• Save
Deliver Business Value with IT! - How to build a CIO Office to deliver effective IT services and meet stakeholder expectations
 

Deliver Business Value with IT! - How to build a CIO Office to deliver effective IT services and meet stakeholder expectations

on

  • 255 views

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

This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here:
http://flevy.com/browse/business-document/deliver-business-value-with-it-how-to-build-a-cio-office-to-deliver-effective-it-services-and-meet-stakeholder-expectations-368

The upper part of the clients that I speak to feel that there is a lack of actionable articles and publications that help to bridge the gap between the execution of the business strategy, business objectives and how IT can be used to support the latter to deliver business value. This is also the reason why I decided to put forward an execution centric material that has for objective to if not entirely bridge the gap between IT and the business provide Business and IT Decision makers the necessary common language to move forward in the same direction (pointing fingers is rarely productive).

The 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. ?Deliver Business Value with IT! ? How to build a CIO Office to deliver effective IT services and meet stakeholder expectations? provides a focus on this area.

The execution of the defined business strategy is often a mystery (missing link) both on the Business and the IT side. The truth is that regardless of how well the executive team draws out the strategy in the boardroom the bottom line is that the business initiatives that were supported by clients succeeds, those not supported by clients (that do not get it) fail and disappear.

Statistics

Views

Total Views
255
Views on SlideShare
255
Embed Views
0

Actions

Likes
0
Downloads
0
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Deliver Business Value with IT! - How to build a CIO Office to deliver effective IT services and meet stakeholder expectations Deliver Business Value with IT! - How to build a CIO Office to deliver effective IT services and meet stakeholder expectations Document Transcript

  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Title: Deliver Business Value with IT! – How to build a CIO Office to deliver effective IT services and meet stakeholder expectations ISBN: 9781301891733 Official website: http://deliverbusinessvaluewithit.com/ AUTHOR Martin PALMGREN, EVP .COMMUNICATE Copyright 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 Introduction The upper part of the clients that I speak to feel that there is a lack of actionable articles and publications that help to bridge the gap between the execution of the business strategy, business objectives and how IT can be used to support the latter to deliver business value. This is also the reason why I decided to put forward an execution centric material that has for objective to if not entirely bridge the gap between IT and the business provide Business and IT Decision makers the necessary common language to move forward in the same direction (pointing fingers is rarely productive). The Deliver Business Value with IT ! series is a reply to “How do we put the IT  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE If you believe to be among the top 100 IT or Business leaders that leverage business value with IT "Deliver Business Value with IT" - The editorial council http://www.linkedin.com/groups/Deliver-Business-Value-IT-editorial-3807899/about is a forum dedicated to the finest business and IT academics. Cheers Martin What the reviewers said “ The “Deliver Business Value with IT” series is an extremely solid piece of work that comes across as the A-Z reference of how to execute and implement IT strategy from a CIO level perspective. The reader will learn robust approaches to deliver services designed to support IT and Business drivers. The perspective that Martin spells out permits an overview of how to leverage existing frameworks but also to effectively support the execution of an IT Strategy aligned with the Business Strategy.” (Jean-Louis Leignel, Ex CIO of the Schneider Electric Group ; past vice-chairman of ISACA (Information System Audit and Control Association), of ISACA’s IT Governance Committee and of the AFAI association (ISACA’s french chapter)). “The focus that Martin takes in the “Deliver Business Value with IT” series will help in tackling the seven main non-technical challenges any CIO or other senior IT business leaders will face: 1. How and what should I communicate to whom in what way? 2. What to think of when it comes to competences needed to provide my IT services? 3. How to provide the best value at the best cost? 4. What to think of when ensuring efficient and effective delivery of projects? 5. How to establish a sourcing strategy and determining how to manage your vendors? 6. What are the best practices for managing my operations, and what to think of? 7. How can I best scan for and analyse emerging technologies? The approach taken utilizing basic business management principles and applying them to how to run an IT department are explained clearly, and takes this publication above and beyond the standard publication proclaiming to ‘run IT as a business’. The 2 key trends identified in the publication for the CIO to focus on  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE blog post to reflect on different aspects and deliver them in a crisp format. The articles / blog posts have then been combined with other aspects of the story to form the book. The book can then be delivered in a paper, electronic or audio format. The question is not weather the book is valid as format or not, the challenge is to find writers capable to synthesis the big picture and deliver it in a chewable format and still retain the attention of the reader. But then again this is not only the challenge of the book format where most articles and blog posts are “journalistic sensational” and few address questions where you need to dig in most likely due to the lack of competence / knowledge on the subject hence the social media or cloud, next fad frenzy where few of the “writers” would be able to describe the landscape with ROI to back up the logics of an investment. All that you would like to know in regards of the “Deliver Business Value with IT” series What is it about the topic that will get readers excited? After the “how do we align business needs to how IT works” (that is Business IT Alignment) clearly seen in SAP implementations the focus of the CIO need to be on how do we support / “leverage the execution of the business strategy with IT” where the IT Department supports new emerging business initiatives that will eventually form the business strategy as they succeed of fail. That said the IT department has not only the responsibility but should be held accountable for how well they help the business side understand how to leverage existing technology solutions (buy / make) effectively hence the notion of service delivery defined not as basic help desk but as a full fledged business partner and this would include IT Financial Management. Why do you think this book would be welcomed by potential customers? Deliver Business Value with IT will help the IT Department to move from a mere third party provider of Information Technology to a position of a full fledged business partner with a comprehension of business needs, stakeholder expectations and strategy execution and how to support the latter. How do you see your book being different from any existing or competing titles? We help the reader evolve from a position of “there are business needs and stakeholder expectations” (see COBIT 5 that is today one of the few IT frameworks that has included the notion “the needs of the business” and stakeholder expectations) to a potential position of a a full fledged business partner with a comprehension of business needs, stakeholder expectations and strategy execution and how to support the latter. For COBIT 5 practintioners the perspective presented in ”Deliver Business Value with IT” pulls the logics presented in COBIT 5 together that you can effectively leverage with the IT Scorecard. Describe the three most important things you want the reader to have learnt/solved by the end of the book: How to ask the right questions to support the needs of the business (and not sit around to wait for the business strategy to be formalised as this might never happen). Focus on ROI and hands on metrics oriented results that supports business objectives. How to re invent the IT Business Model (that is how do we deliver IT services effectively) and the Business (IT) IT Model / Partership that is how do we support the needs of the business effectively.  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 https://flevy.com/browse/business-document/build-an-it-service-strategy-leveraged-by-itil-v2-and-3-build-set-it-processes-and-key-performance-indicators-283/ref=mpalmgre Build an IT Service Strategy Leveraged by ITIL V2 & 3 Run - Aligned to Described ITIL Activities and Processes https://flevy.com/browse/business-document/build-an-it-service-strategy-leveraged-by-itil-v2-and-3-run-aligned-to-described-itil-activities-and-processes-284/ref=mpalmgre To be published in the “Deliver Business Value with IT” Series How to Build a CIO Office https://flevy.com/browse/business-document/how-to-build-a-cio-office-288/ref=mpalmgre CANVASSED in a Business (IT) Strategy Canvas: Business Vision, Architecture https://flevy.com/browse/business-document/canvassed-in-a-business-it-strategy-canvas-business-vision-architecture-289/ref=mpalmgre CANVASSED in a Business (IT) Strategy Canvas: IT Vision https://flevy.com/browse/business-document/canvassed-in-a-business-it-strategy-canvas-it-vision-290/ref=mpalmgre  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE to what should be done that is to “support the execution of the business strategy with IT” as opposed to “how do we align business needs to how IT works” (that is Business IT Alignment) which is current best in class. We will leverage business models and concepts to permit the CIO and the IT department to meet the needs of the business (As Is, To Be). List of topics that will be covered in the chapter: We understand: 1. The need for an “IT value proposition” (an IT Business Model and a Business (IT) Value Proposition), that is the competitive advantage that IT confer 2. The criticality to acquire IT services end to end 3. The need for IT Accountability 4. The reason why IT strategies fail, and miserably 2: To avoid the “Marshmallow” momentum, focus on the business model We spell out the irregularities of the current IT Innovation process and the loss of competitive advantage for both the IT and the Business Side. List of topics that will be covered in the chapter: We understand: 1. How to build an effective innovation process 2. Why current “best in class” might not be best in class at all 3. That Business focused technology can be a make or break factor as we innovate or reinvent a brand and business model 4. To support business strategy execution we need to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy 3: "Do we really need a CIO and IT department to bother us with technology when we can use the cloud?" We spell out the need for The CIO and the IT Department to position as premium provider of IT services and focus on value to cost. In order to avoid the "do we really need a CIO and IT department to bother us with technology when we can use the cloud?" the CIO has to ensure that the business strategy and business objectives are supported by IT (from a Business and IT architecture perspective). Where the IT Strategy support Strategy execution, "Time to Market", Cost Effectiveness and stakeholder expectations from an Executive,  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE business strategy execution with IT to: 1. 2. 3. 4. 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: 1. 2. 3. 4. 5. 6. 7. Define the competitive advantage Acquire the IT Service Portfolio End to End Deliver Value Innovation as we differentiate and keep the cost down Reconstruct Boundries Create demand Govern Shift focus from customers to non-customers Figures Figure 0: IT supports the run and emerging business initiatives: http://deliverbusinessvaluewithit.wordpress.com/2013/03/19/the-very-reason-why-most-it-strategies-fail-and-miserably/ Figure 1: We articulate the Value proposition with a storyboard: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/we-articulate-the-value-proposition-with-a-storyboard/ Figure 2: Time to Market, Cost Effectiveness, CycleTime: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/time-to-market-cost-effectiveness-cycle-time/ Figure 3: Connect information: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/connect-information/ Figure 4: IT support Business Objectives: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/it-support-business-objectives/ Figure 5: Deliver effective business strategy execution: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/deliver-effective-business-strategy-execution/ Figure 6: The   roadmap reflects stakeholder expectations:
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE To deliver business value with IT we need to Focus on the Business Bottom Line: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. The IT Bottom line is that up to 40 % of current IT spend occurs outside the IT budget (CRM, Cloud). The IT department needs to position itself as a facilitator to IT services and effectively address emerging needs, market opportunities and demonstrate that the current Business Model is supported effectively. The IT department should facilitate the access to IT services to support new and current business initiatives. The business strategy emerge out of a number of initiatives that are successful or not. The IT department need to support the “Run” of day-to-day operations as well as new projects. The Cloud might particularly be of interest within this frame. The execution of the defined business strategy is often a mystery (missing link) both on the Business and the IT side. The truth is that regardless of how well the executive team draws out the strategy in the boardroom the bottom line is that the business initiatives that were supported by clients succeeds, those not supported by clients (that do not get it) fail and disappear. The CIO and IT department hence needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. We believe that in order for the CIO and the IT Department to position as premium provider of IT services and focus on value to cost we need to understand the Business (IT) Strategy and how the IT department can deliver effectively to business objectives, that is to deliver business value with IT: - What is the Business’s strategy and plans? , - What is the current business model that IT has to support? ,Where could IT make a significant impact on the business? ,- Are there any further opportunities to use IT? , - How do we provide IT Services as we meet demand and cost drivers where the decision is to make (internal) or to buy (external service provider)? We have identified 2 key trends for the CIO to focus on: - Differentiation (That is, how does IT provide a competitive advantage for the business), and - Cost (How does the IT Department deliver IT Services cost effectively). To do so we need to Build an effective IT Delivery Model to meet business needs and expectations as we leverage business strategy execution and business processes supported by an IT Service strategy (ITIL, IT – CMF, CobIT 5 (ValIT, CobIT 4.1, RiskIT), ISO 38 500, TOGAF and ISO 9001, ISO 27 001, COSO) delivered in a Business IT roadmap; that is how do we support business objectives and processes leveraged by IT and an effective IT Services strategy. Within this scope we would by definition address how 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  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Mauborgne), Business Model Generation (Alex Osterwalder & Yves Pigneur), The Balance Scorecard, The Strategy Focused Organisation, Alignment, Strategy Maps, Mastering the management system, Managing Alliances with the Balanced Scorecard (Kaplan and Norton), Breakthrough IT: Supercharging Organizational Value Through Technology (Patrick Gray), The Marshmallow challenge and the Customer Journey by IDEO.” (Andrew Loveless has held executive roles in Accenture, GE Capital, Saba and Cofounded Element8) “The CIO and IT department must focus on to support business objectives, the business strategy and to be able to demonstrate how they do this (that is to spell out a valid IT strategy and a value proposition to the business). To do so they need to manage IT like a business and be responsible to profit and loss. The “Deliver Business Value with IT” series has inspired me to approach the "how" differently, that is to think differently for the future development of IT services and the Enterprise (Business, IT) Architecture to support business processes, with IT processes (aggregated as services), applications and infrastructure.” (Daud Santosa, Chief Technology Officer and Distinguished Chief IT Open Group) “The “Deliver Business Value with IT” series is an extremely solid piece of work that comes across as the A-Z reference of how to execute and implement IT strategy from a CIO level perspective. The reader will learn robust