Copyright 2013 Martin Palmgren EVP .COMMUNICATE

Title:
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
develop new services that can then be institutionalised as the success of ...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
organisations that I have seen consider “Deliver Business Value with IT” s...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
check list, validate that a process is measured and managed or if IT has a...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

Chapters
1. To deliver Business Value with IT we need to Design, Build an...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

We spell out the need for The CIO and the IT Department to position as pr...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
-­‐

How to spell out IT Activities from a demand and supplier side (Desig...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
-­‐
-­‐

-­‐
-­‐
-­‐

Meet stakeholders expectations
Build an effective IT...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
architecture perspective). Where the IT Strategy support Strategy executio...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
CIO level perspective.
Deliver Business Value further helps us understand ...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
management practice to meet these new challenges; thus the value of the
co...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
IT initiatives to the business strategy and business objectives with the a...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

Track Record:
Martin joins Altimus Partners (www.AltimusPartners.com) in ...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
This is also true for the non brick and mortar references that have emerge...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
It is due to his effort to build a solid infrastructure that David Giambru...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
clients consume which product / service at a specified quantity and subseq...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
He also clearly indicated that where the logics spelled out in ITIL are ex...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
have not been effectively adapted to the execution of the IT Strategy. The...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
sales, marketing, R & D) and the importance of to produce a customer journ...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
Not half that bad case scenario: We bring in a Top 3 or Big 5 to perform a...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
mark. The IT Bottom line is that the IT Strategy should support business o...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

IT provides competitive leverage
As the IT department delivers effective ...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
can be increased at an affordable cost, - How actual ongoing IT cost can b...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
In order for the CIO and the IT Department to position as premium provider...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
how can the IT department support the business from a Cycle Time and Cost
...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
introduced, the IT department as effective broker of services (cost effect...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
that I recently spoke to put it bluntly “if the internal IT Department can...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
competitive (Benchmark Industry Market Forces) and New technological solut...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
& Operational level. Strategic Intent: Product / service life cycle manage...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
the process "develop and maintain information technology solutions" per €1...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
- Conduct a constructive budget dialogue with the business: Total Cost of
...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
Where the Bottom Line is that to leverage competitive advantage with new
t...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

The notion of the IT department as a profit centre
IT Services and the co...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
Business Architecture

Figure

10:

Confirm

business

vision:

http://del...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
Direction
The business (IT) strategy is effective and Provides clear, mean...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
Market Forces) and New technological solutions that could change how curre...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
Acquire, construct and manage property, Manage environmental health and sa...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
the right incentives?

8. Are we comfortable with our level of IT risk?

Q...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
management, business line management, IT management and IT risk management...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and pr...
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COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Service Strategy

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It is critical to build governance in to the execution of the Business and subsequently the IT Strategy. The objective of COBIT 5 is to help IT leaders provide a business view of the IT departments ability to create value and support enterprise goals through effective IT processes and build process capability and was developed by ISAACA to: - Develop process improvement, - Deliver value to the business, - Measure the achievement of current or projected business goals, - Benchmark and deliver consistent reporting, - Ensure organisational compliance.

Yet most COBIT 5 practitioners find it difficult to demonstrate the business value of a COBIT 5 investment and more compliance in a setting where most Business Executives would claim an increased focus on the needs of the business.

The COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! series is a reply to ?How do we put the IT Strategy in place? and how do we communicate effectively with our stakeholders and provides a number of techniques and tools to understand how to meet stakeholder expectations where COBIT 5 can the be used to demonstrate how well this is done.

