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TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? Design: Spell out IT Activities from a demand and supplier side

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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 …

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/togaf-unlocked-the-missing-pieces-deliver-business-value-with-itdesign-spell-out-it-activities-from-a-demand-and-supplier-side-420

It is critical to articulate the execution of the Business and subsequently the IT Strategy in to a Business and IT Architecture. The objective of TOGAF 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.

Yet most TOGAF practitioners find it difficult to understand, articulate and demonstrate the business value of an end-to-end or partial Enterprise Architecture investment and more ?Frame work? compliance in a setting where most Business Executives would claim an increased focus on the needs of the business.

The TOGAF 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 TOGAF can be used to demonstrate how to consolidate the service strategy (Design, Build, Run).

A demonstration that would cover both the "IT Business Model" that is how well do we provide IT services as well as the "Business (IT) Value Proposition" that is how well do we support the needs of the business.

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  • 1. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Title: TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! – Design: Spell out IT Activities from a demand and supplier side ISBN: 9781311892188 Official website: http://deliverbusinessvaluewithit.com/ AUTHOR Martin PALMGREN, EVP .COMMUNICATE Copyright TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! – Design: Spell out IT Activities from a demand and supplier side AUTHOR Martin PALMGREN, EVP .COMMUNICATE Published by .COMMUNICATE Publications at Smashwords Edition Inc Copyright 2013 .COMMUNICATE Publications KEY WORDS: TOGAF, Enterprise Architecture, IT Strategy, IT Architecture, Business Architecture, Business Strategy, Deliver Business Value with IT Introduction: It is critical to articulate the execution of the Business and subsequently the IT Strategy in to a Business and IT Architecture. The objective of TOGAF 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.  
  • 2. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 that comes across as the A-Z reference of how to execute and implement IT strategy from a CIO level perspective. The reader will learn robust approaches to deliver services designed to support IT and Business drivers. The perspective that Martin spells out permits an overview of how to leverage existing frameworks but also to effectively support the execution of an IT Strategy aligned with the Business Strategy.” (Jean-Louis Leignel, Ex CIO of the Schneider Electric Group ; past vice-chairman of ISACA (Information System Audit and Control Association), of ISACA’s IT Governance Committee and of the AFAI association (ISACA’s french chapter)). “The focus that Martin takes in the “Deliver Business Value with IT” series will help in tackling the seven main non-technical challenges any CIO or other senior IT  
  • 3. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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. All that you would like to know in regards of the “Deliver Business Value with IT” series What is it about the topic that will get readers excited? After the “how do we align business needs to how IT works” (that is Business IT Alignment) clearly seen in SAP implementations the focus of the CIO need to be on how do we support / “leverage the execution of the business strategy with IT” where the IT Department supports new emerging business initiatives that will eventually form the business strategy as they succeed of fail. That said the IT department has not only the responsibility but should be held accountable for how well they help the business side understand how to leverage existing technology solutions (buy / make) effectively hence the notion of service delivery defined not as basic help desk but as a full fledged business partner and this would include IT Financial Management.  
  • 4. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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. Design, Build and Run an Effective IT (Service) Strategy to Business Needs https://flevy.com/browse/business-document/design-build-and-run-an-effective-it-service-strategy-to-business-needs-279/ref=mpalmgre Get Your Cloud Strategy Right https://flevy.com/browse/business-document/get-your-cloud-strategy-right-286/ref=mpalmgre Leverage Business Strategy Execution with IT https://flevy.com/browse/business-document/leverage-business-strategy-execution-with-it-281/ref=mpalmgre Logics for IT Sourcing (Internal, Shared service center, Out, Cloud) https://flevy.com/browse/business-document/logics-for-it-sourcing-internal-shared-service-center-out-cloud-285/ref=mpalmgre Build an IT Service Strategy Leveraged by ITIL V2 & 3 Design - Spell out IT Activities from a Demand and Supplier Side  
  • 5. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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. Highlight: Focus on the BIG PICTURE! 1: To deliver Business Value with IT we need to Design, Build and Run an Effective IT (Service) Strategy to business needs We will take the reader and the business and IT executive team out of their “ivory tower” and in to “the valley of death” where we confront current “best in class IT practices” to what should be done that is to “support the execution of the business strategy with IT” as opposed to “how do we align business needs to how IT works” (that is Business IT Alignment) which is current best in class. We will leverage business models and concepts to permit the CIO and the IT department to meet the needs of the business (As Is, To Be). List of topics that will be covered in the chapter:  
  • 6. Copyright 2013 Martin Palmgren EVP .COMMUNICATE -­‐ -­‐ -­‐ 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 5: Cloud computing thunder or lightening? How to draw the fluff out of the cloud and effectively support business objectives with IT The introductory material in this chapter is developed to provide pragmatic guidance on how to develop and execute your IT Strategy with effective “Cloud” Sourcing (Computing) to support the Business Strategy and Business Objectives. List of topics that will be covered in the chapter: We understand: -­‐ -­‐ -­‐   How to build and effective cloud strategy That to cloud is a traditional “to make or to buy” decision That a decision should either be demand or cost driven, if it is political this should be recognized.
  • 7. Copyright 2013 Martin Palmgren EVP .COMMUNICATE -­‐ -­‐ -­‐ -­‐ 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, Design the Technology Architecture, Build the Sourcing Strategy, Develop the Program Plan, Leverage Business Strategy Execution 9: Build - Set IT processes and key performance indicators. The introductory material in this chapter is developed to provide pragmatic guidance on how to develop and execute your IT Strategy as you Set IT processes and key performance indicators (Build the IT Strategy) to support the Business Strategy and Business Objectives. List of topics that will be covered in the chapter: We understand how to:  
  • 8. Copyright 2013 Martin Palmgren EVP .COMMUNICATE -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ 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 Objectives: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/it-support-business-objectives/ Figure 5: Deliver effective business strategy execution: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/deliver-effective-business-strategy-execution/ Figure 6: The roadmap reflects stakeholder expectations: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-roadmap-reflects-stakeholder-expectations/ Figure 7: The ServiceStrategy support Business Drivers: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-service-strategy-support-business-drivers/ Figure 8: End to end industrialisation of business processes: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/end-to-end-industrialisation-of-business-processes/ Figure 9: The Business Strategy is executed by IT: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-business-strategy-is-executed-by-it/ Figure 10: Confirm business vision: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/confirm-business-vision/ Figure 11: Articulate the Business Value Proposition: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/articulate-the-business-value-proposition/ Figure 12: Deliver the Business Architecture: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/deliver-the-business-architecture/  
  • 9. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 we execute the IT service strategy (ITIL) Design - Spell out IT Activities from a demand and supplier side, Build - Set IT processes and key performance indicators, Run - Aligned to described ITIL activities and processes and full IT Financial Management (supported by delivery capability IT CMF, COBIT 5). Once services defined we can then decide where to run the application that support the IT and or Business Services (server / internal / external cloud / outsourced provider). Within the frame of an acquisition up to 80% of the value realisation is (can be) on the IT side. The failure to address IT and the IT strategy can be an additional (1 out of 3) reason to M & A failure. If we assume that to deliver business value with IT we need to support business objectives, the integration of a new entity is an optimisation of the current IT strategy (how we support business objectives and processes). We would obviously need to understand (and hopefully have the opportunity) how the current IT run before the purchase (IT due diligence) with full IT Financial Management to figure out the actual cost of delivered IT services (cost, consumption, chargeback). Once services defined we can then decide where to run the applications that support the IT and or Business Service (server / internal / external cloud / outsourced provider). We also need to define the purpose of the purchase (invest / divest) in the overall corporate strategy where it is of little use and a significant cost to integrate all systems  
  • 10. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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.” (Prof. dr. Wim Van Grembergen, University of Antwerp & Antwerp Management School, Information Technology Alignment and Governance Research Institute) “The focus that Martin takes in the “Deliver Business Value with IT” series will help in tackling the seven main non-technical challenges any CIO or other senior IT business leaders will face: 1. How and what should I communicate to whom in what way? 2. What to think of when it comes to competences needed to provide my IT services? 3. How to provide the best value at the best cost? 4. What to think of when ensuring efficient and effective delivery of projects? 5. How to establish a sourcing strategy and determining how to manage your vendors? 6. What are the best practices for managing my operations, and what to think of?  
