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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
 

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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This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here:

This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here:
http://flevy.com/browse/business-document/cobit-5-unlocked-the-missing-pieces-deliver-business-value-with-it-run-aligned-to-described-itil-activities-and-processes-with-a-service-strategy-403

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 COBIT 5 Unlocked (the missing pieces): Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Service Strategy Document Transcript

    • 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  
    • 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  
    • 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.  
    • 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.  
    • 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.  
    • 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
    • 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,
    • 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:
    • 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  
    • 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.”  
    • 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  
    • 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.  
    • 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  
    • 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).  
    • 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  
    • 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,  
    • 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  
    • 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  
    • 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  
    • 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  
    • 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    
    • 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  
    • 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.  
    • 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  
    • 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.  
    • 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).  
    • 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  
    • 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,  
    • 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):  
    • 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  
    • 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/  
    • 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  
    • 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  
    • 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/  
    • 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.  
    • 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.  
    • 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?  
    • 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  
    • 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  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Make or Buy In both cases defined services are supported by applications and an infrastructure that can be either bought or leased “as a service” where the service (with underlying processes) is executed by the business as opposed to a “classical” outsourcing model where the outsourced services / processes are executed by a provider. Chapter 6. To leverage Business Strategy execution with IT we Focus on the IT (Service) Strategy 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 Business Strategy execution, "Time to Market", Cost Effectiveness and Stakeholder Expectations from an Executive, Business Unit, IT Management and IT Risk Management perspective. 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)? - 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. 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. @ Leverage Business Strategy Execution with IT https://flevy.com/browse/business-document/leverage-business-strategy-execution-with-it-281/ref=mpalmgre Demonstrate how IT contributes to Business Objectives  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Common Problem Context The ……. group current IT Strategy is pragmatic and emerges from operational and tactical opportunities to support the business effectively. As critical mass is reached solutions are then standardised. The current IT Model support business objectives cost effectively but there is an opportunity to leverage best practise as well as to enhance the current IT delivery model with a clear execution model. A Business (IT) Strategy Statement (What) and Roadmap (How) would in this perspective articulate execution on a global and local level and hence permit transparency (As Is) as well as opportunities of improvement (To Be). A Business (IT) Strategy Statement (What) Step 1 Build the Business (IT) Strategy Statement with a focus on time to market, cost effectiveness and cycle time to set focus and priorities. A Business (IT) Strategy Road Map (How) Step 2 Build the As – Is To – Be picture of the IT Strategy Roadmap with a Gap Analysis both on a Global and local level to the granularity needed with a focus on execution (tactical perspective). A Business (IT) Service Strategy Step 3 Design the Business (IT) Service Strategy to demonstrate how IT supports tactical business objectives with total cost of ownership (cost, consumption, chargeback) per user to set the logics for shared services centers, outsourcing, cloud (sourcing). An (IT) Business Model Step 4 Build (confirm) the IT Business Model to ensure that the local IT departments deliver to set standards from a Service Strategy, Delivery capability, Architecture and Security perspective. A Business (IT) Value Proposition Step 5 Design and Build the Business (IT) Value Proposition to ensure a focus on Strategy Execution, Business Drivers, Business Objectives, Business Processes and Metrics. As we meet Stakeholder Expectations Business drivers support Strategy Execution  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Manage environmental health and safety: - Determine environmental health and safety impacts, - Develop and execute environmental health and safety program, Train and educate employees, - Monitor and manage environmental health and safety management program, - Ensure compliance with regulations, - Manage remediation efforts Manage external relationships: - Build investor relationships, - Manage government and industry relationships, - Manage relations with board of directors, - Manage legal and ethical issues, - Manage public relations program Manage knowledge, improvement and change: - Create and manage organisational performance strategy, - Benchmark performance, - Develop enterprise-wide knowledge management (KM) capability, Manage change Demand and Cost drivers are Effective When IT is perceived to: Understand stakeholder expectations, Contribute to business objectives, Deliver services to business needs, Deliver value to cost. IT Supports Business Objectives and meet Stakeholder Expectations When IT is run as a service business: You have to see IT from a customer perspective and address stakeholders priorities: - Realise return on investment, - Ensure that proposed services are competitive in the industry, - IT Cost are transparent, –IT competencies are at least equal to the competition, - IT pricing is fair and clearly aligned with consumption, - IT services are clearly defined and benchmarked. To get the IT Service Management Fundamentals right: Focus on demand and cost drivers in a business perspective: - Run IT as an effective service business, Meet your customer needs, where - Demand drivers are critical in the roll out of IT Service Management Deliver strategy execution. IT provides competitive leverage Priorities from an Executive Management Perspective: - IT supports the achievement of strategic business objectives, - IT Delivers value to expenditure, - IT cost are managed effectively, - IT risks are identified and managed, - Targeted inter company IT synergies deliver to schedule, - We have a clear vision towards which we expect the IT department to deliver: ISO 38 500, VALIT IT delivers to demand and cost drivers  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE slide set on a pad / smart phone / lap top and start to share with your CIO, Executives and Board on the spot. @ Logics for IT Sourcing (Internal, Shared service center, Out, Cloud) https://flevy.com/browse/business-document/logics-for-it-sourcing-internal-shared-service-center-out-cloud-285/ref=mpalmgre This is an introduction to the subject with a full version to be published on a stand alone basis. The 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. How to get your IT Sourcing Strategy Right! We will provide the necessary tools to draw an IT strategy leveraged by effective IT Sourcing to: - Establish an appropriate sourcing strategy, - Identify capabilities that could be sourced, - Develop appropriate approaches for sourcing activities, - Manage risks throughout their sourcing activities, - Identify, select and negotiate with service providers, - Conduct service provider governance and performance management, - Manage relationships with service providers. We Source to: Meet Demand and Cost drivers, Focus on “Time to market”, Cost effectiveness and Cycle Time, Provide an optimised Sourcing Strategy and Leverage Business Strategy execution. Make or Buy We make (provide IT services internally) when the service provides a competitive advantage, can be provided to a lesser or equal cost or legal constraints impose data control. We buy (provide IT services externally) when the service does not provide a competitive advantage and the services can be acquired for a lesser cost externally. In the case of an external Cloud the setup of a service on an external infrastructure (IaaS) can shorten the “Time to Market” that is the time needed to deliver the service (application or bundle of applications) to the client. The application can then be brought to an internal cloud (or server) or continue to run on an external cloud as needed. 