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COBIT 5 Unlocked (the missing pieces): 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: COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run Aligned to described ITIL activities and processes with a Service Strategy ISBN: 9781311131805 Official website: http://deliverbusinessvaluewithit.com/ AUTHOR Martin PALMGREN, EVP .COMMUNICATE Copyright COBIT 5 Unlocked (the missing pieces): 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 KEY WORDS: COBIT 5, ISACA, IT Strategy, Governance, Compliance, Business Strategy, Deliver Business Value with IT Introduction: It is critical to build governance in to the execution of the Business and subsequently the IT Strategy. The objective of COBIT 5 is to help IT leaders provide a business view of the IT departments ability to create value and support enterprise goals through effective IT processes and build process capability and was developed by ISAACA to: - Develop process improvement, - Deliver value to the business, - Measure the  
  2. 2. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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. 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 can we leverage IT in a “Time to Market”, “Cost Effectiveness”, “Cycle Time” perspective? I look for “success stories” of recent IT projects that leverages business capabilities from a cost, demand and go to market perspective. If you are a CEO / CIO / IT Executive I would encourage you to join the “The CIO Office 2.0” @ http://www.linkedin.com/groups/CIO-OFFICE-20-3376230/about a group dedicated to deliver business value with IT with + 850 international on invitation only CXO's. If you are in IT operations and you are a not a CEO / CIO / IT Executive I would encourage you to join the “Governance Office ” @ http://www.linkedin.com/groups?groupDashboard=&gid=2479146 a group dedicated to deliver business value with IT from a non executive perspective. 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  
  3. 3. Copyright 2013 Martin Palmgren EVP .COMMUNICATE organisations that I have seen consider “Deliver Business Value with IT” series as a toolbox that all CIO’s or IT Executives would like to have at hand and consult on a regular basis as they start to Design, Build and Run Effective IT Strategy execution to business needs. What is in it for me or why should I read “Deliver Business Value with IT?” All that you would like to know in regards of Martin Palmgren What is your current experience with the book topic? As transformation director I have worked both on the Business and IT side with clients but also on the consulting side (Big 6) where I have helped executives understand how to deliver business value with IT. I have also put out a number of books on the subject. What other business management topics are you interested in? Strategy both on the Business and IT side, Business Model Innovation, competitive analysis, IT Governance (COBIT 5), IT Sourcing, Cloud Computing, Strategy Execution, Balanced Scorecard Why do you think you would be best suited to write this book? The logics that I provide are international best in class and build on top notch best practice that I use and have used on an IT and Business Executive level. Where do you/your customers normally turn for information about or solutions to business problems? Gartner, Forrester, ACCENTURE, McKinsey, Booz Allen (Top 3). What do you see as the role of the book in the modern world of immediate online content? Where an article is an excellent opportunity to share a reflection or an observation the longer book format permit and end to end observation on a subject where a blog post or article would be to short. In my case I have used articles and 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.  
  4. 4. Copyright 2013 Martin Palmgren EVP .COMMUNICATE check list, validate that a process is measured and managed or if IT has a dashboard, but to ensure that business process and notably those of support functions such as IT support new and ongoing business initiatives. Related Publications by Martin Palmgren @ Amazon http://www.amazon.com /s/ref=nb_sb_noss?url=search-alias%3Dstripbooks&field-keywords=Martin+Palmgren Why Amazon? Amazon is the largest electronic bookstore. @ Smashwords https://www.smashwords.com /profile/view/martinpalmgren Why smashwords? Smashwords is the only publisher that permit a multi format packaging that is you can read the book on any electronic device that is you can use your laptop (PDF, HTML) and bring it with you on your slate and leverage “Deliver Business Value with IT” as a frame of reference. (Actionable Story Boards) @ Flevy https://flevy.com /seller/mpalmgre/ref=mpalmgre Why flevy? Flevy is a market place for premium business document. Share actionable 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.  
  5. 5. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Chapters 1. To deliver Business Value with IT we need to Design, Build and Run an Effective IT (Service) Strategy to business needs 2. To avoid the “Marshmallow” momentum, focus on the business model 3. "Do we really need a CIO and IT department to bother us with technology when we can use the cloud?" 4. IT support business objectives and processes 5. Cloud computing thunder or lightening? How to draw the fluff out of the cloud and effectively support business objectives with IT. 6. To leverage Business Strategy execution with IT we Focus on the IT (Service) Strategy 7. Logics for IT Sourcing (Internal, Shared service center, Out, Cloud). 8. Design - Spell out IT Activities from a demand and supplier side. 9. Build - Set IT processes and key performance indicators. This is an introduction with a full version to be published on a stand alone basis. 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.  
  6. 6. Copyright 2013 Martin Palmgren EVP .COMMUNICATE We spell out the need for The CIO and the IT Department 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 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: We understand: -­‐ -­‐ -­‐ How to leverage the cloud to transform the IT department in to an effective broker of services? That to deliver effective Business (IT) Alignment you need to leverage best in class technology (on paper compliance is not enough). That to Build and demonstrate IT success we need to focus on the Business IT roadmap 4: IT support business objectives and processes The reader will learn that in order to 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. List of topics that will be covered in the chapter: We understand: -­‐ -­‐ -­‐ -­‐   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
  7. 7. Copyright 2013 Martin Palmgren EVP .COMMUNICATE -­‐ How to 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 a Service Strategy (Run), Service Design, Service Transition, Service Operation: - Function, - Process, Service Improvement. 7: Logics for IT Sourcing (Internal, Shared service center, Out, Cloud) The introductory material in this chapter is developed to provide pragmatic guidance on how to develop and execute your IT Strategy with effective Sourcing to support the Business Strategy and Business Objectives. List of topics that will be covered in the chapter: We understand: -­‐ -­‐ -­‐ -­‐ How to Build and effective sourcing strategy That to source is a traditional decision “to make or to buy” That a decision should either be demand or cost driven, if it is political this should be recognized. That all sourcing initiative 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 8: Design - Spell out IT Activities from a demand and supplier side The introductory material in this chapter is developed to provide pragmatic guidance on how to develop and execute your IT Strategy as you Spell out IT Activities from a demand and supplier side (Design 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: -­‐ -­‐ -­‐ -­‐ -­‐ -­‐   “Canvas” the IT Service Strategy, Develop a High level picture of the Business (IT) Strategy, Articulate the Business (IT) Strategy, Develop the Business (IT) Service Strategy, Build the Business (IT) Service Strategy, Govern the Business (IT) Service Strategy,
  8. 8. Copyright 2013 Martin Palmgren EVP .COMMUNICATE -­‐ -­‐ -­‐ -­‐ -­‐ Meet stakeholders expectations 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 Build and demonstrate IT success Deliver effective IT services to business needs Build An IT Business Model and Business (IT) Value Proposition 11: To leverage IT for Strategic Advantage As the reader has appreciated that the IT Department should have a clear IT Business Model and Business (IT) Value proposition we will be able to fully leverage IT for a strategic business advantage. List of topics that will be covered in the chapter: We understand how to: -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ Define the competitive advantage Acquire the IT Service Portfolio End to End Deliver Value Innovation as we differentiate and keep the cost down Reconstruct Boundries Create demand Govern Shift focus from customers to non-customers Figures Figure 0: IT supports the run and emerging business initiatives: http://deliverbusinessvaluewithit.wordpress.com/2013/03/19/the-very-reason-why-most-it-strategies-fail-and-miserably/ Figure 1: We articulate the Value proposition with a storyboard: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/we-articulate-the-value-proposition-with-a-storyboard/ Figure 2: Time to Market, Cost Effectiveness, CycleTime: 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 http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/it-support-business-objectives/   Objectives:
  9. 9. Copyright 2013 Martin Palmgren EVP .COMMUNICATE architecture perspective). Where the IT Strategy support Strategy execution, "Time to Market", Cost Effectiveness and stakeholder expectations from an Executive, Business Unit, IT Management and IT Risk Management perspective. To deliver business value with IT we need to 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. 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. 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. 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  
