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Top 10 Imperatives for Leading a Successful IT Improvement Program
 

Top 10 Imperatives for Leading a Successful IT Improvement Program

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Before embarking on an IT performance and process improvement program, companies should first understand the critical success factors so they can successfully advance their business objectives and ...

Before embarking on an IT performance and process improvement program, companies should first understand the critical success factors so they can successfully advance their business objectives and increase adoption across the enterprise.

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    Top 10 Imperatives for Leading a Successful IT Improvement Program Top 10 Imperatives for Leading a Successful IT Improvement Program Document Transcript

    • • Cognizant 20-20 InsightsTop 10 Imperatives for Leading aSuccessful IT Improvement ProgramWhen companies understand the critical success factors for leading an ITperformance and process improvement program, they can advance theirbusiness objectives and increase adoption across the corporation. Executive Summary 1. Obtain senior leadership commitment to initiating and managing IT organizational Rapid technological advancement (e.g., cloud, performance and process improvement initia- social media, mobile and analytics) and increased tives. globalization are having a profound impact on the IT operating model.1 IT organizations are 2. Perform an objective assessment, leverag- struggling to improve their operating perfor- ing standard models, for defining realistic mance in response to market demands for lower improvement goals. costs, higher quality services, shorter response 3. Focus on identifying the right processes times and higher return on investments. and their process owners to achieve the established goals. Many IT organizations are applying quality improvements pioneered and perfected in the 4. Develop a roadmap that is well understood manufacturing sector to drive organizational per- and accepted by the identified process owners. formance and process excellence. Although most 5. Institute a targeted marketing strategy that organizations clearly understand the benefits, it creates enthusiasm and greater participation. has traditionally been a struggle to successfully 6. Establish a governance model that enables implement IT organizational performance and process improvements, even for top-performing effective management of the program. companies. 7. Develop processes that are standard and “fit to use.” This paper presents solutions and best 8. Facilitate organizational change practices for mitigating challenges and success- fully deploying such initiatives. Based on our management to ensure smooth implementa- experience assisting Fortune 1000 clients with tion of the recommended improvements. large IT organizational performance and process 9. Enable effective benefit tracking and improvement programs, we believe there are 10 reporting to ensure sustained top-manage- key implementation imperatives: ment support. cognizant 20-20 insights | may 2012
    • Top 10 Imperatives for IT Improvement Programs 1 CIO/top management commitment (required across the program) 2 3 4 7 9 10 Process Roadmap Benefit Goal setting identification Execution realization creation Continuous improvement Program Management 5 Program marketing 6 Program governance 8 Program change managementFigure 110. Focus on continuous improvement of the The next section describes how to effectively lay IT organizational performance and process out the vision of such initiatives, as well as effec- improvements. tively manage the implementation journey for achieving desired goals and outcomes.The New IT MandateSeveral technology trends are building the case Top 10 Imperatives for IT Improvementfor enhancing IT performance, including exter- 1. Obtain senior leadership commitment tonalized service delivery, global market demand, initiating and managing IT organizationalincreased data volumes, social media explosion, performance and process improvement ini-IT in business shared services and increased tiatives.complexity of the IT ecosystem (see Figure 2, next Key Challengespage). Overcoming these challenges will help theIT organization increase its agility and respon- IT organizational performance and processsiveness to business requirements. improvements require sustained effort and commitment across all levels of the organization.IT organizations are responding to these trends The morale of employees and their involvementby adopting effective IT operating models (see in the improvement initiative is directly related toFigure 3, page 4). The building blocks for any CIO/top management commitment and clarity ofIT operating model — organization, process and goals.technology — are undergoing a radical rethink toensure tight alignment to meet the demands of Key Recommendationsthe aforementioned trends. Based on our experience, IT organizational per- formance and process improvements that haveTo improve their IT operating model, companies been driven or sponsored by the highest levels inare increasingly adopting IT performance and the organization are more likely to succeed. Weprocess improvement initiatives based on indus- advised one of our clients to include improvementtry-standard frameworks such as CMMI, ITIL, goals and objectives as part of the company’s CIOCOBIT, Lean, etc. to support and drive changes to performance targets and cascade them downtheir IT organizational functions or technologies. to various departmental leaders. This strategy resulted in increased commitment from all levels. cognizant 20-20 insights 2