  • 11. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 proliferation of public form of Cloud Computing, CIO's are threatened of their survival in the corporate world. Business units can readily meet their compute needs by purchasing services directly from service providers without using IT. These services come with predictable cost at given service levels with high degree of agility. IT organizations, on the other hand, are order takers. Martin's publication on designing, building and running an effective IT Strategy to meet business needs was developed to help CIOs create business value by addressing the following mega IT challenges: 1. How to transform IT from an order taker to a product and service organization; 2. How to make IT more agile to create value from a time-to-market perspective; 3. How to develop product and services that are fully aligned with business needs and, then, offer them at predictable cost with given service levels 4. How to provide effective IT Governance. There will be times when it will be more effective to buy services directly from Service Providers as opposed to building them in house. But those decisions should be made in a more methodical way. But, this will require for IT to administer a very effective and sound IT governance process. IT should be the keeper of the product and service catalog.  
  • 12. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated. Author Introduction Martin Palmgren is a seasoned Senior Business / IT Strategy and Transformation Executive that has addressed Strategy formulation and roll out for fortune 500 businesses internationally with a focus on how to ensure that the business strategy and objectives are supported by IT with an effective IT Strategy and Governance (that is how do we support business objectives and processes leveraged by IT and an effective IT strategy). Martin is an expert in “how to deliver business value with IT” where he works with both Business and IT Executives to reach this objectives and has delivered best in class practice with major actors in the Pharma, Bank, Manufacturing and Insurance  
  • 13. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - 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 and offer: target and operational marketing identification (price, geographical zone, mix). Partner & competition bench. Development of an international partner program (+ 30 000 ads on a monthly basis). Martin also held the role of general secretary to the CEO the former CFO of a listed large French group and actively contributed to the overall strategy and was key to international development. Martin joins CAP GEMINI ERNST & YOUNG (Cap Gemini SA) in 1999 (– 2002) as an expatriate project manager affiliated to CGE & Y Sweden and direct report to the Chief Knowledge Officer (later CIO) on a group level. Objective: To leverage the groups presence, shorten go to market and win additional market share through best in class solutions to: deliver, share references, blue prints, delivered solutions, find experts and staff internationally. Mission: Client needs identification (audit, definition). Active participation in the conception and development and roll out of collaborative tools: my office, my connections (expert identification search database: 6000 competencies, 56 000 competency profiles with daily updates to local HR databases). Other assignments: Group initiative proposition articulation (business development): Cost optimization in the aerial, energy and utility sector (CA 20 M€), IAS (International Accounting Standards): development, implementation, evaluation and sector reporting. Client portfolio development: trend, brand and market  
  • 14. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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). How poor IT Financial Management (accountability) set your business, CIO and IT department up for failure! If you owned an airline company would you accept that when you asked how many passengers that had been transported, which distances where the most profitable, how many tickets sold and at what price and if time tables and destination where kept as promised and the amount of gas consumed the reply that the planes had been kept in the air and that any constraints would hamper creativity (innovation). This is however the case for most businesses where the IT department on the premise that they "keep the lights on" should not be held accountable neither for cost nor delivery and IT Financial management is a bean counting mentality (when I spoke to a friend in a top 3 audit firm in regards of this phenomena he told me that whenever a client told him the to keep records of his business was a bean counting mentality he would by definition look closer and 10 times out of 10 would find the records to be revised and basic rules broken) and that to have clear accountability would hamper creativity (innovation). The bottom line is that most outsourcing is performed not to optimise cost but to get a minimum level of service delivered (and at least the illusion of service level agreements to be met). When you sign up as a student in business administration you learn how to assign cost, read and build a balance sheet, calculate and optimise cost in  
  • 15. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 where the blue print was not defined well enough to produce to the needs of the client in the first place (moving target dilemma). The bottom line is that we need to rapidly be able to understand modelise and deliver to the needs of the business and business objectives. If standardised solutions cover 80 % of the needs that would most likely be enough. To systematically capture (modelise) unique “tailored” business processes in a modelisation tool that are not industrialised is not only a waste of time but of enterprise resources (unless this would be required by the audit team). A coherent approach would be to identify business processes that support activities that could be industrialied with IT when needed and modelised if we cannot find a standardised solution off the shelf. Google, box.com, Salesforce and other hosted providers dispose of resources that most IT departments could only dream of to address specific subjects such as mail, document storage, CRM. Why reinvent the wheel when we can extrapolate on hundreds of manyears of cumulated knowledge (not to mention budgets funded by IPO’s) all in the name of “security”? Even my tailor (one of the finest in Paris) has moved forward to a model of “tailor made” to half custom made where he has realised that a person that does not know what he needed in the first place will systematically be disappointed and want  
  • 16. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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, - Meet stakeholder expectations from an executive and business management perspective would this be among your current priorities You need to demonstrate how you Create Business Value and Optimise IT’s contribution to the business: - Service Portfolio optimised around business value - IT spend streamlined through in depth cost transparency - Measure IT performance with financial KPIs - Model customer consumption of IT services – chargeback - Optimise internal processes, controls, organisation - Demonstrate the value that IT contributes to the business - In the follow business critical areas: - Budget – Strategic Planning - IT Controlling - Simulate scenarios - M & A, data center consolidation, etc - Demonstrate IT’s contribution to the business - ITIL v3 implementations, BSM projects Where the Bottom line is that: IT Management needs to transform their business model:  
  • 17. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 external expenditure we were able to give it back to the business to invest in revenue driving initiatives. For Revlon, the more money R&D has to develop new products to get to our consumers and for marketing to tell our “product story” and get it out to our channels and use the media to talk about our glamorous products the more succesfull the business. Another change for Revlon is that it has become a cloud provider itself as we push our cloud out to suppliers and contractors. At the end of the day, we needed to rapidly collaborate with our eco system that is our community of vendors and suppliers, and enable them to interact with us easily where the bottom line is to drive growth for Revlon.” Govern It is crucial to build governance in to the execution of the Business and subsequently the IT Strategy. COBIT 5 helps IT leaders provide a business view of IT’s ability to create value and support enterprise goals through effective IT processes and build process capability and can be used to: Develop process improvement, Deliver value to the business, Measure the achievement of current or projected business goals, Benchmark and deliver consistent reporting, and ensure organisational compliance. Shift focus from customers to non-customers  