  10. 10. Copyright 2013 Martin Palmgren EVP .COMMUNICATE CIO level perspective. Deliver Business Value further helps us understand how to leverage business concepts brought forward in: Blue Ocean Strategy (W. Chan Kim and Renée Mauborgne), Business Model Generation (Alex Osterwalder & Yves Pigneur), The Balance Scorecard, The Strategy Focused Organisation, Alignment, Strategy Maps, Mastering the management system, Managing Alliances with the Balanced Scorecard (Kaplan and Norton), Breakthrough IT: Supercharging Organizational Value Through Technology (Patrick Gray), The Marshmallow challenge and the Customer Journey by IDEO.” (Andrew Loveless has held executive roles in Accenture, GE Capital, Saba and Cofounded Element8) “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. The “Deliver Business Value with IT” series 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.” (Daud Santosa, Chief Technology Officer and Distinguished Chief IT Open Group) “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 “Deliver business value with IT” series gives an excellent practitioner’s view on how to realize value from IT investments. Martin successfully introduces 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.”  
  11. 11. Copyright 2013 Martin Palmgren EVP .COMMUNICATE management practice to meet these new challenges; thus the value of the contribution of “Deliver Business Value with IT”.” (Jerry Luftman Ph.D., Professor & Managing Director Global Institute for IT Management) “I like Martin's practical approach of IT strategy. With his new “Deliver Business Value with IT” series, he is helping us work on actual paradigms we can find in today's organisations like how to find a business foundation for technology supported undertaking while using state of the art technology” (Olivier Neau, has held IS & IT Leadership roles and is today the Business Systems Director at Amcor Flexibles) “The “Deliver Business Value with IT” series has for objective to set and influence the direction that the IT business relationship will take over the next few years. Where traditional IT management focus on management & amortisation the approach “Deliver Business Value with IT” spell out demonstrates the way to the future position of the CIO as de guardian of effective investments providing innovative services to the business by new enabling technologies. The approach focuses on Enterprise Architecture as a way of managing changes in business processes and their IT support services. Competitive advantage in business depends directly on agile business processes and their support by IT. CIOs often struggle with legacy application due to the fact that their flexibility has disappeared. New emerging service delivery models such as SaaS, as PaaS or as IaaS provides an opportunity to reintroduce flexibility to IT services. As stated “Deliver Business Value with IT”, technology evolution does not free up the CIO from his role but in the contrary asks for even greater understanding of the new enabling technologies and how they can support efficiently the business processes. Required skills are shifting from in house server operation to the management of virtual servers provided by external suppliers. The end-to-end service delivery still remains under the responsibility of the CIO. And companies most valuable assets, knowledge and information, getting distributed over the cloud, require higher security measures. “Deliver Business Value with IT” correctly states that the value of IT is even growing over years and becomes the beating heart in the Business processes. Efficiency and effectiveness are more than ever the key concepts of IT management driven by the business needs. By bridging the key elements of best practice IT management Cobit, ITIL, Togaf, COSO, … he provides us with an excellent approach to IT management of the 21 century.” (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  
  12. 12. Copyright 2013 Martin Palmgren EVP .COMMUNICATE IT initiatives to the business strategy and business objectives with the ability to measure the outcome (KPI’s). I particularly appreciate Martins capability to provide a metamodel of common IT frameworks as steps of the execution of the IT Strategy: Deliver IT services, - Ensure delivery capability (Governance), - Coherence (Architecture) and Security.” (Romain Hennion de Thyses, Governance and Architecture Director, Global Knowledge, VP ITSM France). “Information Technology has been a fundamental asset to excel in business performance. The “Deliver Business Value with IT” series is a new way of providing practical ideas to CIO and CEO about the extent to which cutting-edge IT such as Cloud Computing can deliver business value to customers.” (Mohamed Hédi CHARKI, PhD, Associate Professor, Director of the MSc Strategy & Organization Consultancy EDHEC Business School, FRANCE) Audience: CEO, CFO, CIO, CTO, SVP, Architects, Strategy, Business Executives, Procurement professionals and the IT function in general as well ITIL, IT – CMF, CobIT 5 (ValIT, CobIT 4.1, RiskIT), ISO 38 500, TOGAF and ISO 9001, ISO 27 001, COSO) practitioners that are interested in effective IT Strategy and cloud deployment. The material in this book has been derived from best in class practice @ Fortune 500 companies. Deliver Business Value with IT would particularly be of interest for auditors. Where COBIT 5 (ValIT, CobIT 4.1, RiskIT) provides guidance in the right direction it is imperative for the audit department to provide not only red or green light compliance check list, validate that a process is measured and managed or if IT has a dashboard, but to ensure that business process and notably those of support functions such as IT support new and ongoing business initiatives. 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 initiative is confirmed.  
  13. 13. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Track Record: Martin joins Altimus Partners (www.AltimusPartners.com) in 2012 as Associate, a specialist CXO Advisory management consulting firm with operations in NA and EMEA, and focus on sourcing strategy, adoption of cloud services, and deployment of technology business transformation in financial and non-financial markets. Martin founds .COMMUNICATE in 2006 to meet the GAP between the needs of the business and the solutions (value proposition) delivered by the IT department. He believes 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 can we leverage the cloud in this perspective “Time to Market”, “Cost Effectiveness”, “Cycle Time”? Martin has consolidated this perspective (.COMMUNICATE Publications) with a series of best in class “Deliver Business Value with IT” books that address Strategy Execution (Design, Build, Run), (IT) Governance and IT Financial Management that focus on the execution of the IT strategy to business needs and how to leverage the cloud in this perspective. It is also within this frame that Martin founds the CIO Office 2.0 that sports + 850 on invitation only CIO's and CEO’s that focus on how to deliver business value with IT. In 2002 (– 2006) Martin joins a team of outgoing Gemini Consulting Business consultants to accelerate the development of ADSAP as Executive Vice President and associate (a start up specialised in the resale of industrial equipment (online market place) and Enterprise Portal Development) with the objective to accompany the executive management, identify business opportunities and to ensure the development of concordant solutions in the industrial equipment segment. He sells his 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  
  14. 14. Copyright 2013 Martin Palmgren EVP .COMMUNICATE This is also true for the non brick and mortar references that have emerged from silicon valley. Amazon sells books and online store space + run applications on a cloud (mutualised storage space outside the firewall). Google the opportunity to find things + run applications on a cloud (mutualised storage space outside the firewall) + hosted services such as email (the opportunity to communicate in writing and keep a trace). Ebay enables the exchange of goods. Twitter provides a tool for self promotion and advertisement. Facebook fills the void of distance and keep the contact with your friends and the opportunity to make new acquantainces. Linkedin the opportunity to keep up to date with your professional network + some promotional features. The business model sets the direction enabled by best in class technology. Figure 0: IT supports the run and emerging business initiatives: http://deliverbusinessvaluewithit.wordpress.com/2013/03/19/the-very-reason-why-most-it-strategies-fail-and-miserably/ Why it is critical for the business to acquire the IT Service Portfolio End to End I was recently contacted by a large Editor (as most of you like know I have 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)) to help them in their go to market. Where an IT strategy that support business objectives should demonstrate a coherent technology solution this is rarely the case. Most editors or consulting business sell adhoc projects in regards of opportunities to do so with the client. On the client side fire fighting that is to solve problems on an adhoc basis, where focus is on work arounds and throwing man hours and conceive ideal solutions on paper (encouraged by most consulting companies) leaves most businesses with a poor industrialization of business and IT processes. Clients need to step up to buy a full value portfolio of services (em)powered by the purchase department (this is yet to be done) on the other side large service providers should leverage their international organisations to sell and deliver end to end 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).  