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” &  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Manage environmental health and safety: - Determine environmental health and safety impacts, - Develop and execute environmental health and safety program, Train and educate employees, - Monitor and manage environmental health and safety management program, - Ensure compliance with regulations, - Manage remediation efforts Manage external relationships: - Build investor relationships, - Manage government and industry relationships, - Manage relations with board of directors, - Manage legal and ethical issues, - Manage public relations program Manage knowledge, improvement and change: - Create and manage organisational performance strategy, - Benchmark performance, - Develop enterprise-wide knowledge management (KM) capability, Manage change Source Internally As we Source internally Process execution and delivery is performed by an internal provider. Applications can be bought / leased (SaaS) and sit on a server, an internal (private) or external (public) cloud. We In source as we take a decision to internally source a service that was previously outsourced. Shared Service Centre A Shared service centre is put in place to optimise cost and competency. Process execution is performed by an internal provider and the applications can sit on an internal (private) or external (public) cloud. Subcontract We Subcontract to perform punctual tasks delivered by an external provider but there is no process execution. Source externally (Outsource) We Source externally (Outsource) to perform the execution of a process that can be manual or industrialised with IT. Delivery is performed by and external provider. The client data sit on the provider’s servers (provider internal cloud) or on a hosted application (provider external cloud / Hybrid). Public (external) Cloud We leverage the Public (external) Cloud, as an internal provider perform process execution on an external (public) cloud provided by a “storage provider” such as  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE provider internal /external Cloud with the application provider (Gmail, Google Apps for Business, Google + Salesforce.com, dropbox). The provider performs some form of services (infrastructure, security, maintenance, upgrades, helpdesk) but there is no business process execution. Transversal Cloud Perspective Internal (Private) Cloud We run software that we have bought (built) or leased (SaaS) on mutualised servers • Bought (Built) Software • SaaS External (Public) Cloud We run software that we have bought (built) or leased (SaaS) on an infrastructure (IaaS) that we lease that run on a provided platform (PaaS) that we lease. • Bought (Built) Software • SaaS • Iaas • PaaS Hosted Applications such as Google apps, salesforce.com, SAP SMB that sit on a provider • Internal (Private) Cloud • External (Public) Cloud Outsourced Providers Run software that they have bought (built) or leased on an • Internal (Private) Cloud • and External (Public) Cloud (Hybrid model) Chapter 8. Design - Spell out IT Activities from a demand and supplier side To design the Business (IT) Value Proposition we need to: - “Canvas” the IT Service Strategy, Develop a High level picture of the Business (IT) Strategy, Articulate the Business (IT) Strategy,  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE “Canvas” the IT Service Strategy To “Canvas” the IT Service Strategy: - We focus on strategy execution, - Assess the Business (IT) strategy, - Confirm business vision, - The Business Direction and Structure, - Confirm External Environment, - Confirm linkages to partners, - Confirm IT Value Proposition and Product / Service offer, - Confirm Internal Environment / Competencies, - Confirm Business (IT) Strategy, Objectives and Goals, - Confirm monitoring / evaluation procedures, - Validate the Business (IT) Strategy. We focus on strategy execution To assess the Business (IT) strategy we need to develop an understanding of the Business (IT) Strategy and how the IT department will deliver effectively to support strategy execution: Objective: To develop a comprehensive understanding of the business environment and future direction in order to identify areas of strategic IT opportunities and as the basis to develop the IT strategy. Benefit: A Clear business vision and direction avoids dispersed, conflicting, nonvalue added activities and cost and enable a clear focus on the chosen markets / products / services. The establishment of an agreed business vision provides an understanding for how IT can/should contribute to business objectives and how ROI can be driven from IT investments. As you establish the need for and agree on the scope/focus of the IT strategy engagement, it is important to develop a sense of the business environment and future direction. This understanding of the organisation’s present and future is documented and is used to determine how IT will be leveraged. It should be clearly understood that this activity is not intended to build the business vision but to support the roll out of an established business vision. The purpose of this activity is to understand the business, its internal and external environment and make explicit any unstated or inadequately articulated business values and vision elements to build a firm platform for the project. Develop an understanding of the Business (IT) Strategy and how the IT department will deliver effectively to support strategy execution: It is critical to develop a clear and comprehensive understanding of the business strategy and the operating environment: - 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?  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE new or enhanced IT services (Investment b/w €500,000 and €1,000,000), - Time in months to respond to major business shifts, - Time in weeks to complete projects that address an identified business exposure or opportunity (< 20% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (20-40% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (4060% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (60-80% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (More than 80% of total annual revenue), - Time in weeks to close an identified IT skill or capability gap, - Average time in weeks to fulfill a simple information need, - Average time in weeks to fulfill a medium information need, - Average time in weeks to fulfill a complex information need, - Average time in weeks to create the enterprise information management strategic plan, - Time in weeks to report on compliance status of the information architecture, - Average time in weeks to set up a simple technical interface for a user of a defined data content source. Cost Effectiveness Cost Effectiveness Key Performance Indicators would include : - Total IT budget as a percentage of revenue, - Total IT budget per FTE, - IT expense per FTE, - Personnel cost of the process "manage the business of IT" per €1,000 revenue, - Systems cost of the process "manage the business of IT" per €100,000 revenue, - Personnel cost of the process "develop and manage IT customer relationships" per €1,000 revenue, - Systems cost of the process "develop and manage IT customer relationships" per €100,000 revenue, - Personnel cost of the process "manage business resiliency and risk" per €1,000 revenue, - Systems cost of the process "manage business resiliency and risk" per €100,000 revenue, - Personnel cost of the process "manage IT knowledge" per €1,000 revenue, - Systems cost of the process "manage IT knowledge" per €100,000 revenue, - Personnel cost of the process "develop information and content management strategies" per €1,000 revenue, - Systems cost of the process "develop information and content management strategies" per €100,000 revenue, - Personnel cost of the process "define enterprise information architecture" per €1,000 revenue, - Systems cost of the process "define enterprise information architecture" per €100,000 revenue, - Personnel cost of the process "manage information and IT knowledge resources" per €1,000 revenue, Systems cost of the process "manage information and IT knowledge resources" per €100,000 revenue, - Personnel cost of the process "perform enterprise data and content management" per €1,000 revenue, - Systems cost of the process "perform enterprise data and content management" per €100,000 revenue, - Personnel cost of 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, -  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE - Average days late in delivering software, - Average unexpected budget increase, - Percentage of projects performed within SLA, - Percentage of maintenance activities, - Efficient computer operations, - Percentage unavailability of network, - Response times per category of users, - Percentage of jobs done within time, - Efficient help desk function, - Average answer time of help desk, - Percentage of questions answered within time. Future Orientation Future Orientation Key Performance Indicators would include : - Training and education of staff, - Number of educational days per person, - Education budget as a % of total IT budget, - Expertise of the IT staff, - Number of years of IT experience per staff member, - Age pyramid of the IT staff, - Research into emerging technologies, - % of budget spent on IT research General Business Management. 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,  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Focus on Strategy Articulation and Execution To build and demonstrate IT Success we need to focus on the Business IT roadmap; that is how do we (as CIO, IT Department) support business objectives and processes leveraged by IT and an effective IT Service strategy. Where we Focus on the Business Bottom Line is How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective to support: Vision, Principles and strategy. Strategic Intent : set by the Board, Executive Management, Business operations management with objectives on a: Strategic, Tactic & 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: formulated operating processes application portfolio management solutions. Levers Infrastructure Asset Management. IT Infrastructure Portfolio Management: Levers formulated operating processes with IT infrastructure portfolio management. An Effective (IT) Business Model An Effective (IT) Business Model where we Manage Information Technology. To Manage Information Technology Business Drivers & Processes from a Cost Effectiveness and Cycle Time perspective we need to: 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 and Manage IT Knowledge.  