  • 18. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 traditional competitive (structuralist) strategic thinking and to grow demand and profits for the company and the industry as we use blue ocean (reconstructionist) strategic thinking. The third and final part describes the two key implementation principles of blue ocean strategy that would include tipping point leadership and fair process, essential for leaders to overcome the four key organisational hurdles that can prevent even the best strategies from being executed. The four key hurdles comprise the cognitive, resource, motivational and political hurdles that prevent people involved in strategy execution to understand the need to break from status quo, find the resources to implement the new strategic shift, keep your people committed to implementing the new strategy, and from overcome the powerful vested interests that may block the change. In the book the authors draw the attention of their readers towards the correlation of success stories across industries and the formulation of strategies that provide a solid base create unconventional success – a strategy termed as “Blue Ocean Strategy”. Unlike the “Red Ocean Strategy”, the conventional approach to business to beat competition derived from the military organisation, the “Blue Ocean Strategy” tries to align innovation with utility, price and cost positions. The book questions the phenomena of conventional choice between product / service differentiation and lower cost, but rather suggests that both differentiation and lower cost are achievable simultaneously. The authors ask “What is the best unit of analysis of profitable growth? Company? Industry?” – a fundamental question without which any strategy for profitable growth is not worthwhile. The authors justify with original and practical ideas that neither the  
  • 19. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 business and IT processes was business critical and would demonstrate that the IT Strategy is business centric and that the IT department understands the Business, Business objectives and the Business strategy. (Context B) A business or IT internal client wants to industrialise a process or a bundle of services with IT. We decided to use the same consultants as for the six sigma initiative (below) to capture business processes. The problem is that the business people are to busy to do their job (and might not be able to formalise their processes). And if their work is automatised we might chuck their work out on the cloud or an outsourced provider as well (the last time they spoke to a consultant their colleague was fired (sorry made redundant, sorry given the opportunity to seek new challenges))? Obviously they do not get it. Step 2 - Synthesize: (Context A) The captured processes are modelised in a process modelisation tool and will sit in a cuppord. (Context B) The captured processes (in the case of the industrialisation effort) delivered by the somewhat reluctant users are translated by a business analyst in to user requirements. These are then transferred to managment for verification. The 300 pages document sit on a disk somewhere for 3 weeks to 3 months before it is shipped of for programming. Step 3 - Generate Ideas: The user requirements are programmed. Step 4 - Refine: The end user team is brought in 18 months after to validate the application. Hmm they might not have gotten it either. At least we avoided a fist fight…  
  • 20. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 wonder if we can chuck the IT department out to the cloud. Then the cloud provider could deal with users that are not happy. I wonder if the cost cutting genious that we brought in last year is available. On his recommendation we consitently cut the cost of IT for the (mobile) sales force. At the end of the day as they did not have an office or a fix computer why should they need a lap top? Not to forget that we made substantial economies on software licenses and storage space. Phase 4. - Set direction: We have the impression that we might not be on top of things and should add a bit of governance. The Internal audit department confirmed this impression as they confirmed that we clearly lacked focus due to the absence of an IT Dashboard. Best case scenario: As we where quite happy with the Big Change report , the first page does after all look smashing, and the weight of the paper makes my table more stable. We decide to once more bring in our favourite consultants. At the end of the day if the six sigma task force initiative had a few bumps it was not due to the fact that the principles that where implemented where directly applied from the Toyota production chain (they are after all very good at car construction) but certainly due to the fact that the users did not get it. Even though the delivery cycle now takes 180 days compared to 30 before at least it is measured and we can bench cost to competition.  
  • 21. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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     Burburry have taken the a lead in the how to leverage business innovation with IT, notably with social as a key enabler through a “Facebook” driven platform that drives innovation bottom up where employess connect to share best practise on how to set up stores and sell products and even compete internally on a daily basis who sold more in “discussion groups” set up by the teams not by management. I would invite you to discover an interview @ http://blogs.hbr.org/video/2012/12/how-burberry-manages-talent.html?cm_mmc=email-_-newsletter-_-cant_miss_update-_-hbrcm020813&referral=01087&utm_source=newsletter_cant_miss_update&utm_medium=email&utm_campaign=hbrcm020813 To support business strategy execution The execution of the defined business strategy is often a mystery (missing link) both on the Business and the IT side. The truth is that regardless of how well the executive team draws out the strategy in the boardroom the bottom line is that the business initiatives that were supported by clients succeeds, those not supported by clients (that do not get it) fail and disappear. The CIO and IT department hence needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed.  
  • 22. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 teams to articulate and formulate objectives on a project / program basis for improved execution with an extended GAP, risk and added value analysis captured in a DARCI (Decision taker, Accountable, Responsible, Consulted & Informed). A Collaboration Theme Scorecard The Collaboration Theme Scorecard Sets process objectives, Identifies: levers for joint actions and wins, metrics and initiatives on a short, middle & long term basis. Objectives: - Set process objectives,- Identify levers for joint actions and wins,Identify metrics, Identify initiatives on a short, middle and long term basis. Levers: Joint: Steering committee, development committee, project teams, crossfunctional teams, process improvement teams and functional improvement teams. To deliver Business Value with IT, we need to integrate the notion of effective IT delivery as a core process across the organisation. With the contribution of Jerry Luftman I have earlier referred to Michael Porter. In terms of Porter’s Value Chain (http://hbr.org/product/competitive-advantage-the-value-chain-and-your-p-l-applying-michael-porter-s-value-chain-framework-to-your-business/an/8890BC-PDF-ENG ),  
  • 23. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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. This approach permit effective allocation of resources as we provide participants the opportunity to better understand the problems and opportunities that exist and how projects can be leveraged across the organisation to facilitate the integration of IT and support business objectives and processes and hence enhance the value of the business. As we leverage IT to: - Substantially reduce the cost of business processes, - Lower the costs of customers and suppliers, - Differentiate, - Develop new IT features to differentiate products and services, - Reduce the differentiation advantages of competitors, - Focus products and services at selected market niches, - Create new products and services that include IT components, - Develop unique new markets or market niches with the help of IT, - Make radical changes to business processes with IT that dramatically cut cost, improve quality, efficiency, or customer service and shorten time to market, - Manage regional and global business expansion, - Diversify and integrate into other products and services, - Create virtual organisations of business partners, - Develop inter enterprise information systems that support strategic business relationships with customers, suppliers, subcontractors, and other stakeholders. IT must be responsible for profit and loss from a business perspective By Daud Santosa (Chief Technology Officer, Member of the Board @ the Open Group and Distinguished Chief IT Open Group)  
  • 24. Copyright 2013 Martin Palmgren EVP .COMMUNICATE (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 to implement EA to deliver immediate business results. We would typically start to implement EA in different domains of the architecture. It all depends on where the needs of the organisation, culture, and skill set resides. The common challenges that I have seen in most organisations would be that the: - Line of Business continues to develop new projects or add new features with the current existing business applications, IT organisation continues to replace old hardware and add new hardware / software to support new business requirements, has no standard technologies & IT governance, continues to adopt new emerging technologies. We begin our EA journey as we address the spelled out points on a short and long term basis. The primary focus of EA would be to support the future business and new projects first. Based on the drivers, we can begin to create future IT services, shared infrastructure, Enterprise Solution and new cost model to deliver sustainable growth and premier services as we focus on: The Business Bottom Line that is How fast we can get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective.  
