…few track the business benefits the projects actually achieve ” Gartner, Building Brilliant Business Cases” “ Business Cases contain untested assumptions masquerading as facts” Bob Morton, Government of Canada “… 47% of respondents openly admitted to overstating benefits in order to get approval” Cranfield School of Management, survey of 60 European companies Largely works of fiction based on “delusional optimism” and “strategic misrepresentation”! The Business Case
  • 21.
    • The foundation that sows the seeds for success or failure – NOT a bureaucratic hurdle
    • Business cases should:
      • operate at the programme level containing all required initiatives to realize outcomes – not just the technology
      • contain clear and relevant benefits metrics – both lead and lag
      • be a living, operational management tool – updated through the full life cycle of an investment decision
      • be regularly reviewed by an independent body such as a Value Management Office (VMO)
    • Development and management of business cases should be supported by a benefits mapping process
    The Business Case
  • 22. Results- focused programmes Benefits Mapping - Complete and Comparable Business Cases INITIATIVE Source: The Results Chain™, Fujitsu CONTRIBUTION CONTRIBUTION CONTRIBUTION ASSUMPTION ASSUMPTION ASSUMPTION OUTCOME OUTCOME OUTCOME INITIATIVE INITIATIVE INITIATIVE INITIATIVE INITIATIVE INITIATIVE Clear accountabilities Full scope of effort — All necessary IT and business initiatives, including change management Clear understanding of outcomes Relevant metrics
  • 23. Portfolio Management TRANSPARENCY Categorise Transformational Informational Transactional Infrastructure Mandatory Sustaining Discretionary Evaluate
    • Alignment
    • Business Worth
    • Financial
    • Non-Financial
    • Risk
    Select & Monitor Design Programme Define Programme Concept Commission Programme Execute Programme Transfer to Operations Mgmt Approved Mgmt Approved Mgmt Approved Mgmt Approved Mgmt Approved
  • 24. Getting ahead of the Curve!
    • Requires an Effective Full Cycle Governance Process that…
    Prevent / Plan Contain / React Recover / Throw away or start again $’s “ How does a project get to be a year behind schedule? One day at a time.” Fred Brooks Develops complete & comprehensive Value-driven plans Senses & responds to deviations early, quickly and decisively Eliminates the risk of getting to the crisis stage
  • 25.
    • “ After all’s said and done there’s more said then done”
    • Anon
  • 26. Why isn’t everyone doing this?
    • We do this already
      • Confirmation bias
      • D elusion and deception
      • P laying “games”
        • “ Figures don’t lie, but liars can figure”
      • Knowing-doing gap
    • We’re no worse than anyone else
    • You’re making it much too complex
    • It’s an IT problem
      • Lack of business engagement / accountability
    “ Information technology isn’t an optional extra, it is a condition of entry to most markets. It is the enabler of business sustainability. The CEOs who don’t get that are either in the wrong job or have done some calculations in respect of their retirement date and this reality dawning on the shareholders.” Ade McCormack, The IT Value Stack
  • 27.
    • Checking the ego
      • Knowing what you don’t know vs. “I got here because I know what to do”
      • Recognizing/accepting complexity vs. “you’re making it much too complex”
      • Listening vs. confirmation bias
    • Taking the Enterprise view
      • We thinking vs. I thinking
      • Collaboration vs. competition
      • Program scope crosses “traditional” organizational management boundaries
    • Embracing shared visibility
      • Openness vs.. “hidden agendas”
      • No “game playing” (with it’s optimistic delusion & “strategic misrepresentation”)
    ©2010 The Thorp Network Inc. Behavioural Change
  • 28.
    • Taking ownership
      • Activist accountability - outcome vs. activity
      • Not abdicating to the IT function
    • Learning to say and accept “no”
      • Management system worked vs. who to blame
    • Willingness to change course
      • Accepting ambiguity & uncertainty - managing “an uncertain journey to an uncertain destination” vs. “we don’t want to hear bad news”
    • Pragmatism vs. perfection
      • “ Best is the enemy of good”
    ©2010 The Thorp Network Inc. Behavioural Change (Cont.)
  • 29.
    • Current top down, hierarchical, siloed organizational models work against realizing value from IT-enabled change
    • Web 2.0, social networking, crowd sourcing currently seen as a threat
    • Enterprise 2.0 certainly presents governance challenges
    • Enterprise 2.0 also presents governance opportunities
      • Broader and better decision making
      • Leveraging our human knowledge capital
    Governance 2.0
  • 30.
    • “ If you don’t like change, you’re going to like irrelevance even less”
    • General Erik Shinseki, Chief of Staff, US Army
  • 31. What does this mean to you?
    • Value is a business issue
    • Business must own use of IT
    • Strategic (NOT IT) Governance is key
    • Business Case sets stage for success OR failure
    • Proven processes, practices and techniques are available
      • BUT…managing behavioural change is key
    • Think about Governance 2.0 – a challenge and an opportunity
    We can and must do better! You can make a difference!
  • 32. Resource Materials…
    • ISACA ( )
        • Val IT™ Framework 2.0
        • Building the Business Case for COBIT® and Val IT™ – Executive Briefing
        • Implementing and Continually Improving IT Governance
        • ISACA Journal: IT Value Special Compilation
        • Value Management Guidance for Assurance Professionals: Using Val IT™ 2.0
    • ISO ( )
        • ISO/SEC 38500 Corporate Governance of IT
    • OGC ( )
        • Managing the Portfolio
        • Managing Successful Programmes (MSP)
        • Gateway Review for Programmes & Projects
        • Portfolio, Programme and Project Offices (P3O)
    • PMI ( )
        • The Standard for Portfolio Management
        • The Standard for Program Management
    • The Information Paradox
          • Downloadable from Fujitsu website (link from my website
  • 33. Unlocking Value Delivering on the Promise of IT John Thorp, CMC, I.S.P., ITCP John_thorp Consulting Conference 2010 May 29th, 2010 Richmond, BC Val IT and slides copyright © 2006 IT Governance Institute. Used with permission. © 2010 The Thorp Network Inc.