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE order business transactions, successful service delivery, improve performance, - IT processes and indicators with set strategy. We develop the professional competencies needed for We capture organisational knowledge to continuously and Stakeholder departments have clear objectives, clear accountability and responsibility to deliver to the From an IT Risk Management Perspective it is important to understand that: Business continuity is ensured, - The organisations assets and operations are protected, - Key business and technology risk is effectively managed, - Effective process, practise and controls are in place, - We have clear security objectives to which we expect IT to deliver. “Time to Market”, business drivers, cost effectiveness & cycle time. As the business focus on “Time to Market” it is imperative for IT to support business drivers and objectives from a cycle time and cost effectiveness perspective over time. To align IT with the business is not enough. The IT department needs to actively accompany the execution of the strategy. To do so requires a significant comprehension of the business and it’s needs from a business driver (demand & cost) and strategy execution perspective. With “Total cost of ownership”, Cost, Consumption, Chargeback. To build effective services and delivery capabilities it is imperative that the IT department is “Run as a service business” that is to the to the logics of a shared service centre with clearly defined services and cost, consumption and chargeback defined by user. 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 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  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE need to define the purpose of the purchase (invest / divest) in the overall corporate strategy where it is of little use and a significant cost to integrate all systems in to a common backbone if the company is to be divested only a few years later. We could use an IT Scorecard to ensure that stakeholder expectations are met from an executive management, business line management, IT management and IT risk management perspective. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated. See also: “Get your IT Service Strategy right” http://www.brighttalk.com/community/it-service-management/webcast/534/23630 “Leverage Strategy with IT” http://www.brighttalk.com/community/it-service-management/webcast/534/22934 “Run IT as a Service Business!” http://www.brighttalk.com/community/it-service-management/webcast/534/21389 Build and demonstrate IT success To build and demonstrate IT Success we need to focus on the Business IT roadmap, that is how do we (as CIO, IT Department) support business objectives and processes leveraged by IT and an effective IT Service strategy. Where we Focus on the Business Bottom Line: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. This is achieved as Business objectives and Processes (captured in the Business Architecture) are supported by a strategy execution focused IT architecture where Business objectives: We would like to increase sales by 25%, how can the IT Department support the Business in this effort and what will be the impact on the budget of the IT Department? are supported by IT objectives: This would translate  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 we support business processes (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) where Business processes (bundled Business services) are supported by applications. A Roadmap The Roadmap reflects stakeholder expectations from an Executive Management, Business Unit Management, IT Management and IT Risk Management perspective where: Stakeholder Expectations Drives Business (IT) Objectives that Delivers the Business (IT) Road Map executed by Employees & Organisation. The Service Strategy support Business Drivers as Business (IT) Drivers Drives Demand and Cost Drivers Delivers the (IT) Service Strategy that is Executed towards Metrics. IT provides competitive leverage. Priorities from an Executive Management Perspective: IT supports the achievement of strategic business objectives, IT Delivers value to expenditure, IT cost is managed effectively, IT risk is identified and managed, Targeted inter company IT synergies deliver to schedule, We have a clear vision towards which we expect the IT department to deliver. IT delivers to demand and cost drivers. Priorities from a Business Unit Management Perspective: IT supports the achievement of tactical business objectives, IT delivers perceived added value services and at a reasonable cost, IT delivers to operational and service level agreements (commitments), IT investments positively affect business productivity and the customer experience, We have a clear process vision to which we expect the IT department to deliver. The IT Strategy support Business objectives as we meet Priorities from an IT Management Perspective: We understand stakeholder expectations and propose a service portfolio that correspond to both Demand and Cost drivers with a focus on perfect order business transactions, We develop the professional competencies needed  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Develop and counsel employees, - Reward and retain employees, - Redeploy and retire employees, - Manage employee information Manage information technology: - Manage the Business of Information Technology, - Develop and Manage IT Customer Relationships, - Manage Business Resiliency and Risk, - Manage Enterprise Information, - Develop and Manage Information Technology Solutions, - Deploy Information Technology Solutions, Deliver and Support Information Technology Services, - Manage IT Knowledge Manage financial resources: - Perform planning and management accounting, Perform revenue accounting, - Perform general accounting and reporting, - Manage fixed-asset project accounting, - Process payroll, - Process accounts payable and expense reimbursements, - Manage treasury operations, - Manage internal controls, Manage taxes, - Manage international funds/consolidation Acquire, construct and manage property: - Design and construct/acquire nonproductive assets, - Maintain nonproductive assets, - Obtain, install, and plan maintenance for productive assets, - Dispose of productive and nonproductive assets, - Manage physical risk Manage environmental health and safety: - Determine environmental health and safety impacts, - Develop and execute environmental health and safety program, Train and educate employees, - Monitor and manage environmental health and safety management program, - Ensure compliance with regulations, - Manage remediation efforts Manage external relationships: - Build investor relationships, - Manage government and industry relationships, - Manage relations with board of directors, - Manage legal and ethical issues, - Manage public relations program Manage knowledge, improvement and change: - Create and manage organisational performance strategy, - Benchmark performance, - Develop enterprise-wide knowledge management (KM) capability, Manage change Run the IT Business effectively To run the IT business effectively and leverage the execution of the business Strategy and objectives with IT we need to make educated investments (on paper compliance and KPI indications is nice to have but not enough!): 100% of the value impact is in the execution of the process of the supported services over the entire service life cycle “order to bill”. IT support business objectives and processes We align to Business Objectives and Business Processes Defined in the Business Service Catalogue Requirements Information with IT Objectives and IT Processes Defined in the IT Service Catalogue supported by ITILv2 & 3 workflows Broken  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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”. 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). Set the IT Value Proposition Baseline: Set fundamentals of a service business, Process view, Establish Total Cost of Ownership and IT baseline with cost/value/risk, Activity based financial view, Service portfolio view, Value contribution view, Customer consumption view. Draw the Roadmap: Construct the IT Business Model and Value Proposition, Define IT “to be state”: “where we need to go”, “where we are now” & “how we need to proceed” with established KPI’s, Report gap analysis findings, Design IT plan through a project portfolio, Cost out the plan (budget), Develop consensus, business case for change. Design the IT Value Proposition: Design the service strategy, Articulate governance principles, Define project teams, Engage customer ‘buy in’, Design KPI’s, Define & validate service pricing, Design the performance measurement system. Build the IT Value Proposition: Implement the project portfolio, Engage Organisational change, Control IT (measure outcome to set objectives), Capture KPI’s & Measure performance, Enforce governance. To Perform Effective IT Governance: Transform the IT Business Model, Measure KPI trends and targets, Meet business objectives, Control cost, Measure Delivery performance, Manage change, Continuous service & process improvement, Process roll out (articulation & integration), Execute strategic intent. 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  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE The Business (IT) Strategy links to operations Link Strategy and Operations: 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 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. A Strategy Canvas, articulated in a The Stakeholder Strategy Map Formalises stakeholder outcomes to deliver value for all parties. The strategy canvas allow the teams to articulate and formulate objectives on a project / program basis for improved execution with an extended GAP, risk and added value analysis captured in a DARCI (Decision taker, Accountable, Responsible, Consulted & Informed). A Collaboration Theme Scorecard The Collaboration Theme Scorecard Sets process objectives, Identifies: levers for joint actions and wins, metrics and initiatives on a short, middle & long term basis.  