  • 25. Copyright 2013 Martin Palmgren EVP .COMMUNICATE business objectives, that is to deliver business value with IT: - What is the Business’s strategy and plans? , - What is the current business model that IT has to support? ,Where could IT make a significant impact on the business? ,- Are there any further opportunities to use IT? , - How do we provide IT Services as we meet demand and cost drivers where the decision is to make (internal) or to buy (external service provider)? We have identified 2 key trends for the CIO to focus on: - Differentiation (That is, how does IT provide a competitive advantage for the business), and - Cost (How does the IT Department deliver IT Services cost effectively). To do so we need to Build an effective IT Delivery Model to meet business needs and expectations as we leverage business strategy execution and business processes supported by an IT Service strategy (ITIL, IT – CMF, CobIT 5 (ValIT, CobIT 4.1, RiskIT), ISO 38 500, TOGAF and ISO 9001, ISO 27 001, COSO) delivered in a Business IT roadmap; that is how do we support business objectives and processes leveraged by IT and an effective IT Services strategy. Within this scope we would by definition address how we execute the IT service strategy (ITIL) Design - Spell out IT Activities from a demand and supplier side, Build - Set IT processes and key performance indicators, Run - Aligned to described ITIL activities and processes and full IT Financial Management (supported by delivery capability IT CMF, COBIT 5). Once services defined we can then decide where to run the application that support the IT and or Business Services (server / internal / external cloud / outsourced provider). Within the frame of an acquisition up to 80% of the value realisation is (can be) on the IT side. The failure to address IT and the IT strategy can be an additional (1 out of 3) reason to M & A failure. If we assume that to deliver business value with IT we need to support business objectives, the integration of a new entity is an optimisation of the current IT strategy (how we support business objectives and processes). We would obviously need to understand (and hopefully have the opportunity) how the current IT run before the purchase (IT due diligence) with full IT Financial Management to figure out the actual cost of delivered IT services (cost, consumption, chargeback). Once services defined we can then decide where to run the applications that support the IT and or Business Service (server / internal / external cloud / outsourced provider). We also 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  
  • 26. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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). Where the needs of the business and the business strategy should drive the IT Strategy, the IT Department can leverage the business strategy with an effective IT Service Strategy that would spell out how the roadmap for how the IT Department will cost effectively run the IT Function but also how to support the business function where the IT Department support the business functions to simplify processes that can then be industrialised (automatised) when needed and on the cloud (external or internal) for speed / cost effectiveness when applicable. “Social media and the cloud” - Social media applications can either be run as in example 1) by an external provider to whom you outsource the data (Facebook* would be one example) or as in example 2) where an application / a bundle of applications that respond to the needs of the business “for example to interact with our customers” would run on an external or internal cloud. “Make or buy” – To outsource / cloud source (cloud) is a traditional “make or buy decision”, that is “do we perform this well internally at benchmarked cost or do we outsource for success”. One of the critical decisions in apple’s current success was to outsource a manufacturing that was defunct (cost / quality) and did not meet the expectations of the final customers. But to outsource / cloud source effectively as well as to validate the successful set up of a shared service centre, we need to understand the cost of the service delivered before and after the set up function (the cost to change provider should be taken in to account in the business case).  
  • 27. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 forces the business to define services and service level agreements (as well as cost, consumption, chargeback) with an IT Business Model that is if not optimised at least focused on immediate business priorities and drivers (demand and cost). Build and demonstrate IT success To build and demonstrate IT Success we need to focus on the Business IT roadmap; that is how do we (as CIO, IT Department) support business objectives and processes leveraged by IT and an effective IT Service strategy. Where we Focus on the Business Bottom Line: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. This is achieved as Business objectives and Processes (captured in the Business Architecture) are supported by a strategy execution focused IT architecture where Business objectives: We would like to increase sales by 25%, how can the IT Department support the Business in this effort and what will be the impact on the budget of the IT Department? , are supported by IT objectives: This would translate in to, on the business (IT) side: 1) which business processes are concerned with the increase and how do we support them today and how do we anticipate the increase (applications, infrastructure, support)? 2) Is there an opportunity to further  
  • 28. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - 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, - Per seat, basis, - How does customers currently pay for these services, - What is the backlog of new unfulfilled IT demands? - What processes does IT perform? : - How do these processes compare to best practices? - What are the cost drivers on an activity basis? IT Decision are based on Total cost of ownership As Customers pay for services that they use decisions are made based upon cost, not politics. IT is incented to reduce cost and compete and users do not request unnecessary demands. KPI’s become established to measure performance SLA are put in place. IT Decisions are ROI Based IT is effectively managed as we a Establish Baseline with Cost, Consumption, Chargeback. Build a service based business model of IT that is based on IT Service  
  • 29. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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): - Time in months to break even for new or enhanced IT services (Investment < €100,000), - Time in months to break even for new or enhanced IT services (Investment b/w €100,000 and €250,000), - Time in months to break even for new or enhanced IT services (Investment b/w €250,000 and €500,000), - Time in months to break even for new or enhanced IT services (Investment b/w €500,000 and €1,000,000), - Time in months to market for new or enhanced IT services (Investment < €100,000), - Time in months to market for new or enhanced IT services (Investment b/w €100,000 and €250,000), - Time in months to market for new or enhanced IT services (Investment b/w €250,000 and €500,000), - Time in months to market for new or enhanced IT services (Investment b/w €500,000 and €1,000,000), - Time in months to respond to major business shifts, - Time in weeks to complete projects that address an identified business exposure or opportunity (< 20% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (20-40% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (4060% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (60-80% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (More than 80% of total annual revenue), - Time in weeks to close an identified IT skill or capability gap, - Average time in weeks to fulfill a simple information need, - Average time in weeks to fulfill a medium information need, Average time in weeks to fulfill a complex information need, - Average time in weeks to create the enterprise information management strategic plan, - Time in weeks to  
  • 30. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 unavailability of network, - Response times per category of users, - Percentage of jobs done within time, - Efficient help desk function, - Average answer time of help desk, Percentage of questions answered within time. Future Orientation (Key Performance Indicators): - Training and education of staff, - Number of educational days per person, Education budget as a % of total IT budget, - Expertise of the IT staff, - Number of years of IT experience per staff member, - Age pyramid of the IT staff, - Research into emerging technologies, - % of budget spent on IT research General Business Management. To support the business Strategy Set Business processes and key performance indicators (Build): Develop vision and strategy, Develop and manage products and services, Market and sell products and services, Deliver products and services, Manage customer services, Develop and manage Human Capital, Manage information technology, Manage financial resources,  
  • 31. Copyright 2013 Martin Palmgren EVP .COMMUNICATE (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/ A Roadmap The Roadmap (derived from the logics presented in “Managing Alliances with the Balanced Scorecard”, by Kaplan, Norton, Rugelsjoen, Harvard Business Review, January–February 2010, p. 114 – 120) http://hbr.org/2010/01/managing-alliances-with-the-balanced-scorecard/ar/1 reflects stakeholder expectations from an Executive Management, Business Unit Management, IT Management and IT Risk Management perspective where: Stakeholder Expectations Drives Business (IT) Objectives that Delivers the Business (IT) Road Map executed by Employees & Organisation. Figure 7: The Service Strategy support Business Drivers: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-service-strategy-support-businessdrivers/  
  • 32. Copyright 2013 Martin Palmgren EVP .COMMUNICATE The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. 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 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  
  • 33. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 workflows. These are then Broken down in to Key Activities Performed to Responsibility and Accountability Charts (RACI). The logics in chapter 4 clearly links back to CobIT 4.1, ValIT, RiskIT. They are then Measured by Performance indicators (Embedded in Service Catalogue per Service), Outcome Measures, Maturity Models (CMMI, ITIL continuous process improvement) Audited with Control Outcome tests Derived from Control Objectives Audited with Control Design Test Implemented with Control Practices. IT support business objectives and processes with Investment Management We align and lever operating, management and support processes through the effective implementation of IT.  