    • Drivers for Improving IT Organizational and Process Performance Externalized service delivery: IT organizations are increasingly leveraging cloud-based or software as a service (SaaS) delivery models, resulting in significant IT operating model impacts. Global market demand: Business from emerging markets is growing significantly, mandating diverse IT models for supporting business growth. Increased data volumes: Emerging use of mobile devices is driving a need for enhanced data management to support the exponential growth in data volumes. Social media explosion: Social media has enhanced customer and employee interaction with the organization by providing an easy-to-use medium. IT in business shared services: Centrally provided applications and infrastructure are being embedded in business services and delivered by business shared services. Increased complexity of the IT ecosystem: Significant customization and proliferation of IT assets has increased the complexity of the IT landscape.Figure 22. Perform an objective assessment, large insurance clients define and manage a com- leveraging standard models, for defining prehensive two-year roadmap to transition from realistic improvement goals. Level 2 to Level 3 on Gartner’s IT maturity model (see sidebar, page 8).Key ChallengesIt has been a challenge to establish appropriate 3. Focus on identifying the right processesgoals and objectives for an IT organizational per- and their process owners to achieve theformance and process improvement initiative. established goals.Various organizations have struggled to set Key Challengesrealistic goals based on change managementconsiderations. Based on the maturity assessment, once the organization is made aware of areas for improve-Key Recommendations ment, the next challenge is to identify processIT organizational performance and process areas with high impact and associate them withimprovements should focus on every aspect of the right process owners.the IT value chain (as described in Figure 4, page Key Recommendations5) and set up realistic goals that reflect the orga-nizational appetite for the change. There are A software engineering process group (SEPG)3several industry-standard assessment models — or dedicated cross-functional team respon-(e.g., CMMI, ITIL, the Gartner IT maturity model,2 sible for driving the performance and processetc.) that could help chart out an improvement improvement initiative — should lead the exerciseroadmap. of identifying process areas for improvement and associating them with the right process owners.The two forms of assessment methods seen in This should be conducted via a series of programthe industry are formal third-party assessments definition workshops involving key stakeholdersand self-assessments. The choice of a maturity from each of the IT functional areas.model and assessment methodology will dependon the focus of the improvement initiative Based on our experience of implementing such(e.g., CMM/CMMI is more focused on software programs, the appropriate process owner shouldprocesses, while ITIL is aimed at operations), be someone who is involved with many aspectsorganizational relevance and cost considerations. of the process. When there are multiple entitiesIt typically takes 18 to 36 months to transition using a process equally, then it is best to assignfrom one level to the next. We helped one of our the process governance or ownership to a broader cognizant 20-20 insights 3
    • Traditional IT Operating Model Business Corporate Functions Finance Risk and Compliance Enterprise Learning Procurement Business Unit 1 Business Unit 2 Business Unit N Human Resource Sales/Marketing IT Organization Plan Build Control Operate • Business relationship • Business and technical • System testing organization • IT infrastructure services Organizations/ management organization analysis competence • IT service delivery Functions • QA support – performance, • IT portfolio management • Development organization regression, etc. • IT service support Strategic Vendor Services organization • IT audit and controls • Application management • Vendor management office organization and support • Enterprise management • Business engagement • Requirements management • Test case creation • Infrastructure standup Process • Demand management • Code development • Load testing • Service-level management IT Operating • Finance and budgeting • Verification and validation • UAT support • Production support Model • Vendor relationship • Code move • IT audit • Application maintenance management • Application portfolio • Application lifecycle • Quality center • Remedy Technology management tool management tools • Performance testing tools • Service Now • Project portfolio management • Unit and integration tools • Load testing tools • Database tools • Collaboration tools External provider-enabled services (e.g., SaaS, integrated BPO, etc.)Figure 3process management entity (e.g., SEPG). The • Change impact: Although the appetite forprocess owner should be sufficiently senior in the change may vary across organizations, noorganization to drive the change. It is imperative more than two improvement initiatives shouldto identify the right process owner with adequate be targeted at the same functional groupempowerment and interest in driving the change. within a quarter. • Project interdependencies: All project inter-4. Develop a roadmap that is well understood dependencies must be captured and factored and accepted by the identified process into the roadmap. owners.Key Challenges For one of our clients, we conducted a jointWhile developing the program roadmap, IT orga- workshop with various process owners to clearlynizations do not always consider the change establish impacts and interdependencies whileimpact, as well as process interdependencies. developing the multi-year roadmap. The joint workshop helped ensure faster consensus-build-Key Recommendations ing on the roadmap.Various process areas requiring improvement are 5. Institute a targeted marketing strategycarved out as dedicated projects that form partof the overall roadmap. Key considerations for that creates enthusiasm and greaterroadmap definition include: participation.• Process owner buy-in: It is critical to obtain Key Challenges process owner buy-in, as these individuals are IT organization process and performance ultimately accountable for making the process improvement programs invariably lose traction implementation successful. over a period of time due to lack of top-down commitment, ongoing business distraction and• Project size and complexity: This is an lack of ownership. In addition, when impacted important factor in creating the roadmap, as it stakeholders are not appropriately engaged helps companies gauge the effort required for through the entire process, the results will be each project and aggregate the processes into sub-optimal. waves for execution. cognizant 20-20 insights 4
    • Key Recommendations 6. Establish a governance model that enablesOrganizations should focus on establishing an effective management of the program.effective marketing strategy that helps sustain Key Challengesenthusiasm for IT organizational performance The lack of well-thought-out program governanceand process improvement efforts. Key facets of impedes progress due to delays in decision-an effective marketing strategy are as follows: making (e.g., funding, resourcing, change management, etc.).• Effective delivery of program- and project-level messages. Key Recommendations• Assurance that marketing is a continuous Effective governance depends on factors such as endeavor throughout the lifecycle of the the organization’s culture and size, the diversity program. of IT functions, improvement approach chosen,• A cost-effective approach that leverages etc. It is, therefore, best to include representa- existing organizational communication vehicles tion from all functional areas within the organi- as much as possible. zation in the governance model (see Figure 5, next page). Typically, three to four governanceOur experience reveals that some of the most elements are needed:effective marketing channels for IT organization-al performance and process improvement include • Executive leadership team: The teamroadshows, newsletters, company town halls and responsible for sponsoring the program andprogram portals/internal Web site postings. One reviewing/ approving the roadmap, budgetsof our large insurance clients used a combina- and progress.tion of roadshows, newsletters and an annual • Program steering committee: Typically madecompany town hall meeting to champion its up of a cross-functional set of senior teamprogram. These mechanisms allowed our client to members. This group regularly advises perfor-establish a bi-directional communication medium mance and process improvement teams on the(i.e., communicate the improvement initiative changes desired, plans, progress and status.and also gather feedback on refinements tothe initiative) that resulted in greater employeeengagement and success.Key Focus Areas for IT Performance and Process Improvements 1 Software Engineering Processes 2 Business Relationship Engagement 3 Architecture Management ® CMMI Maturity Model ITIL Project monitoring and control 4 Project Portfolio Management Service desk Incident Project planning management 5 IT Workforce Management Requirements management Problem management Supplier agreement management 6 Application Portfolio Management Configuration management Measurement and analysis Change management Configuration management 7 Sourcing and Vendor Management Release management Etc. 8 Application Operations and Support Etc. CMMI is a collection of capability 9 IT Financial Management ITIL is a group of methods that are maturity models that are used as focused on managing and handling 10 Knowledge Management an approach to improve business different aspects of information processes within an organization. technology such as operations, infrastructure and development. COBIT COBIT provides a set of generally accepted Planning and organization measures, indicators, processes and best Delivery and support practices, to assist in maximizing the ben- Monitoring and evaluation efits derived through the use of information Etc. technology, and developing appropriate IT governance and control in a company.Figure 4 cognizant 20-20 insights 5