approaches to deliver services designed to support IT and Business drivers. The perspective that Martin spells out permits an overview of how to leverage existing frameworks but also to effectively support the execution of an IT Strategy aligned with the Business Strategy.” (Jean-Louis Leignel, Ex CIO of the Schneider Electric Group ; past vice-chairman of ISACA (Information System Audit and Control Association), of ISACA’s IT Governance Committee and of the AFAI association (ISACA’s french chapter)) “The “Deliver business value with IT” series gives an excellent practitioner’s view on how to realize value from IT investments. Martin successfully introduces the core theories and practices regarding this topic that recently had a lot of attention from both academics and practitioners. The material in his book also gives for CIO’s a good overview of the most popular IT governance and IT management frameworks including the relative new ones such as ISO 38500 and COBIT 5. This publication may help CIO’s and senior IT people to better understand that the only goal of IT is to support the business and that it is the business that ultimately will make profit from developed applications.” (Prof. dr. Wim Van Grembergen, University of Antwerp & Antwerp Management School, Information Technology Alignment and Governance Research Institute)  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Management) “I like Martin's practical approach of IT strategy. With his new “Deliver Business Value with IT” series, he is helping us work on actual paradigms we can find in today's organisations like how to find a business foundation for technology supported undertaking while using state of the art technology” (Olivier Neau, has held IS & IT Leadership roles and is today the Business Systems Director at Amcor Flexibles) “The “Deliver Business Value with IT” series has for objective to set and influence the direction that the IT business relationship will take over the next few years. Where traditional IT management focus on management & amortisation the approach “Deliver Business Value with IT” spell out demonstrates the way to the future position of the CIO as de guardian of effective investments providing innovative services to the business by new enabling technologies. The approach focuses on Enterprise Architecture as a way of managing changes in business processes and their IT support services. Competitive advantage in business depends directly on agile business processes and their support by IT. CIOs often struggle with legacy application due to the fact that their flexibility has disappeared. New emerging service delivery models such as SaaS, as PaaS or as IaaS provides an opportunity to reintroduce flexibility to IT services. As stated “Deliver Business Value with IT”, technology evolution does not free up the CIO from his role but in the contrary asks for even greater understanding of the new enabling technologies and how they can support efficiently the business processes. Required skills are shifting from in house server operation to the management of virtual servers provided by external suppliers. The end-to-end service delivery still remains under the responsibility of the CIO. And companies most valuable assets, knowledge and information, getting distributed over the cloud, require higher security measures. “Deliver Business Value with IT” correctly states that the value of IT is even growing over years and becomes the beating heart in the Business processes. Efficiency and effectiveness are more than ever the key concepts of IT management driven by the business needs. By bridging the key elements of best practice IT management Cobit, ITIL, Togaf, COSO, … he provides us with an excellent approach to IT management of the 21 century.” (Bjorn Gronquist, Audit of IT Governance and Cobit compliance, he has also held the position as Chief Security Officer & Enterprise Architect @ a Capgemini Group Level) " I am honored to have the opportunity to review the “Deliver Business Value with IT” series, which I found to be very comprehensive and to the point. With the proliferation of public form of Cloud Computing, CIO's are threatened of their survival in the corporate world. Business units can readily meet their compute needs by purchasing services directly from service providers without using IT. These services come with predictable cost at given service levels with high degree of agility.  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE (Architecture) and Security.” (Romain Hennion de Thyses, Governance and Architecture Director, Global Knowledge, VP ITSM France). “Information Technology has been a fundamental asset to excel in business performance. The “Deliver Business Value with IT” series is a new way of providing practical ideas to CIO and CEO about the extent to which cutting-edge IT such as Cloud Computing can deliver business value to customers.” (Mohamed Hédi CHARKI, PhD, Associate Professor, Director of the MSc Strategy & Organization Consultancy EDHEC Business School, FRANCE) Audience: CEO, CFO, CIO, CTO, SVP, Architects, Strategy, Business Executives, Procurement professionals and the IT function in general as well ITIL, IT – CMF, CobIT 5 (ValIT, CobIT 4.1, RiskIT), ISO 38 500, TOGAF and ISO 9001, ISO 27 001, COSO) practitioners that are interested in effective IT Strategy and cloud deployment. The material in this book has been derived from best in class practice @ Fortune 500 companies. Deliver Business Value with IT would particularly be of interest for auditors. Where COBIT 5 (ValIT, CobIT 4.1, RiskIT) provides guidance in the right direction it is imperative for the audit department to provide not only red or green light compliance check list, validate that a process is measured and managed or if IT has a dashboard, but to ensure that business process and notably those of support functions such as IT support new and ongoing business initiatives. The execution of the defined business strategy is often a mystery (missing link) both on the Business and the IT side. The truth is that regardless of how well the executive team draws out the strategy in the boardroom the bottom line is that the business initiatives that were supported by clients succeeds, those not supported by clients (that do not get it) fail and disappear. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. 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  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE EMEA, and focus on sourcing strategy, adoption of cloud services, and deployment of technology business transformation in financial and non-financial markets. Martin founds .COMMUNICATE in 2006 to meet the GAP between the needs of the business and the solutions (value proposition) delivered by the IT department. He believes that in order for the CIO and the IT Department to position as premium provider of IT services and focus on value to cost we need to understand the Business (IT) Strategy and how the IT department can deliver effectively to business objectives, that is to deliver business value with IT. - What is the Business’s strategy and plans? - What is the current business model that IT has to support? - Where could IT make a significant impact on the business? - Are there any further opportunities to use IT? - How can we leverage the cloud in this perspective “Time to Market”, “Cost Effectiveness”, “Cycle Time”? Martin has consolidated this perspective (.COMMUNICATE Publications) with a series of best in class “Deliver Business Value with IT” books that address Strategy Execution (Design, Build, Run), (IT) Governance and IT Financial Management that focus on the execution of the IT strategy to business needs and how to leverage the cloud in this perspective. It is also within this frame that Martin founds the CIO Office 2.0 that sports + 850 on invitation only CIO's and CEO’s that focus on how to deliver business value with IT. In 2002 (– 2006) Martin joins a team of outgoing Gemini Consulting Business consultants to accelerate the development of ADSAP as Executive Vice President and associate (a start up specialised in the resale of industrial equipment (online market place) and Enterprise Portal Development) with the objective to accompany the executive management, identify business opportunities and to ensure the development of concordant solutions in the industrial equipment segment. He sells his parts in 2006 within the frame of the acquisition by a major US based actor within the online market place segment. Mission: Portal conception and solution development: structure, content, classification system elaboration (profession and functional oriented taxonomy: 56 000 lines, 7 languages, compatible with UNSPSC, ECCMA & ECLASS). Position and offer: target and operational marketing identification (price, geographical zone, mix). Partner & competition bench. Development of an international partner program (+ 30 000 ads on a monthly basis). Martin also held the role of general secretary to the CEO the former CFO of a listed large French group and actively contributed to the overall strategy and was key to international development.  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE trace). Ebay enables the exchange of goods. Twitter provides a tool for self promotion and advertisement. Facebook fills the void of distance and keep the contact with your friends and the opportunity to make new acquantainces. Linkedin the opportunity to keep up to date with your professional network + some promotional features. The business model sets the direction enabled by best in class technology. Figure 0: IT supports the run and emerging business initiatives: http://deliverbusinessvaluewithit.wordpress.com/2013/03/19/the-very-reason-why-most-it-strategies-fail-and-miserably/ Why it is critical for the business to acquire the IT Service Portfolio End to End I was recently contacted by a large Editor (as most of you like know I have accompanied a number of IT consulting companies and editors in their “Go to Market” with Client acquisition, (Large) Account Introductions, Alliances (notably with BIG 5 consultancies), Market Position (Forrester, Gartner, Bright Talk) and position of the “Value Proposition” (discovery, competitive analysis of market offerings, road map to realign solutions portfolio and transform sales and delivery operations, develop new market strategy and execution plans, and drive sales transformation, acquisition of smaller actors)) to help them in their go to market. Where an IT strategy that support business objectives should demonstrate a coherent technology solution this is rarely the case. Most editors or consulting business sell adhoc projects in regards of opportunities to do so with the client. On the client side fire fighting that is to solve problems on an adhoc basis, where focus is on work arounds and throwing man hours and conceive ideal solutions on paper (encouraged by most consulting companies) leaves most businesses with a poor industrialization of business and IT processes. Clients need to step up to buy a full value portfolio of services (em)powered by the purchase department (this is yet to be done) on the other side large service providers should leverage their international organisations to sell and deliver end to end solutions to their clients. This will also permit significant cross selling with an increase in the added value perceived (that will take the said actors out of the equation to compete on cost only). How poor IT Financial Management (accountability) set your business, CIO and IT department up for failure! If you owned an airline company would you accept that when you asked how many passengers that had been transported, which distances where the most profitable, how  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Instead most IT departments are IT centric and focus on project management or to roll out frameworks (that have a specific function) to build business strategy. Once the “happy few” certified have managed to talk the IT Executive management in to how important it is to impose an excellent project management tool brought forward to develop software, or manage the IT architecture or how to ensure that IT and Business Processes are managed and controlled to build the IT Strategy we then feel obliged to adapt how the business side is run to fit to this world view and deliver to the needs of the business.. Agile is only the latest methology to suffer “the one methodology fits all dilemma”. I have over the last years encountered a number of CIO’s that tried to apply Agile to build the IT Strategy and run the IT department. Agile is an excellent tool to ensure capability delivery and effective project management and product delivery within the frame of software development. Where I do agree with the principles of a more “adaptive” approach to IT Strategy development spelled out in http://deloitte.wsj.com/cio/2012/05/24/an-agile-approach-to-it-strategy/ I believe it is important to keep the methodologies apart and focus on business objectives not to confuse your business stakeholders. Value Innovation, that is Differentiation and Cost! If apple inc is one of the highest valued business it is because the deliver best in class technology but above all due to the fact that they deliver a superior customer experince at the right cost to value. Michael Porter (http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1) identified competitive advantage by differentiation or cost. The value equation norm in the industrial world has since become differentiation and cost . The IT department as provider of services can no longer focus on one or the other. Standardisation both from a service and process perspective is a must. Each business is unique but the processes used to deliver to business objectives are to 80% the same across sectors. Within manufacturing standardisation is key, the IT department should move down the same path. If Salesforce.com or box.net, Oracle and SAP can deliver cross industry and sector we need to define the amount of “tailor made” that we are ready to pay for and how “Agile” do we need to be? To manufacture a product or build a building we specify the description to the needs of the client, deliver a blue print and produce / build. Changes in the production are costly, yet this is the very basis for “Agile” reason why most IT Contractors would not accept a set cost frame for a contract where the blue print was not defined well enough to produce to the needs of the client in the first place (moving target dilemma). The bottom line is that we need to rapidly be able to understand modelise and deliver to the needs of the business and business objectives. If standardised solutions cover 80 % of the needs that would most likely be enough.  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Proposition. We see Total Cost of Ownership (TCO) as the corner stone to move further from "IT generates to much cost" where we can demonstrate who consumes what services (and should subsequently pay for what they consume) to obtain the means (investments) and ends (budgets). To run a cost effective IT Operation that delivers to business expectations and leverages the execution of the set strategy (1) you would need to build a clear IT Service Strategy (what services do we deliver to the business) with Total Cost of Ownership per user with: cost (how much does each service cost), consumption (how much does the individual user consume) and chargeback (consumed services are allocated "charged back" on an effective cost basis to the business units) (2) in order to be able to provide the means (necessary investments) and ends ( budget). With the right support (best in class technology) this can be done in weeks with a top down (General Ledger), Bottom Up (effective cost) (3) analysis and tied to the roll out of an IT Service Strategy (that drives an end to end roll out of ITIL V 2/3 logics). Most CFO's understand a well concieved business plan (IT Service Strategy), with a clear Value Proposition (What services do we deliver) and Business Model (how do we deliver the depicted services to our potential clients) and know that to generate productivity improvement you need to invest. Our experience is that where some clients underconsume services due to a non effective cost allocation model other heavy users tend to overconsume services and do so the more willingly as they do no not pay for their consumption (are not charged back). An allocation model based on delivered services will hence accord the CFO to deliver a coherent financial model based on effective consumption and reflect user behaviour. Most IT Financial Management solutions tend to "massage" the general ledger and do not provide an effective integration to the IT Service Strategy over time. As a result they do not provide cost transparency on an ongoing basis, nor do they deliver to the above set objectives. You need to pull together an end-to-end perspective of IT Spend to: - Present a full granular IT Financial Management Model and "as a service”, - Align Project Spend with Service Spend, - Provide a transversal view that is an IT sub ledger that break out cost, consumption, show - / chargeback not only a “macro perspective”, Efficiency of each Service, - Leverage / consolidate the initiatives that you have already put in place, - Optimise the service portfolio as we identify opportunities to remove unused services (licenses) incremental cumulation, the time