Copyright 2013 Martin Palmgren EVP .COMMUNICATE

Title:
Business Insights: Deliver Business Value with IT! - Run - Aligned...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
If you believe to be among the top 100 IT or Business leaders that leverag...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
blog post to reflect on different aspects and deliver them in a crisp form...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
storyboards and documents that I use with my high level clients. Flick out...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
10. Run - Aligned to described ITIL activities and processes with a Servic...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

List of topics that will be covered in the chapter:
We understand:
1.
2.
...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
We understand how to:
1. “Canvas” the IT Service Strategy,
2. Develop a Hi...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/time-to-market-...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
We have identified 2 key trends for the CIO to focus on: - Differentiation...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
the core theories and practices regarding this topic that recently had a l...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

(Bjorn Gronquist, Audit of IT Governance and Cobit compliance, he has als...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
The CIO and IT department needs to support the run of the current business...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
parts in 2006 within the frame of the acquisition by a major US based acto...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
solutions to their clients. This will also permit significant cross sellin...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
and how “Agile” do we need to be? To manufacture a product or build a buil...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
solutions” is over (if it ever existed), and take decisions based on econo...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
We did not spend more we changed how we spent our money. Revlon was also a...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
with strategic price and target cost and by overcoming adoption hurdles.
“...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

Step 1 - Observe: (Context A) A vendor of a process modelisation tool man...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
Worst case scenario: We read this really good article by the guy who used ...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
British weather, gray and damp, but not one of these more than 60 people w...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
Strategy Canvas
Articulated in a Strategy Canvas The Stakeholder Strategy ...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
emphase value creation that is a profit center or investment center perspe...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
need for business agility. We must be able provide business value in a sho...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
Within the frame of an acquisition up to 80% of the value realisation is (...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

The public cloud can be used to either leverage cost or to rapidly develo...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

-

The IT department is unable to deliver in a time to market perspective...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
- What is the quality of the service delivery?
- Who consumes the IT servi...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

Cycle Time (Key Performance Indicators):
- Time in months to break even f...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
Operational Excellence (Key Performance Indicators):
- Efficient software ...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

Figure

6:

The

roadmap

reflects

stakeholder

expectations:

http://de...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
Develop and manage Human Capital: - Develop and manage human resources
(HR...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

Chapter 4. IT support business objectives and processes
We align to Busin...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

Figure

14:

Set

the

IT

Value

Proposition

Baseline:

http://deliverb...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
Strategy responds to internal capabilities, Extent to which Critical Succe...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

Strategy Canvas
Articulated in a Strategy Canvas The Stakeholder Strategy...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
- What is the time horizon of these plans, and have they been factored int...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
The IT Bottom line is that up to 40 % of current IT spend occurs outside t...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Servi...
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The upper part of the clients that I speak to feel that there is a lack of actionable articles and publications that help to bridge the gap between the execution of the business strategy, business objectives and how IT can be used to support the latter to deliver business value. This is also the reason why I decided to put forward an execution centric material that has for objective to if not entirely bridge the gap between IT and the business provide Business and IT Decision makers the necessary common language to move forward in the same direction (pointing fingers is rarely productive).

The Business Insights : Deliver Business Value with IT ! series is a reply to the request from Business Executives of an introduction of ?How do we put the IT Strategy in place? where ?Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Service Strategy? provides a breakout for those that would like to focus on this area.
The execution of the defined business strategy is often a mystery (missing link) both on the Business and the IT side. The truth is that regardless of how well the executive team draws out the strategy in the boardroom the bottom line is that the business initiatives that were supported by clients succeeds, those not supported by clients (that do not get it) fail and disappear.

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Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Service Strategy

