Copyright 2013 Martin Palmgren EVP .COMMUNICATE

Title:
TOGAF Unlocked (the missing pieces): Deliver Business Value with I...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
deliver business value with IT:
-

What is the Business’s strategy and pla...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

What is your current experience with the book topic? As transformation di...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
@ Smashwords

https://www.smashwords.com/profile/view/martinpalmgren

Why ...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

Each chapter has been conceived to be able to stand a consultation on a s...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
We understand:
-

That IT support business objectives and processes with I...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
Figure 15: Draw the Roadmap:
http://deliverbusinessvaluewithit.wordpress.c...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

The CIO and IT department needs to support the run of the current busines...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
them to how to run an IT department are explained clearly, and takes this
...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
this publication. Good luck"
(Rajesh Kumar, is a senior IT executive speci...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
Model” to take full advantage of the flexibility and cost advantage that n...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

Chapter 1. To deliver Business Value with IT we need to Design,
Build and...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
The question of IT budgets and IT controlling never came on the table and ...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
18 or 36 months (processes modelled and defined by a consultant, translate...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
IT Management needs to transform their business model:
-

Move from a cost...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
provider solution” as it would significantly reduce the dependency on lega...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
The book examines the experience of companies in areas as diverse as watch...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
client in the first place and certainly not 18 or 36 months down the road ...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

Worst case scenario: We had a meeting with the business consultant that c...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
mark. The IT Bottom line is that the IT Strategy should support business o...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

Total Value of Ownership of IT (IT TVO) is a notion that is if not more a...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
need to manage IT like a business and be responsible to profit and loss.
“...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
oriented KPI’s) with cost. A decision to put in place a shared service cen...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

See also:
“Get your IT Service Strategy right”
“Leverage Strategy with IT...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
clear “business model” defined as “This is how we deliver IT services to t...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
cost? 4) can we ensure that services / applications are up and running (bu...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
The IT Strategy is Effectively Leveraged
As Initiatives are effective and ...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
Cost Effectiveness (Key Performance Indicators):
- Total IT budget as a pe...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/connect-inform...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

IT delivers to demand and cost drivers. Priorities from a Business Unit
M...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
Manage knowledge, improvement and change: - Create and manage organisation...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
Relevant metrics, An effective benefits realisation process over the full ...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

Design the IT Value Proposition: Design the service strategy, Articulate ...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
Meet stakeholder expectations
There is an understanding of the Suitability...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
services to the business” and a Business IT Value proposition “This is how...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

6. Do we have the capabilities required to deliver value from IT?
Questio...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
TOGAF and ISO 9001, ISO 27 001, COSO) delivered in a Business IT roadmap; ...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

Deliver IT Services to Business needs
We Deliver IT Services to Business ...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
- Build the IT business model

For effective strategy execution
Typical Tr...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE

-

Train and educate IT staff,
Build IT staff expertise,
Research in to e...
Copyright 2013 Martin Palmgren EVP .COMMUNICATE
- (IT) Roadmap reflect stakeholder
- Conceived in to a solid Story
- The IT...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT s...
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TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT services and meet stakeholder expectations

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http://flevy.com/browse/business-document/togaf-unlocked-the-missing-pieces-deliver-business-value-with-ithow-to-build-a-cio-office-to-deliver-effective-it-services-and-meet-stakeholder-expectations-423

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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TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT services and meet stakeholder expectations