  • 34. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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/ Set the IT Value Proposition Baseline: Set fundamentals of a service business, Process view, Establish Total Cost of Ownership and IT baseline with cost/value/risk, Activity based financial view, Service portfolio view, Value contribution view, Customer consumption view. Figure 15: Draw the Roadmap: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/draw-the-roadmap/ Draw the Roadmap: Construct the IT Business Model and Value Proposition, Define IT “to be state”: “where we need to go”, “where we are now” & “how we need to proceed” with established KPI’s, Report gap analysis findings, Design IT plan through a project portfolio, Cost out the plan (budget), Develop consensus, business case for change.  
  • 35. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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. Objectives and Plans There is a understanding of the: Extent to which long term plans are coherent and logical, Extent to which short term plans are appropriately costed and timetabled and the Consistency with overall goals and objectives. Financial plans Appropriateness of detail, Clarity with which assumptions have been stated, Extent to which profit / return criteria has been evaluated, Evidence of appropriate scenario and sensitivity analysis, Evidence of appropriate key performance indicators. Communication and buy in  
  • 36. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 teams to articulate and formulate objectives on a project / program basis for improved execution with an extended GAP, risk and added value analysis captured in a DARCI (Decision taker, Accountable, Responsible, Consulted & Informed). A Collaboration Theme Scorecard The Collaboration Theme Scorecard Sets process objectives, Identifies: levers for joint actions and wins, metrics and initiatives on a short, middle & long term basis. Objectives: - Set process objectives,- Identify levers for joint actions and wins,Identify metrics, Identify initiatives on a short, middle and long term basis. Levers: -  
  • 37. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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? - Do we have effective value-assurance processes in place to mitigate execution risk? 5. How will IT improve our operational and strategic agility?  
  • 38. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - 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 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? ,  
  • 39. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 draw an IT strategy leveraged by the cloud to: - Establish an appropriate Cloud sourcing strategy, - Identify capabilities that could be cloud sourced, - Develop appropriate approaches for cloud sourcing activities, - Manage risks throughout their cloud sourcing activities, - Identify, select and negotiate with service providers, - Conduct service provider governance and performance management, - Manage relationships with service providers. We Cloud 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.  
  • 40. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 To demonstrate how IT contributes to Business Objectives we need to build a Blueprint (Road Map) to meet business objectives and stakeholder expectations leveraged by an effective IT Service Strategy. It should support an end-to-end perspective on how to get the IT strategy right, “Canvassed”, with and support Service Strategy (ITIL), Delivery Capability (IT – CMF, COBIT 5 (ValIT, CobIT, RiskIT, CMMI, eSCM), Architecture (TOGAF) Security (ISO 9001, 20 000, 27 001). To deliver IT Services to business needs as we meet stakeholder expectations, we Focus on the Business (IT) Strategy Execution to Leverage strategy with IT and Build a Business (IT) Service Strategy where we Design the IT Service Strategy &  
  • 41. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 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.  
  • 42. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 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 service level agreements (commitments), - IT investments positively affect business productivity and the customer experience, - We have a clear process vision towards which we expect the IT department to deliver: ISO 38 500, VALIT, COBIT, RISKIT, ITIL  
  • 43. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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” & 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.  
  • 44. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 Google, Amazon and the applications (bought or leased (Software as a Service (SaaS)) run on one or several mutualised servers outside the firewall) on a public (external) cloud that is run by a cloud provider. The latter deliver a bundle of services (Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Software as a Service (SaaS) outside the firewall on which the enterprise can run applications (in an architecture). Trends have over the last 12 months seen the evolution of a hybrid Cloud Model that can be defined as an outsourced provider that runs applications on a provider external cloud. The higher up the cloud stack you go (IaaS->PaaS->SaaS->BPO), the greater the  
  • 45. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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, Develop the Business (IT) Service Strategy, Build the Business (IT) Service Strategy, Govern the the Business (IT) Service Strategy, Design the Technology Architecture, Build the Sourcing Strategy, Develop the Program Plan, Leverage Business Strategy Execution. 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  
  • 46. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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? 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?  
  • 47. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Further comprehension of expectations on the “IT Value Proposition” that is how do we (are we expected to) deliver IT services to business needs is achieved by conducting interviews with key executives and an analysis of stakeholder surveys. Confirm Internal Environment / Competencies In order to assess the internal environment and competencies a broad evaluation of the human, financial, productive, physical and technological resources of the company is conducted with the purpose to identify the company’s distinct competitive strengths that is distinct competencies of the business (strengths), as well as the required competencies that need to be developed (weaknesses) to close the “GAP”. Confirm Business (IT) Strategy, Objectives and Goals The business strategy and plan based on available data follows logically from it. The organisation’s business imperatives, strategies, goals and objectives with Critical Success Factors within the control of the organisation are identified and documented. Confirm monitoring / evaluation procedures IT is a key enabler for performance measurement to determine how the organisation has planned to measure performance and the mechanism for monitoring and taking corrective action both for the Business and the IT Business. Key Performance Indicators (KPIs) are identified and defined for each strategic initiative and Business Driver and Objective. Key performance indicators are identified for the IT Value Baseline as well as the Business Baseline. Demand and Cost Drivers should be taken in to account, that is how well does the IT Service Strategy respond to business needs to execute the set strategy and optimise Total Cost of Ownership per user. Validate the Business (IT) Strategy Does IT support strategy execution with a clear IT Business Model and Value Proposition articulated in a service strategy? Focus on the validation of the IT strategy and direction. Where certain areas are less focused, dispersed or contradict elements of the Business (IT) strategy it is necessary to undertake incremental strategic analysis. The extent to which this is necessary or desirable depend on if the area of concern is fundamental to the entire Business Strategy & impact on the Business (IT) Strategy. Develop a high level picture of the Business (IT) Strategy  
  • 48. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Identify scope / opportunities for improvement To identify opportunities for improvement and get a first, high level, view of the potential benefits available to the organisation, we map the Business Strategy with Business Drivers and Objectives to the current IT service strategy. The gap should be used to determine the scope of possible improvements. In addition to the benefits the opportunities are likely to bring in, a preliminary identification of the associated risk and cost is made. The scope / opportunities are validated and recorded on the ‘As-Is’ process model to ensure that the widest possible acceptance of this picture is achieved among management and staff not only involved in but are affected by the process. It should be noted that the opportunities identified in this task will primarily have a business focus. This analysis results in the first view of the Business (IT) Strategy business case. Opportunities with an overall business improvement may have been identified earlier. The role of IT as an enabler of the business should now be examined and specific IT opportunities identified. This analysis will be supported by an assessment of existing IT that is being undertaken. At this stage, specific IT opportunities will likely be high level and cover Strategy Execution Focused opportunities with Business Drivers and Processes: improved time to market, reductions in inventory and faster customer response among others. The IT high level opportunities will provide the focus for the activities in the subsequent IT ‘To-Be’ model development. Ensure stakeholder “buy in” and sponsorship To ensure that stakeholders, top management, IT management and other business managers have been involved in and have “bought in” to the output we need to understand stakeholder expectations and deliver to the latter. Adequate buy-in at appropriate levels from all stakeholders is critical to the success of the engagement. If appropriate sponsorship is not visible at all stages, the quality of the work effectuated and the ability to implement the solution will be limited. Appropriate action should be taken to ensure that the interest and sponsorship of top management is sustained throughout the engagement. The key to maintain sponsorship is to keep relevant stakeholders informed and to demonstrate the benefits case as it develops with the delivery of quick wins. Summarise analysis An agreement to the business design/transformation principles reached, it is important to document the analysis undertaken and prepare a short summary report. The report will be useful as a signed off document that can be revisited during the engagement where the ‘To-Be’ model is developed. We articulate the Business (IT) Strategy  
  • 49. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Assess the Business (IT) relationship The relationship between IT (the supply side) and the Users (the demand side) will depend on the extent of integration of IT in the organisation. Traditionally, IT was a separate department with varying degree of autonomy depending on whether it was a cost or a profit centre. A focus on strategy execution with business objectives and drivers forces the identification of a service strategy, delivery capability, architecture and security and will help you assess the expectations of the business stake holders. Applications Review The review of applications is undertaken in two parts. The first part involves assessment of the functional and technical quality of existing applications. The second part comprises an assessment of the programmes / projects, both existing and proposed, delivering IT applications. Applications Portfolio Review The existing portfolio of applications should be assessed by functional and technical quality. The two views provide the demand and supply side perspectives. The functional quality provides the user’ perception of how well existing applications support the business. The technical quality provides the IT departments perception of how good the applications are from a technical standpoint. It is important to identify all applications that are to be included in the analysis. Assess IT programmes / projects A review of IT programmes could be undertaken as an independent engagement or as part of an assessment, sourcing or strategy engagement. The first step is to agree to the scope of the review to include programmes and projects and their objectives. Once this has been agreed, the design of the data collection can be carried out to inventory projects in the scope but significantly more information can be collected as well as interviewing the project team members. Typical project information to be collected might include strength of business sponsorship, benefits, progress and cost against plan, resources used, strategic alignment, what would happen if it was stopped, etc. IT management practice definitions could be used to score specific aspects of project management processes. Assess Stakeholders Priorities, Maturity and Satisfaction Stakeholder priorities, Maturity and Satisfaction should be assessed to complete the understanding of the reasons for the existing effectiveness of IT in the organisation.  