  1. 1. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Title: Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Service Strategy ISBN: 9781301528660 Official website: http://deliverbusinessvaluewithit.com/ AUTHOR Martin PALMGREN, EVP .COMMUNICATE Copyright Business Insights: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Service Strategy AUTHOR Martin PALMGREN, EVP .COMMUNICATE Published by .COMMUNICATE Publications at Smashwords Edition Inc Copyright 2013 .COMMUNICATE Publications Introduction: The upper part of the clients that I speak to feel that there is a lack of actionable articles and publications that help to bridge the gap between the execution of the business strategy, business objectives and how IT can be used to support the latter to deliver business value. This is also the reason why I decided to put forward an execution centric material that has for objective to if not entirely bridge the gap between IT and the business provide Business and IT Decision makers the necessary common language to move forward in the same direction (pointing fingers is rarely productive). The Business Insights : Deliver Business Value with IT ! series is a reply to the  
  2. 2. Copyright 2013 Martin Palmgren EVP .COMMUNICATE If you believe to be among the top 100 IT or Business leaders that leverage business value with IT "Deliver Business Value with IT" - The editorial council http://www.linkedin.com/groups/Deliver-Business-Value-IT-editorial-3807899/about is a forum dedicated to the finest business and IT academics. Cheers Martin What the reviewers said “ The “Deliver Business Value with IT” series is an extremely solid piece of work that comes across as the A-Z reference of how to execute and implement IT strategy from a CIO level perspective. The reader will learn robust approaches to deliver services designed to support IT and Business drivers. The perspective that Martin spells out permits an overview of how to leverage existing frameworks but also to effectively support the execution of an IT Strategy aligned with the Business Strategy.” (Jean-Louis Leignel, Ex CIO of the Schneider Electric Group ; past vice-chairman of ISACA (Information System Audit and Control Association), of ISACA’s IT Governance Committee and of the AFAI association (ISACA’s french chapter)). “The focus that Martin takes in the “Deliver Business Value with IT” series will help in tackling the seven main non-technical challenges any CIO or other senior IT business leaders will face: 1. How and what should I communicate to whom in what way? 2. What to think of when it comes to competences needed to provide my IT services? 3. How to provide the best value at the best cost? 4. What to think of when ensuring efficient and effective delivery of projects? 5. How to establish a sourcing strategy and determining how to manage your vendors? 6. What are the best practices for managing my operations, and what to think of? 7. How can I best scan for and analyse emerging technologies? The approach taken utilizing basic business management principles and applying them to how to run an IT department are explained clearly, and takes this publication above and beyond the standard publication proclaiming to ‘run IT as a business’. The 2 key trends identified in the publication for the CIO to focus on of “Differentiation” and “Cost” are a perfect example of this.  
  3. 3. Copyright 2013 Martin Palmgren EVP .COMMUNICATE blog post to reflect on different aspects and deliver them in a crisp format. The articles / blog posts have then been combined with other aspects of the story to form the book. The book can then be delivered in a paper, electronic or audio format. The question is not weather the book is valid as format or not, the challenge is to find writers capable to synthesis the big picture and deliver it in a chewable format and still retain the attention of the reader. But then again this is not only the challenge of the book format where most articles and blog posts are “journalistic sensational” and few address questions where you need to dig in most likely due to the lack of competence / knowledge on the subject hence the social media or cloud, next fad frenzy where few of the “writers” would be able to describe the landscape with ROI to back up the logics of an investment. All that you would like to know in regards of the “Deliver Business Value with IT” series What is it about the topic that will get readers excited? After the “how do we align business needs to how IT works” (that is Business IT Alignment) clearly seen in SAP implementations the focus of the CIO need to be on how do we support / “leverage the execution of the business strategy with IT” where the IT Department supports new emerging business initiatives that will eventually form the business strategy as they succeed of fail. That said the IT department has not only the responsibility but should be held accountable for how well they help the business side understand how to leverage existing technology solutions (buy / make) effectively hence the notion of service delivery defined not as basic help desk but as a full fledged business partner and this would include IT Financial Management. Why do you think this book would be welcomed by potential customers? Deliver Business Value with IT will help the IT Department to move from a mere third party provider of Information Technology to a position of a full fledged business partner with a comprehension of business needs, stakeholder expectations and strategy execution and how to support the latter. How do you see your book being different from any existing or competing titles? We help the reader evolve from a position of “there are business needs and stakeholder expectations” (see COBIT 5 that is today one of the few IT frameworks that has included the notion “the needs of the business” and stakeholder expectations) to a potential position of a a full fledged business partner with a comprehension of business needs, stakeholder expectations and strategy execution and how to support the latter. For COBIT 5 practintioners the perspective presented in ”Deliver Business Value with IT” pulls the logics presented in COBIT 5 together that you can effectively leverage with the IT Scorecard. Describe the three most important things you want the reader to have learnt/solved by the end of the book: How to ask the right questions to support the needs of the business (and not sit around to wait for the business strategy to be formalised as this might never happen). Focus on ROI and hands on metrics oriented results that supports business objectives. How to re invent the IT Business Model (that is how do we deliver IT services effectively) and the Business (IT) IT Model / Partership that is how do we support the needs of the business effectively.  
  4. 4. Copyright 2013 Martin Palmgren EVP .COMMUNICATE storyboards and documents that I use with my high level clients. Flick out flick out the document / slide set on a pad / smart phone / lap top and start to share with your Colleagues, CIO, Business Executives and Board on the spot. Related Publications by Martin Palmgren in a Storyboard Format A Story Board is an actionable document conceived in .ppt and often presented in PDF that permit you to flick out the slide set on a pad / smart phone / lap top and start to share with your CIO, Executives and Board on the spot. Design, Build and Run an Effective IT (Service) Strategy to Business Needs https://flevy.com/browse/business-document/design-build-and-run-an-effective-it-service-strategy-to-business-needs-279/ref=mpalmgre Get Your Cloud Strategy Right https://flevy.com/browse/business-document/get-your-cloud-strategy-right-286/ref=mpalmgre Leverage Business Strategy Execution with IT https://flevy.com/browse/business-document/leverage-business-strategy-execution-with-it-281/ref=mpalmgre Logics for IT Sourcing (Internal, Shared service center, Out, Cloud) https://flevy.com/browse/business-document/logics-for-it-sourcing-internal-shared-service-center-out-cloud-285/ref=mpalmgre Build an IT Service Strategy Leveraged by ITIL V2 & 3 Design - Spell out IT Activities from a Demand and Supplier Side https://flevy.com/browse/business-document/build-an-it-service-strategy-leveraged-by-itil-v2-and-3-design-spell-out-it-activities-from-a-demand-and-supplier-side-282/ref=mpalmgre Build an IT Service Strategy Leveraged by ITIL V2 & 3 Build - Set IT Processes and Key Performance Indicators https://flevy.com/browse/business-document/build-an-it-service-strategy-leveraged-by-itil-v2-and-3-build-set-it-processes-and-key-performance-indicators-283/ref=mpalmgre Build an IT Service Strategy Leveraged by ITIL V2 & 3 Run - Aligned to Described ITIL Activities and Processes https://flevy.com/browse/business-document/build-an-it-service-strategy-leveraged-by-itil-v2-and-3-run-aligned-to-described-itil-activities-and-processes-284/ref=mpalmgre How to Build a CIO Office https://flevy.com/browse/business-document/how-to-build-a-cio-office-288/ref=mpalmgre CANVASSED in a Business (IT) Strategy Canvas: Business Vision, Architecture https://flevy.com/browse/business-document/canvassed-in-a-business-it-strategy-canvas-business-vision-architecture-289/ref=mpalmgre CANVASSED in a Business (IT) Strategy Canvas: IT Vision  
  5. 5. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 10. Run - Aligned to described ITIL activities and processes with a Service Strategy, Service Design, Service Transition, Service Operation: - Function, - Process, Service Improvement. 11. To leverage IT for Strategic Advantage Each chapter has been conceived to be able to stand a consultation on a stand alone basis and cover key points. This might give to those that will read “Deliver Business Value with IT” end to end an impression of “deja vu” earlier in the book. Highlight: Focus on the BIG PICTURE! 1: To deliver Business Value with IT we need to Design, Build and Run an Effective IT (Service) Strategy to business needs We will take the reader and the business and IT executive team out of their “ivory tower” and in to “the valley of death” where we confront current “best in class IT practices” to what should be done that is to “support the execution of the business strategy with IT” as opposed to “how do we align business needs to how IT works” (that is Business IT Alignment) which is current best in class. We will leverage business models and concepts to permit the CIO and the IT department to meet the needs of the business (As Is, To Be). List of topics that will be covered in the chapter: We understand: 1. The need for an “IT value proposition” (an IT Business Model and a Business (IT) Value Proposition), that is the competitive advantage that IT confer 2. The criticality to acquire IT services end to end 3. The need for IT Accountability 4. The reason why IT strategies fail, and miserably 2: To avoid the “Marshmallow” momentum, focus on the business model We spell out the irregularities of the current IT Innovation process and the loss of competitive advantage for both the IT and the Business Side. List of topics that will be covered in the chapter:  
  6. 6. Copyright 2013 Martin Palmgren EVP .COMMUNICATE List of topics that will be covered in the chapter: We understand: 1. 2. 3. 4. That IT support business objectives and processes with Investment Management The need for Process Management A coherent Business Architecture The need for a defined direction and Market Position 5: Cloud computing thunder or lightening? How to draw the fluff out of the cloud and effectively support business objectives with IT The introductory material in this chapter is developed to provide pragmatic guidance on how to develop and execute your IT Strategy with effective “Cloud” Sourcing (Computing) to support the Business Strategy and Business Objectives. List of topics that will be covered in the chapter: We understand: 1. How to build and effective cloud strategy 2. That to cloud is a traditional “to make or to buy” decision 3. That a decision should either be demand or cost driven, if it is political this should be recognized. 4. That all cloud initiatives should have a clear business case (financial + roadmap) where the IT department should be held accountable to the successful delivery and within the set cost frame 6: To leverage Business Strategy execution with IT we Focus on the IT (Service) Strategy The reader will learn the criticality for the CIO and the IT Department to position as premium provider of IT services and to focus on value to cost. “In order to avoid the "do we really need a CIO and IT department to bother us with technology when we can use the cloud?" the CIO has to ensure that the business strategy and business objectives are supported by IT (from a Business and IT Architecture perspective). Where the IT Strategy support Business Strategy execution, "Time to Market", Cost Effectiveness and Stakeholder Expectations from an Executive, Business Unit, IT Management and IT Risk Management perspective.” List of topics that will be covered in the chapter:  