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Financial Management for IT Services Value Added: In order to understand and assess the effectiveness of current IT investments, IT spend, and IT cost is collected and reviewed in the context of business priorities to industry best practice with Total Cost of Ownership with Cost, Consumption and Chargeback per user captured in an IT Baseline. The review covers spend on technology, people and services. Spend figures are then benchmarked against similar organisations and current business goals/strategies. The IT Services market can be divided by the primary methods of purchase made by end users and service providers: - Discrete - Project-specific contractual arrangement, with a predetermined scope of work to be completed within a given time period, Outsourcing : Annuity-based contractual arrangement that details how an organisation will provide services on an ongoing basis at a specified level of competency. Outsourcing arrangements usually last between two and five years, but may be either shorter or longer. Objective: To provide cost effective stewardship of IT assets and resources used to provide IT Services: - To be able to fully account for the spend on IT Services and to be able to assign cost to services delivered, - To assist management decisions on IT investment with detailed cost analysis for changes to IT Services. Bench: Cost recovery, Chargeback, Financial Management Execution: Plan, Analyse, Design, Implement, Measure, Control Improve Activities: Service Valuation: - Direct versus indirect cost, - Labour cost, - Variable cost elements, - Translation from cost account data to service value. Service provisioning models and analysis: - Managed services, - Shared services, - Utilitybased provisioning, - On-shore, off shore or near-shore, - Service provisioning cost analysis. Funding model alternatives: - Rolling plan funding, - Trigger-based plans, Zero-based funding. Business Impact Analysis (BIA): - Service Level Management: IT Needs of the Business Activities, - Financial Management: Identify Financial Objectives (IT Plans including Budgets), Cost Control Methods (Accounting), Charging Methods (Charging): Feedback on planned charges. Input: IT Financial Management responsibilities do not exist solely within the IT finance and accounting domain. All parts of the enterprise interact to generate and consume IT financial information: - Service valuation: quantifies, in financial terms, the funding sought by the business and IT for services delivered, based on the agreed value of services, - Provisioning Value, - Service Value Potential, - Demand modeling, - Service portfolio management, - Service provisioning optimization, Planning confidence, - Service investment analysis, - Accounting, - Compliance, Variable cost dynamics. Key Decisions: - Cost recovery, value centre or accounting centre, - Chargeback: to charge or not to charge, - Financial Management implementation checklist: - Plan, Analyse, - Design, - Implement, - Measure. Terminology: Service Asset: A Service Asset is a capability or a resource of a  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE services are required to meet set goals?, - What capabilities and resources are required to deliver and support these services?, - How will we get there? Approve: The exercise complete the final draft of the portfolio. The outcomes for services fall into six categories: - Retain, - Replace, - Rationalize, - Re-factor, - Renew, - Retire. Communicate: The exercise communicates decisions and allocates sufficient resources services. Decisions are communicated via a clear and unambiguous report that includes detailed plans for implementation. Input: Decisions relate to budget and financial plans (budget allocations enforce the good use of resources). In this exercise Service Portfolio Management will engage with: - Newly chartered services are promoted to Service Design, - Existing services will be refreshed in the Service Catalogue, - Retired services are forwarded to Service Transition. Terminology: Service Asset: A Service Asset is a capability or resource of a service provider. Assets are used by an organisation to create value in the form of goods and services. Service Valuation: Service Valuation provide the business and IT with measurement on the perceived value of IT Services (cost vs. benefit analysis). Business case: A model of what a service is expected to achieve to meet business objectives. The assessment of service investments in terms of potential benefits and the resources and capabilities required to provision and maintain it. Utility: Functionality offered by a product or service to meet a particular need. Warranty: A promise or guarantee that a product or service will meet its agreed requirements. Key words: Transform the Business (TTB), Run the Business (RTB), Grow the Business (GTB). Service Pipeline: A database or structured document listing all IT services that are Under consideration or development, but are not yet available to customers. Service Catalogue: Database or structured document with information on IT Services, available for deployment, and available to customers. Retired Services: Decommissioned Services. Value: Utility: - Is performance Supported? - Are constraints removed? Warranty: Is the service available in accordance to business needs (SLA / OLA)? - Do we have enough capacity? - Is the service delivery continuous? - Is the service secure? Cost: - Personnel: Release staff, - Accommodation: Physical location (set-up and ongoing), - Software: Tools (set-up and ongoing), - Hardware: Infrastructure (set-up), - Education: Training (set-up and ongoing), - Procedures: External consultants etc. (set-up). Demand Management Added Value: Demand Management is a critical aspect of service management. Objectives: Demand Management is responsible to understand and strategically respond to business demands for services by: Analysis of patterns of activity and user profiles, and provide capacity in line with strategic objectives. Bench: Effective service Management  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Key activities include to: - Agree on and document a service definition with all relevant parties, - Interface with Service Portfolio Management to agree on content of the Service Portfolio and Catalogue, - Produce and maintain a Service Catalogue and its contents, - Interface with the business and IT Service Continuity Management on the dependencies of business units and their business processes with the supporting IT services, contained within the Business Service Catalogue, - Interface with support teams, suppliers and Configuration management on interfaces and dependencies between IT services and the support services, components and CI contained within the Technical Service Catalogue, - Interface with Business Relationship management and Service Level management to ensure information is aligned to the business process. Input: - Business information from the organisation’s business and IT strategy, plans and financial plans, and information on their current and future requirements from the Service Portfolio, - Business Impact Analysis, that provide information on the impact, priority and risk associated with each service or changes to service requirements, Business requirements, - The Service Portfolio, - The CMS, - Feedback from all other processes. Output: - The documentation and agreement of a ‘definition of the service, - Updates to the Service portfolio, - The Service Catalogue: should contain details and the status of every live and transitioning service. Terminology: Operational Level Agreement (OLA): A written agreement between an IT Service Provider and another part of the same organisation. Service Level Agreement (SLA): Agreement between an IT Service Provider and a customer. Service Level Requirement (SLR): A customer requirement for an aspect of an IT Service. SLRs are based on business objectives and are used to negotiate agreed Service Level Targets. Business Impact Analysis (BIA): BIA is the activity in Business Continuity Management that identify vital business functions and their dependencies. Configuration Item (CI): Any component that needs to be managed in order to deliver an IT Service. Cost: - Personnel (Release staff), - Accommodation (location (set-up and ongoing)), Software (Tools (set-up and ongoing)), - Hardware (Infrastructure (set-up)), Education (Training (set-up and ongoing)), - Procedures (External consultants (setup)). Service Level Management Added Value: As enterprises become increasingly dependent on IT, they demand a higher quality of service. By the creation of an IT Service Management (ITSM) strategy, enterprises are able to maximize end-user productivity, improve operational effectiveness and enhance overall business performance. In addition, the effort creates a forum for communication between the IT organisation and the business units. An ITSM strategy provides the basis to integrate IT measurement into operational and strategic IT management. In most cases, however, service management is not welldefined or not defined at all. Service Level Management principles form the basis on  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE formal plan to implement improvements to a process or IT service. Service Level Agreement (SLA): Agreement between an IT Service Provider and a customer. Service Level Requirement (SLR): A customer requirement for an aspect of an IT Service. SLRs are based on business objectives and are used to negotiate agreed Service Level Targets. Service Quality Plan (SQP): is not specifically an SLM term, but strategically linked Management information for steering the IT organisation Process parameters of the Service Management processes and the operational management Key Performance Indicators: - Incident Management: resolution times for levels of impact. Change Management: Processing times and cost of routine changes. Underpinning Contract (UC): A contract between an IT Service provider and a third party. The third party provides goods or services that support delivery of an IT service to a customer service design. Cost: The cost associated with the implementation and execution of an SLM include: - Staff (salary, training, recruitment cost, consultancy - if needed), both initial and ongoing, - Accommodation (physical space for staff, documentation space, etc.), Support tools (monitoring and reporting, plus some element of integrated Service Management tools), - Hardware on which to run tools, - The production of the Service Catalogue. The cumulative effect of Change Management should lead to a gradual improvement in service quality and an overall reduction in the cost of service provision. Capacity Management Added Value: All applications put demand on the IT environment. The continuous spread of applications for enterprise resource planning (ERP), supply chain management, human-resources management and social media will impact IT with their heavy demands for bandwidth. Finally, additional applications are required to support the growing IT infrastructure of an organisation (remote storage of back-up data, for example). Failure to consider these issues will lead to negative effects on the business, as the capacity of the IT Environment simply does not match the requirements of the business. Objective: Ensures that all the current and future Capacity and performance aspects of the business requirements are provided cost effectively. Defined as the Capacity Management process of business requirements (the required Service Delivery), the organisation's operation (the current Service Delivery) and the IT Infrastructure (the means of Service Delivery). Bench: Effective Service Delivery Activities: Business Capacity Management : This sub-process is responsible to ensure that the future business requirements for IT Services are considered, planned and implemented in a timely fashion. Service Capacity Management: The focus of this sub-process is the management of the performance of the live, operational IT Services used by the Customers. It is responsible for ensuring