  15. 15. Copyright 2013 Martin Palmgren EVP .COMMUNICATE It is due to his effort to build a solid infrastructure that David Giambruno @ Revlon has successfully turned a “we spend 80 percent of our resources to fire fight and hopefully keep the lights on” to one where 20 percent of the resources are spent on the run and 80 percent on how to deliver effective solutions to the business. Instead most IT departments are IT centric and focus on project management or to roll out frameworks (that have a specific function) to build business strategy. Once the “happy few” certified have managed to talk the IT Executive management in to how important it is to impose an excellent project management tool brought forward to develop software, or manage the IT architecture or how to ensure that IT and Business Processes are managed and controlled to build the IT Strategy we then feel obliged to adapt how the business side is run to fit to this world view and deliver to the needs of the business.. Agile is only the latest methology to suffer “the one methodology fits all dilemma”. I have over the last years encountered a number of CIO’s that tried to apply Agile to build the IT Strategy and run the IT department. Agile is an excellent tool to ensure capability delivery and effective project management and product delivery within the frame of software development. Where I do agree with the principles of a more “adaptive” approach to IT Strategy development spelled out in http://deloitte.wsj.com/cio/2012/05/24/an-agile-approach-to-it-strategy/ I believe it is important to keep the methodologies apart and focus on business objectives not to confuse your business stakeholders. Value Innovation, that is Differentiation and Cost! If apple inc is one of the highest valued business it is because the deliver best in class technology but above all due to the fact that they deliver a superior customer experince at the right cost to value. Michael Porter (http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1) identified competitive advantage by differentiation or cost. The value equation norm in the industrial world has since become differentiation and cost . The IT department as provider of services can no longer focus on one or the other. Standardisation both from a service and process perspective is a must. Each business is unique but the processes used to deliver to business objectives are to 80% the same across sectors. Within manufacturing standardisation is key, the IT department should move down the same path. If Salesforce.com or box.net, Oracle and SAP can deliver cross industry and sector we need to define the amount of “tailor made” that we are ready to pay for 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  
  16. 16. Copyright 2013 Martin Palmgren EVP .COMMUNICATE clients consume which product / service at a specified quantity and subsequently be billed for their consumption (nor how you will finance the future run and build)? This is however the reality for most CIO's! The focus of a servicebased model is to demonstrate how IT Delivers Value to the business, that is delivers services to business needs (cost effectively, or at least at a specified cost rate that permit to take qualified decisions) over time with an effective IT Business Model and Value Proposition. We see Total Cost of Ownership (TCO) as the corner stone to move further from "IT generates to much cost" where we can demonstrate who consumes what services (and should subsequently pay for what they consume) to obtain the means (investments) and ends (budgets). To run a cost effective IT Operation that delivers to business expectations and leverages the execution of the set strategy (1) you would need to build a clear IT Service Strategy (what services do we deliver to the business) with Total Cost of Ownership per user with: cost (how much does each service cost), consumption (how much does the individual user consume) and chargeback (consumed services are allocated "charged back" on an effective cost basis to the business units) (2) in order to be able to provide the means (necessary investments) and ends ( budget). With the right support (best in class technology) this can be done in weeks with a top down (General Ledger), Bottom Up (effective cost) (3) analysis and tied to the roll out of an IT Service Strategy (that drives an end to end roll out of ITIL V 2/3 logics). Most CFO's understand a well concieved business plan (IT Service Strategy), with a clear Value Proposition (What services do we deliver) and Business Model (how do we deliver the depicted services to our potential clients) and know that to generate productivity improvement you need to invest. Our experience is that where some clients underconsume services due to a non effective cost allocation model other heavy users tend to overconsume services and do so the more willingly as they do no not pay for their consumption (are not charged back). An allocation model based on delivered services will hence accord the CFO to deliver a coherent financial model based on effective consumption and reflect user behaviour. Most IT Financial Management solutions tend to "massage" the general ledger and do not provide an effective integration to the IT Service Strategy over time. As a result they do not provide cost transparency on an ongoing basis, nor do they deliver to the above set objectives. You need to pull together an end-to-end perspective of IT Spend to: - Present a full granular IT Financial Management Model and "as a service”, - Align Project Spend with Service Spend, - Provide a transversal view that is an IT sub ledger that break out cost, consumption, show - / chargeback not only a “macro perspective”, Efficiency of each Service, - Leverage / consolidate the initiatives that you have already put in place, - Optimise the service portfolio as we identify opportunities to remove unused services (licenses) incremental cumulation, the time of the “silver bullet magical solutions” is over (if it ever existed), and take decisions based on economical logics and business needs rather than the “fad” of the moment,  
  17. 17. Copyright 2013 Martin Palmgren EVP .COMMUNICATE He also clearly indicated that where the logics spelled out in ITIL are excellent they are are a minimum requirement to build an effective IT Strategy to the needs of the business where the perspective has to be completed with a Design (Demand and Supply) and Build (supported by IT processed with clear KPI’s) phase to tie the strategic value piece with the operational elements of IT service delivery. “We are able to get the business hooked on new services and products as we 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. We have shifted the focus of to use 80 % of the budget for workarounds and fire fighting the keep the lights on and 20 % to propose new solutions to the business to an opposite 80 / 20 where 80 % of the budget is used to enhance the capability of the business where the bottom line is to drive growth for Revlon. Where the logics spelled out in ITIL are excellent they are are a minimum requirement to build an effective IT Strategy to the needs of the business where the perspective has to be completed with a Design (Demand and Supply) and Build (supported by IT processed with clear KPI’s) phase to tie the strategic value piece with the operational elements of IT service delivery. This is where I see a clear advantage to leverage “Deliver Business Value with IT! - Design, Build and Run Effective IT Strategy execution to business needs”. When a fire destroyed one of Revlon’s factories in Venezuela in June 2011, operations at that location were quickly brought back up and running in New Jersey within 15 minutes and the team was able to restore operations. The business never noticed as we leveraged the internal cloud, which now supports a range of missioncritical apps and associated data this would include ERP, manufacturing, warehousing, business intelligence. Disaster recovery and business continuity are just one aspect of the benefits companies are leveraging from the private cloud where the bottom line is simplicity. Revlon has 531 applications that run on its internal cloud, which supports roughly 15,000 automated application moves a month, and 14,000 transactions a second, Over 90 percent of our corporate workload sits on our internal cloud, and it runs most of our footprint globally. The cloud ecosystem has delivered the ability to say yes and get more done faster, better, cheaper. What triggered Revlon’s cloud move? The company went through a server refresh, and chose to only replace 20% of its hardware resources. The remaining budget would go into private cloud technologies, such as VMWare. The first step was a storage area network in which data was pooled across enterprise hardware. The second step was to put applications on it. The approach was incremental a crawl, walk, run strategy to gradually introduce the cloud to the enterprise. 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  
  18. 18. Copyright 2013 Martin Palmgren EVP .COMMUNICATE have not been effectively adapted to the execution of the IT Strategy. The Balanced Scorecard by Kaplan and Norton that I have to some extent addresses earlier is one, The Blue Strategy Ocean by W. Chan Kim and Renée Mauborgne is another. Though the approaches were developed for the execution of the business strategy they can effectively be used to ensure that the IT Strategy support the Business Strategy. In short a Blue ocean is a new market created as we innovate and redefine value in regards of the perception of the customer / client. Where technology can be an accelerator value innovation is inherently linked to the customer value perception and can be delivered by both established players and new entrants (start ups). New markets created by established players are usually situated within their core business. Long standing excellence is rare but a brand name and a large treasury and the ability to create new market space is key to deliver industry growth and profit. Key questions are: How attractive is this industry, as existing player what should your strategy be to achieve profitable growth, If you are not in this marketplace should you enter, If yes, what should your strategy be? How can we make the competition irrelevant and create new demand, Do we want to segment or de-segment the market, Do we focus on the competition or on alternatives? Eliminate, Reduce, Raise, Create is one of the techniques used to understand which feature of a service is valued by the client / customer where cirque du Soleil, Swatch, Apple, DuPont, IBM are examples of companies that have created / defined new markets to meet the needs of the customer / client and that can successfully be deployed within an IT context. “Blue Ocean Strategy” illustrates what the authors believe is the best organisational strategy to generate growth and profits. Blue Ocean Strategy suggests that an organisation should create new demand in an uncontested market space, or a "Blue Ocean", rather than compete head-to-head with other suppliers in an existing industry. The first part presents key concepts of blue ocean strategy that would include Value Innovation – the simultaneous pursuit of differentiation and low cost – and key analytical tools and frameworks such as the strategy canvas, the four actions framework and the eliminate-reduce-raise-create grid. The second part describes the four principles of blue ocean strategy formulation: how to create uncontested market space by reconstructing market boundaries, as we focus on the big picture, reach beyond existing demand and get the strategic sequence right. These four formulation principles address how an organisation can create blue oceans as we look across the six conventional boundaries of competition (Six Paths Framework), reduce planning risk by following the four steps of visualizing strategy, create new demand as we unlock the three tiers of noncustomers and launch a commercially-viable blue ocean idea as we align unprecedented utility of an offer with strategic price and target cost and by overcoming adoption hurdles. “Blue Ocean Strategy” looks across industries to demonstrate how to break out of  