  7. 7. Copyright 2013 Martin Palmgren EVP .COMMUNICATE We understand how to: 1. “Canvas” the IT Service Strategy, 2. Develop a High level picture of the Business (IT) Strategy, 3. Articulate the Business (IT) Strategy, 4. Develop the Business (IT) Service Strategy, 5. Build the Business (IT) Service Strategy, 6. Govern the Business (IT) Service Strategy, 7. Design the Technology Architecture, 8. Build the Sourcing Strategy, 9. Develop the Program Plan, 10. Leverage Business Strategy Execution 9: Build - Set IT processes and key performance indicators. The introductory material in this chapter is developed to provide pragmatic guidance on how to develop and execute your IT Strategy as you Set IT processes and key performance indicators (Build the IT Strategy) to support the Business Strategy and Business Objectives. List of topics that will be covered in the chapter: We understand how to: 1. Define the “to be” state with established KPI’s, 2. Design the IT Plan with a project portfolio, 3. Build An Effective (IT) Business Model, 4. Manage the Business of IT, 5. Develop & Manage IT Customer Relationships, 6. Manage Business Resiliency and Risk, 7. Manage Enterprise Information, 8. Develop and Manage IT Solutions, 9. Deploy Information Technology Services, 10. Deliver and Support IT Services, 11. Manage IT Knowledge 10: Run - Aligned to described ITIL activities and processes with a Service Strategy, Service Design, Service Transition, Service Operation: - Function, - Process, Service Improvement The introductory material in this chapter is developed to provide pragmatic guidance on how to develop and execute your IT Strategy Aligned to described ITIL activities  
  8. 8. Copyright 2013 Martin Palmgren EVP .COMMUNICATE http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/time-to-market-cost-effectiveness-cycle-time/ Figure 3: Connect information: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/connect-information/ Figure 4: IT support Business Objectives: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/it-support-business-objectives/ Figure 5: Deliver effective business strategy execution: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/deliver-effective-business-strategy-execution/ Figure 6: The roadmap reflects stakeholder expectations: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-roadmap-reflects-stakeholder-expectations/ Figure 7: The ServiceStrategy support Business Drivers: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-service-strategy-support-business-drivers/ Figure 8: End to end industrialisation of business processes: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/end-to-end-industrialisation-of-business-processes/ Figure 9: The Business Strategy is executed by IT: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-business-strategy-is-executed-by-it/ Figure 10: Confirm business vision: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/confirm-business-vision/ Figure 11: Articulate the Business Value Proposition: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/articulate-the-business-value-proposition/ Figure 12: Deliver the Business Architecture: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/deliver-the-business-architecture/ Figure 13: Translate the Business Vision to an IT Vision: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/translate-the-business-vision-to-an-it-vision/ Figure 14: Set the IT Value Proposition Baseline: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/set-the-it-value-proposition-baseline/ Figure 15: Draw the Roadmap: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/draw-the-roadmap/ Figure 16: Design the IT Value Proposition: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/design-the-it-value-proposition/ Figure 17: Build the IT Value Proposition: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/build-the-it-value-proposition/ Figure 18: To Perform Effective IT Governance: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/to-perform-effective-it-governance/  
  9. 9. Copyright 2013 Martin Palmgren EVP .COMMUNICATE We have identified 2 key trends for the CIO to focus on: - Differentiation (That is, how does IT provide a competitive advantage for the business), and - Cost (How does the IT Department deliver IT Services cost effectively). To do so we need to Build an effective IT Delivery Model to meet business needs and expectations as we leverage business strategy execution and business processes supported by an IT Service strategy (ITIL, IT – CMF, CobIT 5 (ValIT, CobIT 4.1, RiskIT), ISO 38 500, TOGAF and ISO 9001, ISO 27 001, COSO) delivered in a Business IT roadmap; that is how do we support business objectives and processes leveraged by IT and an effective IT Services strategy. Within this scope we would by definition address how we execute the IT service strategy (ITIL) Design - Spell out IT Activities from a demand and supplier side, Build - Set IT processes and key performance indicators, Run - Aligned to described ITIL activities and processes and full IT Financial Management (supported by delivery capability IT CMF, COBIT 5). Once services defined we can then decide where to run the application that support the IT and or Business Services (server / internal / external cloud / outsourced provider). Within the frame of an acquisition up to 80% of the value realisation is (can be) on the IT side. The failure to address IT and the IT strategy can be an additional (1 out of 3) reason to M & A failure. If we assume that to deliver business value with IT we need to support business objectives, the integration of a new entity is an optimisation of the current IT strategy (how we support business objectives and processes). We would obviously need to understand (and hopefully have the opportunity) how the current IT run before the purchase (IT due diligence) with full IT Financial Management to figure out the actual cost of delivered IT services (cost, consumption, chargeback). Once services defined we can then decide where to run the applications that support the IT and or Business Service (server / internal / external cloud / outsourced provider). We also need to define the purpose of the purchase (invest / divest) in the overall corporate strategy where it is of little use and a significant cost to integrate all systems in to a common backbone if the company is to be divested only a few years later. We could use an IT Scorecard to ensure that stakeholder expectations are met from an executive management, business line management, IT management and IT risk management perspective. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated.  
  10. 10. Copyright 2013 Martin Palmgren EVP .COMMUNICATE the core theories and practices regarding this topic that recently had a lot of attention from both academics and practitioners. The material in his book also gives for CIO’s a good overview of the most popular IT governance and IT management frameworks including the relative new ones such as ISO 38500 and COBIT 5. This publication may help CIO’s and senior IT people to better understand that the only goal of IT is to support the business and that it is the business that ultimately will make profit from developed applications.” (Prof. dr. Wim Van Grembergen, University of Antwerp & Antwerp Management School, Information Technology Alignment and Governance Research Institute) “The focus that Martin takes in the “Deliver Business Value with IT” series will help in tackling the seven main non-technical challenges any CIO or other senior IT business leaders will face: 1. How and what should I communicate to whom in what way? 2. What to think of when it comes to competences needed to provide my IT services? 3. How to provide the best value at the best cost? 4. What to think of when ensuring efficient and effective delivery of projects? 5. How to establish a sourcing strategy and determining how to manage your vendors? 6. What are the best practices for managing my operations, and what to think of? 7. How can I best scan for and analyse emerging technologies? The approach taken utilizing basic business management principles and applying them to how to run an IT department are explained clearly, and takes this publication above and beyond the standard publication proclaiming to ‘run IT as a business’. The 2 key trends identified in the publication for the CIO to focus on of “Differentiation” and “Cost” are a perfect example of this. Further to this the focus and examples of non-technical KPIs used, provides a good framework for the CIO to communicate the state of how services are provided and how the company is maximizing its value of their IT assets.” (Alex van der Kruit, is a senior IT executive with extensive experience in building and leading service organisations, and directing change management initiatives for leading global corporations. He has held positions such as Service Delivery Director at CSC, General Manager IT at Swedish Match, and is currently Business Systems Manager at Toyota Material Handling Europe)  
  11. 11. Copyright 2013 Martin Palmgren EVP .COMMUNICATE (Bjorn Gronquist, Audit of IT Governance and Cobit compliance, he has also held the position as Chief Security Officer & Enterprise Architect @ a Capgemini Group Level) " I am honored to have the opportunity to review the “Deliver Business Value with IT” series, which I found to be very comprehensive and to the point. With the proliferation of public form of Cloud Computing, CIO's are threatened of their survival in the corporate world. Business units can readily meet their compute needs by purchasing services directly from service providers without using IT. These services come with predictable cost at given service levels with high degree of agility. IT organizations, on the other hand, are order takers. Martin's publication on designing, building and running an effective IT Strategy to meet business needs was developed to help CIOs create business value by addressing the following mega IT challenges: 1. How to transform IT from an order taker to a product and service organization; 2. How to make IT more agile to create value from a time-to-market perspective; 3. How to develop product and services that are fully aligned with business needs and, then, offer them at predictable cost with given service levels 4. How to provide effective IT Governance. There will be times when it will be more effective to buy services directly from Service Providers as opposed to building them in house. But those decisions should be made in a more methodical way. But, this will require for IT to administer a very effective and sound IT governance process. IT should be the keeper of the product and service catalog. “Deliver Business Value with IT” provides an excellent opportunity for CIO's to develop an effective IT Delivery model. Martin, thanks again for giving me the opportunity to review your publication. You really have done an excellent job with this publication. Good luck" (Rajesh Kumar, is a senior IT executive specialised in cloud, IT Transformation and IT Financial Management. He has held positions such as SVP Bank of America, IT Infrastructure and Finance and Director, Rackspace). “The “Deliver Business Value with IT” series is a comprehensive, concise and KPI focused publication. I have always agreed with the fact that IT services are a profit center. I call this "a business within a business" in actual fact a component of the business' federation of services. The CIO must only be a supporter and a facilitator who relies on architecture services to justify roadmaps and business IT strategies. Unfortunately, and is not only in my experience, many CIO's emerge from project management backgrounds and lack the wealth of knowledge “Deliver Business Value with IT” so nicely describes. CIO's would ideally come from a certified architecture background or subscribe to the approach and methodolgies suggested in the book. I would dare to suggest that specific charters must be defined and accepted for every  
  12. 12. Copyright 2013 Martin Palmgren EVP .COMMUNICATE The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated. Author Introduction Martin Palmgren is a seasoned Senior Business / IT Strategy and Transformation Executive that has addressed Strategy formulation and roll out for fortune 500 businesses internationally with a focus on how to ensure that the business strategy and objectives are supported by IT with an effective IT Strategy and Governance (that is how do we support business objectives and processes leveraged by IT and an effective IT strategy). Martin is an expert in “how to deliver business value with IT” where he works with both Business and IT Executives to reach this objectives and has delivered best in class practice with major actors in the Pharma, Bank, Manufacturing and Insurance Sector to articulate the “IT Business Model” “This is how we deliver effective IT services to the business” and the “Business (IT) Value proposition” “This is how we support business objectives with services in a time to market perspective”. He has over the last 2 years also addressed how to build an effective “Cloud Business Model” to take full advantage of the flexibility and cost advantage that new cloud solutions permit to improve “Time to Market”, “Cost Effectiveness” and “Cycle Time”. Martin has accompanied a number of IT consulting companies and editors in their “Go to Market” with Client acquisition, (Large) Account Introductions, Alliances (notably with BIG 5 consultancies), Market Position (Forrester, Gartner, Bright Talk) and position of the “Value Proposition” (discovery, competitive analysis of market offerings, road map to realign solutions portfolio and transform sales and delivery operations, develop new market strategy and execution plans, and drive sales transformation, acquisition of smaller actors). He is an international thought leader and visiting professor at some of France’s top business schools, notably EDHEC where he intervenes on Innovation, Business Model Innovation, Strategy, IT Strategy (Execution), IT Governance, IT Sourcing, Cloud (Sourcing). He holds a Master in Finance from the University of Gothenburg.  