  1. 1. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Title: TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! – How to build a CIO Office to deliver effective IT services and meet stakeholder expectations ISBN: 9781310288982 Official website: http://deliverbusinessvaluewithit.com/ AUTHOR Martin PALMGREN, EVP .COMMUNICATE Copyright TOGAF Unlocked (the missing pieces): Deliver Business Value with IT! – How to build a CIO Office to deliver effective IT services and meet stakeholder expectations Martin PALMGREN 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. 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” a group dedicated to deliver business value with IT with + 850 international on invitation only CXO's @ http://www.linkedin.com/groups/CIO-OFFICE-20-3376230/about 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 ” a group dedicated to deliver business value with IT from a non executive perspective @ http://www.linkedin.com/groups?groupDashboard=&gid=2479146 If you believe to be among the top 100 IT or Business leaders that leverage business value with “The editorial council” is a forum dedicated to the finest business and IT academics @ http://www.linkedin.com/groups/Deliver-Business-Value-IT-editorial-3807899/about 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  
  3. 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. 4. Copyright 2013 Martin Palmgren EVP .COMMUNICATE @ 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. In the “Deliver Business Value with IT” Series Design, Build and Run an Effective IT (Service) Strategy to Business Needs https://flevy.com/browse/business-document/design-build-and-run-an-effective-it-service-strategy-to-business-needs-279/ref=mpalmgre Get Your Cloud Strategy Right https://flevy.com/browse/business-document/get-your-cloud-strategy-right-286/ref=mpalmgre Leverage Business Strategy Execution with IT https://flevy.com/browse/business-document/leverage-business-strategy-execution-with-it-281/ref=mpalmgre Logics for IT Sourcing (Internal, Shared service center, Out, Cloud) https://flevy.com/browse/business-document/logics-for-it-sourcing-internal-shared-service-center-out-cloud-285/ref=mpalmgre Build an IT Service Strategy Leveraged by ITIL V2 & 3 Design - Spell out IT Activities from a Demand and Supplier Side https://flevy.com/browse/business-document/build-an-it-service-strategy-leveraged-by-itil-v2-and-3-design-spell-out-it-activities-from-a-demand-and-supplier-side-282/ref=mpalmgre Build an IT Service Strategy Leveraged by ITIL V2 & 3 Build - Set IT Processes and Key Performance Indicators  
  5. 5. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 take the reader and the business and IT executive team out of their “ivory tower” and in to “the valley of death” where we confront current “best in class IT practices” to what should be done that is to “support the execution of the business strategy with IT” as opposed to “how do we align business needs to how IT works” (that is Business IT Alignment) which is current best in class. We will leverage business models and concepts to permit the CIO and the IT department to meet the needs of the business (As Is, To Be). List of topics that will be covered in the chapter: We understand: - The need for an “IT value proposition” (an IT Business Model and a Business (IT) Value Proposition), that is the competitive advantage that IT confer The criticality to acquire IT services end to end The need for IT Accountability The reason why IT strategies fail, and miserably 2: To avoid the “Marshmallow” momentum, focus on the business model We spell out the irregularities of the current IT Innovation process and the loss of competitive advantage for both the IT and the Business Side. List of topics that will be covered in the chapter: We understand: -   How to build an effective innovation process Why current “best in class” might not be best in class at all
  6. 6. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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: How to build a CIO Office to deliver effective IT services and meet stakeholder expectations The material in this chapter is developed to provide pragmatic guidance on how to develop and execute your IT Strategy with a CIO Office to deliver effective IT services and meet stakeholder expectations. To effectively manage your IT resources has become business critical as we leverage business strategy execution with IT to: - Meet Demand and Cost drivers, “Time to market”, Cost effectiveness and Cycle Time. 6: To leverage IT for Strategic Advantage As the reader has appreciated that the IT Department should have a clear IT Business Model and Business (IT) Value proposition we will be able to fully leverage IT for a strategic business advantage. List of topics that will be covered in the chapter: We understand how to: -   Define the competitive advantage Acquire the IT Service Portfolio End to End Deliver Value Innovation as we differentiate and keep the cost down Reconstruct Boundries Create demand Govern Shift focus from customers to non-customers
  7. 7. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Figure 15: Draw the Roadmap: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/draw-the-roadmap/ Figure 16: Design the IT Value Proposition: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/design-the-it-value-proposition/ Figure 17: Build the IT Value Proposition: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/build-the-it-value-proposition/ Figure 18: To Perform Effective IT Governance: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/to-perform-effective-it-governance/ Executive Summary: 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. 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.  
  8. 8. Copyright 2013 Martin Palmgren EVP .COMMUNICATE The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated. Endorsements “The “Deliver Business Value with IT” series provides a good overview of the ways a CIO can provide valuable and effective support to your company strategy. The reader will learn robust approaches to navigate the ever changing IT and global economic landscapes and deliver to next generation business drivers of IT architecture. “Deliver Business Value with IT” 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 CEO and CIO level perspective. Deliver Business Value further helps us understand how to leverage business concepts brought forward in: Blue Ocean Strategy (W. Chan Kim and Renée Mauborgne), Business Model Generation (Alex Osterwalder & Yves Pigneur), The Balance Scorecard, The Strategy Focused Organisation, Alignment, Strategy Maps, Mastering the management system, Managing Alliances with the Balanced Scorecard (Kaplan and Norton), Breakthrough IT: Supercharging Organizational Value Through Technology (Patrick Gray), The Marshmallow challenge and the Customer Journey by IDEO.” (Andrew Loveless has held executive roles in Accenture, GE Capital, Saba and Cofounded Element8) “The CIO and IT department must focus on to support business objectives, the business strategy and to be able to demonstrate how they do this (that is to spell out a valid IT strategy and a value proposition to the business). To do so they need to manage IT like a business and be responsible to profit and loss. The “Deliver Business Value with IT” series has inspired me to approach the "how" differently, that is to think differently for the future development of IT services and the Enterprise (Business, IT) Architecture to support business processes, with IT processes (aggregated as services), applications and infrastructure.”  
  9. 9. Copyright 2013 Martin Palmgren EVP .COMMUNICATE them to how to run an IT department are explained clearly, and takes this publication above and beyond the standard publication proclaiming to ‘run IT as a business’. The 2 key trends identified in the publication for the CIO to focus on of “Differentiation” and “Cost” are a perfect example of this. Further to this the focus and examples of non-technical KPIs used, provides a good framework for the CIO to communicate the state of how services are provided and how the company is maximizing its value of their IT assets.” (Alex van der Kruit, is a senior IT executive with extensive experience in building and leading service organisations, and directing change management initiatives for leading global corporations. He has held positions such as Service Delivery Director at CSC, General Manager IT at Swedish Match, and is currently Business Systems Manager at Toyota Material Handling Europe) “The “Deliver Business Value with IT” series is spot on. The role, use, provisioning, and expectations for IT are going through profound changes across the globe. The enterprise is demanding a higher velocity and more agile access to IT capabilities. Users are dismayed that they have better technology at home than they get in the business. IT is increasingly a part of or needed in direct support to the enterprise’s products and services. Stakeholders expect immediate, seamless access to transaction capability, information and analytics in their increasingly mobile work environments. IT leadership requires a refresh of approaches, thinking and management practice to meet these new challenges; thus the value of the contribution of “Deliver Business Value with IT”.” (Jerry Luftman Ph.D., Professor & Managing Director Global Institute for IT Management) “I like Martin's practical approach of IT strategy. With his new “Deliver Business Value with IT” series, he is helping us work on actual paradigms we can find in today's organisations like how to find a business foundation for technology supported undertaking while using state of the art technology” (Olivier Neau, has held IS & IT Leadership roles and is today the Business Systems Director at Amcor Flexibles) “The “Deliver Business Value with IT” series has for objective to set and influence the direction that the IT business relationship will take over the next few years. Where traditional IT management focus on management & amortisation the approach “Deliver Business Value with IT” spell out demonstrates the way to the future position of the CIO as de guardian of effective investments providing innovative services to the business by new enabling technologies. The approach focuses on Enterprise Architecture as a way of managing changes in business processes and their IT support services. Competitive advantage in business depends directly on agile business processes and their support by IT. CIOs often struggle with  