  • 50. Copyright 2013 Martin Palmgren EVP .COMMUNICATE ‘partnership’ or the relationship between the service provider and the client organisation. In this context the IT function will be both a supplier (to business users) and a user (of the service from the third party supplier). This dual relationship requires greater management sophistication than required of the simple IT function. The second aspect of the review is the user satisfaction expressed in regards of externally provided services. Assess IT investment /cost / spending In order to understand and assess the effectiveness of current IT investments, IT spending, 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 spending on technology, people and services. Spend figures are then benchmarked against similar organisations and current business goals/strategies. Develop (Draw) the Business (IT) Service Strategy Key Questions: How will the business operate in the future and how should the IT Business model operate to meet the identified needs? Objective: To define how the business will operate in the future and to provide insights into how the proposed IT Business Model and Value Proposition can be developed. Benefit: Identification and quantification of IT enabled business improvements. Business (IT) Vision The Business (IT) Vision set to strategic direction, stretch targets and design principles will be developed to conceive a ‘To-Be’ Business (IT) Model and Value Proposition. The model specifies objectives and drivers to the required level of detail and identifies the types of measures which will apply to each part of the organisation. A range of different scenario, based on a combination of strategic objectives and business drivers and technology will be created to start with. The benefit / risk / cost / time profile associated with each of the scenarios can be used to eliminate less attractive propositions. Sourcing alternatives should also be considered while developing the ‘To-Be’ Business IT model. If consistent with business principles and priorities, it is possible that certain ‘non-core’ services should be a candidate for outsourced supply based on Demand and Cost Drivers (internal / external shared service centre, outsourced or cloud(out)sourced). Set stretch targets  
  • 51. Copyright 2013 Martin Palmgren EVP .COMMUNICATE data framework focus on the general strategic direction into specific design principles and guidelines that show how objectives can best be achieved given the strengths and weaknesses of the current systems and infrastructure consistent with accepted best practice. This set of principles and guidelines will define the “vision” for use of information technology. This vision may be impacted by constraints from the existing information architecture and technology infrastructure. It is essential that the business and information technology teams, if separate, work together on this task. Security 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. Determine competencies/skills required The ‘To-Be’ IT Service Strategy model and the IT departments role in the strategy execution roll out requires a new set of competencies and skills to deliver the required level of performance that include both business and information technology skills at a management and operational level. An outline of the ‘To-Be’ organisation structure identify skills and talent at different levels is developed as part of this task. Gaps in competencies and skills are identified and are used as an input in the sourcing strategy. Prepare the “Service Strategy” business case The last step is to prepare a set of “Service Strategy” business cases that define the projects required to deliver to the ‘To-Be’ Business (IT) Strategy Execution Model. A business case will identify tasks, resources, time lines, milestones, benefits and risks of identified projects. Build the Business (IT) Service Strategy Build the Business (IT) Service Strategy, - Build the Business (IT) service strategy, Develop the Information Architecture, - Develop the Information Architecture, Develop Applications Architecture, - Define Information/Applications Architecture Implementation Policies/ Principles & Standards, - Revisit and update business cases. Question: What is the structure of services, applications, information and data needed to support the business in the future?  
  • 52. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Define Information/Applications Architecture Implementation Policies/ Principles & Standards Once the information and applications architecture has been defined, a set of policies, principles and standards for implementing this architecture has to be established. This will include policies and principles for package preferred solutions, replacement of applications/modules, integration and interface standards for current and future components of the information and applications architecture and responsibilities for maintaining architectural compliance. Revisit and update business cases The process to define the information and data architecture can highlight issues that may have an impact on “business cases”. This include package solutions, location / ownership / consistency of information or applications as well as insufficient benefits, service levels and additional cost to the initial estimation. Govern the the Business (IT) Service Strategy To govern the the Business (IT) Service Strategy we define, - The role of the IT Department and scope of the IT function, - IT management principles and policies, IT management practices, - Critical Success Factors and Performance Metrics, - The IT Organisational structure. Market dynamics and organisational growth result in a continuous demand on the IT business for new technology enabled solutions. As a result the business and IT architecture needs to accompany the roll out of the business strategy. In order to effectively service business strategy needs, it is important to develop a pro-active framework that ensure a focus on business strategy execution, identify new IT enabled opportunities, manage risk and co-ordinate overall IT activities. Define the role of the IT Department and scope of the IT function We define the role of the IT Department in the organisation as a partner in business planning and strategy processes and an agent to support the change process, an integrator that brings focus on business strategy execution, business drivers and objectives and identify subsequent services and technology solutions as a cost effective provider of services. Define IT management principles and policies A framework to steer IT in the organisation will include the involvement of top management in the management of the IT function, the nature and extent of leadership to be provided by the business in specific IT initiatives and the principles of distribution, ownership and management of IT resources. Total Cost of Ownership is an essential part of this equation with cost, consumption and charge back.  