of the “silver bullet magical solutions” is over (if it ever existed), and take decisions based on economical logics and business needs rather than the “fad” of the moment, - Meet stakeholder expectations from an executive and business management perspective would this be among your current priorities You need to demonstrate how you Create Business Value and Optimise IT’s contribution to the business:  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE “We are able to get the business hooked on new services and products as we actively propose new solutions to the business to leverage competitive advantage and keep the run in perfect shape. But the role as “gatekeeper of technology” to create business value can only be valid as the infrastructure runs smoothly. We have shifted the focus of to use 80 % of the budget for workarounds and fire fighting the keep the lights on and 20 % to propose new solutions to the business to an opposite 80 / 20 where 80 % of the budget is used to enhance the capability of the business where the bottom line is to drive growth for Revlon. Where the logics spelled out in ITIL are excellent they are are a minimum requirement to build an effective IT Strategy to the needs of the business where the perspective has to be completed with a Design (Demand and Supply) and Build (supported by IT processed with clear KPI’s) phase to tie the strategic value piece with the operational elements of IT service delivery. This is where I see a clear advantage to leverage “Deliver Business Value with IT! - Design, Build and Run Effective IT Strategy execution to business needs”. When a fire destroyed one of Revlon’s factories in Venezuela in June 2011, operations at that location were quickly brought back up and running in New Jersey within 15 minutes and the team was able to restore operations. The business never noticed as we leveraged the internal cloud, which now supports a range of missioncritical apps and associated data this would include ERP, manufacturing, warehousing, business intelligence. Disaster recovery and business continuity are just one aspect of the benefits companies are leveraging from the private cloud where the bottom line is simplicity. Revlon has 531 applications that run on its internal cloud, which supports roughly 15,000 automated application moves a month, and 14,000 transactions a second, Over 90 percent of our corporate workload sits on our internal cloud, and it runs most of our footprint globally. The cloud ecosystem has delivered the ability to say yes and get more done faster, better, cheaper. What triggered Revlon’s cloud move? The company went through a server refresh, and chose to only replace 20% of its hardware resources. The remaining budget would go into private cloud technologies, such as VMWare. The first step was a storage area network in which data was pooled across enterprise hardware. The second step was to put applications on it. The approach was incremental a crawl, walk, run strategy to gradually introduce the cloud to the enterprise. We did not spend more we changed how we spent our money. Revlon was also able to take charge of its own disaster recovery. We internalized our DR. As we reduced external expenditure we were able to give it back to the business to invest in revenue driving initiatives. For Revlon, the more money R&D has to develop new products to get to our consumers and for marketing to tell our “product story” and get it out to our channels and use the media to talk about our glamorous products the more succesfull the business. Another change for Revlon is that it has become a cloud provider itself  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE In short a Blue ocean is a new market created as we innovate and redefine value in regards of the perception of the customer / client. Where technology can be an accelerator value innovation is inherently linked to the customer value perception and can be delivered by both established players and new entrants (start ups). New markets created by established players are usually situated within their core business. Long standing excellence is rare but a brand name and a large treasury and the ability to create new market space is key to deliver industry growth and profit. Key questions are: How attractive is this industry, as existing player what should your strategy be to achieve profitable growth, If you are not in this marketplace should you enter, If yes, what should your strategy be? How can we make the competition irrelevant and create new demand, Do we want to segment or de-segment the market, Do we focus on the competition or on alternatives? Eliminate, Reduce, Raise, Create is one of the techniques used to understand which feature of a service is valued by the client / customer where cirque du Soleil, Swatch, Apple, DuPont, IBM are examples of companies that have created / defined new markets to meet the needs of the customer / client and that can successfully be deployed within an IT context. “Blue Ocean Strategy” illustrates what the authors believe is the best organisational strategy to generate growth and profits. Blue Ocean Strategy suggests that an organisation should create new demand in an uncontested market space, or a "Blue Ocean", rather than compete head-to-head with other suppliers in an existing industry. The first part presents key concepts of blue ocean strategy that would include Value Innovation – the simultaneous pursuit of differentiation and low cost – and key analytical tools and frameworks such as the strategy canvas, the four actions framework and the eliminate-reduce-raise-create grid. The second part describes the four principles of blue ocean strategy formulation: how to create uncontested market space by reconstructing market boundaries, as we focus on the big picture, reach beyond existing demand and get the strategic sequence right. These four formulation principles address how an organisation can create blue oceans as we look across the six conventional boundaries of competition (Six Paths Framework), reduce planning risk by following the four steps of visualizing strategy, create new demand as we unlock the three tiers of noncustomers and launch a commercially-viable blue ocean idea as we align unprecedented utility of an offer with strategic price and target cost and by overcoming adoption hurdles. “Blue Ocean Strategy” looks across industries to demonstrate how to break out of traditional competitive (structuralist) strategic thinking and to grow demand and profits for the company and the industry as we use blue ocean (reconstructionist) strategic thinking. The third and final part describes the two key implementation principles of blue ocean strategy that would include tipping point leadership and fair process, essential for leaders to overcome the four key organisational hurdles that can prevent even the best strategies from being executed.  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE (day in the life of) formalised, modelised (prototyped if needed) and validated by the client permit significant improvement in effectivenes (that is productive and efficient) and the customer perception of the experince (in this case Amtrac and the General Portland Hospital). The objective is to address the actual health care service, the patient and staff experience of the service and then define the ways it could be improved. The developpment of what became IDEO Project Journey was key in this success. Step 1 - Observe: Try to define and map the different health care segment (surgery department, waiting room…) of the hospital/health care service. Collect feed-back from different patients/staff members of each segment (then make a statistical survey, with both quantitative and qualitative information about the service and give a mark to each segment). Rank the grades and select the segments that obtained the worst grade. Experiment the journey of a patient in those specific segments (use shadowing, interviews…). Step 2 - Synthesize: Confront the patient and the staff point of views of each segment in the health care service (use a unique support like a board to give a synthetic view). Carry out a « typical patient journey » for each segment selected. Step 3 - Generate Ideas: Allow patient and staff members to post ideas of improvement or suggestions in a box available in the hospital. Brainstorm with the staff. Step 4 - Refine: Realize a quick prototype for each main idea. Test the prototypes with staff members and patient to analyze what could be quickly improved. Give a provisional budget for each main idea. Step 5 - Implement: Implement the ideas that suit to the budget constraints. Implement the ideas collaborating closely with the staff. Inform staff and patients of the undergoing change. Be receptive to direct feedback. If I now describe what can happen in an IT project (all examples are fictional, for educational purpose and any similarity to a real IT project would be coincidental). Phase 1. - To support business processes and enhance the customer experience we: (this is where we tie back to the IDEO project journey): Step 1 - Observe: (Context A) A vendor of a process modelisation tool manages to convince the business or IT executive team that to provide a modelised version of business and IT processes was business critical and would demonstrate that the IT Strategy is business centric and that the IT department understands the Business, Business objectives and the Business strategy. (Context B) A business or IT internal client wants to industrialise a process or a bundle of services with IT. We decided to use the same consultants as for the six sigma initiative (below) to capture business processes. The problem is that the business people are to busy to do their job (and might not be able to formalise their processes). And if their work is automatised we  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE reorganisation so that a task that previously took 3 days now take 5 or 10. We cross our fingers an hope that the green light red light chart now will produce the desired effect. Worst case scenario: We bring in a Top 3 or Big 5 to help management understand how important it is for IT not to be a support function. Executive management is brought in (down from their ivory tower) and walk the floor and participate in a IT strategy workshop. This is often resumed to a quick walk past a few desk and then in to a war room where an entusiastic team of IT leaders, personel (convoqued by the stategy consultants engaged) are to demonstrate how important it is for the company to have IT. A good intention turns in to a strategy exercise (that the Executive Team has no desire to perform let be told how to do strategy by the IT team) on a brown paper. In a Worst worst case scenario: the consultants bring out finger paint and the Businees executive finds himself with green paint on his tie or suit and now sees red. Really bad case scenario: The consultants have organised an excercise for the IT team to solve the problem that end users do not get it when solutions are delivered and tend to interupt the reflections of the IT team. The obvious solution would be to exclude end users from any contact with the IT team and set up an answering machine with no possibility to leave a message as they have problems. Since the business consulting lead did not fel convinced, he managed to convice the IT Director to present the conclusions in front of the board. After all this was the conclusions of his team, and an all in IT initiative would have so much more credibility. Phase 3. - The Big Change: As the business excecutives are a bit stingy and as the green light red light chart still does not do the charm we once more decide to bring in a Top 3 or Big five (preferably the same as earlier). We decide turn the situation around an in order to do so we will not do thing half way and go for a Big Change. Best case scenario: We engage a top 1 team of consultants, that will manage a top 2 team of consultants, that will in turn manage a top 3 team of consultants to deliver change and new revolutionarry projects to be presented to the board. A transversal Big Change programme is announced and consultants from the top 1, 2 and 3 consulting companies an invited and provided with the possibility to bring in new ideas. The business, IT and endusers are not consulted and business is delivered as usual. After a year or so the conclusions of the programme is delivered, the cover looked smashing but we did not have the time so we put it (burried it) in a drawer for a moment where we would have more time on our hands. Worst case scenario: We read this really good article by the guy who used to be the top hen for IT for the US government that decided to chuck IT out to the cloud not to have to run an IT department and IT resources (By the way I wonder why he stayed for such a short time before he went on to evangelise the cloud for salesforce). I wonder if we can chuck the IT department out to the cloud. Then the cloud provider could deal with users that are not happy. I wonder if the cost cutting genious that we brought in last year is available. On his recommendation we consitently cut the cost of IT for the (mobile) sales force. At the end of the day as they did not have an office or a fix computer why should they need a lap top? Not to forget that we made substantial economies on software licenses and storage space.  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE budget (CRM, Cloud). The IT department needs to position itself as a facilitator to IT services and effectively address emerging needs, market opportunities and demonstrate that the current Business Model is supported effectively. The IT department should facilitate the access to IT services to support new and current business initiatives. The business strategy emerge out of a number of initiatives that are successful or not. The IT department need to support the “Run” of day-to-day operations as well as new projects. The Cloud might particularly be of interest within this frame. We believe that in order for the CIO and the IT Department to position as premium provider of IT services and focus on value to cost we need to understand the Business (IT) Strategy and how the IT department can deliver effectively to business objectives, that is to deliver business value with IT: - What is the Business’s strategy and plans? , - What is the current business model that IT has to support? ,Where could IT make a significant impact on the business? ,- Are there any further opportunities to use IT? , - How do we provide IT Services as we meet demand and cost drivers where the decision is to make (internal) or to buy (external service provider)? COBIT 5 (ValIT, CobIT 4.1, RiskIT), ITIL, CMMI, IT-CMF are excellent frameworks to ensure that business and IT processes focus on to deliver business value, to implement a framework is as absurd as to try to roll out a dictionnary. Pick and choose the bits and pieces that apply to your business. Business focused technology can be a make or break factor as we innovate or reinvent a brand and business model Business focused technology can be a make or break factor as we innovate or reinvent a brand and business model. Angela Ahrendts for Harvard Business Review: “When I became the CEO of Burberry, in July 2006, luxury was one of the fastestgrowing sectors in the world. With its rich history, centered on trench coats that were recognized around the world, the Burberry brand should have had many advantages. But as I watched my top managers arrive for our first strategic planning meeting, something struck me right away. They had flown in from around the world to classic British weather, gray and damp, but not one of these more than 60 people was wearing a Burberry trench coat. I doubt that many of them even owned one. If our top people weren’t buying our products, despite the great discount they could get, how could we expect customers to pay full price for them?” Read the full article @ http://hbr.org/2013/01/burberrys-ceo-on-turning-an-aging-british-icon-into-a-global-luxury-brand/ar/1     Burburry have taken the a lead in the how to leverage business innovation with IT, notably with social as a key enabler through a “Facebook” driven platform that drives innovation bottom up where employess connect to share best practise on how to set up stores and sell products and even compete internally on a daily basis who sold more in “discussion groups” set up by the teams not by management. I would invite you to discover an interview @ http://blogs.hbr.org/video/2012/12/how-burberry-manages-talent.html?cm_mmc=email-_-newsletter-_cant_miss_update-_-hbrcm020813&referral=01087&utm_source=newsletter_cant_miss_update&utm_medium=email&utm_campaign=hbrcm020813  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE IT Value proposition “This is how we support business objectives with services in a time to market perspective”. The Business (IT) Strategy, link to operations We Link Strategy and Operations as we Develop the Strategy, Translate the Strategy, Plan Operations, Monitor and Learn, Test and Adapt the Strategy, Execute Procedures and Initiatives. Business (IT) Tactics We Map Strategic Themes from a Financial Perspective, Customer, Process, Learning & Growth Perspective as we Create a High Performance Culture. See also http://hbr.org/2008/01/mastering-the-management-system/ar/1 Business (IT) Context We Define Market Position with New entrants, Suppliers, Substitute products or Services, Buyers, Existing Competitors. http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1 Strategy Map Captured in a Strategy Map that Formalises stakeholder outcomes to deliver value. The Stakeholder Strategy Roadmap set the scope with Objectives: - Formalise stakeholder outcomes: To deliver value for all parties (partnership), Which drives Customer value: For effective and satisfied end users, That deliver - Business processes: Speed, process innovation and growth, Executed by - Employees and organisation: Collaboration that deliver strategy execution. Strategy Canvas Articulated in a Strategy Canvas The Stakeholder Strategy Map Formalises stakeholder outcomes to deliver value for all parties. The strategy canvas allow the teams to articulate and formulate objectives on a project / program basis for improved execution with an extended GAP, risk and added value analysis captured in a DARCI (Decision taker, Accountable, Responsible, Consulted & Informed).  