that the performance of all services, as detailed in the targets in the SLAs and SLRs, is monitored and measured, and that the collected data is recorded, analysed and reported. Component Capacity  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Management is a proactive operations management discipline, which has direct and high returns from an application availability perspective. This discipline involves the use of automated tools to avoid problems (that is automatically increase available file space when a threshold is reached) and job scheduling to reduce operator error and improve the availability of batch applications and data. Objectives: To optimise the capability of the IT Infrastructure, services and the support organisation to deliver a cost effective and sustained level of availability that matches or exceeds the current and future needs of the business. Bench: Availability to cost Activities: The Availability Management process has two key elements: reactive and proactive activities. Reactive Activities: - Monitor the actual availability delivered versus agreed targets, - Establish measures of availability and define availability targets with the business, - Identify unacceptable levels of availability that impact the business and users, - Review availability with the IT support organisation, Continually improvement activities to optimize availability. Proactive Activities: Identify Vital Business functions (VBFs), - Design for availability, - Base product and components, - Systems management, - Service management processes, - Highavailability design, - Special solutions with full redundancy, - Root cause analysis of low availability, - Relationship with the Problem Management process, - Produce & maintain an Availability Plan Report, - Availability % = (Agreed Service Time Downtime / Agreed Service Time) X 100% service design. Input: - Business information, - Business impact information, - Previous Risk Analysis, - Service information, - Financial Information, - Change and release information, - Configuration management, - Service targets, - Component information, - Technology information, - Past performance, - Unavailability and failure information. Output: - Availability Management Information System (AIMS), - The Availability Plan for the proactive improvement of IT services and technology, - Availability and recovery design criteria and proposed service targets for new or changed services, Service availability, reliability and maintainability reports of achievements against targets, including input for all service reports, - Component availability, - Revised risk analysis reviews and reports, - Monitoring, management and reporting requirements for IT services and components, - Availability management test Schedule, - Planned and preventative maintenance schedules, - Projected Service Outage (PSO). Terminology: Availability: Key indicator of the service provided. It should be defined in the Service Level Agreement. Reliability: Reliability of the service is made up out of the reliability of Service Components and the resilience of the IT Infrastructure. Serviceability: Contractual arrangements with 3rd parties in regards to maintenance. Maintainability: The ability of the IT group to maintain the IT infrastructure in operational state and available according to the agreed service levels. Security: Confidentiality, Integrity and Availability (CIA) of data. Vital Business Function: The business critical element of the business process that is supported by the IT service. Resilience: The ability of individual components to absorb or be flexible in times of stress.  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Configuration Management System, - Business Continuity management and Availability Testing Schedules, - IT Service Continuity Plans. Output: - A revised ITSCM policy and strategy, - A set of ITSCM plans, including all Crisis Management, Emergency response and Disaster Recovery plans, - Business impact Analysis exercises and reports, - Risk Analysis and Management reviews and reports, - An ITSCM testing Schedule, - ITSCM test scenarios, - ITSCM test reports and reviews. Terminology: Recovery Options: Do Nothing: Sometimes the business can function without this service. Manual Work around Administrative actions, takes a large amount of resource to enter data back into systems. Reciprocal Arrangements: Agree to use the infrastructure of another organisation for batch processing. Gradual Recovery (cold standby): An empty room available (in house or outsourced service), mobile or fixed, where IT infrastructure can be rebuilt. (Takes longer than 72 hours to recover). Intermediate Recovery (warm standby): A contract with 3rd party recovery organisation to use their infrastructure in a contingency situation. Backup tapes should be available at the crisis site at all times. (Takes 24 to 72 hours to recover). Immediate Recovery (hot standby): Rent floor space at the recovery site with infrastructure available and data mirrored from the operational systems. Or have a full duplication of system (components) for instantaneous recovery (or near to). (Takes up to 4 hours to recover) Cost: - Produce the evacuation plan, - Risk analysis and execution of continuity planning, - Take measures for risk management, - Provide options for replacement, Maintain the plan, - Test and review the plan, - Educate staff. Information Security Management Added Value: Security defines how the IT Business will ensure IT Risk and Business Continuity in the future. The Security perspective provides the basis to identify projects and standards required to achieve to the desired future state. Objectives: To align IT security with business security and ensure that information security is effectively managed in all service and Service management activities. Bench: Cost effectiveness, cycle time, capacity to understand customer needs, business contribution. Activities: - Produce, review and revision an overall Information Security Policy and support policies, - Communicate, implement and enforce security policies, - Assess and classify all information assets and documentation, - Implementation, review, revision and improvement of security controls and risk assessment and responses, Monitor and manage of all security breaches and major security incidents, - Analyse, report and reduce volumes and impact of security breaches and Schedule and completion of security reviews, audits and penetration tests. Input: - Business information, - Corporate governance and business security policies  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Activities: All Supplier Management process activity should be driven by Service Strategy and policy. In order to achieve consistency and effectiveness in the implementation of the policy, a Supplier and Contract Database (SCD) should be established. The information within the Supplier and Contract Database will provide a complete set of reference information for all Supplier Management procedures and activities. Although Supplier Management is firmly placed within the Service Design Phase of the Lifecycle, some of the activities are carried out in the other Lifecycle Phases : - Supplier categorization and maintenance of the Supplier and Contract Database (occurs within the Service Design phase), - Evaluate and setup of new suppliers and contracts (occurs within the Service Design phase), - Establish new suppliers (occurs within the Service Transition phase), - Supplier and Contract Management and performance (occurs within the Service Operation phase), - Contract renewal and termination (occurs within the Service Operation phase). Terminology: Supplier and Contract Database (SCD): A database or structured document used to manage supplier contracts throughout their lifecycle. Service Level Agreement (SLA): An agreement between an IT Service Provider and a customer. Service Level Requirement (SLR): A customer requirement for an aspect of an IT service. Underpinning Contract (UC): A contract between an IT Service Provider and a third party. Cost: - Personnel / Staff: (set-up and ongoing), - Accommodation: Physical location (set-up and ongoing), - Software Tools: (set-up and ongoing), - Hardware: Infrastructure (set-up), - Education: Training (set-up and ongoing), - Procedures: External consultants etc. (set-up). Service Transition Service Transition : - Transition Planning and Support, - Change Management, Service Asset & Configuration Management, - Release & Deployment Management, Service Validation and Testing, - Evaluation, - Knowledge Management. Transition Planning and Support Added Value: Effective Transition Planning and Support can significantly improve a service provider’s ability to handle high volumes of change and releases across its customer base. An integrated approach to planning improves the alignment of the Service Transition plans with the customer, supplier and business change Project Plans. Objectives: The objective of this process is to: - Plan and coordinate the resources to establish successfully a new or changed service into production within the predicted cost, quality and time estimates, - Ensure that all parties adopt the common framework of standard re-usable processes and supporting systems in order to improve the effectiveness and efficiency of integrated planning and coordination activities, - Provide clear and comprehensive plans that enable the customer and  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE technology changes. Thus, the IT operations group must step in and address these changes with the business units and applications development organisation. Strong operational change management reduces errors, as well as planned and unplanned downtime. Objectives: The objective of the Change Management process is to ensure that standardised methods and procedures are used to effectively handle all changes, in order to minimise the impact of change related Incidents on service quality, and consequently to improve the day-to-day operations of the organisation. Change Management cover the questions that must be answered for all changes : Who requested the change, Reason for the change, Return required from the change?, Risk involved in the change?, Resources required to deliver the change?, Responsible for the build, test and implementation of the change?, Relationship between this change and other changes? Bench: Cost effectiveness, cycle time, capacity to understand customer needs, business contribution Activities: - Plan and control changes, - Change and release scheduling, Communications, - Change decision making and change authorization, - Ensure there are remediation plans, - Measurement and control, - Management reporting, Understand the impact of change, - Continual improvement. Input: - Policy