  • 53. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - Define Core Technology, - Define Site Technology Models, - Define the Enterprise Technology Model, - Summarise models and define technology cost and risk. Define architecture framework, design principles and policies: Question: What technology components are needed to support strategy execution with the information and application architecture in the future? Objective: To develop a set of technology blueprints for an integrated set of information system components, together with a framework of standards and principles to ensure that components will operate effectively together, and adapt readily to the evolving needs of the business and supports strategy execution. Benefit: As we support the strategy execution process we identify the optimal integrated set of information systems technology components to invest in that willbest help manage information/knowledge and adapt readily to the future needs of the business. The technology architecture/infrastructure identifies the different technology components required to support the architecture defined earlier. The technology architecture provides the structure, organisation and integration of the various infrastructure components of information systems across multiple business units, functions, processes and/or geographical areas. A set of blueprints for an integrated set of information system components is derived from the technology infrastructure together with a framework of standards and principles to ensure that components will operate effectively together, and adapt to the evolving needs of the business. Blueprints guides the various project teams engaged in activities such as software development, the implementation of commercial application packages, and the enhancement of infrastructure capabilities, such as networks or system management processes. The Blueprints will serve as the basis for the detailed design, construction, and physical implementation of the full range of information systems components (hardware, software, data, networks, and support infrastructure) required to meet the needs of the existing and future business. The architecture framework defines the general design principles that will the guide development of the technology blueprints. In addition to establishing common approaches to general architectural requirements such as flexibility and scalability, the framework provides standards and guidelines for a number of common system design and integration issues. These are based on the application of industry and technology best practices to the overall business information requirements that have been defined in previous activities. The framework also identifies technology standards that will be used to implement the infrastructure.  
  • 54. Copyright 2013 Martin Palmgren EVP .COMMUNICATE the various design principles and guidelines, as well as conflicts with business drivers and other framework constraints. Define Blue Prints To develop an integrated set of solutions to the information gaps and architecture requirements the defined solutions will need to be presented as one or more models or blueprints depicting the integration of technology components. The blueprints will serve as the basis for the detailed design, construction, and physical implementation of the full range of information systems components. Detailed design and construction of these components is typically not within the scope of an IT Strategy and a separate Architecture engagement should be considered for activities required to build and deliver the technology blueprints. Programme Planning covers the master plan to manage the transition from the current environment to the end-state represented by the blueprints developed to address the technology aspects of the overall design process. The technology blueprint will contain a specification of the actual distributed operating environment, in terms of hardware, operating systems, and connectivity (network) services that are needed to deliver applications and data to users across the enterprise to achieve performance, reliability, and cost objectives. The blueprint consists of a set “profiles,” which specify the technologies for each type of component or device found at each site, together with an enterprise connectivity design that specifies the technologies and services that will be used to provide intersite connectivity. Blueprints are defined to meet the data storage and communications capabilities required to implement the information/applications solutions to meet agreed objectives in terms of performance, reliability, security and evolution. This is done as we determine the technologies required at each type of site (based on the applications and databases that run on workstations and servers located on site), define the network and communication technologies required to provide needed connectivity. Proof of concept testing will be required to confirm the inter-operability and performance of the various hardware and software components. At this point the team assess how the new technology infrastructure will need to be supported to deliver to set metrics. The final activity in this phase revisits the business case. In the light of what has been learned through the blueprint design process, the team will be in a good position to refine earlier projections and assumptions on the benefits that the new architecture will be able to deliver, cost and risks involved in the construction. This reassessment may lead to modifications in the proposed architecture. Define Core Technology We define the core technology components to form the technology infrastructure with hardware, operating systems, systems software and networking components (communications protocols, standards and security considerations). The definition will include technology infrastructure standards at the enterprise and site levels and clearly identify preferred growth and integration paths. It will also include a definition  
  • 55. Copyright 2013 Martin Palmgren EVP .COMMUNICATE The enterprise technology model is an aggregate model of site models with the network equipment and bandwidth necessary to connect them. The equipment is located in physical sites, but it may also have an impact on the architecture beyond its location. Once the profiles of individual users are collected in site models, the site models are, in turn, collected into a complete picture of the connections needed between sites. The main driver for the model is the capacity requirements for each site, stated in terms of communications throughput. This activity also deals with fine tuning models of centralisation or de-centralisation of data and applications, as performance requirements and constraints meet geographical constraints. Summarise models and define technology cost and risk We consolidate technology diagrams to assess cost and risks involved with the overall infrastructure and to define boundaries of the infrastructure, identify responsibilities for maintenance and operations of specific applications and technologies including outsourced services. The original business case should be revisited. In light of what has been learned through the blueprint design process, the team will be in a good position to refine earlier projections and assumptions both on the benefits the new architecture will be able to deliver, and the cost and risk involved in building it. Build the Sourcing Strategy To Build the Sourcing Strategy, - Identify an optimal sourcing strategy for the IT Service Strategy, - Develop a service architecture: - Establish guiding principles, Package services to develop sourcing options, - Evaluate sourcing options, - Develop strategy to close skills / competency gaps, - Outsource, Cloud (source) Effectively. The focus on sourcing as a part of the service strategy is limited to the identification of an optimal sourcing strategy for the IT Service Strategy. Question: How do we optimally source our IT requirements to execute strategy and business drivers and objectives? Objective: The objective is to create a model to meet the IT services strategy required by the organisation and how it should be packaged for optimal delivery. This leads to a definition of the resources (skills and competencies) required to support and manage defined services effectively. Service levels and key performance indicators to monitor and manage each service ‘bundle’ are also developed to ensure the effective management services. Benefit: Define the value of services required to support the business requirements and identify the best sourcing options for IT to meet business performance objectives.  
  • 56. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Outsource, Cloud (source) Effectively The best outsourcing agreement is not necessarily the one with the lowest price. In fact, successful outsourcing contracts are those that strike a balance and focus on the primary goal of meeting business needs on day one and throughout the life of the contract. Five guidelines to help companies align their outsourcing agreements with internal strategies and requirements: 1. Contract Terms – It is important for you to fully understand the terms and conditions you will live with for many years to come. Governance, delivery locations, and clear termination language are critical pieces of a successful outsourcing agreement. 2. Statement of Work (SOW) – SOWs should clearly define the roles and responsibilities of the provider as well as the client side. We recommends organizing the SOW into market-based towers, such as Server Management, Contact Center Management, Applications Development, etc. which results in easier ‘apples to apples’ comparisons of competing providers. Setting up the SOW this way also makes it much easier to benchmark the price of services periodically over the term of the contract. 3. Service Levels – It is imperative to have a Service Level Agreement (SLA), set up so that the provider will provide you with significant service level credits in the event that minimum target levels are not achieved. 4. Transition and Transform – Document your transformation needs early in the process, this way you will be in a good position to ensure the business value of the transformation. Clearly articulated milestones and changes in the scope of work needed are critical to a balanced agreement. The scope should address things such as transition/transformation management, objectives, methodology, high-level schedule, roles and responsibilities of each party, the content of the forthcoming detailed project plan, third-party transitions, security transition, procedures manual development, personnel transitions, a description of how cross-tower services will be implemented (such as change management, incident management, problem management, configuration management and service level reporting), and a description by tower of the changes that will be implemented. 5. Pricing – Expect your outsourcing cost to go down over time. One of the best ways to ensure the long-term success of your outsourcing agreement is to start with an agreement based on market prices. This means you are starting the relationship in the right place, and any future pricing adjustments (such as benchmark adjustments) will not be as extreme or emotional as they otherwise might be. Develop the Program Plan Develop the Program Plan, - Update Business Cases, - Establish Program Management Principles, - Develop a Strategy Implementation Plan, - Develop a  