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE In order to successfully deliver business value with IT we could: 1) Create a committee of stakeholders affected by the IT investment, that would include IT managers and business unit managers. 2) Define intangible benefits of the IT investment that are agreed on by the committee with flexible and effective budget process and improved decision analysis. 3) Define intangible risks associated with the IT investment that is: slow response to system change, risk of poor integration with existing systems and staff resistance to a new system. 4) Establish weights to the relative importance of the tangible benefits (the financial result), the intangible benefits, and the intangible risks of the IT investment. 5) Estimate on a scale of zero to five the likelihood benefit and risk observed. 6) The investment alternative that results in the largest sum of benefits is the preferred alternative. Make a plan and get executive support: - Build a plan to ensure that the IT Strategy support the business objectives, - Include all top-level executives and business unit heads in the plan. - Be certain to cover business technology execution, support processes, and the organisation, - Meet with the key executive stakeholders to receive input and buy in, - To strive to create a partnership. Form a steering committee: - Create an executive-level steering committee to review all business technology initiatives and projects, - Gain support from top management for the steering committee, portfolio management process, and TVO model, - Meet formally and informally to build a “trusted adviser” relationship with key stakeholders. To anchor Total Value of Ownership in to the business and IT culture we: Implement a reporting process and consistently communicate the company’s progress on key initiatives and projects to all levels in the business. - Build a culture of enterprise wide planning, - Enforce a practice of rigorous TVO prioritisation and analysis, - Make sure all business units and key stakeholders use a TVO approach to projects. Bottom line: We focus on value impact: As we focus on business objectives and processes that will have the most value impact as they are industrialised. We ensure success: A business executive sponsor and business champions is committed to the successful delivery of identified business objectives and process to be supported / industrialised. We select: The information technology was selected to best enable the process changes to generate the greatest value to the business. We deliver to the needs of the business and on target: IT and business management work together to identify and ensure the delivery of benefits. The relationship is essential to effectively support business objectives with IT (Business IT Alignment). The organisation moves from a pure cost center perspective to emphase value creation that is a profit center or investment center perspective. Managers evaluate and coordinate a portfolio of projects with an effective IT governance process. This would include for IT and business leaders to share accountability. This approach permit effective allocation of resources as we provide participants the opportunity to better understand the problems and opportunities that exist and how projects can be leveraged across the organisation to facilitate the integration of IT and  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE - What is the Business’s strategy and plans? - What is the current business model that IT has to support? - Where could IT make a significant impact on the business? - Are there any further opportunities to use IT? - How do we provide IT Services as we meet demand and cost drivers where the decision is to make (internal) or to buy (external service provider)? In our case we do this via a shared service centre that we leverage as a catalyst for breakthrough innovation in competitive IT services where the objective is to become the premier shared services provider as we deliver exceptional customer experience (both from a service delivery and cost perspective) and address the “challenges” of a 21st century service centre. We promote a continuous competitive market position as we deliver cost effective (productive and efficient) IT services to business needs that spur operational excellence: provide economic value, support open capital investment that allocate resources to the most promising ideas / solutions, encourage effectiveness (productive and efficient) and innovation for operational excellence, - promote and support communities of innovation and culture. To do so we invest innovatively as we: recruit, retain, and develop competent staff, build and sustain agile infrastructure and processes, build dynamic adhoc teams to foster ideas and implement innovation, - encourage and promote enterprise solutions that improve effectiveness (productive and efficient) across functional disciplines, proactively suggest new ideas and new solutions, - promote better business (LoBs) University, and Industry partnerships to spur ideas and innovation to, - leverage emerging technologies and innovation to deliver premier services. To deliver effective Business and IT services supported by EA (Enterprise Architecture): There are numerous EA frameworks: TOGAF, DODAF, FEAF, Zachman that provide guidance to implement EA to business needs. Government and the private sector have spent millions of dollars with long life cycle to develop their EA programs and yet we still struggle to identify short term added value / result to the Business. On the other hand, technologies have changed rapidly and the business has to react quickly in order to beat competition. Numerous companies have started to build their EA program in order to support the business / Lines of Business (LoBs) but few have seen immediate result / business value with their EA program. A program must have both short and long term strategy in order to show immediate value to the business / LoBs. I also believe that the mentioned frameworks must change in the future in order to accommodate new emerging technologies and the need for business agility. We must be able provide business value in a short time frame. We need to focus on the area of the architecture that can provide short term business solutions and result. Many architecture practitioners face challenges of where to begin to implement EA to deliver immediate business results. We would typically start to implement EA in different domains of the architecture. It all depends on where the needs of the organisation, culture, and skill set resides.  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE The IT Bottom line is that up to 40 % of current IT spend occurs outside the IT budget (CRM, Cloud). The IT department needs to position itself as a facilitator to IT services and effectively address emerging needs, market opportunities and demonstrate that the current Business Model is supported effectively. The IT department should facilitate the access to IT services to support new and current business initiatives. The business strategy emerge out of a number of initiatives that are successful or not. The IT department need to support the “Run” of day-to-day operations as well as new projects. The Cloud might particularly be of interest within this frame. IT must be responsible for profit and loss from a business perspective and be managed like a business. The fact is the technology will play a bigger role in order for business to thrive in the future. The level of implication of IT varies as it depends on the nature of the business. The more the business rely on technologies the more the business needs to include technology as a part of the business strategy. We believe that in order for the CIO and the IT Department to position as premium provider of IT services and focus on value to cost we need to understand the Business (IT) Strategy and how the IT department can deliver effectively to business objectives, that is to deliver business value with IT: - What is the Business’s strategy and plans? , - What is the current business model that IT has to support? ,Where could IT make a significant impact on the business? ,- Are there any further opportunities to use IT? , - How do we provide IT Services as we meet demand and cost drivers where the decision is to make (internal) or to buy (external service provider)? We have identified 2 key trends for the CIO to focus on: - Differentiation (That is, how does IT provide a competitive advantage for the business), and - Cost (How does the IT Department deliver IT Services cost effectively). To do so we need to Build an effective IT Delivery Model to meet business needs and expectations as we leverage business strategy execution and business processes supported by an IT Service strategy (ITIL, IT – CMF, CobIT 5 (ValIT, CobIT 4.1, RiskIT), ISO 38 500, TOGAF and ISO 9001, ISO 27 001, COSO) delivered in a Business IT roadmap; that is how do we support business objectives and processes leveraged by IT and an effective IT Services strategy. Within this scope we would by definition address how we execute the IT service strategy (ITIL) Design - Spell out IT Activities from a demand and supplier side, Build - Set IT processes and key performance indicators, Run - Aligned to described ITIL activities and processes and full IT Financial Management (supported by delivery capability IT CMF, COBIT 5). Once services defined we can then decide where to run the application that support the IT and or Business Services (server / internal / external cloud / outsourced provider). Within the frame of an acquisition up to 80% of the value realisation is (can be) on the IT side. The failure to address IT and the IT strategy can be an additional (1 out of 3) reason to M & A failure. 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  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE than on fact based logics. “Time to Market” – The notion of time to market is critical within the context of a business. The delayed launch of a product might erase up to 70% of potential earning (the rest is evaporated by the cost of the resources absorbed to solve the problems that delayed the launch). “Time to market” can be applied to the context of the IT department 1) in the frame of how well do we set up a new service (bundle of application with a coherent architecture) 2) How well do we support the business to launch a new service / execute the business strategy supported with IT (when needed). “To Cloud source” – Cloud computing is the result of 2 trends*. 1) The survival of salesforce.com (that is to outsource data in an application that we have decided not to buy / run on an internal server) 2) the decision of amazon, google and other cloud (external storage space) providers to leverage their capability to buy and run server parks more effectively then an IT department would / could (external cloud). A decision to run applications on a server outside the firewall can be motivated by cost or demand (time to market) where an architecture and applications are set up to rapidly respond to the needs of the business. The “service bundle” can then either be brought inside the firewall and run on an internal cloud or continue to run on the cloud provider’s server (outside the fire wall). The private cloud: We leverage the Private (internal) Cloud, as an internal provider perform process execution and the applications (bought or leased (Software as a Service (SaaS)) run on one or several mutualised servers inside the firewall) sit on an internal (private) cloud. The public cloud: Salesforce.com is one of the few survivors of the first internet wave where one of the major ideas targeted towards the B to B market was to facilitate the ERP court for enterprises where independent providers would run ERP blocs such as CRM for the client where the data would reside outside the firewall in the providers application. This solution is excellent for enterprises that do not wish to invest in an application and infrastructure that would provide a similar service internally. Google has over the years enhanced their portfolio of application that run on their servers where individuals can use an email function (Gmail) to drive trafic to their search engine. This function was later made available to enterprises together with an office suite and google +. As Amazon (and Google) have become highly effective over time to negotiate storage space they at one point decided to leverage this ability to procure and run storage space less expensively available to individuals and enterprises. The principle is to provide storage space and services (Infrastructure as a Service (Iaas), Platform as a Service PaaS, Sofrtware as a Service (SaaS) outside the firewall on which the enterprise can run applications (in an architecture as a bundle of services). The public cloud can be used to either leverage cost or to rapidly develop new application architectures that can then continue to run on a public cloud or be brought in house to a server or a bundle of servers (private cloud). Where the needs of the business and the business strategy should drive the IT Strategy, the IT Department can leverage the business strategy with an effective IT Service Strategy that would spell out how the roadmap for how the IT Department  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE In order to deliver effective Business (IT) Alignment you need to leverage best in class technology (on paper compliance is not enough). The frameworks should be a point of reference and only the bits and pieces applicable and useful for the business should be rolled out (but you need to understand which framework represent which perspective and how to leverage the latter) and above all focus on stakeholder expectations! Step 1) Define the services that the IT department deliver to the business with total cost of ownership (TCO) with cost, consumption and chargeback. Cost – This is often where you would get the WOW, we did not know that we spend this much on IT from the executive management. Consumption – most IT departments suffer from the overconsumption of users that are not willing to pay for what they consume hence the importance of coherent chargeback based on factual cost of the delivered services. TCO is also the base to qualified selection of cloud sourcing / outsourcing partners. Step 2) Capture the “IT Business Model” that is “This is how we deliver IT services to the business” in the IT Service Catalogue, Step 3) and the “Business (IT) Value Proposition” “This is how we support business objectives with services in a time to market perspective” in the Business Service Catalogue. Our experience is that where IT is perceived to fail to deliver to business expectations the “IT Business Model” (“This is how we deliver IT services to the business”) and “Business (IT) Value proposition” (“This is how we support business objectives with services in a time to market perspective”) is often broken or nonexistent (demand and cost drivers not understood or not communicated well enough). At the end of the day, business executives take the decision to outsource / cloud source when: - IT is not perceived to understand stakeholder expectations, IT is not perceived to contribute to business objectives, IT is not perceived to deliver value to cost, IT is not perceived to deliver services to business needs, The service is a commodity and cost is the primary driver - The IT department is unable to deliver in a time to market perspective This is why a shared services or outsourcing solution is put in place since it forces the business to define services and service level agreements (as well as cost, consumption, chargeback) with an IT Business Model that is if not optimised at least focused on immediate business priorities and drivers (demand and cost).  