  10. 10. Copyright 2013 Martin Palmgren EVP .COMMUNICATE this publication. Good luck" (Rajesh Kumar, is a senior IT executive specialised in cloud, IT Transformation and IT Financial Management. He has held positions such as SVP Bank of America, IT Infrastructure and Finance and Director, Rackspace). “The “Deliver Business Value with IT” series is a comprehensive, concise and KPI focused publication. I have always agreed with the fact that IT services are a profit center. I call this "a business within a business" in actual fact a component of the business' federation of services. The CIO must only be a supporter and a facilitator who relies on architecture services to justify roadmaps and business IT strategies. Unfortunately, and is not only in my experience, many CIO's emerge from project management backgrounds and lack the wealth of knowledge “Deliver Business Value with IT” so nicely describes. CIO's would ideally come from a certified architecture background or subscribe to the approach and methodolgies suggested in the book. I would dare to suggest that specific charters must be defined and accepted for every role as part of governance. Many thanks for the opportunity to review this publication.” (Gabriel Maties, Enterprise Architecture Manager, Gala Coral Group). “The “Deliver Business Value with IT” series provides a pragmatic approach to align IT initiatives to the business strategy and business objectives with the ability to measure the outcome (KPI’s). I particularly appreciate Martins capability to provide a metamodel of common IT frameworks as steps of the execution of the IT Strategy: Deliver IT services, - Ensure delivery capability (Governance), - Coherence (Architecture) and Security.” (Romain Hennion de Thyses, Governance and Architecture Director, Global Knowledge, VP ITSM France). “Information Technology has been a fundamental asset to excel in business performance. The “Deliver Business Value with IT” series is a new way of providing practical ideas to CIO and CEO about the extent to which cutting-edge IT such as Cloud Computing can deliver business value to customers.” (Mohamed Hédi CHARKI, PhD, Associate Professor, Director of the MSc Strategy & Organization Consultancy EDHEC Business School, FRANCE) Audience: CEO, CFO, CIO, CTO, SVP, Architects, Strategy, Business Executives, Procurement professionals and the IT function in general as well ITIL, IT – CMF, CobIT 5 (ValIT,  
  11. 11. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Model” to take full advantage of the flexibility and cost advantage that new cloud solutions permit to improve “Time to Market”, “Cost Effectiveness” and “Cycle Time”. Martin has accompanied a number of IT consulting companies and editors in their “Go to Market” with Client acquisition, (Large) Account Introductions, Alliances (notably with BIG 5 consultancies), Market Position (Forrester, Gartner, Bright Talk) and position of the “Value Proposition” (discovery, competitive analysis of market offerings, road map to realign solutions portfolio and transform sales and delivery operations, develop new market strategy and execution plans, and drive sales transformation, acquisition of smaller actors). He is an international thought leader and visiting professor at some of France’s top business schools, notably EDHEC where he intervenes on Innovation, Business Model Innovation, Strategy, IT Strategy (Execution), IT Governance, IT Sourcing, Cloud (Sourcing). He holds a Master in Finance from the University of Gothenburg. Martin is trilingual Swedish, English, French and fluent (operational) in German and Spanish. Track Record: Martin joins Altimus Partners (www.AltimusPartners.com) in 2012 as Associate, a specialist CXO Advisory management consulting firm with operations in NA and EMEA, and focus on sourcing strategy, adoption of cloud services, and deployment of technology business transformation in financial and non-financial markets. Martin founds .COMMUNICATE in 2006 to meet the GAP between the needs of the business and the solutions (value proposition) delivered by the IT department. He believes that in order for the CIO and the IT Department to position as premium provider of IT services and focus on value to cost we need to understand the Business (IT) Strategy and how the IT department can deliver effectively to business objectives, that is to deliver business value with IT. - What is the Business’s strategy and plans? - What is the current business model that IT has to support? - Where could IT make a significant impact on the business? - Are there any further opportunities to use IT? - How can we leverage the cloud in this perspective “Time to Market”, “Cost Effectiveness”, “Cycle Time”?  
  12. 12. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Chapter 1. To deliver Business Value with IT we need to Design, Build and Run an Effective IT (Service) Strategy to business needs. Please find an actionable story board format designed to permit you to flick out the slide set on a pad / smart phone / lap top and start to share with your CIO, Executives and Board on the spot @ Design, Build and Run an Effective IT (Service) Strategy to Business Needs https://flevy.com/browse/business-document/design-build-and-run-an-effective-it-service-strategy-to-business-needs-279/ref=mpalmgre Value, Profit, People – What is your unique competitive advantage? To leverage IT to execute on the set business strategy we need to effectively focus on: Value, Profit and people aligned to create a unique competitive advantage. 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 + run applications on a cloud (mutualised storage space outside the firewall). Google the opportunity to find things + run applications on a cloud (mutualised storage space outside the firewall) + hosted services such as email (the opportunity to communicate in writing and keep a trace). Ebay enables the exchange of goods. Twitter provides a tool for self promotion and advertisement. Facebook fills the void of distance and keep the contact with your friends and the opportunity to make new acquantainces. Linkedin the opportunity to keep up to date with your professional network + some promotional features. The business model sets the direction enabled by best in class technology. Figure 0: IT supports the run and emerging business initiatives: http://deliverbusinessvaluewithit.wordpress.com/2013/03/19/the-very-reason-why-most-it-strategies-fail-and-miserably/ Why it is critical for the business to acquire the IT Service Portfolio End to End I was recently contacted by a large Editor (as most of you like know I have accompanied a number of IT consulting companies and editors in their “Go to Market” with Client acquisition, (Large) Account Introductions, Alliances (notably with BIG 5 consultancies), Market Position (Forrester, Gartner, Bright Talk) and  
  13. 13. Copyright 2013 Martin Palmgren EVP .COMMUNICATE The question of IT budgets and IT controlling never came on the table and had it I believe that most students would have found it difficult to understand that cost, consumption and chargeback of a service (product) would not be defined and that business entities and subcontractors (tier outsourcing parties) would not define the cost of execution (manufacturing) and the validity of the information used for the billing (chargeback). The very reason why most IT Strategies fail and miserably The IT department needs to perform 3 things well: 1) understand the needs of the business, 2) how to build and run applications that meets the needs of the business and 3) to run an effective infrastructure. That is IT supports new emerging business initiatives that will eventually form the business strategy as they succeed or fail and the RUN. Yet most IT Departments: 1) has a poor understanding of the needs of the business, 2) are not very successful @ to build and run applications that meets the needs of the business and 3) do not run an effective infrastructure. We all know that infrastructure is unsexy. It is due to his effort to build a solid infrastructure that David Giambruno @ Revlon has successfully turned a “we spend 80 percent of our resources to fire fight and hopefully keep the lights on” to one where 20 percent of the resources are spent on the run and 80 percent on how to deliver effective solutions to the business. Instead most IT departments are IT centric and focus on project management or to roll out frameworks (that have a specific function) to build business strategy. Once the “happy few” certified have managed to talk the IT Executive management in to how important it is to impose an excellent project management tool brought forward to develop software, or manage the IT architecture or how to ensure that IT and Business Processes are managed and controlled to build the IT Strategy we then feel obliged to adapt how the business side is run to fit to this world view and deliver to the needs of the business. Agile is only the latest methology to suffer “the one methodology fits all dilemma”. I have over the last years encountered a number of CIO’s that tried to apply Agile to build the IT Strategy and run the IT department. Agile is an excellent tool to ensure capability delivery and effective project management and product delivery within the frame of software development. Where I do agree with the principles of a more “adaptive” approach to IT Strategy development spelled out I believe it is important to keep the methodologies apart and focus on business objectives not to confuse your business stakeholders.  
  14. 14. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 servicebased model is to demonstrate how IT Delivers Value to the business, that is delivers services to business needs (cost effectively, or at least at a specified cost rate that permit to take qualified decisions) over time with an effective IT Business Model and Value Proposition. We see Total Cost of Ownership (TCO) as the corner stone to move further from "IT generates to much cost" where we can demonstrate who consumes what services (and should subsequently pay for what they consume) to obtain the means (investments) and ends (budgets). To run a cost effective IT Operation that delivers to business expectations and leverages the execution of the set strategy (1) you would need to build a clear IT Service Strategy (what services do we deliver to the business) with Total Cost of Ownership per user with: cost (how much does each service cost), consumption (how much does the individual user consume) and chargeback (consumed services are allocated "charged back" on an effective cost basis to the business units) (2) in order to be able to provide the means (necessary investments) and ends ( budget). With the right support (best in class technology) this can be done in weeks with a top down (General Ledger), Bottom Up (effective cost) (3) analysis and tied to the roll out of an IT Service Strategy (that drives an end to end roll out of ITIL V 2/3 logics). Most CFO's understand a well concieved business plan (IT Service Strategy), with a clear Value Proposition (What services do we deliver) and Business Model (how do we deliver the depicted services to our potential clients) and know that to generate productivity improvement you need to invest. Our experience is that where some clients underconsume services due to a non effective cost allocation model other  