  19. 19. Copyright 2013 Martin Palmgren EVP .COMMUNICATE sales, marketing, R & D) and the importance of to produce a customer journey map and prototype. Each time I perfom the exercise it hits me how often the “Tadaa” moment turns in to the “Uuh” (translated in to that they did not get it) moment during the delivery of an IT project / IT strategy delivery. But rest assured this would also be valid for strategy, marketing, production, R & D, Sales and Delivery. Within the exercise we demonstrate how IDEO with a simple customer jurney map (day in the life of) formalised, modelised (prototyped if needed) and validated by the client permit significant improvement in effectivenes (that is productive and efficient) and the customer perception of the experince (in this case Amtrac and the General Portland Hospital). The objective is to address the actual health care service, the patient and staff experience of the service and then define the ways it could be improved. The developpment of what became IDEO Project Journey was key in this success. Step 1 - Observe: Try to define and map the different health care segment (surgery department, waiting room…) of the hospital/health care service. Collect feed-back from different patients/staff members of each segment (then make a statistical survey, with both quantitative and qualitative information about the service and give a mark to each segment). Rank the grades and select the segments that obtained the worst grade. Experiment the journey of a patient in those specific segments (use shadowing, interviews…). Step 2 - Synthesize: Confront the patient and the staff point of views of each segment in the health care service (use a unique support like a board to give a synthetic view). Carry out a « typical patient journey » for each segment selected. Step 3 - Generate Ideas: Allow patient and staff members to post ideas of improvement or suggestions in a box available in the hospital. Brainstorm with the staff. Step 4 - Refine: Realize a quick prototype for each main idea. Test the prototypes with staff members and patient to analyze what could be quickly improved. Give a provisional budget for each main idea. Step 5 - Implement: Implement the ideas that suit to the budget constraints. Implement the ideas collaborating closely with the staff. Inform staff and patients of the undergoing change. Be receptive to direct feedback. If I now describe what can happen in an IT project (all examples are fictional, for educational purpose and any similarity to a real IT project would be coincidental). Phase 1. - To support business processes and enhance the customer experience we: (this is where we tie back to the IDEO project journey): 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  
  20. 20. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Not half that bad case scenario: We bring in a Top 3 or Big 5 to perform a change excercise (preferable a very long slide deck of .ppt that if not produces nausea or panic puts the subject (participant) out (commonly called death by powerpoint) from exhaustion. The presentation should idealy be based on example of a project put in place for the production in a tooth paste / car factory (not our domain). If possible with a reorganisation so that a task that previously took 3 days now take 5 or 10. We cross our fingers an hope that the green light red light chart now will produce the desired effect. Worst case scenario: We bring in a Top 3 or Big 5 to help management understand how important it is for IT not to be a support function. Executive management is brought in (down from their ivory tower) and walk the floor and participate in a IT strategy workshop. This is often resumed to a quick walk past a few desk and then in to a war room where an entusiastic team of IT leaders, personel (convoqued by the stategy consultants engaged) are to demonstrate how important it is for the company to have IT. A good intention turns in to a strategy exercise (that the Executive Team has no desire to perform let be told how to do strategy by the IT team) on a brown paper. In a Worst worst case scenario: the consultants bring out finger paint and the Businees executive finds himself with green paint on his tie or suit and now sees red. Really bad case scenario: The consultants have organised an excercise for the IT team to solve the problem that end users do not get it when solutions are delivered and tend to interupt the reflections of the IT team. The obvious solution would be to exclude end users from any contact with the IT team and set up an answering machine with no possibility to leave a message as they have problems. Since the business consulting lead did not fel convinced, he managed to convice the IT Director to present the conclusions in front of the board. After all this was the conclusions of his team, and an all in IT initiative would have so much more credibility. Phase 3. - The Big Change: As the business excecutives are a bit stingy and as the green light red light chart still does not do the charm we once more decide to bring in a Top 3 or Big five (preferably the same as earlier). We decide turn the situation around an in order to do so we will not do thing half way and go for a Big Change. Best case scenario: We engage a top 1 team of consultants, that will manage a top 2 team of consultants, that will in turn manage a top 3 team of consultants to deliver change and new revolutionarry projects to be presented to the board. A transversal Big Change programme is announced and consultants from the top 1, 2 and 3 consulting companies an invited and provided with the possibility to bring in new ideas. The business, IT and endusers are not consulted and business is delivered as usual. After a year or so the conclusions of the programme is delivered, the cover looked smashing but we did not have the time so we put it (burried it) in a drawer for a moment where we would have more time on our hands. 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  
  21. 21. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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. 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)? COBIT 5 (ValIT, CobIT 4.1, RiskIT), ITIL, CMMI, IT-CMF are excellent frameworks to ensure that business and IT processes focus on to deliver business value, to implement a framework is as absurd as to try to roll out a dictionnary. Pick and choose the bits and pieces that apply to your business. Business focused technology can be a make or break factor as we innovate or reinvent a brand and business model Business focused technology can be a make or break factor as we innovate or reinvent a brand and business model. Angela Ahrendts for Harvard Business Review: “When I became the CEO of Burberry, in July 2006, luxury was one of the fastestgrowing sectors in the world. With its rich history, centered on trench coats that were recognized around the world, the Burberry brand should have had many advantages. But as I watched my top managers arrive for our first strategic planning meeting, something struck me right away. They had flown in from around the world to classic 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    
  22. 22. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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”. The Business (IT) Strategy, link to operations We Link Strategy and Operations as we Develop the Strategy, Translate the Strategy, Plan Operations, Monitor and Learn, Test and Adapt the Strategy, Execute Procedures and Initiatives. Business (IT) Tactics We Map Strategic Themes from a Financial Perspective, Customer, Process, Learning & Growth Perspective as we Create a High Performance Culture. See also http://hbr.org/2008/01/mastering-the-management-system/ar/1 Business (IT) Context We Define Market Position with New entrants, Suppliers, Substitute products or Services, Buyers, Existing Competitors. http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1 Strategy Map Captured in a Strategy Map that Formalises stakeholder outcomes to deliver value. The Stakeholder Strategy Roadmap set the scope with Objectives: - Formalise stakeholder outcomes: To deliver value for all parties (partnership), Which drives Customer value: For effective and satisfied end users, That deliver - Business processes: Speed, process innovation and growth, Executed by - Employees and organisation: Collaboration that deliver strategy execution. 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  