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE The demand and cost model is clear and long term risk / benefits are established We have identified the following critical success (benefit) / risk factors: - Total cost of ownership - Does the initiative support business objectives: - Cost is the primary driver, - Demand is the primary driver - Capacity is adapted to need & price is scalable as business in(de)crease - Peak loads can be absorbed with little impact on performance and response time - Ability to audit metrics used by the provider to calculate the utility price - Version upgrades and migration are transparent (cloud, hosted provider) - Licensing of applications is clear & Interoperability ensured (cloud, hosted provider) - As we break services out, how do we manage data integration - Re integration of data if we decide to insource / change outsourcing partner - How do we recuperate data / applications if the outsourcing partner is attacked / goes out of business (cloud, hosted provider) Total Cost of Ownership To establish an effective IT Business Model you need to perform an in depth analysis of business needs to understand Total Cost of Ownership with Cost, Consumption and Chargeback. IT Cost is spelled out - What are my IT assets and what do they cost? - What are my IT resources and what do they cost? - What services do I provide to the customer: - What do these services cost? - What was their intended value proposition? - What is the quality of the service delivery? - Who consumes the IT services: - What is the consumption on a per unit, - Per seat, basis, - How does customers currently pay for these services, - What is the backlog of new unfulfilled IT demands?  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Portfolio Management: Interprets, models and articulates the business objectives and ensures capability. IT Strategy: Process based IT governance: Levers formulated operating processes with best in class IT solutions. Aligned on business requirements: Service Portfolio Management: Levers formulated operating processes with portfolio management. Software Asset Management: Application Portfolio Management: Levers formulated operating processes application portfolio management solutions. Infrastructure Asset Management: IT Infrastructure Portfolio Management: Levers formulated operating processes with IT infrastructure portfolio management. We Design, Build and Run the IT Service Strategy We Design, Build and Run the IT Service Strategy as we spell out IT Activities from a demand and supplier side (Design), Set IT processes and key performance indicators (Build): Manage the Business of Information Technology, Develop and Manage IT Customer Relationships, Manage Business Resiliency and Risk, Manage Enterprise Information, Develop and Manage Information Technology Solutions, Deploy Information Technology Solutions, Deliver and Support Information Technology Services, Manage IT Knowledge. Aligned to described ITIL activities and processes with full IT Financial Management (Run). Define “to be” state with established KPI’s: - Articulated, - Key Performance Indicators, - Cycle Time, - Cost Effectiveness, - Corporate Contribution, - User Orientation, - Operational Excellence, - Future Orientation. Articulated from a Cost Effectiveness and Cycle Time perspective where IT Business Drivers & Processes are clearly spelled out: Manage information technology: To Manage the Business of Information Technology we: Develop the enterprise IT strategy, Build strategic intelligence, Identify long-term IT needs of the enterprise in collaboration with stakeholders, Define strategic standards, guidelines, and principles, Define and establish IT architecture and development standards, Define strategic vendors for IT components, Establish IT governance organisation and processes, Build strategic plan to support business objectives, Develop and Manage IT Customer Relationships, Manage Business Resiliency and Risk, Manage Enterprise Information, Develop and Manage Information Technology Solutions, Deploy Information, Technology Solutions, Deliver and Support Information Technology Services, Manage IT Knowledge. Cycle Time (Key Performance Indicators): - Time in months to break even for new or enhanced IT services (Investment < €100,000), - Time in months to break even for new or enhanced IT services (Investment b/w €100,000 and €250,000), - Time in months to break even for new or enhanced IT services (Investment b/w €250,000 and €500,000), - Time in months to  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE revenue, - Personnel cost of the process "deliver and support IT services" per €1,000 revenue, - Systems cost of the process "deliver and support IT services" per €100,000 revenue, - Total cost of the process "manage the business of IT" per €1,000 revenue, Total cost of the process "develop and manage IT customer relationships" per €1,000 revenue, - Total cost of the process "manage business resiliency and risk" per €1,000 revenue, - Total cost of the process "manage IT knowledge" per €1,000 revenue, Total cost of the process "develop information and content management strategies" per €1,000 revenue, - Total cost of the process "define enterprise information architecture" per €1,000 revenue, - Total cost of the process "manage information and IT knowledge resources" per €1,000 revenue, - Total cost of the process "perform enterprise data and content management" per €1,000 revenue, - Total cost of the process group "manage enterprise information" per 1,000 revenue, - Total cost of the process "develop and maintain information technology solutions" per €1,000 revenue, - Total cost of the process "deploy IT solutions" per €1,000 revenue, - Total cost of the process "deliver and support IT services" per €1,000 revenue, - Total IT cost per €1,000 revenue. Corporate Contribution (Key Performance Indicators): - Control of IT expenses percentage, over or under IT budget, allocation to different budget items, - IT budget as a percentage of turnover, - IT expenses per staff member, - Business value of the IT function percentage of the development capacity engaged in strategic projects relationship between new developments/infrastructure investments/replacement investments, - Business value of new IT projects financial evaluation based on ROI, NPV, IRR, PB business evaluation based on information economics. User Orientation (Key Performance Indicators): - Preferred IT supplier, - Percentage of applications managed by IT, - Percentage of applications delivered by IT, - Partnership with users, - Index of user involvement in strategic applications, - Applications index of user involvement in developing new applications, - User satisfaction, - Index of user friendliness of applications, - Index of user satisfaction Process Management. Operational Excellence (Key Performance Indicators): - Efficient software development, - Average days late in delivering software, Average unexpected budget increase, - Percentage of projects performed within SLA, - Percentage of maintenance activities, - Efficient computer operations, - Percentage unavailability of network, - Response times per category of users, - Percentage of jobs done within time, - Efficient help desk function, - Average answer time of help desk, Percentage of questions answered within time.  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Figure 5: Deliver effective business strategy execution: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/deliver-effective-business-strategyexecution/ An IT Business Model and Business (IT) Value Proposition IT provides competitive leverage as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated in: An IT Business Model “This is how we deliver IT services to the business” and a Business IT Value proposition “This is how we support business objectives with services in a time to market perspective”. We deliver effective business strategy execution with an: (IT) Business Model “This is how we deliver IT services to the business” where IT processes (bundled IT services) are supported by applications and execute the IT Service strategy to business needs (where ITIL Spell out IT Activities from a demand and supplier side (Design), Set IT processes and key performance indicators (Build), Aligned to described ITIL activities and processes with full IT Financial Management (Run)), Delivery capability (IT - CMF, CobIT 5, ValIT, CobIT 4.1, RiskIT, where we ensure that managed processes and objectives meet stakeholder expectations, ISO 38 500 we ensure that IT has the necessary means to effectively support the business strategy), Architecture (TOGAF where business objectives are supported by business processes, a business architecture leveraged by an IT architecture and applications that sit on an IT infrastructure as needed (inside the firewall on a server or mutualised servers (internal / private cloud) or outside the firewall on a mutualised server (external / public cloud), Security (ISO 9001, ISO 27 001, COSO where business continuity is ensured by risk and control objectives). A Business (IT) Value Proposition “This is how we support business objectives with services in a time to market perspective” where Business processes (bundled Business services) are supported by applications (Develop vision and strategy, Develop and manage products and services, Market and sell products and services, Deliver products and services, Manage customer services, Develop and manage Human Capital, Manage information technology, Manage financial resources, Acquire, construct and manage property, Manage environmental health and safety, Manage external relationships, Manage knowledge, improvement and change). Figure 6: The roadmap reflects stakeholder expectations: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-roadmap-reflects-stakeholderexpectations/  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Figure 8: End to end industrialisation of business processes: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/end-to-end-industrialisation-of-businessprocesses/ As we meet Stakeholder Expectations Business drivers support Strategy Execution To deliver business value with IT we need to Focus on the Business Bottom Line: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. Develop vision and strategy: - Define the business concept and long-term vision, Develop business strategy, - Manage strategic initiatives, Develop and manage products and services: - Manage product and service portfolio, Develop products and services, Market and sell products and services: - Understand markets, customers, and capabilities,- Develop marketing strategy, - Develop sales strategy, - Develop and manage marketing plans, - Develop and manage sales plans, Deliver products and services: - Plan for and acquire necessary resources (Supply Chain Planning), - Procure materials and services, - Produce/Manufacture/Deliver product, - Deliver service to customer, - Manage logistics and warehousing Manage customer services: - Develop customer care/customer service strategy, Plan and manage customer service operations, - Measure and evaluate customer service operations Develop and manage Human Capital: - Develop and manage human resources (HR) planning policies, and strategies, - Recruit, source, and select employees, Develop and counsel employees, - Reward and retain employees, - Redeploy and retire employees, - Manage employee information Manage information technology: - Manage the Business of Information Technology, - Develop and Manage IT Customer Relationships, - Manage Business Resiliency and Risk, - Manage Enterprise Information, - Develop and Manage Information Technology Solutions, - Deploy Information Technology Solutions, -  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE The notion of the IT department as a profit centre IT Services and the cost of a services delivered by the IT department is a notion that was introduced on a broader basis with ITIL V3 and confirmed with the introduction of CobIT 5. Where the IT department traditionally account for services delivered and billed by outsourced providers, services delivered by the IT department (outsourced services included) have not been formalised and broken down in to direct and indirect cost and related to the cost, consumption and chargeback of an engaged service. Traditionally the IT Department tend to be run as a “cost centre” rather than a “profit centre” and investments tend to be technology rather than business driven. The hypothesis of this paper is then that in order for the IT department to deliver the right IT Services cost effectively, the IT Strategy need to support the business strategy and set business objectives. Furthermore the IT Department should be run as an internal profit centre where resources are considered as scarce and services delivered supported by IT financial management. In order to do so we need to identify the services delivered together with cost, consumption and chargeback of the delivered services to ensure that the business units that consume services are conscious that IT services bear a cost to avoid overconsumption of services that the business is not willing to pay for as well as a coherent repartition of cost related to the use of ERP / infrastructure services. The notion of the IT department as a profit centre focused on total cost of ownership with cost, consumption and chargeback is also critical to ensure financial resources from the business units as well as an effective use of resources deployed to deliver IT Services. Recent efforts to outsource (data) cloud source (infrastructure) needs to be supported by solid business cases with ROI and clear cost, consumption and chargeback of the billed services which is rarely the case today where invoices from outsourcers, cloud computing providers are non granular and does not provide data clear enough to distribute cost (charge) the users / business units that consumed the service. ROI and the total cost of services delivered are difficult to validate as contract conditions in regards of the cost of termination / exit that would include a secure migration of data or applications tend not to be transparent. To conclude IT Financial Management is a critical part of a successful IT Strategy and the effective delivery of IT Services. Though the notion of service delivery is supported by internationally recognised standards such as ITIL and CobIT 5 IT Financial management is yet to be broadly applied and standardised. Chapter 4. IT support business objectives and processes We align to Business Objectives and Business Processes the latter are Defined in the Business Service Catalogue, Requirements Information with IT Objectives and IT Processes are Defined in the IT Service Catalogue and supported by ITILv2 & 3 workflows.  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Figure 10: Confirm business vision: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/confirm-business-vision/ Confirm Business Vision: Articulate strategic intent, Business objectives, Business drivers. Figure 11: Articulate the Business Value Proposition: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/articulate-the-business-value-proposition/ Articulate the Business Value Proposition: Translate (Articulate) Business Vision to Business Architecture Vision & Business Architecture, Vision of Business Architecture “to be”: state “where we need to go”, “where we are now” & “how we need to proceed”, Architecture principles, Business principles, Technology principles, Build business case & roll out (with Roadmap). Figure 12: Deliver the Business Architecture: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/deliver-the-business-architecture/ Deliver the Business Architecture: Translate Business Architecture Vision to Business Architecture, Vision of Business Architecture “to be”: state “where we need to go”, “where we are now” & “how we need to proceed”. Figure 13: Translate the Business Vision to an IT Vision: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/translate-the-business-vision-to-an-itvision/ Translate the Business Vision to an IT Vision: Vision of IT “to be state”: “where we need to go”, “where we are now” & “how we need to proceed”, Regulatory requirements, Technology guiding principles, IT Governance guiding principles (process & organise decisions). Figure 14: Set the IT Value Proposition Baseline: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/set-the-it-value-proposition-baseline/ Set the IT Value Proposition Baseline: Set fundamentals of a service business, Process view, Establish Total Cost of Ownership and IT baseline with cost/value/risk,  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Defined Market Position Industry structure with New entrants, Suppliers, Substitute products or Services, Buyers (customers), Existing Competitors. Competitive Advantage There is an understanding of Competitive Positioning, Strengths and weaknesses, Strategies and relative positioning. External environment There is an understanding of the Political, Environmental, Social, Technological external environment. Customer value proposition There is an understanding of The Customer value proposition, needs, segmentation. Talent Appreciation of the implications for the strategy of Resources, Skills and competencies, Appropriate development / recruitment plans, Shared direction, Extent of buy-in to shared vision by key managers, Barriers / commitment to change, Structure of the organisation. Execution There is a understanding of the: Clarity of the IT Strategy roll out, Extent to which the IT Strategy responds to industry and competitive environment, Extent to which the IT Strategy responds to internal capabilities, Extent to which Critical Success Factors are clearly identified, the Clarity of implementation plan. Objectives and Plans  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE IT provides competitive leverage As the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated in: An IT Business Model “This is how we deliver IT services to the business” and a Business IT Value proposition “This is how we support business objectives with services in a time to market perspective”. The Business (IT) Strategy, link to operations We Link Strategy and Operations as we Develop the Strategy, Translate the Strategy, Plan Operations, Monitor and Learn, Test and Adapt the Strategy, Execute Procedures and Initiatives. Business (IT) Tactics We Map Strategic Themes from a Financial Perspective, Customer, Process, Learning & Growth Perspective as we Create a High Performance Culture. See also http://hbr.org/2008/01/mastering-the-management-system/ar/1 Business (IT) Context We Define Market Position with New entrants, Suppliers, Substitute products or Services, Buyers, Existing Competitors. http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1 Strategy Map Captured in a Strategy Map that Formalises stakeholder outcomes to deliver value. The Stakeholder Strategy Roadmap set the scope with Objectives: - Formalise stakeholder outcomes: To deliver value for all parties (partnership), Which drives Customer value: For effective and satisfied end users, That deliver - Business processes: Speed, process innovation and growth, Executed by - Employees and organisation: Collaboration that deliver strategy execution. Strategy Canvas Articulated in a Strategy Canvas The Stakeholder Strategy Map Formalises stakeholder outcomes to deliver value for all parties. The strategy canvas allow the  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE The do-or-die questions boards should ask about technology In the “The do-or-die questions boards should ask about technology” (http://www.mckinsey.com/Insights/Business_Technology/The_do-or-die_questions_boards_should_ask_about_technology?cid=other-eml-alt-mip-mck-oth-1306 ) Paul Willmott raises a number of questions that well recapitualtes what we have seen in this chapter: 1. How will IT change the basis of competition in our industry? Questions to ask: - Who are our emerging competitors? - How is technology helping us win against traditional and new competitors? - How can we use technology to enter new markets? 