  15. 15. Copyright 2013 Martin Palmgren EVP .COMMUNICATE IT Management needs to transform their business model: - Move from a cost center centric to a Service based model Manage a Portfolio of Services-enable cost / value optimization Efficiency of each Service Effectiveness of each Service Manage IT performance on a cost per unit and consumption basis Compete on the open market Benchmark and measure apples to apples Create demand In a recent conversation that I had with David Giambruno, CIO Revlon, he mentioned his ability to get the business hooked on new services and products as he actively propose new solutions to the business to leverage competitive advantage and keep the run in perfect shape. But the role as “gatekeeper of technology” to create business value can only be valid as the infrastructure runs smoothly. David has over they years shifted the focus of to use 80 % of the budget for workarounds and fire fighting the keep the lights on and 20 % to propose new solutions to the business to an opposite 80 / 20 where 80 % of the budget is used to enhance the capability of the business. He also clearly indicated that where the logics spelled out in ITIL are excellent they are are a minimum requirement to build an effective IT Strategy to the needs of the business where the perspective has to be completed with a Design (Demand and Supply) and Build (supported by IT processed with clear KPI’s) phase to tie the strategic value piece with the operational elements of IT service delivery. “We are able to get the business hooked on new services and products as we actively propose new solutions to the business to leverage competitive advantage and keep the run in perfect shape. But the role as “gatekeeper of technology” to create business value can only be valid as the infrastructure runs smoothly. We have shifted the focus of to use 80 % of the budget for workarounds and fire fighting the keep the lights on and 20 % to propose new solutions to the business to an opposite 80 / 20 where 80 % of the budget is used to enhance the capability of the business where the bottom line is to drive growth for Revlon. Where the logics spelled out in ITIL are excellent they are are a minimum requirement to build an effective IT Strategy to the needs of the business where the perspective has to be completed with a Design (Demand and Supply) and Build (supported by IT processed with clear KPI’s) phase to tie the strategic value piece with the operational elements of IT service delivery. This is where I see a clear advantage to leverage “Deliver Business Value with IT! - Design, Build and Run Effective IT Strategy execution to business needs”. When a fire destroyed one of Revlon’s factories in Venezuela in June 2011, operations at that location were quickly brought back up and running in New Jersey within 15 minutes and the team was able to restore operations. The business never noticed as we leveraged the internal cloud, which now supports a range of mission-  
  16. 16. Copyright 2013 Martin Palmgren EVP .COMMUNICATE provider solution” as it would significantly reduce the dependency on legacy applications that stakeholders and a significant number of employees had build their career on). A recent acquisition by the business management at France’s major airline permitted a major improvement to the business both from a capability and performance perspective to a fraction of the cost, and provided the IT department with 600 resources to perform other tasks. The IT department will have to rapidly shift their business model from “reward and remuneration in concordance to how many people that I manage” to a model related to the value delivered to the business with a Focus on the Business Bottom Line that is: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective or will see the go to market trend with the business as direct customer grow significantly. Transform the IT Business Model A number of approaches to strategy execution have evolved over the last years, but have not been effectively adapted to the execution of the IT Strategy. The Balanced Scorecard by Kaplan and Norton that I have to some extent addresses earlier is one, The Blue Strategy Ocean by W. Chan Kim and Renée Mauborgne is another. Though the approaches were developed for the execution of the business strategy they can effectively be used to ensure that the IT Strategy support the Business Strategy. In short a Blue ocean is a new market created as we innovate and redefine value in regards of the perception of the customer / client. Where technology can be an accelerator value innovation is inherently linked to the customer value perception and can be delivered by both established players and new entrants (start ups). New markets created by established players are usually situated within their core business. Long standing excellence is rare but a brand name and a large treasury and the ability to create new market space is key to deliver industry growth and profit. Key questions are: How attractive is this industry, as existing player what should your strategy be to achieve profitable growth, If you are not in this marketplace should you enter, If yes, what should your strategy be? How can we make the competition irrelevant and create new demand, Do we want to segment or de-segment the market, Do we focus on the competition or on alternatives? Eliminate, Reduce, Raise, Create is one of the techniques used to understand which feature of a service is valued by the client / customer where cirque du Soleil, Swatch, Apple, DuPont, IBM are examples of companies that have created / defined new markets to meet the needs of the customer / client and that can successfully be deployed within an IT context.  
  17. 17. Copyright 2013 Martin Palmgren EVP .COMMUNICATE The book examines the experience of companies in areas as diverse as watches, wine, cement, computers, automobiles, textiles, coffee makers, airlines, retailers, and even the circus, to answer this fundamental question and builds upon the argument about “Value Innovation” being the cornerstone of a blue ocean strategy. Value Innovation is necessarily the alignment of innovation with utility, price and cost positions. This creates uncontested market space and makes competition irrelevant. Business Model Generation by Alex Osterwalder & Yves Pigneur also provides models based on the concepts brought forward by blue ocean strategy. Chapter 2. To avoid the “Marshmallow” momentum, focus on the business model I regularly perform an innovation cursus where we use the Marshmallow challenge as an exercise to demonstrate the make or break factor of a project (strategy, innovation production, sales, marketing, R & D) and the importance of to produce a customer journey map and prototype. Each time I perfom the exercise it hits me how often the “Tadaa” moment turns in to the “Uuh” (translated in to that they did not get it) moment during the delivery of an IT project / IT strategy delivery. But rest assured this would also be valid for strategy, marketing, production, R & D, Sales and Delivery. http://www.marshmallowchallenge.com/TED_Talk.html Within the exercise we demonstrate how IDEO with a simple customer jurney map (day in the life of) formalised, modelised (prototyped if needed) and validated by the client permit significant improvement in effectivenes (that is productive and efficient) and the customer perception of the experince (in this case Amtrac and the General Portland Hospital). The objective is to address the actual health care service, the patient and staff experience of the service and then define the ways it could be improved. The developpment of what became IDEO Project Journey was key in this success. Step 1 - Observe: Try to define and map the different health care segment (surgery department, waiting room…) of the hospital/health care service. Collect feed-back from different patients/staff members of each segment (then make a statistical survey, with both quantitative and qualitative information about the service and give a mark to each segment). Rank the grades and select the segments that obtained the worst grade. Experiment the journey of a patient in those specific segments (use shadowing, interviews…). Step 2 - Synthesize: Confront the patient and the staff point of views of each segment in the health care service (use a unique support like a board to give a synthetic view). Carry out a « typical patient journey » for each segment selected.  
  18. 18. Copyright 2013 Martin Palmgren EVP .COMMUNICATE client in the first place and certainly not 18 or 36 months down the road (not to mention thousands of man hours). Phase 2. - Solve the problem: We realise that the customer experience and the services delivered by IT does not work / might not be perceived to be effective and the green light red light charts that we produce to demonstrate that we are able to keep the lights on during critical periods of the run performs the effect that we thought it would. Best case scenario: We convince the executive team to leverage social media and post the business strategy via facebook and twitter for the IT personnel to appreciate it in a crisp 140 characters format Next best case scenario: Walk your dead dog. This scenario would typically implicate a subject matter expert that would come in for an hour or 2 compare the Information system to a car, a boat or an engine where the new technology is a paradigm shift. The IT team that have participated gets all worked up because the analogy used that relates back to the early 19th century is so descriptive for our current cloud deployment. We build this really great presentation on how to leverage the cloud much as henry ford revolutionaised the personal transport industry with his you can have any coulour you like as long as it is black concept to optimise cost. Not half that bad case scenario: We bring in a Top 3 or Big 5 to perform a change excercise (preferable a very long slide deck of .ppt that if not produces nausea or panic puts the subject (participant) out (commonly called death by powerpoint) from exhaustion. The presentation should idealy be based on example of a project put in place for the production in a tooth paste / car factory (not our domain). If possible with a reorganisation so that a task that previously took 3 days now take 5 or 10. We cross our fingers an hope that the green light red light chart now will produce the desired effect. Worst case scenario: We bring in a Top 3 or Big 5 to help management understand how important it is for IT not to be a support function. Executive management is brought in (down from their ivory tower) and walk the floor and participate in a IT strategy workshop. This is often resumed to a quick walk past a few desk and then in to a war room where an entusiastic team of IT leaders, personel (convoqued by the stategy consultants engaged) are to demonstrate how important it is for the company to have IT. A good intention turns in to a strategy exercise (that the Executive Team has no desire to perform let be told how to do strategy by the IT team) on a brown paper. In a Worst worst case scenario: the consultants bring out finger paint and the Businees executive finds himself with green paint on his tie or suit and now sees red. Really bad case scenario: The consultants have organised an excercise for the IT team to solve the problem that end users do not get it when solutions are delivered and tend to interupt the reflections of the IT team. The obvious solution would be to exclude end users from any contact with the IT team and set up an answering machine with no possibility to leave a message as they have problems. Since the business  
