Alignment in the 21st Century:
   Balancing Innovation and
       Implementation


       Professor N. Venkatraman
Boston ...
Imagine life without……




(c) Venkatraman, 2007     2
Yet.. there are conflicting views on the
role and value of IT…
       “expensive.. But necessary evil”
       “Am I getti...
My Agenda

         Alignment in the 21st century:
          Innovation and Implementation

         IT Strategy 2.0

  ...
New Excitement.. circa 2007

           CIO as the Chief Innovation Officer!

           I.T contributing to Revenue and ...
66
(c) Venkatraman, 2007
© N. Venkatraman, 2006
Source: Bill Gates
We see I.T everywhere now..




(c) Venkatraman, 2007          8
A Car is a computer on wheels connected
to the network




(c) Venkatraman, 2007                     9
Software is shaping next generation
business processes..




(c) Venkatraman, 2007                 10
with new web functionality…




(c) Venkatraman, 2007          11
We see convergence and overlap
 across industries and markets




(c) Venkatraman, 2007             12
Four conversation questions

              1.How different will your business landscape
                be in the next 3-5...
Alignment 1.0




                                      IT
                        Business
                              ...
We have captured value from IT




                          +               +
             People           Processes    ...
Alignment 1.0 Mechanisms

      Business process reengineering (massive scale)
      Decentralize and centralize (adapt ...
Alignment 1.0 Scorecard




                             B
    If we are charitable..
(c) Venkatraman, 2007            17
Alignment 2.0: The Network Era


                                                      Network Era



                    ...
We are in an era of global network

                        Live   Connect




          Work                      Create
...
And globalization of work and business
processes




(c) Venkatraman, 2007                    20
Innovation… The new focus?




(c) Venkatraman, 2007        21
My view on business model innovations

                            Moore’s
                             Law




          ...
Alignment 2.0:
    New Perspective, New Mandate


                                   Drives


                        Busi...
Alignment Agenda 2.0

                   Innovation



                    Strategic
                     Focus




      ...
Alignment Agenda 1.0 focused on
 operational, execution issues
                   Innovation



                    Strate...
Alignment Agenda 2.0: Building
 Blocks (1)
                   Innovation



                    Strategic
                ...
Cost Center

                         Focus        Best in class global IT
                                          infra...
Alignment Agenda 2.0: Building
 Blocks (2)
                   Innovation



                    Strategic
                ...
Profit Center

                         Focus        Support current business
                                            o...
IT and Implementation Benefits




         Data                                                         Results
          ...
Alignment Agenda 2.0: Building
 Blocks (3)
                   Innovation   Growth
                                Center
 ...
How to think about innovation?

                         Moore’s
                          Law


                         ...
Growth Center

                        Focus    Support future growth trajectories
                                   thro...
Alignment Agenda 2.0: Building
 Blocks (4)
                   Innovation   Growth          Investment
                    ...
What’s your experimentation
 equation?




                        Google’s equation is 70-20-10.
                        ...
Investment Center

                        Focus   Influence future growth trajectories
                                 t...
The building blocks have different
personalities…
                   Innovation   Growth          Investment
             ...
These building blocks are also dynamic

                   Innovation



                    Strategic
                   ...
Where’s Your IT Capital Allocated?



                         What % for Innovation?


                        What % for...
Where’s Your IT Core Competence?



                  IT Competence for Innovation?


             IT Competence for Imple...
Where’s Your IT Sourcing focused?



                        IT Sourcing for Innovation?


                  IT Sourcing f...
Where’s Your IT Mandate?



                        IT Mandate for Innovation?


                  IT Mandate for Implemen...
What about IT Performance Metrics?



       IT Performance Metrics for Innovation?


 IT Performance Metrics for Implemen...
There’s legacy ‘management’ problem


        We say innovation.. But we manage IT
         for implementation
        W...
Managing for the future with I.T.

                                                       Value creation for
             ...
Your Challenges

              The impact of I.T will be more than ever
               before
                     Perva...
Putting these ideas into action

        Clarity of Mandate for IT through
         management workshops
        Recogni...
Are you ready to take on the
expanded IT mandate to win??