  13. 13. Copyright 2013 Martin Palmgren EVP .COMMUNICATE parts in 2006 within the frame of the acquisition by a major US based actor within the online market place segment. Mission: Portal conception and solution development: structure, content, classification system elaboration (profession and functional oriented taxonomy: 56 000 lines, 7 languages, compatible with UNSPSC, ECCMA & ECLASS). Position and offer: target and operational marketing identification (price, geographical zone, mix). Partner & competition bench. Development of an international partner program (+ 30 000 ads on a monthly basis). Martin also held the role of general secretary to the CEO the former CFO of a listed large French group and actively contributed to the overall strategy and was key to international development. Martin joins CAP GEMINI ERNST & YOUNG (Cap Gemini SA) in 1999 (– 2002) as an expatriate project manager affiliated to CGE & Y Sweden and direct report to the Chief Knowledge Officer (later CIO) on a group level. Objective: To leverage the groups presence, shorten go to market and win additional market share through best in class solutions to: deliver, share references, blue prints, delivered solutions, find experts and staff internationally. Mission: Client needs identification (audit, definition). Active participation in the conception and development and roll out of collaborative tools: my office, my connections (expert identification search database: 6000 competencies, 56 000 competency profiles with daily updates to local HR databases). Other assignments: Group initiative proposition articulation (business development): Cost optimization in the aerial, energy and utility sector (CA 20 M€), IAS (International Accounting Standards): development, implementation, evaluation and sector reporting. Client portfolio development: trend, brand and market analysis (CGE & Y, Buenos Aires, Argentina, 2002). CRM pilot offer group (CGE & Y Sweden, 2000 – 2002). Chapter 1. To deliver Business Value with IT we need to Design, Build and Run an Effective IT (Service) Strategy to business needs. Please find an actionable story board format designed to permit you to flick out the slide set on a pad / smart phone / lap top and start to share with your CIO, Executives and Board on the spot @ Design, Build and Run an Effective IT (Service) Strategy to Business Needs https://flevy.com/browse/business-document/design-build-and-run-an-effective-it-service-strategy-to-business-needs-279/ref=mpalmgre Value, Profit, People – What is your unique competitive advantage? To leverage IT to execute on the set business strategy we need to effectively focus on: Value, Profit and people aligned to create a unique competitive advantage.  
  14. 14. Copyright 2013 Martin Palmgren EVP .COMMUNICATE solutions to their clients. This will also permit significant cross selling with an increase in the added value perceived (that will take the said actors out of the equation to compete on cost only). How poor IT Financial Management (accountability) set your business, CIO and IT department up for failure! If you owned an airline company would you accept that when you asked how many passengers that had been transported, which distances where the most profitable, how many tickets sold and at what price and if time tables and destination where kept as promised and the amount of gas consumed the reply that the planes had been kept in the air and that any constraints would hamper creativity (innovation). This is however the case for most businesses where the IT department on the premise that they "keep the lights on" should not be held accountable neither for cost nor delivery and IT Financial management is a bean counting mentality (when I spoke to a friend in a top 3 audit firm in regards of this phenomena he told me that whenever a client told him the to keep records of his business was a bean counting mentality he would by definition look closer and 10 times out of 10 would find the records to be revised and basic rules broken) and that to have clear accountability would hamper creativity (innovation). The bottom line is that most outsourcing is performed not to optimise cost but to get a minimum level of service delivered (and at least the illusion of service level agreements to be met). When you sign up as a student in business administration you learn how to assign cost, read and build a balance sheet, calculate and optimise cost in production (later as a business controller in the production chain you would project budgets based on ongoing business cost that is clearly spelled out). The question of IT budgets and IT controlling never came on the table and had it I believe that most students would have found it difficult to understand that cost, consumption and chargeback of a service (product) would not be defined and that business entities and subcontractors (tier outsourcing parties) would not define the cost of execution (manufacturing) and the validity of the information used for the billing (chargeback). The very reason why most IT Strategies fail and miserably The IT department needs to perform 3 things well: 1) understand the needs of the business, 2) how to build and run applications that meets the needs of the business and 3) to run an effective infrastructure. That is IT supports new emerging business initiatives that will eventually form the business strategy as they succeed or fail and the RUN.  
  15. 15. Copyright 2013 Martin Palmgren EVP .COMMUNICATE and how “Agile” do we need to be? To manufacture a product or build a building we specify the description to the needs of the client, deliver a blue print and produce / build. Changes in the production are costly, yet this is the very basis for “Agile” reason why most IT Contractors would not accept a set cost frame for a contract where the blue print was not defined well enough to produce to the needs of the client in the first place (moving target dilemma). The bottom line is that we need to rapidly be able to understand modelise and deliver to the needs of the business and business objectives. If standardised solutions cover 80 % of the needs that would most likely be enough. To systematically capture (modelise) unique “tailored” business processes in a modelisation tool that are not industrialised is not only a waste of time but of enterprise resources (unless this would be required by the audit team). A coherent approach would be to identify business processes that support activities that could be industrialied with IT when needed and modelised if we cannot find a standardised solution off the shelf. Google, box.com, Salesforce and other hosted providers dispose of resources that most IT departments could only dream of to address specific subjects such as mail, document storage, CRM. Why reinvent the wheel when we can extrapolate on hundreds of manyears of cumulated knowledge (not to mention budgets funded by IPO’s) all in the name of “security”? Even my tailor (one of the finest in Paris) has moved forward to a model of “tailor made” to half custom made where he has realised that a person that does not know what he needed in the first place will systematically be disappointed and want something better as the product is delivered (even if it corresponds to what the client asked for). The situation is comparable to that of most IT departments and one of the reasons why an internal client can refuse to sign off the delivery of an application because the colour of beige is not right where he most likely know that the definition did not correspond to the needs of the business in the first place and certainly less so 18 or 36 months (processes modelled and defined by a consultant, translated and programmed) down the road. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated.  
  16. 16. Copyright 2013 Martin Palmgren EVP .COMMUNICATE solutions” is over (if it ever existed), and take decisions based on economical logics and business needs rather than the “fad” of the moment, - Meet stakeholder expectations from an executive and business management perspective would this be among your current priorities You need to demonstrate how you Create Business Value and Optimise IT’s contribution to the business: - Service Portfolio optimised around business value - IT spend streamlined through in depth cost transparency - Measure IT performance with financial KPIs - Model customer consumption of IT services – chargeback - Optimise internal processes, controls, organisation - Demonstrate the value that IT contributes to the business - In the follow business critical areas: - Budget – Strategic Planning - IT Controlling - Simulate scenarios - M & A, data center consolidation, etc - Demonstrate IT’s contribution to the business - ITIL v3 implementations, BSM projects Where the Bottom line is that: IT Management needs to transform their business model: - Move from a cost center centric to a Service based model - Manage a Portfolio of Services-enable cost / value optimization - Efficiency of each Service - Effectiveness of each Service - Manage IT performance on a cost per unit and consumption basis - Compete on the open market - Benchmark and measure apples to apples Create demand In a recent conversation that I had with David Giambruno, CIO Revlon, he mentioned his ability to get the business hooked on new services and products as he actively propose new solutions to the business to leverage competitive advantage and keep the run in perfect shape. But the role as “gatekeeper of technology” to create business value can only be valid as the infrastructure runs smoothly. David has over they years shifted the focus of to use 80 % of the budget for workarounds and fire fighting the  
  17. 17. Copyright 2013 Martin Palmgren EVP .COMMUNICATE We did not spend more we changed how we spent our money. Revlon was also able to take charge of its own disaster recovery. We internalized our DR. As we reduced external expenditure we were able to give it back to the business to invest in revenue driving initiatives. For Revlon, the more money R&D has to develop new products to get to our consumers and for marketing to tell our “product story” and get it out to our channels and use the media to talk about our glamorous products the more succesfull the business. Another change for Revlon is that it has become a cloud provider itself as we push our cloud out to suppliers and contractors. At the end of the day, we needed to rapidly collaborate with our eco system that is our community of vendors and suppliers, and enable them to interact with us easily where the bottom line is to drive growth for Revlon.” Govern It is crucial to build governance in to the execution of the Business and subsequently the IT Strategy. COBIT 5 helps IT leaders provide a business view of IT’s ability to create value and support enterprise goals through effective IT processes and build process capability and can be used to: Develop process improvement, Deliver value to the business, Measure the achievement of current or projected business goals, Benchmark and deliver consistent reporting, and ensure organisational compliance. Shift focus from customers to non-customers Salesforce.com have over the last year demonstrated the ability to shift focus from the traditional customer (that in most cases had no desire to implement the “hosted provider solution” as it would significantly reduce the dependency on legacy applications that stakeholders and a significant number of employees had build their career on). A recent acquisition by the business management at France’s major airline permitted a major improvement to the business both from a capability and performance perspective to a fraction of the cost, and provided the IT department with 600 resources to perform other tasks. The IT department will have to rapidly shift their business model from “reward and remuneration in concordance to how many people that I manage” to a model related to the value delivered to the business with a Focus on the Business Bottom Line that is: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective or will see the go to market trend with the business as direct customer grow significantly.  