  19. 19. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Worst case scenario: We had a meeting with the business consultant that convinced us that for IT to demonstrate that we support the business we should modelise all 15 00 business processes (I wonder why executive management put an end to this effort ?) This time we will demonstrate how we execute the IT strategy to the business strategy as we will implement a full audit framework! The execution of the defined business strategy is often a mystery (missing link) both on the Business and the IT side. The truth is that regardless of how well the executive team draws out the strategy in the boardroom the bottom line is that the business initiatives that were supported by clients succeeds, those not supported by clients (that do not get it) fail and disappear. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the 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. The IT Bottom line is that up to 40 % of current IT spend occurs outside the IT budget (CRM, Cloud). The IT department needs to position itself as a facilitator to IT services and effectively address emerging needs, market opportunities and demonstrate that the current Business Model is supported effectively. The IT department should facilitate the access to IT services to support new and current business initiatives. The business strategy emerge out of a number of initiatives that are successful or not. The IT department need to support the “Run” of day-to-day operations as well as new projects. The Cloud might particularly be of interest within this frame. We believe that in order for the CIO and the IT Department to position as premium provider of IT services and focus on value to cost we need to understand the Business (IT) Strategy and how the IT department can deliver effectively to business objectives, that is to deliver business value with IT: - What is the Business’s strategy and plans? , - What is the current business model that IT has to support? ,Where could IT make a significant impact on the business? ,- Are there any further opportunities to use IT? , - How do we provide IT Services as we meet demand and cost drivers where the decision is to make (internal) or to buy (external service provider)?  
  20. 20. Copyright 2013 Martin Palmgren EVP .COMMUNICATE mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated. 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/ IT contributes to business objectives The IT service proposition is aligned to the business strategy as: Stakeholder expectations are understood and IT propose a service portfolio that correspond to Demand and Cost drivers, Business Contribution, Cost, Consumption & Chargeback is identified, Focus is on perfect order business transactions, Services are effective (demand and cost drivers identified), Services are competitive (Benchmark Industry Market Forces) and New technological solutions that could change how current business is performed are explored, proposed and implemented. IT provides competitive leverage As the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated in: An IT Business Model “This is how we deliver IT services to the business” and a Business IT Value proposition “This is how we support business objectives with services in a time to market perspective”. The Business (IT) Strategy, link to operations We Link Strategy and Operations as we Develop the Strategy, Translate the Strategy, Plan Operations, Monitor and Learn, Test and Adapt the Strategy, Execute Procedures and Initiatives. Business (IT) Tactics 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  
  21. 21. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Total Value of Ownership of IT (IT TVO) is a notion that is if not more at least as important as Return on Investment (ROI) and Total Cost of Ownership (TCO). Positive IT TVO could concern: - Greater customer satisfaction, - A more differentiated service offer, - Stronger customer relationship, - Increased ability to meet the needs of the business and clients, - Lower direct cost, - Better use of assets, Faster cycle time, - Increased accuracy, - Higher level of customisation or precision, Higher added value, - Simplified processes, - Higher customer retention, - Greater market share, - Ability to execute on set strategy and enter new markets. Priorities from an Executive Management Perspective: - The investment leverages the execution of the business strategy, - Enhance the value of the business, - Improve customer retention and increase the market share. Priorities from a Business Unit Management Perspective: - IT investment proposals are understood in terms of expected Business Outcomes, - The effort needed to reach the set outcomes and the risk involved, - The risk associated with IT investments are in line with the business acceptable risk profile, - IT investments are aligned with the business strategy. Priorities from an IT Management Perspective: - Provide predictable cost and budget levels, - Determine which IT resources can be applied to the firm’s core mission, - Define the current cost and services of IT operations, - How service levels can be increased at an affordable cost, - How actual ongoing IT cost can be tracked or organised, - How cost effective IT improvement expertise can be found, - The most effective implementation of strategy to improve effective delivery of IT services. In order to successfully deliver business value with IT we could: 1) Create a committee of stakeholders affected by the IT investment, that would include IT managers and business unit managers. 2) Define intangible benefits of the IT investment that are agreed on by the committee with flexible and effective budget process and improved decision analysis. 3) Define intangible risks associated with the IT investment that is: slow response to system change, risk of poor integration with existing systems and staff resistance to a new system. 4) Establish weights to the relative importance of the tangible benefits (the financial result), the intangible benefits, and the intangible risks of the IT investment. 5) Estimate on a scale of zero to five the likelihood benefit and risk observed. 6) The investment alternative that results in the largest sum of benefits is the preferred alternative. Make a plan and get executive support: - Build a plan to ensure that the IT Strategy support the business objectives, - Include all top-level executives and business unit heads in the plan. - Be certain to cover business technology execution, support processes, and the organisation, - Meet with the key executive stakeholders to receive input and buy in, - To strive to create a partnership. Form a steering committee: - Create an executive-level steering committee to review all business technology initiatives and projects, - Gain support from top management for the steering committee, portfolio management process, and TVO model, - Meet formally and informally to build a “trusted adviser” relationship with key stakeholders.  
  22. 22. Copyright 2013 Martin Palmgren EVP .COMMUNICATE need to manage IT like a business and be responsible to profit and loss. “Deliver Business Value with IT” has inspired me to approach the "how" differently, that is to think differently for the future development of IT services and the Enterprise (Business, IT) Architecture to support business processes, with IT processes (aggregated as services), applications and infrastructure. ” IT must be responsible for profit and loss from a business perspective and be managed like a business. The fact is the technology will play a bigger role in order for business to thrive in the future. The level of implication of IT varies as it depends on the nature of the business. The more the business rely on technologies the more the business needs to include technology as a part of the business strategy. Further the IT Department and the (Enterprise) Architecture team must promote a continuous competitive market position as we deliver cost effective (productive and efficient) IT service to business needs and are able to demonstrate that we do so. To build and demonstrate IT success we need to Focus on the Business Bottom Line: that is How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. In order for the CIO and the IT Department to position as premium provider of IT services and focus on value to cost we need to understand the Business (IT) Strategy and how the IT department can deliver effectively to business objectives, that is to deliver business value with IT: - What is the Business’s strategy and plans? - What is the current business model that IT has to support? - Where could IT make a significant impact on the business? - Are there any further opportunities to use IT? - How do we provide IT Services as we meet demand and cost drivers where the decision is to make (internal) or to buy (external service provider)? In our case we do this via a shared service centre that we leverage as a catalyst for breakthrough innovation in competitive IT services where the objective is to become the premier shared services provider as we deliver exceptional customer experience (both from a service delivery and cost perspective) and address the “challenges” of a 21st century service centre. We promote a continuous competitive market position as we deliver cost effective (productive and efficient) IT services to business needs that spur operational excellence: provide economic value, support open capital investment that allocate resources to the most promising ideas / solutions, encourage effectiveness (productive and efficient) and innovation for operational excellence, - promote and support communities of innovation and culture. To do so we invest innovatively as we: recruit, retain, and develop competent staff, build and sustain agile infrastructure and processes, build dynamic adhoc teams to  
  23. 23. Copyright 2013 Martin Palmgren EVP .COMMUNICATE oriented KPI’s) with cost. A decision to put in place a shared service centre can only be valid as we have a clear business case with ROI and total cost of ownership (cost, consumption, chargeback) and can follow up on the actual cost of service delivered and benchmark the latter to competition / the market. Chapter 3. "Do we really need a CIO and IT department to bother us with technology when we can use the cloud?" The CIO and the IT Department need to position as premium provider of IT services and focus on value to cost. In order to avoid the "do we really need a CIO and IT department to bother us with technology when we can use the cloud?" the CIO has to ensure that the business strategy and business objectives are supported by IT (from a Business and IT architecture perspective). Where the IT Strategy support Strategy execution, "Time to Market", Cost Effectiveness and stakeholder expectations from an Executive, Business Unit, IT Management and IT Risk Management perspective. To deliver business value with IT we need to Focus on the Business Bottom Line: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. The IT Bottom line is that up to 40 % of current IT spend occurs outside the IT budget (CRM, Cloud). The IT department needs to position itself as a facilitator to IT services and effectively address emerging needs, market opportunities and demonstrate that the current Business Model is supported effectively. The IT department should facilitate the access to IT services to support new and current business initiatives. The business strategy emerge out of a number of initiatives that are successful or not. The IT department need to support the “Run” of day-to-day operations as well as new projects. The Cloud might particularly be of interest within this frame. IT must be responsible for profit and loss from a business perspective and be managed like a business. The fact is the technology will play a bigger role in order for business to thrive in the future. The level of implication of IT varies as it depends on the nature of the business. The more the business rely on technologies the more the business needs to include technology as a part of the business strategy. We believe that in order for the CIO and the IT Department to position as premium provider of IT services and focus on value to cost we need to understand the Business (IT) Strategy and how the IT department can deliver effectively to business objectives, that is to deliver business value with IT: - What is the Business’s strategy and plans? , - What is the current business model that IT has to support? ,Where could IT make a significant impact on the business? ,- Are there any further opportunities to use IT? , - How do we provide IT Services as we meet demand and  