             Thank You Very Much
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IT Strategy 2.0: Balancing Innovation and Implementation

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IT Strategy 2.0: Balancing Innovation and Implementation

  1. 1. Alignment in the 21st Century: Balancing Innovation and Implementation Professor N. Venkatraman Boston University School of Management SAP Users Group @ Maastricht April 20, 2007
  2. 2. Imagine life without…… (c) Venkatraman, 2007 2
  3. 3. Yet.. there are conflicting views on the role and value of IT…  “expensive.. But necessary evil”  “Am I getting value from IT investments?”  “Are we investing in the right areas?”  “Can IT become my core competence?”  “Why not outsource and offshore?”  “I see my competitors using IT strategically..”  “I know that IT will become more central in the future… but I do not know how to extract value” (c) Venkatraman, 2007 3
  4. 4. My Agenda Alignment in the 21st century: Innovation and Implementation IT Strategy 2.0 Reframing the Business--IT Conversation (c) Venkatraman, 2007 4
  5. 5. New Excitement.. circa 2007  CIO as the Chief Innovation Officer!  I.T contributing to Revenue and Growth  From Business Process Reengineering to Crafting Business Model Innovations  Pervasiveness of I.T in products, processes and services (c) Venkatraman, 2007 5
  6. 6. 66 (c) Venkatraman, 2007 © N. Venkatraman, 2006
  7. 7. Source: Bill Gates
  8. 8. We see I.T everywhere now.. (c) Venkatraman, 2007 8
  9. 9. A Car is a computer on wheels connected to the network (c) Venkatraman, 2007 9
  10. 10. Software is shaping next generation business processes.. (c) Venkatraman, 2007 10
  11. 11. with new web functionality… (c) Venkatraman, 2007 11
  12. 12. We see convergence and overlap across industries and markets (c) Venkatraman, 2007 12
  13. 13. Four conversation questions 1.How different will your business landscape be in the next 3-5 years? 2.What’s the role of Innovation.. especially business model innovation for your future success? 3.Is I.T central to business model innovations? 4.How important is I.T to achieving your current business profitability? (c) Venkatraman, 2007 13
  14. 14. Alignment 1.0 IT Business Strategy Strategy (c) Venkatraman, 2007 14
  15. 15. We have captured value from IT + + People Processes Technology OO + IT = EOO 15 (c) Venkatraman, 2007 15
  16. 16. Alignment 1.0 Mechanisms  Business process reengineering (massive scale)  Decentralize and centralize (adapt over time)  Standardize to reduce inefficiency  Outsource and multi-source IT functionality  Cross-functional global teams  Service level agreements  Business--IT partnerships  Etc… (c) Venkatraman, 2007 16
  17. 17. Alignment 1.0 Scorecard B If we are charitable.. (c) Venkatraman, 2007 17
  18. 18. Alignment 2.0: The Network Era Network Era Client/Server Era Mainframe Era (c) Venkatraman, 2007 18
  19. 19. We are in an era of global network Live Connect Work Create Consume Play (c) Venkatraman, 2007 19
  20. 20. And globalization of work and business processes (c) Venkatraman, 2007 20
  21. 21. Innovation… The new focus? (c) Venkatraman, 2007 21
  22. 22. My view on business model innovations Moore’s Law Products Processes Services People Metcalf’s Bandwidth Law Law (c) Venkatraman, 2007 22
  23. 23. Alignment 2.0: New Perspective, New Mandate Drives Business I.T. Strategy Strategy Shapes (c) Venkatraman, 2007 23
  24. 24. Alignment Agenda 2.0 Innovation Strategic Focus Implementation Business IT/IS Leadership Responsibility (c) Venkatraman, 2007 24
  25. 25. Alignment Agenda 1.0 focused on operational, execution issues Innovation Strategic Focus Implementation Business IT/IS Leadership Responsibility (c) Venkatraman, 2007 25
  26. 26. Alignment Agenda 2.0: Building Blocks (1) Innovation Strategic Focus Cost Center Implementation Business IT/IS Leadership Responsibility (c) Venkatraman, 2007 26
  27. 27. Cost Center Focus Best in class global IT infrastructure Business Case Lowest delivered cost benchmarked against external referent; not directly connected to strategy Organization Detached from business operations Sourcing Best-in-class global sourcing partners and vendors (c) Venkatraman, 2007 27