  18. 18. Copyright 2013 Martin Palmgren EVP .COMMUNICATE with strategic price and target cost and by overcoming adoption hurdles. “Blue Ocean Strategy” looks across industries to demonstrate how to break out of traditional competitive (structuralist) strategic thinking and to grow demand and profits for the company and the industry as we use blue ocean (reconstructionist) strategic thinking. The third and final part describes the two key implementation principles of blue ocean strategy that would include tipping point leadership and fair process, essential for leaders to overcome the four key organisational hurdles that can prevent even the best strategies from being executed. The four key hurdles comprise the cognitive, resource, motivational and political hurdles that prevent people involved in strategy execution to understand the need to break from status quo, find the resources to implement the new strategic shift, keep your people committed to implementing the new strategy, and from overcome the powerful vested interests that may block the change. In the book the authors draw the attention of their readers towards the correlation of success stories across industries and the formulation of strategies that provide a solid base create unconventional success – a strategy termed as “Blue Ocean Strategy”. Unlike the “Red Ocean Strategy”, the conventional approach to business to beat competition derived from the military organisation, the “Blue Ocean Strategy” tries to align innovation with utility, price and cost positions. The book questions the phenomena of conventional choice between product / service differentiation and lower cost, but rather suggests that both differentiation and lower cost are achievable simultaneously. The authors ask “What is the best unit of analysis of profitable growth? Company? Industry?” – a fundamental question without which any strategy for profitable growth is not worthwhile. The authors justify with original and practical ideas that neither the company nor the industry is the best unit of analysis of profitable growth; rather it is the strategic move that creates “Blue Ocean” and sustained high performance. The book examines the experience of companies in areas as diverse as watches, wine, cement, computers, automobiles, textiles, coffee makers, airlines, retailers, and even the circus, to answer this fundamental question and builds upon the argument about “Value Innovation” being the cornerstone of a blue ocean strategy. Value Innovation is necessarily the alignment of innovation with utility, price and cost positions. This creates uncontested market space and makes competition irrelevant. Business Model Generation by Alex Osterwalder & Yves Pigneur also provides models based on the concepts brought forward by blue ocean strategy. Chapter 2. To avoid the “Marshmallow” momentum, focus on the business model  
  19. 19. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Step 1 - Observe: (Context A) A vendor of a process modelisation tool manages to convince the business or IT executive team that to provide a modelised version of business and IT processes was business critical and would demonstrate that the IT Strategy is business centric and that the IT department understands the Business, Business objectives and the Business strategy. (Context B) A business or IT internal client wants to industrialise a process or a bundle of services with IT. We decided to use the same consultants as for the six sigma initiative (below) to capture business processes. The problem is that the business people are to busy to do their job (and might not be able to formalise their processes). And if their work is automatised we might chuck their work out on the cloud or an outsourced provider as well (the last time they spoke to a consultant their colleague was fired (sorry made redundant, sorry given the opportunity to seek new challenges))? Obviously they do not get it. Step 2 - Synthesize: (Context A) The captured processes are modelised in a process modelisation tool and will sit in a cuppord. (Context B) The captured processes (in the case of the industrialisation effort) delivered by the somewhat reluctant users are translated by a business analyst in to user requirements. These are then transferred to managment for verification. The 300 pages document sit on a disk somewhere for 3 weeks to 3 months before it is shipped of for programming. Step 3 - Generate Ideas: The user requirements are programmed. Step 4 - Refine: The end user team is brought in 18 months after to validate the application. Hmm they might not have gotten it either. At least we avoided a fist fight… Step 5 - Implement: The project sponsor refuses to sign off the project budget because the coulour of beige of the application is not right. We and they know that this is due to the fact that the modelisation did not correspond to the needs of the client in the first place and certainly not 18 or 36 months down the road (not to mention thousands of man hours). Phase 2. - Solve the problem: We realise that the customer experience and the services delivered by IT does not work / might not be perceived to be effective and the green light red light charts that we produce to demonstrate that we are able to keep the lights on during critical periods of the run performs the effect that we thought it would. Best case scenario: We convince the executive team to leverage social media and post the business strategy via facebook and twitter for the IT personnel to appreciate it in a crisp 140 characters format Next best case scenario: Walk your dead dog. This scenario would typically implicate a subject matter expert that would come in for an hour or 2 compare the Information system to a car, a boat or an engine where the new technology is a paradigm shift. The IT team that have participated gets all worked up because the analogy used that relates back to the early 19th century is so descriptive for our current cloud deployment. We build this really great presentation on how to leverage  
  20. 20. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Worst case scenario: We read this really good article by the guy who used to be the top hen for IT for the US government that decided to chuck IT out to the cloud not to have to run an IT department and IT resources (By the way I wonder why he stayed for such a short time before he went on to evangelise the cloud for salesforce). I wonder if we can chuck the IT department out to the cloud. Then the cloud provider could deal with users that are not happy. I wonder if the cost cutting genious that we brought in last year is available. On his recommendation we consitently cut the cost of IT for the (mobile) sales force. At the end of the day as they did not have an office or a fix computer why should they need a lap top? Not to forget that we made substantial economies on software licenses and storage space. Phase 4. - Set direction: We have the impression that we might not be on top of things and should add a bit of governance. The Internal audit department confirmed this impression as they confirmed that we clearly lacked focus due to the absence of an IT Dashboard. Best case scenario: As we where quite happy with the Big Change report , the first page does after all look smashing, and the weight of the paper makes my table more stable. We decide to once more bring in our favourite consultants. At the end of the day if the six sigma task force initiative had a few bumps it was not due to the fact that the principles that where implemented where directly applied from the Toyota production chain (they are after all very good at car construction) but certainly due to the fact that the users did not get it. Even though the delivery cycle now takes 180 days compared to 30 before at least it is measured and we can bench cost to competition. Now to the point, as the audit team requires an IT dash board we asked our consultants to deliver one that looks smashing and the audit team is satisfied. The best part is that we now feel that we have effective governance in place and that they did not have to bother neither the IT executive team nor the business or the IT team. Worst case scenario: We had a meeting with the business consultant that convinced us that for IT to demonstrate that we support the business we should modelise all 15 00 business processes (I wonder why executive management put an end to this effort ?) This time we will demonstrate how we execute the IT strategy to the business strategy as we will implement a full audit framework! The execution of the defined business strategy is often a mystery (missing link) both on the Business and the IT side. The truth is that regardless of how well the executive team draws out the strategy in the boardroom the bottom line is that the business initiatives that were supported by clients succeeds, those not supported by clients (that do not get it) fail and disappear. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the  
  21. 21. Copyright 2013 Martin Palmgren EVP .COMMUNICATE British weather, gray and damp, but not one of these more than 60 people was wearing a Burberry trench coat. I doubt that many of them even owned one. If our top people weren’t buying our products, despite the great discount they could get, how could we expect customers to pay full price for them?” Read the full article @ http://hbr.org/2013/01/burberrys-ceo-on-turning-an-aging-british-icon-into-a-global-luxury-brand/ar/1     Burburry have taken the a lead in the how to leverage business innovation with IT, notably with social as a key enabler through a “Facebook” driven platform that drives innovation bottom up where employess connect to share best practise on how to set up stores and sell products and even compete internally on a daily basis who sold more in “discussion groups” set up by the teams not by management. I would invite you to discover an interview @ http://blogs.hbr.org/video/2012/12/how-burberry-manages-talent.html?cm_mmc=email-_-newsletter-_cant_miss_update-_-hbrcm020813&referral=01087&utm_source=newsletter_cant_miss_update&utm_medium=email&utm_campaign=hbrcm020813 To support business strategy execution The execution of the defined business strategy is often a mystery (missing link) both on the Business and the IT side. The truth is that regardless of how well the executive team draws out the strategy in the boardroom the bottom line is that the business initiatives that were supported by clients succeeds, those not supported by clients (that do not get it) fail and disappear. The CIO and IT department hence needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated. Figure 1: We articulate the Value proposition with a storyboard: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/we-articulate-the-value-proposition-witha-storyboard/ IT contributes to business objectives The IT service proposition is aligned to the business strategy as: Stakeholder expectations are understood and IT propose a service portfolio that correspond to Demand and Cost drivers, Business Contribution, Cost, Consumption & Chargeback is identified, Focus is on perfect order business transactions, Services are effective  
  22. 22. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Strategy Canvas Articulated in a Strategy Canvas The Stakeholder Strategy Map Formalises stakeholder outcomes to deliver value for all parties. The strategy canvas allow the teams to articulate and formulate objectives on a project / program basis for improved execution with an extended GAP, risk and added value analysis captured in a DARCI (Decision taker, Accountable, Responsible, Consulted & Informed). A Collaboration Theme Scorecard The Collaboration Theme Scorecard Sets process objectives, Identifies: levers for joint actions and wins, metrics and initiatives on a short, middle & long term basis. Objectives: - Set process objectives,- Identify levers for joint actions and wins,Identify metrics, Identify initiatives on a short, middle and long term basis. Levers: Joint: Steering committee, development committee, project teams, crossfunctional teams, process improvement teams and functional improvement teams. To deliver Business Value with IT, we need to integrate the notion of effective IT delivery as a core process across the organisation. With the contribution of Jerry Luftman I have earlier referred to Michael Porter. In terms of Porter’s Value Chain (http://hbr.org/product/competitive-advantage-the-value-chain-and-your-p-l-applying-michael-porter-s-value-chain-framework-to-your-business/an/8890BC-PDF-ENG ), IT has to become a part of the core processes instead of being a separate support function. The role of the IT Department and the business stakeholders need to change to a strategic partnership, rather than service provider and internal customer. We need to view the IT portfolio as an integrated portfolio of enterprise services. Total Value of Ownership of IT (IT TVO) is a notion that is if not more at least as important as Return on Investment (ROI) and Total Cost of Ownership (TCO). Positive IT TVO could concern: - Greater customer satisfaction, - A more differentiated service offer, - Stronger customer relationship, - Increased ability to meet the needs of the business and clients, - Lower direct cost, - Better use of assets, Faster cycle time, - Increased accuracy, - Higher level of customisation or precision, Higher added value, - Simplified processes, - Higher customer retention, - Greater market share, - Ability to execute on set strategy and enter new markets. Priorities from an Executive Management Perspective: - The investment leverages the execution of the business strategy, - Enhance the value of the business, - Improve customer retention and increase the market share. Priorities from a Business Unit Management Perspective: - IT investment proposals are understood in terms of expected Business Outcomes, - The effort needed to reach the set outcomes and the risk involved, - The risk associated with IT investments are in line with the business acceptable risk profile, - IT investments are aligned with the business strategy.  