  24. 24. Copyright 2013 Martin Palmgren EVP .COMMUNICATE See also: “Get your IT Service Strategy right” “Leverage Strategy with IT” http://www.brighttalk.com/community/it-service-management/webcast/534/23630 http://www.brighttalk.com/community/it-service-management/webcast/534/22934 “Run IT as a Service Business!” http://www.brighttalk.com/community/it-service-management/webcast/534/21389 Can we leverage the cloud to transform the IT department in to an effective broker of services? I have introduced “non traditional IT” notions such as ”Time to Market”, “Cloud source”, ”Make or Buy”, “Cost and Demand drivers”, “An IT Business Model and Value Proposition” and ”An IT service Strategy”. Within this context I believe that a new notion and function will have to be introduced, the IT department as effective broker of services (cost effective and that meet demand drivers). Where most IT department perform well, some decisions are still based on “gut feeling” or external pressure from executive management influenced by vendors / management consultants “as a strategy of survival” rather than on fact based logics. “Time to Market” – The notion of time to market is critical within the context of a business. The delayed launch of a product might erase up to 70% of potential earning (the rest is evaporated by the cost of the resources absorbed to solve the problems that delayed the launch). “Time to market” can be applied to the context of the IT department 1) in the frame of how well do we set up a new service (bundle of application with a coherent architecture) 2) How well do we support the business to launch a new service / execute the business strategy supported with IT (when needed). “To Cloud source” – Cloud computing is the result of 2 trends*. 1) The survival of salesforce.com (that is to outsource data in an application that we have decided not to buy / run on an internal server) 2) the decision of amazon, google and other cloud (external storage space) providers to leverage their capability to buy and run server parks more effectively then an IT department would / could (external cloud). A decision to run applications on a server outside the firewall can be motivated by cost or demand (time to market) where an architecture and applications are set up to rapidly respond to the needs of the business. The “service bundle” can then either be brought inside the firewall and run on an internal cloud or continue to run on the cloud provider’s server (outside the fire wall). The private cloud: We leverage the Private (internal) Cloud, as an internal provider perform process execution and the applications (bought or leased (Software as a Service (SaaS)) run on one or several mutualised servers inside the firewall) sit on an internal (private) cloud. The public cloud: Salesforce.com is one of the few survivors of the first internet wave where one of the major ideas targeted towards the B to B market was to  
  25. 25. Copyright 2013 Martin Palmgren EVP .COMMUNICATE clear “business model” defined as “This is how we deliver IT services to the business” and “Value Proposition” defined as “This is how we support business objectives with services in a time to market perspective” will continuously find it difficult to obtain sufficient funds from executive management and the board for the above mentioned reasons. “An IT service Strategy” – In order to effectively communicate with the business the IT department need to adopt the notion of services a bundle of applications to be run cost effectively and set up in a time to market logics in accordance to cost and demand drivers where demand drivers are linked to the business emerging needs to support the execution of the business strategy with IT when needed. The authority (leadership) of the IT Department can only be confirmed as it delivers cost effective services in a time to market perspective to the business lines in order to deliver to the set business objectives and strategy, to impose non adapted technology solutions on the business will not. The fact that we often find a significant amount of the IT Spend hidden in the budgets of the Business Lines might give a hint. The international COO of a multi B€ business that I recently spoke to put it bluntly “if the internal IT Department can not deliver to our needs, they should at least get out of the way”. In order to deliver effective Business (IT) Alignment you need to leverage best in class technology (on paper compliance is not enough). The frameworks should be a point of reference and only the bits and pieces applicable and useful for the business should be rolled out (but you need to understand which framework represent which perspective and how to leverage the latter) and above all focus on stakeholder expectations! Step 1) Define the services that the IT department deliver to the business with total cost of ownership (TCO) with cost, consumption and chargeback. Cost – This is often where you would get the WOW, we did not know that we spend this much on IT from the executive management. Consumption – most IT departments suffer from the overconsumption of users that are not willing to pay for what they consume hence the importance of coherent chargeback based on factual cost of the delivered services. TCO is also the base to qualified selection of cloud sourcing / outsourcing partners. Step 2) Capture the “IT Business Model” that is “This is how we deliver IT services to the business” in the IT Service Catalogue, Step 3) and the “Business (IT) Value Proposition” “This is how we support business objectives with services in a time to market perspective” in the Business Service Catalogue.  
  26. 26. Copyright 2013 Martin Palmgren EVP .COMMUNICATE cost? 4) can we ensure that services / applications are up and running (business continuity)…. Deliver effective IT services to business needs We Deliver effective IT services to business needs as we understand that At the end of the day Business Executives take the decision to out / cloud source when: IT is not perceived to understand stakeholder expectations, IT is not perceived to contribute to business objectives, IT is not perceived to deliver value to cost, IT is not perceived to deliver services to business needs, The IT department is unable to deliver services in a time to market perspective, IT propose an effective service portfolio that correspond to Demand and Cost drivers. IT contributes to business objectives as The IT service proposition is aligned to the business strategy: 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. The demand and cost model is clear and long term risk / benefits are established We have identified the following critical success (benefit) / risk factors: - Total cost of ownership - Does the initiative support business objectives: - Cost is the primary driver, - Demand is the primary driver - Capacity is adapted to need & price is scalable as business in(de)crease - Peak loads can be absorbed with little impact on performance and response time - Ability to audit metrics used by the provider to calculate the utility price - Version upgrades and migration are transparent (cloud, hosted provider) - Licensing of applications is clear & Interoperability ensured (cloud, hosted provider) - As we break services out, how do we manage data integration - Re integration of data if we decide to insource / change outsourcing partner - How do we recuperate data / applications if the outsourcing partner is attacked / goes out of business (cloud, hosted provider)  
  27. 27. Copyright 2013 Martin Palmgren EVP .COMMUNICATE The IT Strategy is Effectively Leveraged As Initiatives are effective and stakeholder oriented we can perform effective: Mergers and Acquisitions (M&A) with Data room Development and Synergies & consolidation options, - Data Centre Migration with GAP (As Is, To Be, ROI), - IT Organisational Transformation Towards a Service Based Logic with GAP (As Is, To Be, ROI), - Shared Service Centres, Outsource, Cloud & Benchmark with GAP (As Is, To Be, ROI). Figure 2: Time to Market, Cost Effectiveness, Cycle Time: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/time-to-market-cost-effectiveness-cycle-time/ We focus on Time to Market, Strategy Execution With 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: Levers formulated operating processes application portfolio management solutions. Infrastructure Asset Management: IT Infrastructure Portfolio Management: Levers formulated operating processes with IT infrastructure portfolio management. We Design, Build and Run the IT Service Strategy We Design, Build and Run the IT Service Strategy as we spell out IT Activities from a demand and supplier side (Design), Set IT processes and key performance indicators (Build): Manage the Business of Information Technology, Develop and Manage IT Customer Relationships, Manage Business Resiliency and Risk, Manage Enterprise Information, Develop and Manage Information Technology Solutions, Deploy Information Technology Solutions, Deliver and Support Information Technology Services, Manage IT Knowledge. Aligned to described ITIL activities and processes with full IT Financial Management (Run).  
  28. 28. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Cost Effectiveness (Key Performance Indicators): - Total IT budget as a percentage of revenue, - Total IT budget per FTE, - IT expense per FTE, - Personnel cost of the process "manage the business of IT" per €1,000 revenue, - Systems cost of the process "manage the business of IT" per €100,000 revenue, - Personnel cost of the process "develop and manage IT customer relationships" per €1,000 revenue, - Systems cost of the process "develop and manage IT customer relationships" per €100,000 revenue, - Personnel cost of the process "manage business resiliency and risk" per €1,000 revenue, - Systems cost of the process "manage business resiliency and risk" per €100,000 revenue, - Personnel cost of the process "manage IT knowledge" per €1,000 revenue, - Systems cost of the process "manage IT knowledge" per €100,000 revenue, - Personnel cost of the process "develop information and content management strategies" per €1,000 revenue, - Systems cost of the process "develop information and content management strategies" per €100,000 revenue, - Personnel cost of the process "define enterprise information architecture" per €1,000 revenue, - Systems cost of the process "define enterprise information architecture" per €100,000 revenue, - Personnel cost of the process "manage information and IT knowledge resources" per €1,000 revenue, Systems cost of the process "manage information and IT knowledge resources" per €100,000 revenue, - Personnel cost of the process "perform enterprise data and content management" per €1,000 revenue, - Systems cost of the process "perform enterprise data and content management" per €100,000 revenue, - Personnel cost of the process "develop and maintain information technology solutions" per €1,000 revenue, - Systems cost of the process "develop and maintain information technology solutions" per €100,000 revenue, - Personnel cost of the process "deploy IT solutions" per €1,000 revenue, - Systems cost of the process "deploy IT solutions" per €100,000 revenue, - Personnel cost of the process "deliver and support IT services" per €1,000 revenue, - Systems cost of the process "deliver and support IT services" per €100,000 revenue, - Total cost of the process "manage the business of IT" per €1,000 revenue, Total cost of the process "develop and manage IT customer relationships" per €1,000 revenue, - Total cost of the process "manage business resiliency and risk" per €1,000 revenue, - Total cost of the process "manage IT knowledge" per €1,000 revenue, Total cost of the process "develop information and content management strategies" per €1,000 revenue, - Total cost of the process "define enterprise information architecture" per €1,000 revenue, - Total cost of the process "manage information and IT knowledge resources" per €1,000 revenue, - Total cost of the process "perform enterprise data and content management" per €1,000 revenue, - Total cost of the process group "manage enterprise information" per 1,000 revenue, - Total cost of the process "develop and maintain information technology solutions" per €1,000 revenue, - Total cost of the process "deploy IT solutions" per €1,000 revenue, - Total cost of the process "deliver and support IT services" per €1,000 revenue, - Total IT cost per €1,000 revenue. Corporate Contribution (Key Performance Indicators): - Control of IT expenses percentage, over or under IT budget, allocation to different budget items, - IT budget as a percentage of turnover, - IT expenses per staff member, - Business value of the IT function percentage of the development capacity engaged  