2. What will it take to exceed our customers’ expectations in a digital world? Questions to ask: - How does our customer experience compare with that of leaders in other sectors? - What will our customers expect in the future, and what will it take to delight them? - Do we have clear plans for how to meet or exceed their expectations? 3. Do our business plans reflect the full potential of technology to improve our performance? Questions to ask: - Has the P&L opportunity and threat from IT been quantified by business unit and by market? - Will our current plans fully capture the opportunity and neutralize the threat? - What is the time horizon of these plans, and have they been factored into future financial projections for both business and IT? 4. Is our portfolio of technology investments aligned with opportunities and threats?  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE 8. Are we comfortable with our level of IT risk? Questions to ask: - Do we have a comprehensive understanding of the IT risks we face? - How is our level of IT risk measured, and is it aligned with the company’s overall risk appetite? - How are we reducing our IT risk on an ongoing basis? - Who is responsible for overseeing the level of IT risk? 9. Are we making the most of our technology story? Questions to ask: - What are the key messages we should communicate? - How, when, and to whom should they be communicated? To conclude The CIO and the IT Department need to position as premium provider of IT services and focus on value to cost. In order to avoid the "do we really need a CIO and IT department to bother us with technology when we can use the cloud?" the CIO has to ensure that the business strategy and business objectives are supported by IT (from a Business and IT architecture perspective). Where the IT Strategy support Strategy execution, "Time to Market", Cost Effectiveness and stakeholder expectations from an Executive, Business Unit, IT Management and IT Risk Management perspective. To deliver business value with IT we need to Focus on the Business Bottom Line: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. The IT Bottom line is that up to 40 % of current IT spend occurs outside the IT budget (CRM, Cloud). The IT department needs to position itself as a facilitator to IT services and effectively address emerging needs, market opportunities and demonstrate that the current Business Model is supported effectively. The IT department should facilitate the access to IT services to support new and current business initiatives. The business strategy emerge out of a number of initiatives that are successful or not. The IT department need to support the “Run” of day-to-day  
  • 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. Chapter 5. How to build a CIO Office to deliver effective IT services and meet stakeholder expectations To effectively manage your IT resources has has become business critical as we leverage business strategy execution with IT to: 1. Meet Demand and Cost drivers, 2. “Time to market”, 3. Cost effectiveness 4. and Cycle Time. 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 @ How to build a CIO office https://flevy.com /browse/business-document/how-to-build-a-cio-office-288 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. How to get our CIO office initiative Right! We will provide the necessary tools to: 1. Deliver IT Services to Business needs 2. Meet Stakeholder Expectations  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE We Deliver IT Services to Business needs as we : 1. Focus on business objectives, 2. Problem statement, 3. The cause, 4. The solution, 5. Deliver a roadmap, 6. To demand and cost drivers, 7. Build the IT Business Model, 8. For effective strategy execution, 9. 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 : 1. Makes the most effective investments in IT, 2. Manage the resulting IT services with a high degree of quality & effectiveness Problem statement To leverage business strategy with IT we need to: 1. Link IT to the Business Strategy 2. Drive IT strategy into IT operations 3. Set a baseline from which to measure IT performance 4. Measure IT operational performance 5. Improve IT performance and strategic contribution The cause IT is managed as a functional cost centre :  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE 2. Stakeholder expectations are understood and managed 3. IT is managed as a service business – financially oriented 4. Cost baseline established around service portfolio, Chargeback by service 5. IT value contribution is measured and monitored 6. Services are benchmarked on a competitive basis 7. IT becomes a business partner who can ‘prove’ its contribution Build the IT Business Model Key Steps : 1. Establish the Financial baseline 2. Define the Service Portfolio – TCO by service 3. Describe service consumption by customers - Chargeback 4. Align business strategy and goals to drive IT goals 5. Analyse IT processes and optimize efficiencies 6. Build the IT business model For effective strategy execution Typical Transformation Initiatives where we need to provide GAP (As Is, To Be, ROI) 1. Mergers and Acquisitions (M&A) 2. Data room Development 3. Synergies & consolidation options 4. Data Centre Migration, virtualization 5. IT Organisational Transformation: Towards a Service Business  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE 1. Balance value added to investment, 2. Business value of IT projects, 3. Provision of new business capabilities, 4. Do we effectively use frameworks such as ISO 38 500, VALIT? Business focus How effective are business (IT) objectives? Baseline: To deliver to effective business (IT) objectives Objectives: 1. Align business to set strategic objectives, 2. Do we allow IT to successfully deliver to clear, defined and measurable business objectives. Best in class solutions How do users see the IT department? Baseline: To be the preferred supplier of information systems Objectives: 1. Preferred supplier of applications solutions, and operations as proposer of best in class 2. Partnership with users (Stakeholder Strategy Map, Collaboration Theme Scorecard), 3. User satisfaction. 4. Do we effectively use methodologies such as the Stakeholder Strategy Map and the Collaboration Theme Scorecard in order to capture client (process) objectives and metrics. Competency How well is IT positioned to meet future needs? Baseline: To develop opportunities to meet future challenges  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE innovation, learning and personal organisational growth. Execute Business Strategy 1. Execute the Business Strategy 2. Confirm Business Vision, 3. Articulate the Business Value Proposition, 4. Deliver the Business Architecture, 5. Translate the Business Vision to an IT Vision, 6. Set the IT Value Proposition Baseline, 7. Construct the IT Business Model, 8. Design the IT Value Proposition, 9. Build the IT Value Proposition, 10. To Perform Effective IT Governance, 11. To Run IT as a Service Business. To Run IT as a Service Business! The IT service proposition is aligned to the business strategy: 1. Stakeholder expectations are understood and IT propose a service portfolio that correspond to Demand and Cost drivers 2. Business Contribution, Cost, Consumption & Chargeback identified 3. Perfect order business transactions focus 4. Services are effective (demand and cost drivers identified) 5. Services are competitive (Benchmark Industry Market Forces) 6. IT delivers service innovations to improve competitiveness Bottom Line :   IT Contributes to Business Objectives!
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Support Business Objectives To ensure stakeholder “Buy In” You have to see IT from a customer perspective and address stakeholders priorities: 1. Realise return on investment 2. Ensure that proposed services are competitive in the industry 3. IT Costs are transparent 4. IT competencies are at least equal to the competition 5. IT pricing is fair and clearly aligned with consumption 6. IT services are clearly defined and benchmarked Understand Stakeholder Expectations To get the IT Service Management Fundamentals right: 1. Focus on demand and cost drivers in a business perspective: 2. Run IT as an effective service business 3. Meet your customer needs, where 4. Demand drivers are critical in the roll out of IT Service Management 5. Deliver strategy execution IT provides competitive leverage Priorities from an Executive Management Perspective: 1. IT supports the achievement of strategic business objectives 2. IT Delivers value to expenditure 3. IT costs are managed effectively 4. IT risks are identified and managed  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE 3. Effective process, practise and controls are in place 4. We have clear security objectives to which we expect IT to deliver: VALIT, COBIT, RISKIT, COSO, ISO 20 000 / 27 000 Set clear accountability & responsibility As we position IT as an added value activity we need to: 1. Ensure that the IT and Stakeholder departments have clear objectives, processes and indicators with clear accountability and responsibility, 2. Achieve best in class status as IT service provider and strategic partner, 3. Maximise purchase power and operating effectiveness, 4. Lever technology investments, 5. Optimise technical Architecture and application support cost. Deliver to Stakeholder Expectations In order to do so we need to: 1. Align IT plans and activities with business goals and needs, 2. Align Stakeholder (internal and external) and employee effort toward objectives with clear processes and metrics, 3. Establish measures to evaluate the effectiveness of the IT organisation, 4. Stimulate and sustain improved IT performance, 5. Achieve balanced results across stakeholder groups. With a Clear Baseline 1. IT contribution to company goals and objectives 2. IT optimisation of business processes 3. IT service proposition: At what cost, Are these services competitive within the industry, What new services could make us more competitive ?  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE 6. The launch and management of the program 7. Updating of the operational IT portfolio 8. Updating of the business case 9. Monitoring and reporting on the program 10. Retirement of the program Business (IT) Investment Management How to align and lever operating, management and support processes through the effective implementation of IT. Do we do the right things? The investment: 1. Is in line with our vision, 2. Is consistent with our business principles, 3. Contributes to our strategic objectives, 4. Provides optimal value, at affordable cost, at an acceptable level of risk. Do we reap the benefits? We have: 1. A clear and shared understanding of the expected benefits, 2. Clear accountability for realising the benefits, 3. Relevant metrics, 4. An effective benefits realisation process over the full economic life cycle of the investment. Business (IT) Process Management How to align and lever operating, management and support processes through the effective implementation of IT.  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Consulted & Informed). A Collaboration Theme Scorecard The Collaboration Theme Scorecard: Prioritise business drivers and objectives, Identify levers for joint actions and wins, metrics and initiatives on a short, middle & long term basis. Collaboration Theme Scorecard: Business drivers: - Prioritise business drivers and objectives, - Identify levers for joint actions and wins,- Identify metrics, Identify initiatives on a short, middle long term basis. Levers: - Joint: Steering committee, development committee, project teams, cross functional teams, process improvement teams, functional improvement teams. To execute Business (IT) Strategy http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/time-to-market-cost-effectiveness-cycle-time/ (IT) Service Strategy supports Business Drivers http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-roadmap-reflects-stakeholder-expectations/ (IT) Roadmap reflect stakeholder expectations http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-service-strategy-support-business-drivers/ Conceived in to a solid story In order to do so we need to define: Objectives: Levers: The IT department as effective broker of services? The IT department as effective broker of services?  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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. Support the IT Strategy with a “Canvass” We Support the IT Strategy with a “Canvass” : 1. IT Value Baseline 2. Executive, Business Unit management 3. IT Management 4. Risk IT Value Baseline 1. Align IT plans and activities with business goals and needs 2. Align employees’ efforts toward IT objectives 3. Establish measures for evaluating the effectiveness of the IT organization 4. Stimulate and sustain improved IT performance 5. Achieve balanced results across stakeholder groups Executive, Business Unit management 1. Does IT support the achievement of business objectives? 2. What value does the expenditure on IT deliver? 3. Are IT costs being managed effectively? 4. Are IT risks being identified and managed?  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE 3. IT expenses per staff member 4. Business value of the IT function percentage of the development capacity engaged in strategic projects relationship between new developments/infrastructure investments/replacement investments 5. Business value of new IT projects financial evaluation based on ROI, NPV, IRR, PB business evaluation based on information economics User orientation 1. Preferred IT supplier 2. Percentage of applications managed by IT 3. Percentage of applications delivered by IT 4. Partnership with users 5. Index of user involvement in strategic applications 6. Applications index of user involvement in developing new applications 7. User satisfaction 8. Index of user friendliness of applications 9. Index of user satisfaction Process Management Operational Excellence 1. Efficient software development 2. Average days late in delivering software 3. Average unexpected budget increase 4. Percentage of projects performed within SLA 5. Percentage of maintenance activities 6. Efficient computer operations 7. Percentage unavailability of network 8. Response times per category of users  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE 8. Business (IT) Strategy, Objectives and Goals 9. Monitoring / evaluation procedures 10. Validate the Business (IT) Strategy Assess the Business (IT) strategy Develop an understanding of the Business (IT) Strategy and how the IT department will deliver effectively to support strategy execution: Objective: To develop a comprehensive understanding of the business environment and future direction in order to identify areas of strategic IT opportunities and as the basis to develop the IT strategy. Benefit: A Clear business vision and direction avoids dispersed, conflicting, non-value added activities and costs and enable a clear focus on the chosen markets / products / services. The establishment of an agreed business vision provides an understanding for how IT can/should contribute to business objectives and how ROI can be driven from IT investments. As you establish the need for and agree on the scope/focus of the IT strategy engagement, it is important to develop a sense of the business environment and future direction. This understanding of the organisation’s present and future is documented and is used to determine how IT will be leveraged. It should be clearly understood that this activity is not intended to build the business vision but to support the roll out of an established business vision. The purpose of this activity is to understand the business, its internal and external environment and make explicit any unstated or inadequately articulated business values and vision elements to build a firm platform for the project. Assess the Business (IT) strategy Develop an understanding of the Business (IT) Strategy and how the IT department will deliver effectively to support strategy execution: It is critical to develop a clear and comprehensive understanding of the business strategy and the operating environment: 1. What is the Business’s strategy and plans ?  