  23. 23. Copyright 2013 Martin Palmgren EVP .COMMUNICATE emphase value creation that is a profit center or investment center perspective. Managers evaluate and coordinate a portfolio of projects with an effective IT governance process. This would include for IT and business leaders to share accountability. This approach permit effective allocation of resources as we provide participants the opportunity to better understand the problems and opportunities that exist and how projects can be leveraged across the organisation to facilitate the integration of IT and support business objectives and processes and hence enhance the value of the business. As we leverage IT to: - Substantially reduce the cost of business processes, - Lower the costs of customers and suppliers, - Differentiate, - Develop new IT features to differentiate products and services, - Reduce the differentiation advantages of competitors, - Focus products and services at selected market niches, - Create new products and services that include IT components, - Develop unique new markets or market niches with the help of IT, - Make radical changes to business processes with IT that dramatically cut cost, improve quality, efficiency, or customer service and shorten time to market, - Manage regional and global business expansion, - Diversify and integrate into other products and services, - Create virtual organisations of business partners, - Develop inter enterprise information systems that support strategic business relationships with customers, suppliers, subcontractors, and other stakeholders. IT must be responsible for profit and loss from a business perspective By Daud Santosa (Chief Technology Officer, Member of the Board @ the Open Group and Distinguished Chief IT Open Group) “The CIO and IT department must focus on to support business objectives, the business strategy and to be able to demonstrate how they do this (that is to spell out a valid IT strategy and a value proposition to the business). To do so they need to manage IT like a business and be responsible to profit and loss. “Deliver Business Value with IT” has inspired me to approach the "how" differently, that is to think differently for the future development of IT services and the Enterprise (Business, IT) Architecture to support business processes, with IT processes (aggregated as services), applications and infrastructure. ” IT must be responsible for profit and loss from a business perspective and be managed like a business. The fact is the technology will play a bigger role in order for business to thrive in the future. The level of implication of IT varies as it depends on the nature of the business. The more the business rely on technologies the more the business needs to include technology as a part of the business strategy. Further the IT Department and the (Enterprise) Architecture team must promote a continuous competitive market position as we deliver cost effective (productive and efficient) IT service to business needs and are able to demonstrate that we do so.  
  24. 24. Copyright 2013 Martin Palmgren EVP .COMMUNICATE need for business agility. We must be able provide business value in a short time frame. We need to focus on the area of the architecture that can provide short term business solutions and result. Many architecture practitioners face challenges of where to begin to implement EA to deliver immediate business results. We would typically start to implement EA in different domains of the architecture. It all depends on where the needs of the organisation, culture, and skill set resides. The common challenges that I have seen in most organisations would be that the: - Line of Business continues to develop new projects or add new features with the current existing business applications, IT organisation continues to replace old hardware and add new hardware / software to support new business requirements, has no standard technologies & IT governance, continues to adopt new emerging technologies. We begin our EA journey as we address the spelled out points on a short and long term basis. The primary focus of EA would be to support the future business and new projects first. Based on the drivers, we can begin to create future IT services, shared infrastructure, Enterprise Solution and new cost model to deliver sustainable growth and premier services as we focus on: The Business Bottom Line that is How fast we can get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. *A shared service centre has 2 objectives 1) to provide unique talent as we pool resources that can focus on core competency rather than to have multiple service delivery centres where resources would spend 1/ 25 of their time on a competency or be underused. 2) we increase service delivery quality and reduce the cost of delivery of a service. To do so we need to define services (activity + process + business oriented KPI’s) with cost. A decision to put in place a shared service centre can only be valid as we have a clear business case with ROI and total cost of ownership (cost, consumption, chargeback) and can follow up on the actual cost of service delivered and benchmark the latter to competition / the market. Chapter 3. "Do we really need a CIO and IT department to bother us with technology when we can use the cloud?" The CIO and the IT Department need to position as premium provider of IT services and focus on value to cost. In order to avoid the "do we really need a CIO and IT department to bother us with technology when we can use the cloud?" the CIO has to ensure that the business strategy and business objectives are supported by IT (from a Business and IT architecture perspective). Where the IT Strategy support Strategy execution, "Time to  
  25. 25. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Within the frame of an acquisition up to 80% of the value realisation is (can be) on the IT side. The failure to address IT and the IT strategy can be an additional (1 out of 3) reason to M & A failure. If we assume that to deliver business value with IT we need to support business objectives, the integration of a new entity is an optimisation of the current IT strategy (how we support business objectives and processes). We would obviously need to understand (and hopefully have the opportunity) how the current IT run before the purchase (IT due diligence) with full IT Financial Management to figure out the actual cost of delivered IT services (cost, consumption, chargeback). Once services defined we can then decide where to run the applications that support the IT and or Business Service (server / internal / external cloud / outsourced provider). We also need to define the purpose of the purchase (invest / divest) in the overall corporate strategy where it is of little use and a significant cost to integrate all systems in to a common backbone if the company is to be divested only a few years later. We could use an IT Scorecard to ensure that stakeholder expectations are met from an executive management, business line management, IT management and IT risk management perspective. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated. See also: “Get your IT Service Strategy right” http://www.brighttalk.com/community/it-service-management/webcast/534/23630 “Leverage Strategy with IT” http://www.brighttalk.com/community/it-service-management/webcast/534/22934 “Run IT as a Service Business!” http://www.brighttalk.com/community/it-service-management/webcast/534/21389 Can we leverage the cloud to transform the IT department in to an effective broker of services? I have introduced “non traditional IT” notions such as ”Time to Market”, “Cloud  
  26. 26. Copyright 2013 Martin Palmgren EVP .COMMUNICATE The public cloud can be used to either leverage cost or to rapidly develop new application architectures that can then continue to run on a public cloud or be brought in house to a server or a bundle of servers (private cloud). Where the needs of the business and the business strategy should drive the IT Strategy, the IT Department can leverage the business strategy with an effective IT Service Strategy that would spell out how the roadmap for how the IT Department will cost effectively run the IT Function but also how to support the business function where the IT Department support the business functions to simplify processes that can then be industrialised (automatised) when needed and on the cloud (external or internal) for speed / cost effectiveness when applicable. “Social media and the cloud” - Social media applications can either be run as in example 1) by an external provider to whom you outsource the data (Facebook* would be one example) or as in example 2) where an application / a bundle of applications that respond to the needs of the business “for example to interact with our customers” would run on an external or internal cloud. “Make or buy” – To outsource / cloud source (cloud) is a traditional “make or buy decision”, that is “do we perform this well internally at benchmarked cost or do we outsource for success”. One of the critical decisions in apple’s current success was to outsource a manufacturing that was defunct (cost / quality) and did not meet the expectations of the final customers. But to outsource / cloud source effectively as well as to validate the successful set up of a shared service centre, we need to understand the cost of the service delivered before and after the set up function (the cost to change provider should be taken in to account in the business case). “Cost and Demand drivers” – With “to keep the lights on”, to optimise the cost of the services delivered is among the critical functions of the IT Department. Demand drivers are linked to the business emerging needs to support the execution of the business strategy with IT when needed. “An IT Business Model and Value Proposition” – To obtain funds in the business world an investor would require a good business case with a clear “Business Model” and “Value Proposition”. Our experience is that an IT department that does not have a clear “business model” defined as “This is how we deliver IT services to the business” and “Value Proposition” defined as “This is how we support business objectives with services in a time to market perspective” will continuously find it difficult to obtain sufficient funds from executive management and the board for the above mentioned reasons. “An IT service Strategy” – In order to effectively communicate with the business the IT department need to adopt the notion of services a bundle of applications to be run cost effectively and set up in a time to market logics in accordance to cost and demand drivers where demand drivers are linked to the business emerging needs to support the execution of the business strategy with IT when needed. The authority (leadership) of the IT Department can only be confirmed as it delivers cost effective services in a time to market perspective to the business  
  27. 27. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - The IT department is unable to deliver in a time to market perspective This is why a shared services or outsourcing solution is put in place since it forces the business to define services and service level agreements (as well as cost, consumption, chargeback) with an IT Business Model that is if not optimised at least focused on immediate business priorities and drivers (demand and cost). Build and demonstrate IT success To build and demonstrate IT Success we need to focus on the Business IT roadmap; that is how do we (as CIO, IT Department) support business objectives and processes leveraged by IT and an effective IT Service strategy. Where we Focus on the Business Bottom Line: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. This is achieved as Business objectives and Processes (captured in the Business Architecture) are supported by a strategy execution focused IT architecture where Business objectives: We would like to increase sales by 25%, how can the IT Department support the Business in this effort and what will be the impact on the budget of the IT Department? , are supported by IT objectives: This would translate in to, on the business (IT) side: 1) which business processes are concerned with the increase and how do we support them today and how do we anticipate the increase (applications, infrastructure, support)? 2) Is there an opportunity to further industrialise processes (off the shelf applications, build)? 3) Supported by hardware (laptop, (i)pad, smart phone)? 4) Can we spell out the cost? On the IT side we need to understand 1) which services that are concerned (increase / decrease in demand) and if we need to modify / provide new service bundles, 2) do we provide a cost effective and secure IT architecture and that permit the rapid development of new business services 3) Business cases, that is can we spell out the cost? 4) can we ensure that services / applications are up and running (business continuity)…. Deliver effective IT services to business needs We Deliver effective IT services to business needs as we understand that At the end of the day Business Executives take the decision to out / cloud source when: IT is not perceived to understand stakeholder expectations, IT is not perceived to contribute to business objectives, IT is not perceived to deliver value to cost, IT is not perceived to deliver services to business needs, The IT department is unable to deliver services in a time to market perspective, IT propose an effective service portfolio that correspond to Demand and Cost drivers.  