    • • Software engineering process group: Made activity to be of lower priority and do not focus on up of process experts and champions to drive it adequately, leading to a prolonged turnaround. the improvement program. Moreover, standard process definition shortcom- ings often create difficulties in adoption across• Performance and process improvement the organization. team: Formed as needed to execute perfor- mance and process improvement activities (i.e., Key Recommendations analysis or aid in implementation). This group We recommend involving dedicated subject is often led by a member of the SEPG and made matter experts for process definition. It is also up of consulting subject matter experts. essential to standardize the organization’s• Program manager: Depending on the scale of processes, including process descriptions, process the IT organizational performance and process maps, roles and responsibilities, and measures. improvement program, a dedicated program manager is required to manage the program • Process description: Clearly illustrates the from inception to closure. purpose of the process. The description may be depicted graphically, textually or both.Importantly, periodic governance reviews amongthese three to four teams ensure that the initiative • Standard operating procedure: SOPs provideis continuously steered in the right direction. a repeatable way of executing the process. It includes process maps, roles and respon-The following review checkpoints are usually rec- sibilities, templates, guidelines, standards,ommended for successful program execution: checklists, etc.weekly status reporting, monthly steering • Measures and metrics: This enables measure-committee updates and monthly process owner ment of the improvements and successes offorums (i.e., fortnightly meetings to share lessons the initiative.learned across implementations). 8. Facilitate organizational change manage-7. Develop processes that are standard and ment to ensure smooth implementation of “fit to use.” the recommended improvements.Key Challenges Key ChallengesCIOs and top managers most often treat IT orga- In our experience, the biggest constraint to anizational performance and process improve- successful IT organizational performance andments as internal projects that can be performed process improvement program is resistance toby employees on a part-time basis. This approach change.fails in most cases, as employees consider theGovernance Model for the IT Improvement Program Executive Program Steering Leadership Team Committee Performance / Process Improvement Program Team, Led by Manager SEPG Process Owner 1 Process Owner 2 Process Owner 3 Process Owner NFigure 5 cognizant 20-20 insights 6
    • Key Recommendations 9. Enable effective benefit tracking and• Adoption model: There are several ways to reporting to ensure sustained top adopt effective IT organizational performance management support. and process improvements. Some of the best Key Challenges ways to do so (but not exclusive of each other) Aligning improvement measurements with orga- include: nizational objectives has always been a challenge. >> Top-down adoption: This approach first In our experience, demonstrating ROI of the focuses on appropriate buy-in at the cor- improvement effort has proved to be a bane for porate level (top management) and then many companies. drives adoption down to the individual busi- ness units. Key Recommendations Based on industry best practices, high-level >> Bottom-up adoption: This approach benefit categories include reduced cycle time, assumes that change is defined for any improved quality, increased customer satisfaction smaller sub-group through a project, or and reduced costs. a series of projects, and is then adopted across the organization based on proven It is imperative that the metrics are natural results. Typically, this approach is utilized byproducts of the process and that minimal effort for driving improvements within business is spent on collecting and reporting. A typical units (BU), based on specific BU goals. A BU best practice is to define, baseline and set targets blueprint drives organizational change. for benefit measures during process definition. >> Agile improvement adoption: This agile As part of the implementation, realized benefits method of adoption focuses on iterative should be assessed on a periodic basis. changes to the process using a continu- Based on our experience, IT organizational per- ous customer feedback mechanism. This