  28. 28. Alignment Agenda 2.0: Building Blocks (2) Innovation Strategic Focus Profit Cost Center Center Implementation Business IT/IS Leadership Responsibility (c) Venkatraman, 2007 28
  29. 29. Profit Center Focus Support current business operations Business Case Contributions to customer value and current profitability levels Organization Embedded (and partnering) with business operations Sourcing Selective use of best-in-class global sourcing partners and vendors (c) Venkatraman, 2007 29
  30. 30. IT and Implementation Benefits Data Results Information Knowledge Action } } } } Design Expertise Process Execution Gap Gap Gap Gap (c) Venkatraman, 2007 30
  31. 31. Alignment Agenda 2.0: Building Blocks (3) Innovation Growth Center Strategic Focus Profit Cost Center Center Implementation Business IT/IS Leadership Responsibility (c) Venkatraman, 2007 31
  32. 32. How to think about innovation? Moore’s Law Business Metcalf’s Model Law Innovation Bandwidth Law Supporting the growth agenda (c) Venkatraman, 2007 32
  33. 33. Growth Center Focus Support future growth trajectories through new business model innovations Business Case Contributions of IT to business model innovations Organization Embedded within business operations—shared responsibility Sourcing Selective use of innovation network partners and vendors (c) Venkatraman, 2007 33
  34. 34. Alignment Agenda 2.0: Building Blocks (4) Innovation Growth Investment Center Center Strategic Focus Profit Cost Center Center Implementation Business IT/IS Leadership Responsibility (c) Venkatraman, 2007 34
  35. 35. What’s your experimentation equation? Google’s equation is 70-20-10. What’s your equation? (c) Venkatraman, 2007 35
  36. 36. Investment Center Focus Influence future growth trajectories through selective experimentation Business Case Allowing for experimentation of plausible business models Organization Decoupled from current operations Sourcing Selective use of innovation network partners and vendors (c) Venkatraman, 2007 36
  37. 37. The building blocks have different personalities… Innovation Growth Investment Center Center Strategic Focus Profit Cost Center Center Implementation Business IT/IS Leadership Responsibility (c) Venkatraman, 2007 37
  38. 38. These building blocks are also dynamic Innovation Strategic Focus Implementation Business IT/IS Leadership Responsibility (c) Venkatraman, 2007 38
  39. 39. Where’s Your IT Capital Allocated? What % for Innovation? What % for Implementation? (c) Venkatraman, 2007 39
  40. 40. Where’s Your IT Core Competence? IT Competence for Innovation? IT Competence for Implementation? (c) Venkatraman, 2007 40
  41. 41. Where’s Your IT Sourcing focused? IT Sourcing for Innovation? IT Sourcing for Implementation? (c) Venkatraman, 2007 41
  42. 42. Where’s Your IT Mandate? IT Mandate for Innovation? IT Mandate for Implementation? (c) Venkatraman, 2007 42
  43. 43. What about IT Performance Metrics? IT Performance Metrics for Innovation? IT Performance Metrics for Implementation? (c) Venkatraman, 2007 43
  44. 44. There’s legacy ‘management’ problem We say innovation.. But we manage IT for implementation We say future.. But we manage IT for today We say shared business-IT responsibility but we blame IT for the problems (c) Venkatraman, 2007 44
  45. 45. Managing for the future with I.T. Value creation for today and No Business tomorrow innovation without IT Inf chn Te y or ol teg ma og ra tio y St n Leadership (c) Venkatraman, 2007 45
  46. 46. Your Challenges  The impact of I.T will be more than ever before  Pervasive  Fast changing  Value potential  Management of IT is equally important  Multiple roles within enterprises  Leadership and strategy linkages (c) Venkatraman, 2007 46
  47. 47. Putting these ideas into action Clarity of Mandate for IT through management workshops Recognition of the four building blocks for business innovation and implementation Reinforce joint business-IT responsibility Develop an IT Strategy 2.0 scorecard (c) Venkatraman, 2007 47
  48. 48. Are you ready to take on the expanded IT mandate to win?? Thank You Very Much

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