and strategies for change and release, - Request for change, - Change proposal, - Plans: change, transition, release, deployment, test, evaluation and remediation, - Current change schedule and PSO, - Current assets or configuration items that is base line, service package, release package, - As-planned configuration Baseline, - Test results, test report and evaluation report. Output: - Rejected Request For Change, - Approved Request For Change, - Change the services, service or infrastructure resulting from approved Request For Change, New, changed or disposed assets or configuration items, e.g. baseline, service package, release package, - Change Schedule, - Revised PSO, - Authorised change plans, - Change decisions and actions, - Change documents and records, - Change Management reports. Terminology: Normal Change: A change that follows all of the steps of the change process. Standard Change: A pre-approved change that is low risk, common and follows a procedure or work instruction. Emergency Change: A change that must be introduced as soon as possible, e.g. to resolve a major incident or implement a security patch. Requests for Change: Every change to the IT Infrastructure has to go through Change Management. A Request for Change (RFC): is formally issued for every change request. Change Manager: Responsible for the Change Management process and authorizes all changes. Change Advisory Board (CAB): A dynamic group of people (depending on the change) that approve Changes with medium to high priority, risk and impact. Change Advisory Board Emergency Committee (CABEC): approves and authorizes changes with high urgency, risk and impact. Change models: Some organisations use change models prior to implementation to estimate the impact of the change. Change Management and Capacity management work together on this. Forward Schedule of change (FSC): contains details of all approved changes and their  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE standards and catalogues, - Acquired service assets and components and their documentation, - Build models and plans, - Environment requirements and spécifications, - Release policy and release design from Service Design, - Release and deployment models including template plans, - Exit and entry criteria for each stage of release and deployment. Output: - Release and deployment plans, - Completed RFCs for the release and deployment activities, - Service notification, Updated service catalogue, - New tested service capability and environment, - New or changed Service Management documentation, - Service package that defines the requirements from the business/customer for the service, - SLP that defines the service level requirements, SLA, underpinning OLAs, and contracts, - Service model, New or changed service reports, - Tested continuity plans, - Complete and accurate configuration item list, Service capacity plan that is aligned to the relevant business plans, - Service Transition Report. Cost: - Personnel (Audit verification staff, database management team (set-up and ongoing)), - Accommodation (Physical location (set-up and ongoing)), - Software (Tools (set-up and ongoing)), - Hardware (Infrastructure (set-up)), - Education (Training (set-up and ongoing)), - Procedures (External consultants etc. (set-up)). Release and Deployment Management Added Value: IT operations groups continue to struggle with the incorporation of application, infrastructure, and operational changes into their IT production environments. IT operations groups will increasingly seek to maintain/improve change management service levels as they formalise and adopt processes that enable improved acceptance of change into the production environment (production acceptance, production control, quality assurance, release management). Objectives: The Objective of Release and Deployment Management is to build, test and deliver the capability to provide the services specified by Service Design. This includes the processes, systems and functions to package, build, test and deploy a release into production and prepare for Service Operation. Bench: Cost effectiveness, cycle time, capacity to understand customer needs, business contribution Activities: -Plan, - Release and deployment plans, - Pass/fail criteria, - Build and test prior to production, - Planning pilots, release packaging and build, - Deployment planning, - Financial/commercial planning, - Preparation for build, test and deployment, - Build and test, - Release and build documentation, Acquire and test input configuration items and components, Release packaging, - Build and manage the test environments, - Service testing and pilots, - Service rehearsals, Plan, Do, Check, - Act – take action following the rehearsal, Pilots, - Prepare and plan for deployment, - Perform transfer, deployment and retirement, - Verify Deployment, Early life support, - Review and close a deployment, - Review and close Service Transition. Release management should be used for: - Large or critical hardware  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE service design and release will deliver a new or changed service or service offer that is fit for purpose and use. To test is vital within Service Management and has often been the unseen underlying cause of what was taken to be inefficient Service Management processes. If services are not tested sufficiently then their introduction into the operational environment will bring rise in: Incidents – failure in service elements and mismatches between what was wanted and what was delivered, impact on business support. Service Desk calls for assistance : services that does not function as intended are inherently less intuitive and cause higher support requirements. Problems and errors : that are harder to diagnose in the live environment. Cost : since errors are more expensive to fix in production than if found in testing. Services : - that are not used effectively by the users to deliver the desired value. Objectives: The objectives of this process are to: Provide confidence that a release will create a new or changed service or service offerings that deliver the expected outcomes and value for the customers within the projected cost, capacity and constraints, Validate that a service is ‘fit for purpose’: thatit will deliver the required performance with desired constraints removed, Assure a service is ‘fit for use’: it meets certain specifications under the specified terms and conditions of use, Confirm that the customer and stakeholder requirements for the new or changed service are correctly defined and remedy any errors or variances early in the service lifecycle as this is considerably cheaper than fixing errors in production. Bench: Time to market and customer expectations, Cost Effectiveness, Cycle Time Activities: - Validation and test management, - Plan and design test, - Verify test plan and test design, - Prepare test environments, - Perform tests, - Evaluate exit criteria and report, - Test clean up and closure. Input: - The service package, - SLP, - Service provider interface definitions, - The Service Design package, - Release and deployment plans, - Acceptance Criteria, RFCs Output: - Configuration baseline of the testing environment, - Testing carried out, Results from those tests, - Analysis of the results. Terminology: Acceptance: Formal agreement that an IT service, process, plan or other deliverable is complete, accurate reliable and meets its specified requirements. Acceptance is usually preceded by evaluation or testing and is often required before proceeding to the next stage of a project or process. Evaluation: Responsible for assessing a new or changes IT service to ensure that risks have been managed and to help determine whether to proceed with the change. Fit for Purpose Describes whether the process, CI, IT service etc. is capable of meeting its objectives or service levels. Test: The activity that verifies that a CI, IT Service, process etc. meets its specified or agreed requirements. Validation: The activity that ensures a new or changed IT service, process, plan or other deliverable meets the needs of the business. Validation ensures that business requirements are met even though these may have changed since the original design phase. Cost: - Personnel: Audit verification staff, database management team (set-up and ongoing), - Accommodation: Physical location (set-up and ongoing), - Software:  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE underpinning data and information available to service staff. Objectives: Knowledge Management is responsible to gather, analyse, store and share knowledge and information within the organisation to enable informed decision. The primary purpose is to improve efficiency by the reduction of the need to rediscover knowledge. This is achieved as we enable the service provider to be more effective and improve the quality of the service, reduce cost, increase satisfaction, Ensure that staff have a clear and shared understanding of the value that their services provide to customers and how benefits are realized, Ensuring that, as required, service provider staff have adequate information on: Who currently use their services, The current states of consumption, Service delivery constraints, Difficulties faced by customers in realizing the expected benefits from a service. Bench: Service provider effectiveness, Activities: - Knowledge Management strategy : specifically Knowledge Management will identify and plan for the capture of relevant knowledge and the consequential information and data that will support it, - Knowledge transfer : this is the activity through which one unit (e.g. group or department) is affected by the experiences of another. The form of knowledge transfer must suit those who will use it, examples of criteria /examples that can be used are: - Learning styles, - Knowledge visualization, Driving behavior, - Seminars, webinars and advertising, - Journals and newsletters, Data and information management : knowledge rests on the management of the information and data that underpins it. For this process to be efficient it requires answers to some key input questions, such as how the data and information will be used, what conditions will need to be monitored, what data is available, what are the associated cost, legislative and requirements : - Data and Information requirements, Data and information management procédures, - Evaluation and improvement. Input: - Service package, - SDP and SAC, - Test results and report Output: - Evaluation report for Change Management Terminology: Service Knowledge Management System (SKMS): A set of tools and databases used to manage knowledge and information. Configuration Management System (CMS): A set of tools and databases used to manage an IT