  23. 23. Copyright 2013 Martin Palmgren EVP .COMMUNICATE can be increased at an affordable cost, - How actual ongoing IT cost can be tracked or organised, - How cost effective IT improvement expertise can be found, - The most effective implementation of strategy to improve effective delivery of IT services. In order to successfully deliver business value with IT we could: 1) Create a committee of stakeholders affected by the IT investment, that would include IT managers and business unit managers. 2) Define intangible benefits of the IT investment that are agreed on by the committee with flexible and effective budget process and improved decision analysis. 3) Define intangible risks associated with the IT investment that is: slow response to system change, risk of poor integration with existing systems and staff resistance to a new system. 4) Establish weights to the relative importance of the tangible benefits (the financial result), the intangible benefits, and the intangible risks of the IT investment. 5) Estimate on a scale of zero to five the likelihood benefit and risk observed. 6) The investment alternative that results in the largest sum of benefits is the preferred alternative. Make a plan and get executive support: - Build a plan to ensure that the IT Strategy support the business objectives, - Include all top-level executives and business unit heads in the plan. - Be certain to cover business technology execution, support processes, and the organisation, - Meet with the key executive stakeholders to receive input and buy in, - To strive to create a partnership. Form a steering committee: - Create an executive-level steering committee to review all business technology initiatives and projects, - Gain support from top management for the steering committee, portfolio management process, and TVO model, - Meet formally and informally to build a “trusted adviser” relationship with key stakeholders. To anchor Total Value of Ownership in to the business and IT culture we: Implement a reporting process and consistently communicate the company’s progress on key initiatives and projects to all levels in the business. - Build a culture of enterprise wide planning, - Enforce a practice of rigorous TVO prioritisation and analysis, - Make sure all business units and key stakeholders use a TVO approach to projects. Bottom line: We focus on value impact: As we focus on business objectives and processes that will have the most value impact as they are industrialised. We ensure success: A business executive sponsor and business champions is committed to the successful delivery of identified business objectives and process to be supported / industrialised. We select: The information technology was selected to best enable the process changes to generate the greatest value to the business. We deliver to the needs of the business and on target: IT and business management work together to identify and ensure the delivery of benefits. The relationship is essential to effectively support business objectives with IT (Business IT Alignment). The organisation moves from a pure cost center perspective to 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.  
  24. 24. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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)? In our case we do this via a shared service centre that we leverage as a catalyst for breakthrough innovation in competitive IT services where the objective is to become the premier shared services provider as we deliver exceptional customer experience (both from a service delivery and cost perspective) and address the “challenges” of a 21st century service centre. We promote a continuous competitive market position as we deliver cost effective (productive and efficient) IT services to business needs that spur operational excellence: provide economic value, support open capital investment that allocate resources to the most promising ideas / solutions, encourage effectiveness (productive and efficient) and innovation for operational excellence, - promote and support communities of innovation and culture. To do so we invest innovatively as we: recruit, retain, and develop competent staff, build and sustain agile infrastructure and processes, build dynamic adhoc teams to foster ideas and implement innovation, - encourage and promote enterprise solutions that improve effectiveness (productive and efficient) across functional disciplines, proactively suggest new ideas and new solutions, - promote better business (LoBs) University, and Industry partnerships to spur ideas and innovation to, - leverage emerging technologies and innovation to deliver premier services. To deliver effective Business and IT services supported by EA (Enterprise Architecture): There are numerous EA frameworks: TOGAF, DODAF, FEAF, Zachman that provide guidance to implement EA to business needs. Government and the private sector have spent millions of dollars with long life cycle to develop their EA programs and yet we still struggle to identify short term added value / result to the Business. On the other hand, technologies have changed rapidly and the business has to react quickly in order to beat competition. Numerous companies have started to build their EA program in order to support the business / Lines of Business (LoBs) but few have seen immediate result / business value with their EA program. A program must have both short and long term strategy in order to show immediate value to the business / LoBs. I also believe that the mentioned frameworks must change in the future in order to accommodate new emerging technologies and the 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  
  25. 25. Copyright 2013 Martin Palmgren EVP .COMMUNICATE how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. 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. 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. 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.  
  26. 26. Copyright 2013 Martin Palmgren EVP .COMMUNICATE introduced, the IT department as effective broker of services (cost effective and that meet demand drivers). Where most IT department perform well, some decisions are still based on “gut feeling” or external pressure from executive management influenced by vendors / management consultants “as a strategy of survival” rather than on fact based logics. “Time to Market” – The notion of time to market is critical within the context of a business. The delayed launch of a product might erase up to 70% of potential earning (the rest is evaporated by the cost of the resources absorbed to solve the problems that delayed the launch). “Time to market” can be applied to the context of the IT department 1) in the frame of how well do we set up a new service (bundle of application with a coherent architecture) 2) How well do we support the business to launch a new service / execute the business strategy supported with IT (when needed). “To Cloud source” – Cloud computing is the result of 2 trends*. 1) The survival of salesforce.com (that is to outsource data in an application that we have decided not to buy / run on an internal server) 2) the decision of amazon, google and other cloud (external storage space) providers to leverage their capability to buy and run server parks more effectively then an IT department would / could (external cloud). A decision to run applications on a server outside the firewall can be motivated by cost or demand (time to market) where an architecture and applications are set up to rapidly respond to the needs of the business. The “service bundle” can then either be brought inside the firewall and run on an internal cloud or continue to run on the cloud provider’s server (outside the fire wall). The private cloud: We leverage the Private (internal) Cloud, as an internal provider perform process execution and the applications (bought or leased (Software as a Service (SaaS)) run on one or several mutualised servers inside the firewall) sit on an internal (private) cloud. The public cloud: Salesforce.com is one of the few survivors of the first internet wave where one of the major ideas targeted towards the B to B market was to facilitate the ERP court for enterprises where independent providers would run ERP blocs such as CRM for the client where the data would reside outside the firewall in the providers application. This solution is excellent for enterprises that do not wish to invest in an application and infrastructure that would provide a similar service internally. Google has over the years enhanced their portfolio of application that run on their servers where individuals can use an email function (Gmail) to drive trafic to their search engine. This function was later made available to enterprises together with an office suite and google +. As Amazon (and Google) have become highly effective over time to negotiate storage space they at one point decided to leverage this ability to procure and run storage space less expensively available to individuals and enterprises. The principle is to provide storage space and services (Infrastructure as a Service (Iaas), Platform as a Service PaaS, Sofrtware as a Service (SaaS) outside the firewall on which the enterprise can run applications (in an architecture as a bundle of services). 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).  
  27. 27. Copyright 2013 Martin Palmgren EVP .COMMUNICATE that I recently spoke to put it bluntly “if the internal IT Department can not deliver to our needs, they should at least get out of the way”. In order to deliver effective Business (IT) Alignment you need to leverage best in class technology (on paper compliance is not enough). The frameworks should be a point of reference and only the bits and pieces applicable and useful for the business should be rolled out (but you need to understand which framework represent which perspective and how to leverage the latter) and above all focus on stakeholder expectations! Step 1) Define the services that the IT department deliver to the business with total cost of ownership (TCO) with cost, consumption and chargeback. Cost – This is often where you would get the WOW, we did not know that we spend this much on IT from the executive management. Consumption – most IT departments suffer from the overconsumption of users that are not willing to pay for what they consume hence the importance of coherent chargeback based on factual cost of the delivered services. TCO is also the base to qualified selection of cloud sourcing / outsourcing partners. Step 2) Capture the “IT Business Model” that is “This is how we deliver IT services to the business” in the IT Service Catalogue, Step 3) and the “Business (IT) Value Proposition” “This is how we support business objectives with services in a time to market perspective” in the Business Service Catalogue. Our experience is that where IT is perceived to fail to deliver to business expectations the “IT Business Model” (“This is how we deliver IT services to the business”) and “Business (IT) Value proposition” (“This is how we support business objectives with services in a time to market perspective”) is often broken or nonexistent (demand and cost drivers not understood or not communicated well enough). At the end of the day, business executives take the decision to outsource / 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 service is a commodity and cost is the primary driver - 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  