formance and process improvement programs approach is typically suitable for mature or- typically help reduce costs by 8% to 10%, reduce ganizations requiring continuous improve- cycle time by 8% to 10%, reduce defects by 10% ments. to 12% and improve customer satisfaction by 2%• Change agent involvement: Involvement to 5% over a two- to four-year time horizon. of empowered stakeholders from impacted groups ensures a smooth process roll-out. 10. Focus on continuous improvement of the IT organizational performance and process• Adoption survey: An evaluation is conducted improvements. as part of the process roll-out to assess adoption effectiveness. Key Challenges• Piloting: This provides a means of verifying IT organizational performance and process that the processes will work in a broader improvement is often treated as a project, practice and allows for necessary adjustments whose focus ends with project completion. This before they are fully deployed. undermines the emphasis on incremental and continuous improvement to the process.• Communication: As part of the program plan, an elaborate communications strategy is Key Recommendations needed that aligns with overall organizational IT organizational performance and process communication activities. improvements should be viewed as an ongoing• Training: Roll-out usually entails training effort. Once the processes have been rolled out, activities that officially introduce the new or the program should be reviewed and adjusted revised processes. Typically, the process owner at least once a year. User feedback, ongoing identifies a training subject matter expert who assessment of audit findings and effectiveness is closely involved in the process definition to measurements drive the future direction of instruct program participants. A best practice the improvement. Key success drivers include is to record the training and host it as part of continuous planning, monitoring and control of the company’s intranet. the organizational process assets. cognizant 20-20 insights 7
    • CASE STUDY >>Enabling a U.S. Insurer to Boost IT Organizational MaturityBusiness Situation • Level 5: Optimizing. The organization isDue to accelerated growth, the IT group of a major consistent, reliable and regularly improves andU.S. insurance company was facing increasing changes itself based on measures.business expectations. As a result, supporting IT Solutionprocesses needed to be improved/established. • Created a process improvement team that rolled under the client’s software engineeringAn assessment of the IT organization’s maturity process group.was conducted using Gartner’s IT maturity model.Based on the outcome, an organizational maturity • Worked with key stakeholders from the clientgoal was defined by the CIO. organization to develop a multi-year IT orga- nizational performance and process improve-Objective ment roadmap. This effort included:Achieve Level 3 on Gartner’s IT maturity model. >> Identification of the right projects to• Level 1: Ad hoc. The organization does not achieve the maturity level. specify processes and leaves determination of >> Determination of the schedule and budget the right approach to individuals. requirements.• Level 2: Repeatable. Processes are estab- >> Establishment of the approach and gover- lished in work teams or departments. Little nance. consistency of approach. >> Buy-in from key stakeholders on the road-• Level 3: Defined. Defined and documented map and approach. processes are established across each applica- tion discipline. • Helped execute roughly 40 IT performance and process improvement projects using our• Level 4: Quantitatively Managed. Consistent three-step approach (see Figure 6). This effort measurements are in place to refine and included: optimize processes.Three-Step Approach Organizational readiness Initiation and Planning Analysis Phase Implementation Phase Onboard Project Current Future Implementation Communicated Trained Utilized Adopted Benefits Realized Team Plan State State Plan (Project Closed) Q4 ‘11 Q1 ‘12 Q2 12 # Action Item Dec Jan Feb Mar Apr May Jun Owned by Supported by Pre-rollout activities 1 Develop / update communication material for rollout -Mgmt. Owner -AIT Communication team Rollout of Vendor Management 2 Communication on rollout of improved / Target State AIT -Mgmt. Owner -AIT Leadership Financial Governance CBA processes -AIT Communication team 3 Conduct training sessions on improved AIT Financial -Mgmt. Owner -Training SMEs Governance CBA processes for various audiences -Stakeholders internal to AIT (ROM estimation team, BRM, IT Leads, etc.) -Business, PMO, Annuities Finance -Sample Benefit owners 4 Rollout formalized AIT Financial Governance CBA -Mgmt. Owner -Business processes -PMO -Annuities Finance -BRM -ROM Estimation team -IT Leads Adoption Assessment 5 Assess adoption of Target State Vendor Management -Mgmt. Owner processes Project Closure 6 Conduct lessons learned session -Mgmt. Owner Key Activities Key Activities Key Activities Onboard the process Perform process improvement analysis and develop stan- • Change communication improvement team. Plan for dard operating procedures for the desired process area. • Training the process improvement. • Current-state assessment • Adoption success measurement • Project scope • Gap identification • Project closure/benefit realization • Project plan • Future-state definition Key Deliverables Key Deliverables Key Deliverables • Project charter and • Standard operating procedure • Communication and training project plan • Implementation plan • Benefits measurements • Project closure documentationFigure 6 cognizant 20-20 insights 8