  28. 28. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - What is the quality of the service delivery? - Who consumes the IT services: - What is the consumption on a per unit, - Per seat, basis, - How does customers currently pay for these services, - What is the backlog of new unfulfilled IT demands? - What processes does IT perform? : - How do these processes compare to best practices? - What are the cost drivers on an activity basis? IT Decision are based on Total cost of ownership As Customers pay for services that they use decisions are made based upon cost, not politics. IT is incented to reduce cost and compete and users do not request unnecessary demands. KPI’s become established to measure performance SLA are put in place. IT Decisions are ROI Based IT is effectively managed as we a Establish Baseline with Cost, Consumption, Chargeback. Build a service based business model of IT that is based on IT Service Management. Perform Business Case & Best Practise Bench Mark with GAP (As Is, To Be, ROI) and Track Realisation of ROI Outcomes. The IT Strategy is Effectively Leveraged As Initiatives are effective and stakeholder oriented we can perform effective: Mergers and Acquisitions (M&A) with Data room Development and Synergies & consolidation options, - Data Centre Migration with GAP (As Is, To Be, ROI), - IT Organisational Transformation Towards a Service Based Logic with GAP (As Is, To Be, ROI), - Shared Service Centres, Outsource, Cloud & Benchmark with GAP (As Is, To Be, ROI). Figure 2: Time to Market, Cost Effectiveness, Cycle Time: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/time-to-market-cost-effectiveness-cycletime/  
  29. 29. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Cycle Time (Key Performance Indicators): - Time in months to break even for new or enhanced IT services (Investment < €100,000), - Time in months to break even for new or enhanced IT services (Investment b/w €100,000 and €250,000), - Time in months to break even for new or enhanced IT services (Investment b/w €250,000 and €500,000), - Time in months to break even for new or enhanced IT services (Investment b/w €500,000 and €1,000,000), - Time in months to market for new or enhanced IT services (Investment < €100,000), - Time in months to market for new or enhanced IT services (Investment b/w €100,000 and €250,000), - Time in months to market for new or enhanced IT services (Investment b/w €250,000 and €500,000), - Time in months to market for new or enhanced IT services (Investment b/w €500,000 and €1,000,000), - Time in months to respond to major business shifts, - Time in weeks to complete projects that address an identified business exposure or opportunity (< 20% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (20-40% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (4060% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (60-80% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (More than 80% of total annual revenue), - Time in weeks to close an identified IT skill or capability gap, - Average time in weeks to fulfill a simple information need, - Average time in weeks to fulfill a medium information need, Average time in weeks to fulfill a complex information need, - Average time in weeks to create the enterprise information management strategic plan, - Time in weeks to report on compliance status of the information architecture, - Average time in weeks to set up a simple technical interface for a user of a defined data content source. Cost Effectiveness (Key Performance Indicators): - Total IT budget as a percentage of revenue, - Total IT budget per FTE, - IT expense per FTE, - Personnel cost of the process "manage the business of IT" per €1,000 revenue, - Systems cost of the process "manage the business of IT" per €100,000 revenue, - Personnel cost of the process "develop and manage IT customer relationships" per €1,000 revenue, - Systems cost of the process "develop and manage IT customer relationships" per €100,000 revenue, - Personnel cost of the process "manage business resiliency and risk" per €1,000 revenue, - Systems cost of the process "manage business resiliency and risk" per €100,000 revenue, - Personnel cost of the process "manage IT knowledge" per €1,000 revenue, - Systems cost of the process "manage IT knowledge" per €100,000 revenue, - Personnel cost of the process "develop information and content management strategies" per €1,000 revenue, - Systems cost of the process "develop information and content management strategies" per €100,000 revenue, - Personnel cost of the process "define enterprise information architecture" per €1,000 revenue, - Systems cost of the process "define enterprise information architecture" per €100,000 revenue, - Personnel cost of the process "manage information and IT knowledge resources" per €1,000 revenue,  
  30. 30. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Operational Excellence (Key Performance Indicators): - Efficient software development, - Average days late in delivering software, Average unexpected budget increase, - Percentage of projects performed within SLA, - Percentage of maintenance activities, - Efficient computer operations, - Percentage unavailability of network, - Response times per category of users, - Percentage of jobs done within time, - Efficient help desk function, - Average answer time of help desk, Percentage of questions answered within time. Future Orientation (Key Performance Indicators): - Training and education of staff, - Number of educational days per person, Education budget as a % of total IT budget, - Expertise of the IT staff, - Number of years of IT experience per staff member, - Age pyramid of the IT staff, - Research into emerging technologies, - % of budget spent on IT research General Business Management. To support the business Strategy Set Business processes and key performance indicators (Build): Develop vision and strategy, Develop and manage products and services, Market and sell products and services, Deliver products and services, Manage customer services, Develop and manage Human Capital, Manage information technology, Manage financial resources, Acquire, construct and manage property, Manage environmental health and safety, Manage external relationships, Manage knowledge, improvement and change. Figure 3: Connect information: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/connect-information/ Connect information to take qualified decisions We Connect information to take qualified decisions as Financial, Budget and Actuals, Projects, Contracts, Business Cases, Resource Allocation, IT Assets, IT Services, IT Metrics, Chargeback, Business goal Alignment information is structured in an IT Financial Management Model that can be used to support the prices set in the Business and IT service catalogue. Figure 4: IT support Business Objectives: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/it-support-business-objectives/  
  31. 31. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Figure 6: The roadmap reflects stakeholder expectations: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-roadmap-reflects-stakeholderexpectations/ A Roadmap The Roadmap (derived from the logics presented in “Managing Alliances with the Balanced Scorecard”, by Kaplan, Norton, Rugelsjoen, Harvard Business Review, January–February 2010, p. 114 – 120) http://hbr.org/2010/01/managing-alliances-with-the-balanced-scorecard/ar/1 reflects stakeholder expectations from an Executive Management, Business Unit Management, IT Management and IT Risk Management perspective where: Stakeholder Expectations Drives Business (IT) Objectives that Delivers the Business (IT) Road Map executed by Employees & Organisation. Figure 7: The Service Strategy support Business Drivers: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-service-strategy-support-businessdrivers/ The Service Strategy support Business Drivers as Business (IT) Drivers Drives Demand and Cost Drivers and Delivers the (IT) Service Strategy that is Executed towards Metrics. IT provides competitive leverage. Priorities from an Executive Management Perspective: IT supports the achievement of strategic business objectives, IT Delivers value to expenditure, IT cost is managed effectively, IT risk is identified and managed, Targeted inter company IT synergies deliver to schedule, We have a clear vision towards which we expect the IT department to deliver. IT delivers to demand and cost drivers. Priorities from a Business Unit Management Perspective: IT supports the achievement of tactical business objectives, IT delivers perceived added value services and at a reasonable cost, IT delivers to operational and service level agreements (commitments), IT investments positively affect business productivity and the customer experience, We have a clear process vision to which we expect the IT department to deliver. The IT Strategy support Business objectives as we meet Priorities from an IT Management Perspective: We understand stakeholder expectations and propose a service portfolio that correspond to both Demand and Cost drivers with a focus on perfect order business transactions, We develop the professional competencies needed for successful service delivery, We capture organisational knowledge to continuously improve performance, The IT and Stakeholder departments have clear objectives, processes and indicators with clear accountability and responsibility to deliver to set objectives.  
  32. 32. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Develop and manage Human Capital: - Develop and manage human resources (HR) planning policies, and strategies, - Recruit, source, and select employees, Develop and counsel employees, - Reward and retain employees, - Redeploy and retire employees, - Manage employee information Manage information technology: - Manage the Business of Information Technology, - Develop and Manage IT Customer Relationships, - Manage Business Resiliency and Risk, - Manage Enterprise Information, - Develop and Manage Information Technology Solutions, - Deploy Information Technology Solutions, Deliver and Support Information Technology Services, - Manage IT Knowledge Manage financial resources: - Perform planning and management accounting, Perform revenue accounting, - Perform general accounting and reporting, - Manage fixed-asset project accounting, - Process payroll, - Process accounts payable and expense reimbursements, - Manage treasury operations, - Manage internal controls, Manage taxes, - Manage international funds/consolidation Acquire, construct and manage property: - Design and construct/acquire nonproductive assets, - Maintain nonproductive assets, - Obtain, install, and plan maintenance for productive assets, - Dispose of productive and nonproductive assets, - Manage physical risk Manage environmental health and safety: - Determine environmental health and safety impacts, - Develop and execute environmental health and safety program, Train and educate employees, - Monitor and manage environmental health and safety management program, - Ensure compliance with regulations, - Manage remediation efforts Manage external relationships: - Build investor relationships, - Manage government and industry relationships, - Manage relations with board of directors, - Manage legal and ethical issues, - Manage public relations program Manage knowledge, improvement and change: - Create and manage organisational performance strategy, - Benchmark performance, - Develop enterprise-wide knowledge management (KM) capability, Manage change Run the IT Business effectively To run the IT business effectively and leverage the execution of the business Strategy and objectives with IT we need to make educated investments (on paper compliance and KPI indications is nice to have but not enough!): 100% of the value impact is in the execution of the process of the supported services over the entire service life cycle “order to bill”. Financial Management for Business and IT Services  