  28. 28. Copyright 2013 Martin Palmgren EVP .COMMUNICATE competitive (Benchmark Industry Market Forces) and New technological solutions that could change how current business is performed are explored, proposed and implemented. The demand and cost model is clear and long term risk / benefits are established We have identified the following critical success (benefit) / risk factors: - Total cost of ownership - Does the initiative support business objectives: - Cost is the primary driver, - Demand is the primary driver - Capacity is adapted to need & price is scalable as business in(de)crease - Peak loads can be absorbed with little impact on performance and response time - Ability to audit metrics used by the provider to calculate the utility price - Version upgrades and migration are transparent (cloud, hosted provider) - Licensing of applications is clear & Interoperability ensured (cloud, hosted provider) - As we break services out, how do we manage data integration - Re integration of data if we decide to insource / change outsourcing partner - How do we recuperate data / applications if the outsourcing partner is attacked / goes out of business (cloud, hosted provider) Total Cost of Ownership To establish an effective IT Business Model you need to perform an in depth analysis of business needs to understand Total Cost of Ownership with Cost, Consumption and Chargeback. IT Cost is spelled out - What are my IT assets and what do they cost? - What are my IT resources and what do they cost? - What services do I provide to the customer: - What do these services cost? - What was their intended value proposition? - What is the quality of the service delivery? - Who consumes the IT services: - What is the consumption on a per unit,  
  29. 29. Copyright 2013 Martin Palmgren EVP .COMMUNICATE & Operational level. Strategic Intent: Product / service life cycle management: Interprets, models and articulates the strategic intent in to business strategy. Business Strategy: Process based Enterprise Architecture: Interprets, models and articulates the business strategy and ensures capability. Business & IT objectives: Project Portfolio Management: Interprets, models and articulates the business objectives and ensures capability. IT Strategy: Process based IT governance: Levers formulated operating processes with best in class IT solutions. Aligned on business requirements: Service Portfolio Management: Levers formulated operating processes with portfolio management. Software Asset Management: Application Portfolio Management: Levers formulated operating processes application portfolio management solutions. Infrastructure Asset Management: IT Infrastructure Portfolio Management: Levers formulated operating processes with IT infrastructure portfolio management. We Design, Build and Run the IT Service Strategy We Design, Build and Run the IT Service Strategy as we spell out IT Activities from a demand and supplier side (Design), Set IT processes and key performance indicators (Build): 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. Aligned to described ITIL activities and processes with full IT Financial Management (Run). Define “to be” state with established KPI’s: - Articulated, - Key Performance Indicators, - Cycle Time, - Cost Effectiveness, - Corporate Contribution, - User Orientation, - Operational Excellence, - Future Orientation. Articulated from a Cost Effectiveness and Cycle Time perspective where IT Business Drivers & Processes are clearly spelled out: Manage information technology: To Manage the Business of Information Technology we: Develop the enterprise IT strategy, Build strategic intelligence, Identify long-term IT needs of the enterprise in collaboration with stakeholders, Define strategic standards, guidelines, and principles, Define and establish IT architecture and development standards, Define strategic vendors for IT components, Establish IT governance organisation and processes, Build strategic plan to support business objectives, 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. Cycle Time (Key Performance Indicators):  
  30. 30. Copyright 2013 Martin Palmgren EVP .COMMUNICATE the process "develop and maintain information technology solutions" per €1,000 revenue, - Systems cost of the process "develop and maintain information technology solutions" per €100,000 revenue, - Personnel cost of the process "deploy IT solutions" per €1,000 revenue, - Systems cost of the process "deploy IT solutions" per €100,000 revenue, - Personnel cost of the process "deliver and support IT services" per €1,000 revenue, - Systems cost of the process "deliver and support IT services" per €100,000 revenue, - Total cost of the process "manage the business of IT" per €1,000 revenue, Total cost of the process "develop and manage IT customer relationships" per €1,000 revenue, - Total cost of the process "manage business resiliency and risk" per €1,000 revenue, - Total cost of the process "manage IT knowledge" per €1,000 revenue, Total cost of the process "develop information and content management strategies" per €1,000 revenue, - Total cost of the process "define enterprise information architecture" per €1,000 revenue, - Total cost of the process "manage information and IT knowledge resources" per €1,000 revenue, - Total cost of the process "perform enterprise data and content management" per €1,000 revenue, - Total cost of the process group "manage enterprise information" per 1,000 revenue, - Total cost of the process "develop and maintain information technology solutions" per €1,000 revenue, - Total cost of the process "deploy IT solutions" per €1,000 revenue, - Total cost of the process "deliver and support IT services" per €1,000 revenue, - Total IT cost per €1,000 revenue. Corporate Contribution (Key Performance Indicators): - Control of IT expenses percentage, over or under IT budget, allocation to different budget items, - IT budget as a percentage of turnover, - IT expenses per staff member, - Business value of the IT function percentage of the development capacity engaged in strategic projects relationship between new developments/infrastructure investments/replacement investments, - Business value of new IT projects financial evaluation based on ROI, NPV, IRR, PB business evaluation based on information economics. User Orientation (Key Performance Indicators): - Preferred IT supplier, - Percentage of applications managed by IT, - Percentage of applications delivered by IT, - Partnership with users, - Index of user involvement in strategic applications, - Applications index of user involvement in developing new applications, - User satisfaction, - Index of user friendliness of applications, - Index of user satisfaction Process Management. 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  
  31. 31. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - Conduct a constructive budget dialogue with the business: Total Cost of Ownership (TCO) with Cost Consumption and Chargeback / Showback, - Build and run an effective IT Business Model to Best Practice Frameworks. Figure 5: Deliver effective business strategy execution: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/deliver-effective-business-strategyexecution/ An IT Business Model and Business (IT) Value Proposition 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, 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 6: The roadmap reflects stakeholder expectations: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-roadmap-reflects-stakeholderexpectations/  
  32. 32. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Where the Bottom Line is that to leverage competitive advantage with new technology is “nice to have”, to keep the business systems running is mission critical! Figure 8: End to end industrialisation of business processes: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/end-to-end-industrialisation-of-businessprocesses/ As we meet Stakeholder Expectations Business drivers support Strategy Execution To deliver business value with IT we need to 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. 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. Develop vision and strategy: - Define the business concept and long-term vision, Develop business strategy, - Manage strategic initiatives, Develop and manage products and services: - Manage product and service portfolio, Develop products and services, Market and sell products and services: - Understand markets, customers, and capabilities,- Develop marketing strategy, - Develop sales strategy, - Develop and manage marketing plans, - Develop and manage sales plans, Deliver products and services: - Plan for and acquire necessary resources (Supply Chain Planning), - Procure materials and services, - Produce/Manufacture/Deliver product, - Deliver service to customer, - Manage logistics and warehousing Manage customer services: - Develop customer care/customer service strategy, Plan and manage customer service operations, - Measure and evaluate customer service operations 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  