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE systems related opportunities of improvement depend on third party links these should be explicitly considered. This can be documented as an extended value chain to identify the information exchanged. Confirm IT Value Proposition and Product / Service offer The value proposition clearly articulates how value is defined by the stakeholder. It will differ by stakeholder and be defined by cost and demand drivers in regards of business drivers and objectives. Further comprehension of expectations on the “IT Value Proposition” that is how do we (are we expected to) deliver IT services to business needs is achieved by conducting interviews with key executives and an analysis of stakeholder surveys. Confirm Internal Environment / Competencies In order to assess the internal environment and competencies a broad evaluation of the human, financial, productive, physical and technological resources of the company is conducted with the purpose to identify the company’s distinct competitive strengths that is distinct competencies of the business (strengths), as well as the required competencies that need to be developed (weaknesses) to close the “GAP”. Confirm Business (IT) Strategy, Objectives and Goals The business strategy and plan based on available data follows logically from it. The organisation’s business imperatives, strategies, goals and objectives with Critical Success Factors within the control of the organisation are identified and documented. Confirm monitoring / evaluation procedures IT is a key enabler for performance measurement to determine how the organisation has planned to measure performance and the mechanism for monitoring and taking corrective action both for the Business and the IT Business. Key Performance Indicators (KPIs) are identified and defined for each strategic initiative and Business Driver and Objective. Key performance indicators are identified for the IT Value Baseline as well as the Business Baseline. Demand and Cost Drivers should be taken in to account, that is how well does the IT Service Strategy respond to business needs to execute the set strategy and optimise Total Cost of Ownership per user.  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE model with Business Drivers and objectives. The strategy articulation model is then translated to the Business (IT) Strategy. Determine the leverage of IT to support strategy execution The extent to which IT is used as an organisational asset is an indication of Key Business Stakeholders Perception of IT as critical lever and drives the value the organisation places on it. This in turn will determine the nature and quality of information technology in use in the organisation. The importance of IT on the board’s agenda usually provides a good indication of the value the organisation places on IT. A SWOT analysis could be performed on the IT Strategy to highlight critical “hot spots”. Identify high level IT Strategy enabled business opportunities To identify the opportunities offered by IT and to determine the scope and potential role in organisational change we have to understand that change range from organisational transformation to performance improvement. The perceived scope of IT as an enabler will also help focus effort on downstream activities in the IT strategy development programme. Focus Areas To identify the areas of the organisation that are critical to the success of the business strategy we focus on business drivers and objectives. This involves to map prioritised IT objectives to high level business drivers and objectives. The current role of IT It is useful to involve business managers in the determination of the current role of IT. The IT management definitions and governance model should be used to develop a picture of the existing role of IT in the organisation. Scope/opportunities for improvement To identify opportunities for improvement and get a first, high level, view of the potential benefits available to the organisation, we map the Business Strategy with Business Drivers and Objectives to the current IT service strategy.  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE 5. to understand and assess overall Alignment of IT to the business 6. with an IT benefits review 7. Assess the Business (IT) relationship 8. An applications portfolio review 9. Assess IT programmes / projects 10. Stakeholders priorities, maturity and satisfaction 11. Review of Information Assets 12. Assess IT talent and organisational skills 13. Technology Review 14. Review of External Services 15. Asses IT investment / cost / spending Draw the current Business (IT) Service Strategy: Scope The focus of the SCOPE as a part of the service strategy at this stage is limited to the assessment of existing IT in order to develop an ‘As-Is’ picture. With an Effective (IT) Business Model http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/deliver-effective-business-strategy-execution/ An IT Business Model & Value Proposition 1. Service strategy (ITIL) 2. Delivery capability (VALIT, COBIT, RISKIT, CMMI, eSCM, ITDB) 3. Architecture (TOGAF) 4. Security (ISO 9000, 20/ 27 000)  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE A focus on strategy execution with business objectives and drivers forces the identification of a service strategy, delivery capability, architecture and security and will help you assess the expectations of the business stake holders. Applications Review The review of applications is undertaken in two parts. The first part involves assessment of the functional and technical quality of existing applications. The second part comprises an assessment of the programmes / projects, both existing and proposed, delivering IT applications. Applications Portfolio Review The existing portfolio of applications should be assessed by functional and technical quality. The two views provide the demand and supply side perspectives. The functional quality provides the user’ perception of how well existing applications support the business. The technical quality provides the IT departments perception of how good the applications are from a technical standpoint. It is important to identify all applications that are to be included in the analysis. Assess IT programmes / projects A review of IT programmes could be undertaken as an independent engagement or as part of an assessment, sourcing or strategy engagement. The first step is to agree to the scope of the review to include programmes and projects and their objectives. Once this has been agreed, the design of the data collection can be carried out to inventory projects in the scope but significantly more information can be collected as well as interviewing the project team members. Typical project information to be collected might include strength of business sponsorship, benefits, progress and cost against plan, resources used, strategic alignment, what would happen if it was stopped, etc. IT management practice definitions could be used to score specific aspects of project management processes. Assess Stakeholders Priorities, Maturity and Satisfaction Stakeholder priorities, Maturity and Satisfaction should be assessed to complete the understanding of the reasons for the existing effectiveness of IT in the organisation. Stakeholder priorities can be assessed by structured interviews of selected stakeholders to understand users priorities, IT skills, involvement in and satisfaction with IT. Alternatively, a user maturity assessment can be made via a  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Where the organisation has an IT service provided by a third party supplier, the relationship between the service provider and IT on the one hand and Users on the other should be examined as this represents an extension of the IT supply chain. Several aspects of the external service need to be assessed. The first of these is the ‘partnership’ or the relationship between the service provider and the client organisation. In this context the IT function will be both a supplier (to business users) and a user (of the service from the third party supplier). This dual relationship requires greater management sophistication than required of the simple IT function. The second aspect of the review is the user satisfaction expressed in regards of externally provided services. Assess IT investment /cost / spending In order to understand and assess the effectiveness of current IT investments, IT spending, and IT cost is collected and reviewed in the context of business priorities to industry best practice with Total Cost of Ownership with Cost, Consumption and Chargeback per user captured in an IT Baseline. The review covers spending on technology, people and services. Spend figures are then benchmarked against similar organisations and current business goals/strategies. Develop the Business (IT) Service Strategy () We Develop the Business (IT) Service Strategy as we : 1. Draw the future Business (IT) Service Strategy 2. With a Business (IT) Vision 3. Set stretch targets 4. Consolidate Business (IT) opportunities of improvement 5. Service Strategy 6. Delivery Capability 7. Architecture 8. Security 9. Determine competencies required  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE programme. Consolidate Business IT opportunities of improvement To develop the Business (IT) Model the strategic preferences of identified stakeholders are used to develop themes to address business / information technology opportunities. The latter could range from “to extend the value chain to customers and suppliers” to support the business strategy or use of new technology to underpin performance improvement. Opportunities should reflect the Business Strategy that is: Strategy execution, Business objectives and drivers. Input from best practice models, industry benchmark and technology practices should be used to identify available opportunities. To meet stakeholder needs, incorporate new technologies to out perform competition and capture revenue are some examples of strategy considerations to improve business performance. Improvement opportunities are formulated and grouped as common elements to evaluate available options. Service Strategy The Service Strategy defines how the Business (IT) Strategy will be structured in the future. The Service Strategy perspective provides a basis to identify the projects required to achieve to the desired future state. Delivery Capability Delivery Capability ensures that the IT Business is able to deliver IT capability to Execute the Business Strategy. The Delivery Capability perspective provides the basis to identify the projects and standards required to achieve to the desired future state. Architecture The ‘To-Be’ Business (IT) Model will be enabled by an information and technology infrastructure. In this stage of the engagement, a set of high level principles and guidelines to leverage technology will be established. These will be used to align the information / data architecture and the technology infrastructure. The application and data framework focus on the general strategic direction into specific design principles and guidelines that show how objectives can best be achieved given the strengths and weaknesses of the current systems and infrastructure consistent with  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE 5. Revisit and update business cases. Build the Business (IT) service strategy: Question: What is the structure of services, applications, information and data needed to support the business in the future? Objective: To identify how services, applications, information and data will be structured to support the ‘To-Be’ business architecture. Benefit: Increase the flexibility of information systems to adapt to changing business needs and provide the information needed to manage the business. Develop the Information Architecture The information architecture provides the framework for the organisation and management of information in the organisation. In this step data entities are defined, their relationships are identified, entity process relationships established and a logical model created. Subsequently a physical model can be designed which is influenced by data security and access considerations and constrained by the application architecture and technical infrastructure. Workshops are conducted to identify key information in the business. Further techniques, such a data normalisation, can be used to rationalise data group and link data. The exercise is best performed with a small group of talent with at least one experienced data modeller. The results is then validated with a wider business audience for buy-in and verification. Workshops are used to identify responsibilities for ownership and maintenance of critical information and data the establishment of appropriate business drivers and subsequent processes included. Develop Applications Architecture The applications architecture identifies the applications components and their structure and defines how information will flow and be processed. The two main inputs for this work are the information architecture and the business architecture.  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE 6. Define the IT Organisational structure Govern the Business (IT) Service Strategy: Market dynamics and organisational growth result in a continuous demand on the IT business for new technology enabled solutions. As a result the business and IT architecture needs to accompany the roll out of the business strategy. In order to effectively service business strategy needs, it is important to develop a pro-active framework that ensure a focus on business strategy execution, identify new IT enabled opportunities, manage risk and co-ordinate overall IT activities. Define the role of the IT Department and scope of the IT function We define the role of the IT Department in the organisation as a partner in business planning and strategy processes and an agent to support the change process, an integrator that brings focus on business strategy execution, business drivers and objectives and identify subsequent services and technology solutions as a cost effective provider of services. Define IT management principles and policies A framework to steer IT in the organisation will include the involvement of top management in the management of the IT function, the nature and extent of leadership to be provided by the business in specific IT initiatives and the principles of distribution, ownership and management of IT resources. Total Cost of Ownership is an essential part of this equation with cost, consumption and charge back. In addition to the definition of the involvement and responsibilities of the business, management principles and policies will also define the manner in which investment in IT will be managed, standards and processes for investment proposals and policies for the review and approval of proposals. Guidelines for programme / project / benefits management will also be defined with overall organisational principles: how many IT functions should there be and their respective role? Define IT management practices To define the desired IT management practices and processes we need to understand that not all management practices will be important for the future and we should focus on the key practices that need to be improved. We need to identify a prioritised list of practices for which improvement programs should be kicked-off as part of the overall program plan. In addition, the IT Business Strategy should clearly  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Define architecture framework, design principles and policies: Question: What technology components are needed to support strategy execution with the information and application architecture in the future? Objective: To develop a set of technology blueprints for an integrated set of information system components, together with a framework of standards and principles to ensure that components will operate effectively together, and adapt readily to the evolving needs of the business and supports strategy execution. Benefit: As we support the strategy execution process we identify the optimal integrated set of information systems technology components to invest in that will best help manage information/knowledge and adapt readily to the future needs of the business. The technology architecture/infrastructure identifies the different technology components required to support the architecture defined earlier. The technology