    • >> Development and syndication of the target Benefits state process packages, including process We successfully implemented the IT organiza- flows, standard operating procedures, roles tional performance and process improvement and responsibilities, control gates and mea- program, delivering the desired benefits of sures, as well as process templates. defined and documented processes across the IT >> Development and syndication of high-level value chain. The client achieved an 8% improve- implementation plans to enable the client ment in customer satisfaction based on a business to roll out the recommended improvements. partner survey; a 10% reduction in overall post- production defects; a 12% improvement in cycle >> Facilitated the roll-out of complex process- time due to faster rate of production stabilization es (e.g., SDLC, Estimation, etc.), even as the process owner had the primary responsibil- of projects delivered; and approximately 10% ity of implementation. cost savings per year due to a decrease in post- production defects after the first year of imple- mentation. The success of the implementation has encouraged other business units within the client organization to start emulating the defined implementation model.Footnotes1 An IT operating model is a representation of how an IT organization operates across people/organization, process and technology dimensions to implement various business objectives.2 Gartner’s IT maturity model overview for application organizations, http://www.gartner.com/resources/175700/175750/itscore_overview_for_applica_175750.pdf.3 A software engineering process group (SEPG) is a one-stop-shop for driving process excellence within organizations. Typically, SEPG is responsible for process consultation, process assessments, process improvements, process asset governance, process training, and process change management.ReferencesITIL: http://www.itil-officialsite.comCMMI: http://www.sei.cmu.edu/cmmi/COBIT: http://www.isaca.org/Knowledge-Center/COBIT/Pages/Overview.aspx cognizant 20-20 insights 9
    • About the AuthorsPhilippe Dintrans is the Vice President and Practice Leader of the Cognizant Business Consulting (CBC)/Strategic Services Group for North America. Philippe has led numerous consulting engagements onbusiness transformation, IT transformation and change management for marquee clients at Cognizant.Philippe holds a master’s of science degree in engineering from the Massachusetts Institute of Technology(MIT) and an MBA from INSEAD. He can be reached at Philippe.Dintrans@cognizant.com.Amit Anand is a Senior Manager with Cognizant Business Consulting/Strategic Services. He has 11-plusyears of experience in successfully leading and managing large IT performance and process improvementinitiatives for various clients. Amit holds a bachelor’s degree from the IIT Delhi and an MBA from theIndian School of Business, Hyderabad. He can be reached at Amit.Anand@cognizant.com.Madhusudan Ponnuveetil is an Engagement Manager with Cognizant Business Consulting/StrategicServices. He has eight-plus years of experience in leading IT performance and process improvementinitiatives, program management and change management. Madhu holds an MBA from Asian Institute ofManagement, Philippines, and a bachelor’s degree in engineering from MSRIT, India. He can be reachedat Madhusudan.Ponnuveetil@cognizant.com.About CognizantCognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process out-sourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered inTeaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industryand business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50delivery centers worldwide and approximately 140,500 employees as of March 31, 2012, Cognizant is a member of theNASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performingand fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant. World Headquarters European Headquarters India Operations Headquarters 500 Frank W. Burr Blvd. 1 Kingdom Street #5/535, Old Mahabalipuram Road Teaneck, NJ 07666 USA Paddington Central Okkiyam Pettai, Thoraipakkam Phone: +1 201 801 0233 London W2 6BD Chennai, 600 096 India Fax: +1 201 801 0243 Phone: +44 (0) 20 7297 7600 Phone: +91 (0) 44 4209 6000 Toll Free: +1 888 937 3277 Fax: +44 (0) 20 7121 0102 Fax: +91 (0) 44 4209 6060 Email: inquiry@cognizant.com Email: infouk@cognizant.com Email: inquiryindia@cognizant.com©­­ Copyright 2012, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by anymeans, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein issubject to change without notice. All other trademarks mentioned herein are the property of their respective owners.