Service Provider’s configuration data. Known Error Database (KEDB): A database containing all Known Error Records. Definitive Media Library (DML): One or more locations in which the definitive and approved versions of all software configuration items are securely stored. Cost: - Personnel (Release staff), - Accommodation (Physical location (set-up and ongoing)), - Software Tools (set-up and ongoing), - Hardware (Infrastructure (setup)), - Education (Training (set-up and ongoing)). Service Operation: Function Service Operation: Function, - Service Desk Function, - Technical Management  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE advice, or for a standard change or for access to an IT service. Single Point of Contact (SPOC): Providing a single consistent way to communicate with an organisation or business unit (usually a Service Desk). Cost: - Personnel: To staff the Service Desk (set-up and ongoing), - Accommodation: Physical location (set-up and ongoing), - Software: Tools (set-up and ongoing), Hardware: Infrastructure (set-up), - Education: Training (set-up and ongoing), Procedures: External consultants etc. (set-up). Technical Management Added Value: As the custodian of technical knowledge and expertise related to manage the IT Infrastructure, the Technical Management function provides technical skills and resources needed to support the ongoing operation of the IT Infrastructure. Technical Management also plays an important role as they provide the resources to support the IT Service Management lifecycle. It ensures resources are effectively trained and deployed to design, build, transition, operate and improve the technology to deliver and support IT Services. Objectives: To help plan, implement and maintain a stable technical infrastructure to support the organisation’s business processes through: Well designed and highly resilient, cost-effective topology, The use of adequate technical skills to maintain the technical infrastructure in optimum condition, Swift use of technical skills to speedily diagnose and resolve any technical failures that do occur. Bench: Process support: Design, resilience, topology Activities: We - Identify the knowledge and expertise required to manage and operate the IT infrastructure and to deliver IT services, - Document skills that exist in the organisation, as well as those that need to be developed, - Initiate training programs to develop and refine the skills in the appropriate technical resources and maintaining training records for all technical resources, - Design and deliver training for users, the Service Desk and other groups, - Recruit or contract resources with skills that cannot be developed internally, or where there are insufficient resources to perform the required Technical Management activities, - Procure skills for specific activities where the required skills are not available internally or in the open market, or where it is more cost-effective to do so, - Research and develop solutions which can be used to simplify, automate or reduce cost as well as Model and forecast workload. Cost: - Personnel: To staff the Service Desk (set-up and ongoing), Accommodation (Physical location (set-up and ongoing)), - Software (Tools (set-up and ongoing)), - Hardware (Infrastructure (set-up)), - Education (Training (set-up and ongoing)), - Procedures (External consultants etc. (set-up)). IT Operations Management Added Value: IT Operations is the function responsible for the daily operational  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE documentation is up to date, complete and that relevant staff are familiar with the content. Cost: -Personnel (To staff the Service Desk (set-up and ongoing)), - Accommodation (Physical location (set-up and ongoing)), - Software (Tools (set-up and ongoing)), Hardware (Infrastructure (set-up)), - Education (Training (set-up and ongoing)), Procedures (External consultants etc. (set-up)). Service Operation: Process Service Operation: Process, - Event Management, - Incident Management, - Request Fulfilment, - Problem Management, - Access Management. Event Management Added Value: An event can be defined as any detectable or discernable occurrence that has significance for the management of the IT Infrastructure or the delivery of IT service and evaluation of the impact a deviation might cause to the services. Events are typically notifications created by an IT service, Configuration Item (CI) or monitoring tool. Effective Service Operation is dependent on knowing the status of the infrastructure and detecting any deviation from normal or expected operation. This is provided by good monitoring and control systems, which are based on two types of tools: - Active monitoring tools that poll key CIs to determine their status and availability. Any expectations will generate an alert that needs to be communicated to the appropriate tool or team for action, and - Passive monitoring tools that detect and correlate operational alerts or communications generated by CIs. Objectives: The objective of Event Management is to provide the entry point for the execution of many Service Operation processes and activities. In addition, it provides a way of comparing actual performance and behavior against design standards and SLAs. Bench: Performance to design standards and SLA’s Activities: Event Occurs : Events occur continuously, but not all of them are detected or registered. It is therefore important that everybody involved in designing, developing, managing and supporting IT services and the IT infrastructure that they run on understands what kind of events need to be detected. Event Notification – Most CIs are designed to communicate certain information about themselves in one of two ways: - A device is interrogated by a management tool, which collects certain targeted data (polling), - The CI generates a notification when certain conditions are met. The ability to produce these notifications has to be designed and built into the CI, for example, a programming hook inserted into an application. Event Detection : As an Event notification has been generated, it will be detected by an agent running on the same system, or transmitted directly to a management tool specifically designed to read and interpret the meaning of the event.  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE logged using an Incident Model that is appropriate for this type of exception that is a Security Incident. Review Actions : As thousands of events are generated on a daily basis, it is not possible to review every one. However, it is important to check that any significant events or exceptions have been handled appropriately, or to track trends or counts of event types, etc. In many cases this can be done automatically. Close Event : Some events will remain open until a certain action takes place, for example an event that is linked to an open incident. However, most events are not ‘opened’ or ‘closed’. Informational events are simply logged and then used as input to other processes, such as Backup and Storage Management. Auto-response events will typically be closed by the generation of a second event. Input: Interface with business applications and/or business processes to allow potentially significant business events to be detected and acted upon : - The primary ITSM relationships are with Incident, Problem and Change Management, - Capacity and Availability Management are critical in defining what events are significant, what appropriate thresholds should be and how to respond to them, - Configuration Management is able to use events to determine the current status of any CI in the infrastructure, - Asset Management can use Event Management to determine the lifecycle status of assets, - Events are a rich source of information that can be processed to inclusion in Knowledge Management systems. Incident Management Added Value: While efficiencies can be made from process improvement (e.g. outsourcing and staff reductions), mechanisms need to be in place to determine baselines and ongoing measurements of performance. Fundamental evolution from a reactive help desk support model, to a consolidated IT service desk with Incident Management, brings the need to demonstrate the value of service quality. That quality is inextricably linked to IT customer satisfaction. Objectives: To restore normal service operation as quickly as possible and minimize the adverse impact on business operations, thus ensuring that the best possible levels of service quality and availability are maintained. Bench: Restore, service quality & availability Activities: Incident identification and logging (Service Desk responsibility): - Record basic details of the incident, - Alert specialist support group(s) as necessary, Categorization, prioritization and initial diagnosis, - Categorize Incidents, - Assigning impact and urgency, and thereby defining priority, - Match against Known Errors and problems, - Informing Problem Management of the existence of new problems and of unmatched or multiple incidents, - Assessing related configuration details (daily verification), - Providing initial support (assess Incident details, find quick resolution), - Close the incident or routing to a specialist support group, and informing the user(s). Investigation and diagnosis : - Assessment of the incident details, Collection and analysis of all related information, and resolution (Including any workaround) or a route to in-line support, - Functional or hierarchical escalation where necessary Resolution and recovery, - Resolve the incident using the  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE further approval may be needed – such as compliance related or wider business approval. Request Fulfillment must have the ability to define and check such approvals where needed. Fulfillment: The actual fulfillment activity will depend upon the nature of the Service Request. Some simpler requests may be completed by the Service Desk, acting as the first-line support, while others have to be forwarded to specialist groups and/or suppliers for fulfillment. Some organisations may have specialist fulfillment groups, or they may outsource some fulfillment activities to a third party supplier. The Service Desk will monitor and chase progress and keep users informed throughout, regardless of the actual fulfillment source. Closure: When the Service Request has been fulfilled it must be referred back to the Service Desk for closure. The Service Desk will check that the user is satisfied with the outcome. Input: The primary interfaces with Request Fulfillment are: - Service Desk/Incident Management, - Asset Management, Release Management and Configuration Management. Problem Management Added Value: In ITIL terms we refer to these as incidents. A pattern of incidents is