  29. 29. Copyright 2013 Martin Palmgren EVP .COMMUNICATE http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/connect-information/ Connect information to take qualified decisions We Connect information to take qualified decisions as Financial, Budget and Actuals, Projects, Contracts, Business Cases, Resource Allocation, IT Assets, IT Services, IT Metrics, Chargeback, Business goal Alignment information is structured in an IT Financial Management Model that can be used to support the prices set in the Business and IT service catalogue. Figure 4: IT support Business Objectives: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/it-support-business-objectives/ Address Critical Success Factors How do we: - Deliver services to the needs of the business on target in a “Time to Market” perspective (Business (IT) Value Proposition) and demonstrate contribution, - Conduct a constructive budget dialogue with the business: Total Cost of Ownership (TCO) with Cost Consumption and Chargeback / Showback, - Build and run an effective IT Business Model to Best Practice Frameworks. Figure 5: Deliver effective business strategy execution: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/deliver-effective-business-strategy-execution/ An IT Business Model and Business (IT) Value Proposition IT provides competitive leverage as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated in: An IT Business Model “This is how we deliver IT services to the business” and a Business IT Value proposition “This is how we support business objectives with services in a time to market perspective”. We deliver effective business strategy execution with an: (IT) Business Model “This is how we deliver IT services to the business” where IT processes (bundled IT services) are supported by applications and execute the IT Service strategy to business needs (where ITIL Spell out IT Activities from a demand and supplier side (Design), Set IT processes and key performance indicators (Build), Aligned to described ITIL activities and processes with full IT Financial  
  30. 30. Copyright 2013 Martin Palmgren EVP .COMMUNICATE IT delivers to demand and cost drivers. Priorities from a Business Unit Management Perspective: IT supports the achievement of tactical business objectives, IT delivers perceived added value services and at a reasonable cost, IT delivers to operational and service level agreements (commitments), IT investments positively affect business productivity and the customer experience, We have a clear process vision to which we expect the IT department to deliver. The IT Strategy support Business objectives as we meet Priorities from an IT Management Perspective: We understand stakeholder expectations and propose a service portfolio that correspond to both Demand and Cost drivers with a focus on perfect order business transactions, We develop the professional competencies needed for successful service delivery, We capture organisational knowledge to continuously improve performance, The IT and Stakeholder departments have clear objectives, processes and indicators with clear accountability and responsibility to deliver to set objectives. Business Continuity is ensured. Priorities from an IT Risk Management Perspective: 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. Where the Bottom Line is that to leverage competitive advantage with new technology is “nice to have”, to keep the business systems running is mission critical! Figure 8: End to end industrialisation of business processes: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/end-to-end-industrialisation-of-business-processes/ 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,  
  31. 31. 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 Run the IT Business effectively To run the IT business effectively and leverage the execution of the business Strategy and objectives with IT we need to make educated investments (on paper compliance and KPI indications is nice to have but not enough!): 100% of the value impact is in the execution of the process of the supported services over the entire service life cycle “order to bill”. Financial Management for Business and IT Services IT Financial Management is a critical part of 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 beyond classical activity based costing related to IT projects. With the introduction of CobIT 5 the notion of IT Service Delivery and the use of IT Service Management will become a standard exercise beyond helpdesk, problem and change management. The notion of the IT department as a profit centre IT Services and the cost of a services delivered by the IT department is a notion that was introduced on a broader basis with ITIL V3 and confirmed with the introduction of CobIT 5. Where the IT department traditionally account for services delivered and billed by outsourced providers, services delivered by the IT department (outsourced services included) have not been formalised and broken down in to direct and indirect cost and related to the cost, consumption and chargeback of an engaged service. Traditionally the IT Department tend to be run as a “cost centre” rather than a “profit centre” and investments tend to be technology rather than business driven. The hypothesis of this paper is then that in order for the IT department to deliver the right IT Services cost effectively, the IT Strategy need to support the business strategy and set business objectives. Furthermore the IT Department should be run as an internal profit centre where resources are considered as scarce and services delivered supported by IT financial management. In order to do so we need to identify the services delivered together with cost, consumption and chargeback of the delivered services to ensure that the business units that consume services are conscious that IT services bear a cost to avoid overconsumption of services that the business is not willing to pay for as well as a coherent repartition of cost related to the use of ERP / infrastructure services.  
  32. 32. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Relevant metrics, An effective benefits realisation process over the full economic life cycle of the investment. Process Management We align and lever operating, management and support processes through the effective implementation of IT. Do we perform them in the right manner? The architecture question: The investment: Is in line with our architecture, Is consistent with our architectural principles, Contributes to the population of our architecture. Do we perform them well? The delivery question: We have Effective and disciplined management, delivery and change management processes, Competent and available technical and business resources to deliver: The required capabilities, Organisational change required to lever capabilities. Figure 9: The Business Strategy is executed by IT: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-business-strategy-is-executed-by-it/ Business Architecture Figure 10: Confirm business vision: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/confirm-business-vision/ Confirm Business Vision: Articulate strategic intent, Business objectives, Business drivers. Figure 11: Articulate the Business Value Proposition: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/articulate-the-business-value-proposition/ Articulate the Business Value Proposition: Translate (Articulate) Business Vision to Business Architecture Vision & Business Architecture, Vision of Business Architecture “to be”: state “where we need to go”, “where we are now” & “how we need to proceed”, Architecture principles, Business principles, Technology principles, Build business case & roll out (with Roadmap).  
  33. 33. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Design the IT Value Proposition: Design the service strategy, Articulate governance principles, Define project teams, Engage customer ‘buy in’, Design KPI’s, Define & validate service pricing, Design the performance measurement system. Figure 17: Build the IT Value Proposition: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/build-the-it-value-proposition/ Build the IT Value Proposition: Implement the project portfolio, Engage Organisational change, Control IT (measure outcome to set objectives), Capture KPI’s & Measure performance, Enforce governance. Figure 18: To Perform Effective IT Governance: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/to-perform-effective-it-governance/ To Perform Effective IT Governance: Transform the IT Business Model, Measure KPI trends and targets, Meet business objectives, Control cost, Measure Delivery performance, Manage change, Continuous service & process improvement, Process roll out (articulation & integration), Execute strategic intent. Direction The business (IT) strategy is effective and Provides clear, meaningful Business (IT) Vision / Mission: as it is realistic and achievable, articulated, communicated. Defined Market Position Industry structure with New entrants, Suppliers, Substitute products or Services, Buyers (customers), Existing Competitors. Competitive Advantage There is an understanding of Competitive Positioning, Strengths and weaknesses, Strategies and relative positioning. External environment  