  • 57. Copyright 2013 Martin Palmgren EVP .COMMUNICATE The IT program is driven to support the Execution of the Business Strategy with a Stage Gate implementation plan with clear objectives. Identify and prioritise work streams and projects Tasks and work streams required to deliver the Business Case are reviewed to identify dependencies. The timing, ROI and contribution to business objectives is reviewed to set delivery priorities that will reflect quick wins necessary to demonstrate early success of application “bundle” considerations such as availability of resources. Identify and plan for required skills and competencies It is important to identify skills and competencies required to deliver the program. The skills and competencies for each major stream and project should be identified separately and synergies to share resources agreed on. This will require a review of priorities. Prepare the implementation plan Resource requirements for each work stream and project along with delivery milestones are reviewed to prepare an implementation plan. It is possible that the Business case change as a result of Stakeholder priorities. Suitable sponsors are identified and scope, timing, cost, risk and benefit cases validated. Contingency plans are developed and incorporated in the implementation plan. A preferred option for delivery is identified and documented. Prepare for program implementation The implementation of the program plan involves a number of activities such as to define roles and responsibilities, the establishment of an appropriate program organisation, the set up of processes for risk management, issue resolution, quality management as well as program governance and communication. Set up program organisation A well funded and politically endorsed program is essential for the successful delivery of a major program with dedicated resources and an independent reporting structure. This includes to define roles and responsibilities, reporting relationships of the Program Manager, Project Managers and independent Work stream Leaders. Resources committed to the Program are also clearly identified and authority structures defined. Set up program monitoring and management mechanism  
  • 58. Copyright 2013 Martin Palmgren EVP .COMMUNICATE (Investment b/w €100,000 and €250,000), - Time in months to break even for new or enhanced IT services (Investment b/w €250,000 and €500,000), - Time in months to break even for new or enhanced IT services (Investment b/w €500,000 and €1,000,000), - Time in months to market for new or enhanced IT services (Investment < €100,000), - Time in months to market for new or enhanced IT services (Investment b/w €100,000 and €250,000), - Time in months to market for new or enhanced IT services (Investment b/w €250,000 and €500,000), - Time in months to market for new or enhanced IT services (Investment b/w €500,000 and €1,000,000), - Time in months to respond to major business shifts, - Time in weeks to complete projects that address an identified business exposure or opportunity (< 20% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (20-40% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (4060% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (60-80% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (More than 80% of total annual revenue), - Time in weeks to close an identified IT skill or capability gap, - Average time in weeks to fulfill a simple information need, - Average time in weeks to fulfill a medium information need, - Average time in weeks to fulfill a complex information need, - Average time in weeks to create the enterprise information management strategic plan, - Time in weeks to report on compliance status of the information architecture, - Average time in weeks to set up a simple technical interface for a user of a defined data content source. Cost Effectiveness 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  
  • 59. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Operational Excellence Operational Excellence Key Performance Indicators would include : - Efficient software development, - Average days late in delivering software, - Average unexpected budget increase, - Percentage of projects performed within SLA, - Percentage of maintenance activities, - Efficient computer operations, - Percentage unavailability of network, - Response times per category of users, - Percentage of jobs done within time, - Efficient help desk function, - Average answer time of help desk, - Percentage of questions answered within time. Future Orientation 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,  
  • 60. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Manage knowledge, improvement and change: - Create and manage organisational performance strategy, - Benchmark performance, - Develop enterprise-wide knowledge management (KM) capability, Manage change Design the IT Plan with a project portfolio We Design the IT Plan with a project portfolio : - Report Gap analysis findings, Focus on Strategy Execution, - And articulation. 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  
  • 61. Copyright 2013 Martin Palmgren EVP .COMMUNICATE IT delivers to demand and cost drivers, - IT supports the achievement of tactical business objectives, - IT delivers perceived added value services and at a reasonable cost, - IT delivers to service level agreements (commitments), - IT investments positively affect business productivity and the customer experience, - We have a clear process vision towards which we expect the IT department to deliver. Priorities from an IT Management Perspective: - Strategy is reflected in the IT Value Baseline, - We understand stakeholder expectations and propose a service portfolio that correspond to both Demand and Cost drivers with a focus on perfect order business transactions, - We develop the professional competencies needed for successful service delivery, - We capture organisational knowledge to continuously improve performance, - IT and Stakeholder departments have clear objectives, processes and indicators with clear accountability and responsibility to deliver to the set strategy. 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.  
  • 62. Copyright 2013 Martin Palmgren EVP .COMMUNICATE If we assume that to deliver business value with IT we need to support business objectives, the integration of a new entity is an optimisation of the current IT strategy (how we support business objectives and processes). We would obviously need to understand (and hopefully have the opportunity) how the current IT run before the purchase (IT due diligence) with full IT Financial Management to figure out the actual cost of delivered IT services (cost, consumption, chargeback). Once services defined we can then decide where to run the applications that support the IT and or Business Service (server / internal / external cloud / outsourced provider). We also need to define the purpose of the purchase (invest / divest) in the overall corporate strategy where it is of little use and a significant cost to integrate all systems in to a common backbone if the company is to be divested only a few years later. We could use an IT Scorecard to ensure that stakeholder expectations are met from an executive management, business line management, IT management and IT risk management perspective. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated. See also: “Get your IT Service Strategy right” http://www.brighttalk.com/community/it-service-management/webcast/534/23630 “Leverage Strategy with IT” http://www.brighttalk.com/community/it-service-management/webcast/534/22934 “Run IT as a Service Business!” http://www.brighttalk.com/community/it-service-management/webcast/534/21389 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  
  • 63. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 (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 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  
  • 64. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Chain Planning), - Procure materials and services, - Produce/Manufacture/Deliver product, - Deliver service to customer, - Manage logistics and warehouse 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 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  
  • 65. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Business Architecture Confirm Business Vision: Articulate strategic intent, Business objectives, Business drivers. 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). 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.  
  • 66. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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. We 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 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.  
  • 67. Copyright 2013 Martin Palmgren EVP .COMMUNICATE health and safety, Manage external relationships, Manage knowledge, improvement and change) where Business processes (bundles Business services) are supported by applications. With a Service Strategy Service Strategy with Financial Management for IT Services, Service Portfolio management, Demand Management. 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  
  • 68. Copyright 2013 Martin Palmgren EVP .COMMUNICATE To systematically capture (modelise) unique “tailored” business processes in a modelisation tool that are not industrialised is not only a waste of time but of enterprise resources (unless this would be required by the audit team). A coherent approach would be to identify business processes that support activities that could be industrialied with IT when needed and modelised if we cannot find a standardised solution off the shelf. 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  
  • 69. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - Budget – Strategic Planning - IT Controlling - Simulate scenarios - M & A, data center consolidation, etc - Demonstrate IT’s contribution to the business - ITIL v3 implementations, BSM projects Where the Bottom line is that: IT Management needs to transform their business model: - Move from a cost center centric to a Service based model - Manage a Portfolio of Services-enable cost / value optimization - Efficiency of each Service - Effectiveness of each Service - Manage IT performance on a cost per unit and consumption basis - Compete on the open market - Benchmark and measure apples to apples Create demand In a recent conversation that I had with David Giambruno, CIO Revlon, he mentioned his ability to get the business hooked on new services and products as he actively propose new solutions to the business to leverage competitive advantage and keep the run in perfect shape. But the role as “gatekeeper of technology” to create business value can only be valid as the infrastructure runs smoothly. David has over they years shifted the focus of to use 80 % of the budget for workarounds and fire fighting the 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.  
  • 70. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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. To support business strategy execution The execution of the defined business strategy is often a mystery (missing link) both on the Business and the IT side. The truth is that regardless of how well the executive team draws out the strategy in the boardroom the bottom line is that the business initiatives that were supported by clients succeeds, those not supported by clients (that do not get it) fail and disappear. The CIO and IT department hence needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated. 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  
  • 71. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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? 4. Is our portfolio of technology investments aligned with opportunities and threats?  
  • 72. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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? 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  
  • 73. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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.  

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