  33. 33. Copyright 2013 Martin Palmgren EVP .COMMUNICATE The notion of the IT department as a profit centre IT Services and the cost of a services delivered by the IT department is a notion that was introduced on a broader basis with ITIL V3 and confirmed with the introduction of CobIT 5. Where the IT department traditionally account for services delivered and billed by outsourced providers, services delivered by the IT department (outsourced services included) have not been formalised and broken down in to direct and indirect cost and related to the cost, consumption and chargeback of an engaged service. Traditionally the IT Department tend to be run as a “cost centre” rather than a “profit centre” and investments tend to be technology rather than business driven. The hypothesis of this paper is then that in order for the IT department to deliver the right IT Services cost effectively, the IT Strategy need to support the business strategy and set business objectives. Furthermore the IT Department should be run as an internal profit centre where resources are considered as scarce and services delivered supported by IT financial management. In order to do so we need to identify the services delivered together with cost, consumption and chargeback of the delivered services to ensure that the business units that consume services are conscious that IT services bear a cost to avoid overconsumption of services that the business is not willing to pay for as well as a coherent repartition of cost related to the use of ERP / infrastructure services. The notion of the IT department as a profit centre focused on total cost of ownership with cost, consumption and chargeback is also critical to ensure financial resources from the business units as well as an effective use of resources deployed to deliver IT Services. Recent efforts to outsource (data) cloud source (infrastructure) needs to be supported by solid business cases with ROI and clear cost, consumption and chargeback of the billed services which is rarely the case today where invoices from outsourcers, cloud computing providers are non granular and does not provide data clear enough to distribute cost (charge) the users / business units that consumed the service. ROI and the total cost of services delivered are difficult to validate as contract conditions in regards of the cost of termination / exit that would include a secure migration of data or applications tend not to be transparent. To conclude IT Financial Management is a critical part of a successful IT Strategy and the effective delivery of IT Services. Though the notion of service delivery is supported by internationally recognised standards such as ITIL and CobIT 5 IT Financial management is yet to be broadly applied and standardised. 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  
  34. 34. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Business Architecture Figure 10: Confirm business vision: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/confirm-business-vision/ Confirm Business Vision: Articulate strategic intent, Business objectives, Business drivers. Figure 11: Articulate the Business Value Proposition: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/articulate-the-business-value-proposition/ Articulate the Business Value Proposition: Translate (Articulate) Business Vision to Business Architecture Vision & Business Architecture, Vision of Business Architecture “to be”: state “where we need to go”, “where we are now” & “how we need to proceed”, Architecture principles, Business principles, Technology principles, Build business case & roll out (with Roadmap). Figure 12: Deliver the Business Architecture: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/deliver-the-business-architecture/ Deliver the Business Architecture: Translate Business Architecture Vision to Business Architecture, Vision of Business Architecture “to be”: state “where we need to go”, “where we are now” & “how we need to proceed”. Figure 13: Translate the Business Vision to an IT Vision: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/translate-the-business-vision-to-an-itvision/ Translate the Business Vision to an IT Vision: Vision of IT “to be state”: “where we need to go”, “where we are now” & “how we need to proceed”, Regulatory requirements, Technology guiding principles, IT Governance guiding principles (process & organise decisions). Figure 14: Set the IT Value Proposition Baseline: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/set-the-it-value-proposition-baseline/  
  35. 35. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Direction The business (IT) strategy is effective and Provides clear, meaningful Business (IT) Vision / Mission: as it is realistic and achievable, articulated, communicated. Defined Market Position Industry structure with New entrants, Suppliers, Substitute products or Services, Buyers (customers), Existing Competitors. Competitive Advantage There is an understanding of Competitive Positioning, Strengths and weaknesses, Strategies and relative positioning. External environment There is an understanding of the Political, Environmental, Social, Technological external environment. Customer value proposition There is an understanding of The Customer value proposition, needs, segmentation. Talent Appreciation of the implications for the strategy of Resources, Skills and competencies, Appropriate development / recruitment plans, Shared direction, Extent of buy-in to shared vision by key managers, Barriers / commitment to change, Structure of the organisation. Execution There is a understanding of the: Clarity of the IT Strategy roll out, Extent to which the IT Strategy responds to industry and competitive environment, Extent to which the IT Strategy responds to internal capabilities, Extent to which Critical Success Factors are clearly identified, the Clarity of implementation plan.  
  36. 36. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Market Forces) and New technological solutions that could change how current business is performed are explored, proposed and implemented. 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”. The Business (IT) Strategy, link to operations We Link Strategy and Operations as we Develop the Strategy, Translate the Strategy, Plan Operations, Monitor and Learn, Test and Adapt the Strategy, Execute Procedures and Initiatives. Business (IT) Tactics We Map Strategic Themes from a Financial Perspective, Customer, Process, Learning & Growth Perspective as we Create a High Performance Culture. See also http://hbr.org/2008/01/mastering-the-management-system/ar/1 Business (IT) Context We Define Market Position with New entrants, Suppliers, Substitute products or Services, Buyers, Existing Competitors. http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1 Strategy Map Captured in a Strategy Map that Formalises stakeholder outcomes to deliver value. The Stakeholder Strategy Roadmap set the scope with Objectives: - Formalise stakeholder outcomes: To deliver value for all parties (partnership), Which drives Customer value: For effective and satisfied end users, That deliver - Business processes: Speed, process innovation and growth, Executed by - Employees and organisation: Collaboration that deliver strategy execution.  
  37. 37. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Acquire, construct and manage property, Manage environmental health and safety, Manage external relationships, Manage knowledge, improvement and change). The do-or-die questions boards should ask about technology In the “The do-or-die questions boards should ask about technology” (http://www.mckinsey.com/Insights/Business_Technology/The_do-or-die_questions_boards_should_ask_about_technology?cid=other-eml-alt-mip-mck-oth-1306 ) Paul Willmott raises a number of questions that well recapitualtes what we have seen in this chapter: 1. How will IT change the basis of competition in our industry? Questions to ask: - Who are our emerging competitors? - How is technology helping us win against traditional and new competitors? - How can we use technology to enter new markets? 2. What will it take to exceed our customers’ expectations in a digital world? Questions to ask: - How does our customer experience compare with that of leaders in other sectors? - What will our customers expect in the future, and what will it take to delight them? - Do we have clear plans for how to meet or exceed their expectations? 3. Do our business plans reflect the full potential of technology to improve our performance? Questions to ask: - Has the P&L opportunity and threat from IT been quantified by business unit and by market? - Will our current plans fully capture the opportunity and neutralize the threat? - What is the time horizon of these plans, and have they been factored into future financial projections for both business and IT?  
  38. 38. Copyright 2013 Martin Palmgren EVP .COMMUNICATE the right incentives? 8. Are we comfortable with our level of IT risk? Questions to ask: - Do we have a comprehensive understanding of the IT risks we face? - How is our level of IT risk measured, and is it aligned with the company’s overall risk appetite? - How are we reducing our IT risk on an ongoing basis? - Who is responsible for overseeing the level of IT risk? 9. Are we making the most of our technology story? Questions to ask: - What are the key messages we should communicate? - How, when, and to whom should they be communicated? To conclude 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 Market", Cost Effectiveness and stakeholder expectations from an Executive, Business Unit, IT Management and IT Risk Management perspective. To deliver business value with IT we need to 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. 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  
  39. 39. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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. Chapter 5. Cloud computing thunder or lightening? How to draw the fluff out of the cloud and effectively support business objectives with IT. The 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. 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. @ Get Your Cloud Strategy Right https://flevy.com/browse/business-document/get-your-cloud-strategy-right-286/ref=mpalmgre This is an introduction to the subject with a full version to be published on a stand alone basis. See also “Get your cloud strategy right” http://www.brighttalk.com/community/it-service-management/webcast/534/29211 as well as “Cloud Computing: Fluff or Lightening?” http://www.brighttalk.com/community/it-service-management/webcast/534/21892 How to get your Cloud Strategy Right! Cloud computing (cloud sourcing) is now a part of the IT strategy landscape and an understanding of how to leverage the "cloud" will become prerequisite for decision makers both on the IT and the business side. We will provide the necessary tools to  

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