  34. 34. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Meet stakeholder expectations There is an understanding of the Suitability of the IT strategy, Feasibility of the IT strategy and the Acceptability of the IT strategy. Deliver IT services to business needs We understand that At the end of the day Business Executives take the decision to out / cloud source when: IT is not perceived to understand stakeholder expectations, IT is not perceived to contribute to business objectives, IT is not perceived to deliver value to cost, IT is not perceived to deliver services to business needs, The IT department is unable to deliver services in a time to market perspective, IT propose an effective service portfolio that correspond to Demand and Cost drivers. IT contributes to business objectives The IT service proposition is aligned to the business strategy as: Stakeholder expectations are understood and IT propose a service portfolio that correspond to Demand and Cost drivers, Business Contribution, Cost, Consumption & Chargeback is identified, Focus is on perfect order business transactions, Services are effective (demand and cost drivers identified), Services are competitive (Benchmark Industry Market Forces) and New technological solutions that could change how current business is performed are explored, proposed and implemented. IT provides competitive leverage As the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated in: An IT Business Model “This is how we deliver IT services to the business” and a Business IT Value proposition “This is how we support business objectives with services in a time to market perspective”. The Business (IT) Strategy, link to operations We Link Strategy and Operations as we Develop the Strategy, Translate the Strategy, Plan Operations, Monitor and Learn, Test and Adapt the Strategy, Execute Procedures and Initiatives. Business (IT) Tactics  
  35. 35. Copyright 2013 Martin Palmgren EVP .COMMUNICATE services to the business” and a Business IT Value proposition “This is how we support business objectives with services in a time to market perspective”. We deliver effective business strategy execution with an: (IT) Business Model “This is how we deliver IT services to the business” where IT processes (bundled IT services) are supported by applications and execute the IT Service strategy to business needs (where ITIL Spell out IT Activities from a demand and supplier side (Design), Set IT processes and key performance indicators (Build), Aligned to described ITIL activities and processes with full IT Financial Management (Run)), Delivery capability (IT – CMF, CobIT 5, ValIT, CobIT 4.1, RiskIT, where we ensure that managed processes and objectives meet stakeholder expectations, ISO 38 500 we ensure that IT has the necessary means to effectively support the business strategy), Architecture (TOGAF where business objectives are supported by business processes, a business architecture leveraged by an IT architecture and applications that sit on an IT infrastructure as needed (inside the firewall on a server or mutualised servers (internal / private cloud) or outside the firewall on a mutualised server (external / public cloud), Security (ISO 9001, ISO 27 001, COSO where business continuity is ensured by risk and control objectives). A Business (IT) Value Proposition “This is how we support business objectives with services in a time to market perspective” where Business processes (bundled Business services) are supported by applications (Develop vision and strategy, Develop and manage products and services, Market and sell products and services, Deliver products and services, Manage customer services, Develop and manage Human Capital, Manage information technology, Manage financial resources, Acquire, construct and manage property, Manage environmental health and safety, Manage external relationships, Manage knowledge, improvement and change). The do-or-die questions boards should ask about technology In the “The do-or-die questions boards should ask about technology” Paul Willmott raises a number of questions that well recapitualtes what we have seen in this chapter: 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 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?  
  36. 36. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 6. Do we have the capabilities required to deliver value from IT? Questions to ask: - Do we have the capabilities needed to drive full value from our existing IT systems? - What are the weakest links in our capabilities? - Do we have enough IT-literate executives? - What is our plan for upgrading capabilities? 7. Who is accountable for IT and how do we hold them to account? Questions to ask: - What is our operating model for IT, and is it aligned with our business priorities? - Who is accountable for delivering business value from IT—both overall and by activity? - Are those accountable being measured using business-friendly scorecards that create the right incentives? 8. Are we comfortable with our level of IT risk? Questions to ask: - Do we have a comprehensive understanding of the IT risks we face? - How is our level of IT risk measured, and is it aligned with the company’s overall risk appetite? - How are we reducing our IT risk on an ongoing basis? - Who is responsible for overseeing the level of IT risk? 9. Are we making the most of our technology story? Questions to ask: - What are the key messages we should communicate?  
  37. 37. Copyright 2013 Martin Palmgren EVP .COMMUNICATE TOGAF and ISO 9001, ISO 27 001, COSO) delivered in a Business IT roadmap; that is how do we support business objectives and processes leveraged by IT and an effective IT Services strategy. Within this scope we would by definition address how we execute the IT service strategy (ITIL) Design - Spell out IT Activities from a demand and supplier side, Build - Set IT processes and key performance indicators, Run - Aligned to described ITIL activities and processes and full IT Financial Management (supported by delivery capability IT CMF, COBIT 5). Once services defined we can then decide where to run the application that support the IT and or Business Services (server / internal / external cloud / outsourced provider). Within the frame of an acquisition up to 80% of the value realisation is (can be) on the IT side. The failure to address IT and the IT strategy can be an additional (1 out of 3) reason to M & A failure. If we assume that to deliver business value with IT we need to support business objectives, the integration of a new entity is an optimisation of the current IT strategy (how we support business objectives and processes). We would obviously need to understand (and hopefully have the opportunity) how the current IT run before the purchase (IT due diligence) with full IT Financial Management to figure out the actual cost of delivered IT services (cost, consumption, chargeback). Once services defined we can then decide where to run the applications that support the IT and or Business Service (server / internal / external cloud / outsourced provider). We also need to define the purpose of the purchase (invest / divest) in the overall corporate strategy where it is of little use and a significant cost to integrate all systems in to a common backbone if the company is to be divested only a few years later. We could use an IT Scorecard to ensure that stakeholder expectations are met from an executive management, business line management, IT management and IT risk management perspective. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated. Chapter 5. How to build a CIO Office to deliver effective IT services and meet stakeholder expectations  
  38. 38. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Deliver IT Services to Business needs We Deliver IT Services to Business needs as we : - Focus on business objectives, Problem statement, The cause, The solution, Deliver a roadmap, To demand and cost drivers, Build the IT Business Model, For effective strategy execution, To meet stakeholder expectations. Focus on business objectives Every business is driven by strategic objectives that define how to compete in the marketplace. An effective IT Business Model ensures that business management : - Makes the most effective investments in IT, - Manage the resulting IT services with a high degree of quality & effectiveness Problem statement To leverage business strategy with IT we need to: - Link IT to the Business Strategy Drive IT strategy into IT operations Set a baseline from which to measure IT performance Measure IT operational performance Improve IT performance and strategic contribution The cause IT is managed as a functional cost centre : -   IT is positioned as a cost centre IT is technology, not business oriented IT operations are managed as one large block of ‘maintenance’ New projects get all the attention, then not followed up on Very little IT strategic planning takes place
  39. 39. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - Build the IT business model For effective strategy execution Typical Transformation Initiatives where we need to provide GAP (As Is, To Be, ROI) - Mergers and Acquisitions (M&A) Data room Development Synergies & consolidation options Data Centre Migration, virtualization IT Organisational Transformation: Towards a Service Business Shared Service Centres, Outsource, Cloud & Benchmark Meet Stakeholder Expectations - Meet Stakeholder Expectations Effective Investments, Business focus, Best in class solutions, Competency, Direction, Develop in to a Business partner relationship. To meet stakeholder expectations We define a financial baseline from which to measure IT performance with : - IT Service Portfolio and TCO by service Customer consumption of IT services – chargeback IT goals aligned to the business goals and objectives IT processes evaluated against industry standards Dashboards to measure KPI’s Scenarios for major transformation initiatives Effective Investments How does executive management view the IT department?  
  40. 40. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - Train and educate IT staff, Build IT staff expertise, Research in to emergent technologies, Pertinence, scalability, evolutivity of application portfolio. Direction In order to succeed IT need a clearly articulated business strategy: Objectives: - Evolve from a service provider to strategic partner, Provide mutualised solutions focused on to develop best in class capabilities, Support the achievement of company strategies and objectives, Become the “supplier of choice” of information services, Establish a forward looking enterprise architecture strategy that enables the use of technology as a competitive edge in the financial market place, - Become the “employer of choice” for career oriented IT professionals in the markets in which the group operates. Develop in to a Business partner relationship And more precisely: Objectives: - Become the supplier of choice for all information services, either directly or indirectly through supplier relationships, - To enable and contribute to the achievement of business objectives through effective delivery of value added information services, - Deliver timely and effective IT services at targeted service levels and cost, - Develop internal capabilities to continuously improve performance through innovation, learning and personal organisational growth. Execute Business Strategy -   Execute the Business Strategy Confirm Business Vision, Articulate the Business Value Proposition, Deliver the Business Architecture, Translate the Business Vision to an IT Vision, Set the IT Value Proposition Baseline,
  41. 41. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - (IT) Roadmap reflect stakeholder - Conceived in to a solid Story - The IT department as effective broker of services? Support Business Objectives To ensure stakeholder “Buy In” 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 Costs 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 Understand Stakeholder Expectations 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 costs 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 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  

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