  33. 33. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Chapter 4. IT support business objectives and processes We align to Business Objectives and Business Processes the latter are Defined in the Business Service Catalogue, Requirements Information with IT Objectives and IT Processes are Defined in the IT Service Catalogue and supported by ITILv2 & 3 workflows. These are then Broken down in to Key Activities Performed to Responsibility and Accountability Charts (RACI). The logics in chapter 4 clearly links back to CobIT 4.1, ValIT, RiskIT. They are then Measured by Performance indicators (Embedded in Service Catalogue per Service), Outcome Measures, Maturity Models (CMMI, ITIL continuous process improvement) Audited with Control Outcome tests Derived from Control Objectives Audited with Control Design Test Implemented with Control Practices. IT support business objectives and processes with Investment Management We align and lever operating, management and support processes through the effective implementation of IT. Do we do the right things? The strategic question: The investment Is in line with our vision, Is consistent with our business principles, Contributes to our strategic objectives, Provides optimal value, at affordable cost, at an acceptable level of risk. Do we reap the benefits? The value question: We have A clear and shared understanding of the expected benefits, Clear accountability for realising the benefits, Relevant metrics, An effective benefits realisation process over the full economic life cycle of the investment. Process Management We align and lever operating, management and support processes through the effective implementation of IT. Do we perform them in the right manner? The architecture question: The investment: Is in line with our architecture, Is consistent with our architectural principles, Contributes to the population of our architecture. Do we perform them well? The delivery question: We have Effective and disciplined management, delivery and change management processes, Competent and available technical and business resources to deliver: The required capabilities, Organisational change required to lever capabilities.  
  34. 34. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Figure 14: Set the IT Value Proposition Baseline: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/set-the-it-value-proposition-baseline/ Set the IT Value Proposition Baseline: Set fundamentals of a service business, Process view, Establish Total Cost of Ownership and IT baseline with cost/value/risk, Activity based financial view, Service portfolio view, Value contribution view, Customer consumption view. Figure 15: Draw the Roadmap: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/draw-the-roadmap/ Draw the Roadmap: Construct the IT Business Model and Value Proposition, Define IT “to be state”: “where we need to go”, “where we are now” & “how we need to proceed” with established KPI’s, Report gap analysis findings, Design IT plan through a project portfolio, Cost out the plan (budget), Develop consensus, business case for change. Figure 16: Design the IT Value Proposition: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/design-the-it-value-proposition/ Design the IT Value Proposition: Design the service strategy, Articulate governance principles, Define project teams, Engage customer ‘buy in’, Design KPI’s, Define & validate service pricing, Design the performance measurement system. Figure 17: Build the IT Value Proposition: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/build-the-it-value-proposition/ Build the IT Value Proposition: Implement the project portfolio, Engage Organisational change, Control IT (measure outcome to set objectives), Capture KPI’s & Measure performance, Enforce governance. Figure 18: To Perform Effective IT Governance: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/to-perform-effective-it-governance/ To Perform Effective IT Governance: Transform the IT Business Model, Measure KPI trends and targets, Meet business objectives, Control cost, Measure Delivery  
  35. 35. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Strategy responds to internal capabilities, Extent to which Critical Success Factors are clearly identified, the Clarity of implementation plan. Objectives and Plans There is a understanding of the: Extent to which long term plans are coherent and logical, Extent to which short term plans are appropriately costed and timetabled and the Consistency with overall goals and objectives. Financial plans Appropriateness of detail, Clarity with which assumptions have been stated, Extent to which profit / return criteria has been evaluated, Evidence of appropriate scenario and sensitivity analysis, Evidence of appropriate key performance indicators. Communication and buy in There is an understanding of the Extent to which the strategy has been communicated and the Extent to which staff performance towards the business IT strategy is recognised. Meet stakeholder expectations There is an understanding of the Suitability of the IT strategy, Feasibility of the IT strategy and the Acceptability of the IT strategy. Deliver IT services to business needs We understand that At the end of the day Business Executives take the decision to out / cloud source when: IT is not perceived to understand stakeholder expectations, IT is not perceived to contribute to business objectives, IT is not perceived to deliver value to cost, IT is not perceived to deliver services to business needs, The IT department is unable to deliver services in a time to market perspective, IT propose an effective service portfolio that correspond to Demand and Cost drivers. IT contributes to business objectives The IT service proposition is aligned to the business strategy as: Stakeholder expectations are understood and IT propose a service portfolio that correspond to  
  36. 36. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Strategy Canvas Articulated in a Strategy Canvas The Stakeholder Strategy Map Formalises stakeholder outcomes to deliver value for all parties. The strategy canvas allow the teams to articulate and formulate objectives on a project / program basis for improved execution with an extended GAP, risk and added value analysis captured in a DARCI (Decision taker, Accountable, Responsible, Consulted & Informed). A Collaboration Theme Scorecard The Collaboration Theme Scorecard Sets process objectives, Identifies: levers for joint actions and wins, metrics and initiatives on a short, middle & long term basis. Objectives: - Set process objectives,- Identify levers for joint actions and wins,Identify metrics, Identify initiatives on a short, middle and long term basis. Levers: Joint: Steering committee, development committee, project teams, crossfunctional teams, process improvement teams and functional improvement teams. To leverage business strategy execution with IT IT provides competitive leverage as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated in: An IT Business Model “This is how we deliver IT services to the business” and a Business IT Value proposition “This is how we support business objectives with services in a time to market perspective”. We deliver effective business strategy execution with an: (IT) Business Model “This is how we deliver IT services to the business” where IT processes (bundled IT services) are supported by applications and execute the IT Service strategy to business needs (where ITIL Spell out IT Activities from a demand and supplier side (Design), Set IT processes and key performance indicators (Build), Aligned to described ITIL activities and processes with full IT Financial Management (Run)), Delivery capability (IT – CMF, CobIT 5, ValIT, CobIT 4.1, RiskIT, where we ensure that managed processes and objectives meet stakeholder expectations, ISO 38 500 we ensure that IT has the necessary means to effectively support the business strategy), Architecture (TOGAF where business objectives are supported by business processes, a business architecture leveraged by an IT architecture and applications that sit on an IT infrastructure as needed (inside the firewall on a server or mutualised servers (internal / private cloud) or outside the firewall on a mutualised server (external / public cloud), Security (ISO 9001, ISO 27 001, COSO where business continuity is ensured by risk and control objectives). A Business (IT) Value Proposition “This is how we support business objectives with services in a time to market perspective” where Business processes (bundled Business services) are supported by applications (Develop vision and strategy,  
  37. 37. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - What is the time horizon of these plans, and have they been factored into future financial projections for both business and IT? 4. Is our portfolio of technology investments aligned with opportunities and threats? Questions to ask: - How well is our IT-investment portfolio aligned with business value with regard to opportunities and threats? - How well does the portfolio balance short-term and long-term needs? - Do we have effective value-assurance processes in place to mitigate execution risk? 5. How will IT improve our operational and strategic agility? Questions to ask: - How does our business and IT agility measure up with that of our competitors? - How do our IT plans increase our business and IT agility? - Are our sourcing relationships increasing or reducing our agility? 6. Do we have the capabilities required to deliver value from IT? Questions to ask: - Do we have the capabilities needed to drive full value from our existing IT systems? - What are the weakest links in our capabilities? - Do we have enough IT-literate executives? - What is our plan for upgrading capabilities? 7. Who is accountable for IT and how do we hold them to account? Questions to ask: - What is our operating model for IT, and is it aligned with our business priorities?  
  38. 38. Copyright 2013 Martin Palmgren EVP .COMMUNICATE The IT Bottom line is that up to 40 % of current IT spend occurs outside the IT budget (CRM, Cloud). The IT department needs to position itself as a facilitator to IT services and effectively address emerging needs, market opportunities and demonstrate that the current Business Model is supported effectively. The IT department should facilitate the access to IT services to support new and current business initiatives. The business strategy emerge out of a number of initiatives that are successful or not. The IT department need to support the “Run” of day-to-day operations as well as new projects. The Cloud might particularly be of interest within this frame. We believe that in order for the CIO and the IT Department to position as premium provider of IT services and focus on value to cost we need to understand the Business (IT) Strategy and how the IT department can deliver effectively to business objectives, that is to deliver business value with IT: - What is the Business’s strategy and plans? , - What is the current business model that IT has to support? , - Where could IT make a significant impact on the business? , - Are there any further opportunities to use IT? , - How do we provide IT Services as we meet demand and cost drivers where the decision is to make (internal) or to buy (external service provider)? We have identified 2 key trends for the CIO to focus on: - Differentiation (That is, how does IT provide a competitive advantage for the business), and - Cost (How does the IT Department deliver IT Services cost effectively). To do so we need to Build an effective IT Delivery Model to meet business needs and expectations as we leverage business strategy execution and business processes supported by an IT Service strategy (ITIL, IT – CMF, CobIT 5 (ValIT, CobIT 4.1, RiskIT), ISO 38 500, TOGAF and ISO 9001, ISO 27 001, COSO) delivered in a Business IT roadmap; that is how do we support business objectives and processes leveraged by IT and an effective IT Services strategy. Within this scope we would by definition address how we execute the IT service strategy (ITIL) Design - Spell out IT Activities from a demand and supplier side, Build - Set IT processes and key performance indicators, Run - Aligned to described ITIL activities and processes and full IT Financial Management (supported by delivery capability IT CMF, COBIT 5). Once services defined we can then decide where to run the application that support the IT and or Business Services (server / internal / external cloud / outsourced provider). Within the frame of an acquisition up to 80% of the value realisation is (can be) on the IT side. The failure to address IT and the IT strategy can be an additional (1 out of 3) reason to M & A failure. If we assume that to deliver business value with IT we need to support business objectives, the integration of a new entity is an optimisation of the current IT strategy (how we support business objectives and processes). We would obviously need to understand (and hopefully have the opportunity) how the current IT run before the purchase (IT due diligence) with full IT Financial Management to figure out the actual cost of delivered IT services (cost, consumption, chargeback). Once services defined we can then decide where to run the applications that support the IT and or Business Service (server / internal / external cloud / outsourced provider). We also  

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