a problem. Failure to halt the recurrence of incidents leads to lost time and frustrated users. Users who have to ask for the same issue to be fixed day after day will quite rightly lose their patience. Effective Problem Management halts the recurrence of incidents and has benefits to the individual and the organisation as a whole. Objectives: The objective of Problem Management is to minimize the adverse impact of incidents and problems on the business that are caused by errors within the IT Infrastructure, and to prevent recurrence of incidents related to these errors. Bench: Business Impact of incidents, recurrence Activities: Problem Management consists of two major processes: Reactive Problem Management: generally executed as part of Service Operation. Proactive Problem Management: initiated in Service Operation, but generally driven as part of Continual Service Improvement. The activities are: Problem detection and logging: - Use incident guidelines for problem identification - Log all relevant details of a problem so that a full historic record exists - Other processes (e.g. Availability, Security) could log problems prior to incident occurring. Problem categorization and prioritization: Categorize the problem by functional areas of the IT organisation, - Assess urgency frequency and impact to assign priority. Problem Investigation and Diagnosis, Assign to IT functional area for further investigation, - Apply appropriate level of resources and expertise to find a resolution proportionate to priority level. Workarounds and raising a Known Error Record: - In cases where a workaround is found, it is important that the problem record remains open, and details of the workaround are always documented within the Problem Record. • As soon as the diagnosis is complete, and particularly where a workaround has been found (even though it may not be a permanent resolution), a Known Error Record must be raised and placed in the KEDB – so if further incidents or problems arise, they can be  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE promotions/demotions, resignation or death etc. Access Management should understand and document the typical User Lifecycle for each type of user and use it to automate the process. Access Management tools should provide features that enable a user to be moved from one state to another or from one group to another, easily and with an audit trail. Logging and tracking access : Access Management should not only respond to requests. It is also responsible for ensuring that the rights that they have provided are being properly used. Information Security Management plays a vital role in detecting unAuthorised access and comparing it with the rights that were provided by Access Management. Access Management may also be required to provide a record of access for specific services during forensic investigations. If a user is suspected of breaches of policy, inappropriate use of resources, or fraudulent use of data, Access Management may be required to provide evidence of dates, times and even content of that user’s access to specific services. Removing or restricting rights – Just as Access Management provides rights to use a service, it is also responsible for revoking those rights. Again, this is not a decision that it makes on its own. Access Management will execute the decisions and policies made during Service Strategy and Design and also decisions made by managers within the organisation. Removing access is usually done in the following circumstances: Death, - Resignation, - Dismissal, or - User has changed roles etc. Input: - Human Resources, - Change Management, - Information Security Management, - Service Level Management Output: - Configuration Management. Service Improvement Service Improvement, - Continuous Improvement, - Measure & Report Continuous Improvement Value Added: Fundamental to Continual Service Improvement (CSI) is the concept of measurement. At the beginning of the Service Lifecycle, Service Strategy and Service Design will identify this information. Continual Service Improvement uses this information to to define the “As Is” and “To Be” for both business and IT. Objectives: Fundamental to Continual Service Improvement (CSI) is the concept of measurement where we use the an Improvement Process. At the beginning of the Service Lifecycle, Service Strategy and Service Design will identify this information. Continual Service Improvement uses this information to find where we are now and identify the ideal situation for both business and IT. Bench: Cost effectiveness, cycle time, capacity to understand customer needs, business contribution Activities: Step One: Define what you need to measure. Talk to the business, find out what your customer’s needs are and discuss with IT Management how those needs  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Input: Vision: Set Direction? (Business Vision, Mission, Goals and Objectives), Where are we now? (Baseline Assessment), Where do we want to be? (Measurable Targets), How do we get there? (Service & Process Improvement), Did we get there? (Measurements & Metrics). Chapter 11. To leverage IT for Strategic Advantage Value, Profit, People – What is your unique competitive advantage? To leverage IT to execute on the set business strategy we need to effectively focus on: Value, Profit and people aligned to create a unique competitive advantage. The tandem is an excellent metaphor for the Business IT relationship. Where Information Technology can accellerate “Go to market”, “Cycle time” and “Cost effectiveness” it is for the Business to set direction and for the IT Department to support the business model. This is also true for the non brick and mortar references that have emerged from silicon valley. Amazon sells books and online store space. 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. 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  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Even my tailor (one of the finest in Paris) has moved forward to a model of “tailor made” to half custom made where he has realised that a person that does not know what he needed in the first place will systematically be disappointed and want something better as the product is delivered (even if it corresponds to what the client asked for). The situation is comparable to that of most IT departments and one of the reasons why an internal client can refuse to sign off the delivery of an application because the colour of beige is not right where he most likely know that the definition did not correspond to the needs of the business in the first place and certainly less so 18 or 36 months (processes modelled and defined by a consultant, translated and programmed) down the road. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated. Reconstruct Boundries Would you sign up to run a retail business operation where you do not know what 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 service based 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  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE IT Management needs to transform their business model: - Move from a cost center centric to a Service based model - Manage a Portfolio of Services-enable cost / value optimization - Efficiency of each Service - Effectiveness of each Service - Manage IT performance on a cost per unit and consumption basis - Compete on the open market - Benchmark and measure apples to apples Create demand In a recent conversation that I had with David Giambruno, CIO Revlon, he mentioned his ability to get the business hooked on new services and products as he actively propose new solutions to the business to leverage competitive advantage and keep the run in perfect shape. But the role as “gatekeeper of technology” to create business value can only be valid as the infrastructure runs smoothly. David has over they years shifted the focus of to use 80 % of the budget for workarounds and fire fighting the 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. 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. Govern It is crucial to build governance in to the execution of the Business and subsequently the IT Strategy. COBIT 5 helps IT leaders provide a business view of IT’s ability to create value and support enterprise goals through effective IT processes and build process capability and can be used to: Develop process improvement, Deliver value to the business, Measure the achievement of current or projected business goals, Benchmark and deliver consistent reporting, and ensure organisational compliance. Shift focus from customers to non-customers Salesforce.com have over the last year demonstrated the ability to shift focus from the traditional customer (that in most cases had no desire to implement the “hosted provider solution” as it would significantly reduce the dependency on legacy applications that stakeholders and a significant number of employees had build their career on). A recent acquisition by the business management at France’s major airline  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE The execution of the defined business strategy is often a mystery (missing link) both on the Business and the IT side. The truth is that regardless of how well the executive team draws out the strategy in the boardroom the bottom line is that the business initiatives that were supported by clients succeeds, those not supported by clients (that do not get it) fail and disappear. The CIO and IT department hence needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated. IT contributes to business objectives The IT service proposition is aligned to the business strategy as: Stakeholder expectations are understood and IT propose a service portfolio that correspond to Demand and Cost drivers, Business Contribution, Cost, Consumption & Chargeback is identified, Focus is on perfect order business transactions, Services are effective (demand and cost drivers identified), Services are competitive (Benchmark Industry 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  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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? 4. Is our portfolio of technology investments aligned with opportunities and threats? Questions to ask: - How well is our IT-investment portfolio aligned with business value with regard to opportunities and threats? - How well does the portfolio balance short-term and long-term needs?  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE - 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? 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 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  
    • Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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.