architecture provides the structure, organisation and integration of the various infrastructure components of information systems across multiple business units, functions, processes and/or geographical areas. A set of blueprints for an integrated set of information system components is derived from the technology infrastructure together with a framework of standards and principles to ensure that components will operate effectively together, and adapt to the evolving needs of the business. Blueprints guides the various project teams engaged in activities such as software development, the implementation of commercial application packages, and the enhancement of infrastructure capabilities, such as networks or system management processes. The Blueprints will serve as the basis for the detailed design, construction, and physical implementation of the full range of information systems components (hardware, software, data, networks, and support infrastructure) required to meet the needs of the existing and future business. The architecture framework defines the general design principles that will the guide development of the technology blueprints. In addition to establishing common approaches to general architectural requirements such as flexibility and scalability, the framework provides standards and guidelines for a number of common system design and integration issues. These are based on the application of industry and technology best practices to the overall business information requirements that have been defined  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE We use the framework identified to define specific technologies or classes of technologies that will be used to implement the design. As we identify and prioritise the various issues to be addressed by the framework we agree on best practices, and then identify and evaluate alternatives (where possible) that will enable an effective migration from the As Is to the To Be. Once preferred alternatives have been identified for all of the framework topic areas, the team conduct a systematic review to identify and resolve gaps and inconsistencies among the various design principles and guidelines, as well as conflicts with business drivers and other framework constraints. If existing policies or contracts specifies the use of predefined products they should be clearly identified, since they may influence the selection of other technologies or products. Define Blue Prints To develop an integrated set of solutions to the information gaps and architecture requirements the defined solutions will need to be presented as one or more models or blueprints depicting the integration of technology components. The blueprints will serve as the basis for the detailed design, construction, and physical implementation of the full range of information systems components. Detailed design and construction of these components is typically not within the scope of an IT Strategy and a separate Architecture engagement should be considered for activities required to build and deliver the technology blueprints. Programme Planning covers the master plan to manage the transition from the current environment to the end-state represented by the blueprints developed to address the technology aspects of the overall design process. The technology blueprint will contain a specification of the actual distributed operating environment, in terms of hardware, operating systems, and connectivity (network) services that are needed to deliver applications and data to users across the enterprise to achieve performance, reliability, and cost objectives. The blueprint consists of a set “profiles,” which specify the technologies for each type of component or device found at each site, together with an enterprise connectivity design that specifies the technologies and services that will be used to provide intersite connectivity. Blueprints are defined to meet the data storage and communications capabilities required to implement the information/applications solutions to meet agreed objectives in terms of performance, reliability, security and evolution. This is done as we determine the technologies required at each type of site (based on the applications and databases that run on workstations and servers located on site), define the network and communication technologies required to provide needed connectivity. Proof of concept testing will be required to confirm the inter-operability and performance of the various hardware and software components. At this point the team  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Define the Enterprise Technology Model As we draw the enterprise technology model we present a definition of the way the organisation’s technology infrastructure will be organised and managed; specific hardware, software and network components and identity responsibilities for maintenance, operation and support together with technology infrastructure components shared with suppliers/customers and/or with outsourced service providers. The enterprise technology model is concerned with connecting the site models developed in the previous sub-task. Once application and database functionality has been bundled in user workstations, and these workstations have been distributed into representative sites and attached to local networks, it is possible to model a network that responds to the aggregate demand for system and network bandwidth resources. The enterprise technology model is also concerned with system and network management requirements as they exist as a result of connecting the sites. The enterprise technology model is an aggregate model of site models with the network equipment and bandwidth necessary to connect them. The equipment is located in physical sites, but it may also have an impact on the architecture beyond its location. Once the profiles of individual users are collected in site models, the site models are, in turn, collected into a complete picture of the connections needed between sites. The main driver for the model is the capacity requirements for each site, stated in terms of communications throughput. This activity also deals with fine tuning models of centralisation or de-centralisation of data and applications, as performance requirements and constraints meet geographical constraints. Summarise models and define technology cost and risk We consolidate technology diagrams to assess costs and risks involved with the overall infrastructure and to define boundaries of the infrastructure, identify responsibilities for maintenance and operations of specific applications and technologies including outsourced services. The original business case should be revisited. In light of what has been learned through the blueprint design process, the team will be in a good position to refine earlier projections and assumptions both on the benefits the new architecture will be able to deliver, and the cost and risk involved in building it. We Build the Sourcing Strategy  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Develop a service architecture: The Service Strategy is developed with input from the IT Assessment, Demand Side Architecture, Technical Architecture and preliminary reflections on governance to structure an architecture of the IT services. The architecture clearly identifies services (in-house and outsourced) required by the organisation with skills and competencies required to effectively manage the required services. Establish guiding principles As we develop and define the service architecture, the next step is to define the service delivery options that will in turn will be influenced by how the services are “bundled”. As a consequence, a number of sub tasks have to be performed iteratively to ensure that IT services are optimally “bundled” and realistic options identified. To establish guiding principles to take decisions on to in-source or outsource services the key elements considered include available skills and competencies, cost, potential for improved productivity, effectiveness and user satisfaction to meet demand and cost drivers. Package services to develop sourcing options Where synergies exist between services they are grouped for effective / optimal sourcing. It is important to ensure that they are “bundled” to set the scope and ensure that the proposition is of interest for service providers. Evaluate sourcing options All identified sourcing options should be evaluated as we look at the benefits, cost and risk associated with each option. Develop strategy to close skills / competency gaps The service architecture agreed in the earlier steps will require a set of skills and competencies to support the identified service architecture. A strategy to develop / acquire skills and competencies is developed as an input. Outsource, Cloud(source) Effectively  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE 4. A change program to set target 5. Identify and prioritise work streams and projects with Required skills and competencies 6. Prepare an implementation plan for 7. Program implementation with an organisation 8. monitoring and management mechanism 9. IT Contributes to business objectives 10. and provide competitive leverage Develop Program Plan: Question: How do we sequence tasks needed to support the business strategy and what resources do we need? What are the capital investments and operating expenses over the next 5 years to implement the plan? How do we manage risk and change during implementation? Objective: The purpose of this step is to develop an implementation strategy and plan to effectively manage the transition from the ‘As-Is’ to the ‘To-Be’ state. Benefit: Business buy-in, ownership and commitment to the transition plan and its benefits. Update Business Cases The business cases developed in the earlier phase are updated. They should contain details of tasks and activities required to be carried out, timing and sequence and resources and responsibilities.  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Prepare the implementation plan Resource requirements for each work stream and project along with delivery milestones are reviewed to prepare an implementation plan. It is possible that the Business case change as a result of Stakeholder priorities. Suitable sponsors are identified and scope, timing, cost, risk and benefit cases validated. Contingency plans are developed and incorporated in the implementation plan. A preferred option for delivery is identified and documented. Prepare for program implementation The implementation of the program plan involves a number of activities such as to define roles and responsibilities, the establishment of an appropriate program organisation, the set up of processes for risk management, issue resolution, quality management as well as program governance and communication. Set up program organisation A well funded and politically endorsed program is essential for the successful delivery of a major program with dedicated resources and an independent reporting structure. This includes to define roles and responsibilities, reporting relationships of the Program Manager, Project Managers and independent Work stream Leaders. Resources committed to the Program are also clearly identified and authority structures defined. Set up program monitoring and management mechanism A program performance monitoring and management mechanism is established to ensure that the benefits identified are delivered on time, to budget and the required quality. This include the establishment of milestones and a set of performance measures that will guide the program roll-out together with processes for risk management, issue resolution, quality management and program reporting and communication. We “Canvas” the IT Service Strategy 1. “Canvas” the IT Service Strategy 2. The Business (IT) Strategy link to operations 3. Business (IT) Tactics  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE Link Strategy and Operations 1. Develop the Strategy 2. Translate the Strategy 3. Plan Operations 4. Monitor and Learn 5. Test and Adapt the Strategy Execute Procedures and Initiatives Business (IT) Tactics Map Strategic Themes 1. Financial Perspective 2. Customer Perspective 3. Process Perspective 4. Learning & Growth Perspective Create a High Performance Culture Business (IT) Context Define Market Position 1. New entrants 2. Suppliers 3. Substitute products or Services 4. Buyers 5. Existing Competitors Captured in a Strategy Map  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE 2. development committee, 3. project teams, 4. cross functional teams, 5. process improvement teams, 6. functional improvement teams. Conceived in to a solid story In order to do so we need to: Objectives: - Levers: - Chapter 6. To leverage IT for Strategic Advantage Value, Profit, People – What is your unique competitive advantage? To leverage IT to execute on the set business strategy we need to effectively focus on: Value, Profit and people aligned to create a unique competitive advantage. The tandem is an excellent metaphor for the Business IT relationship. Where Information Technology can accellerate “Go to market”, “Cycle time” and “Cost effectiveness” it is for the Business to set direction and for the IT Department to support the business model. This is also true for the non brick and mortar references that have emerged from silicon valley. Amazon sells books and online store space. Google the opportunity to find things + run applications on a cloud (mutualised storage space outside the firewall) + hosted services such as email (the opportunity to communicate in writing and keep a trace). Ebay enables the exchange of goods. Twitter provides a tool for self promotion and advertisement. Facebook fills the void of distance and keep the contact with your friends and the opportunity to make new acquantainces. Linkedin the opportunity to keep up to date with your professional network + some promotional features. The business model sets the direction enabled by best in class technology.  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE build. Changes in the production are costly, yet this is the very basis for “Agile” reason why most IT Contractors would not accept a set cost frame for a contract where the blue print was not defined well enough to produce to the needs of the client in the first place (moving target dilemma). The bottom line is that we need to rapidly be able to understand modelise and deliver to the needs of the business and business objectives. If standardised solutions cover 80 % of the needs that would most likely be enough. To systematically capture (modelise) unique “tailored” business processes in a modelisation tool that are not industrialised is not only a waste of time but of enterprise resources (unless this would be required by the audit team). A coherent approach would be to identify business processes that support activities that could be industrialied with IT when needed and modelised if we cannot find a standardised solution off the shelf. Even my tailor (one of the finest in Paris) has moved forward to a model of “tailor made” to half custom made where he has realised that a person that does not know what he needed in the first place will systematically be disappointed and want something better as the product is delivered (even if it corresponds to what the client asked for). The situation is comparable to that of most IT departments and one of the reasons why an internal client can refuse to sign off the delivery of an application because the colour of beige is not right where he most likely know that the definition did not correspond to the needs of the business in the first place and certainly less so 18 or 36 months (processes modelled and defined by a consultant, translated and programmed) down the road. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated. Reconstruct Boundries Would you sign up to run a retail business operation where you do not know what clients consume which product / service at a specified quantity and subsequently be billed for their consumption (nor how you will finance the future run and build)? This is however the reality for most CIO's! The focus of a service based model is to demonstrate how IT Delivers Value to the business, that is delivers services to business needs (cost effectively, or at least at a specified cost rate that permit to take  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE You need to demonstrate how you Create Business Value and Optimise IT’s contribution to the business: - Service Portfolio optimised around business value - IT spend streamlined through in depth cost transparency - Measure IT performance with financial KPIs - Model customer consumption of IT services – chargeback - Optimise internal processes, controls, organisation - Demonstrate the value that IT contributes to the business - In the follow business critical areas: - Budget – Strategic Planning - IT Controlling - Simulate scenarios - M & A, data center consolidation, etc - Demonstrate IT’s contribution to the business - ITIL v3 implementations, BSM projects Where the Bottom line is that: IT Management needs to transform their business model: - Move from a cost center centric to a Service based model - Manage a Portfolio of Services-enable cost / value optimization - Efficiency of each Service - Effectiveness of each Service - Manage IT performance on a cost per unit and consumption basis - Compete on the open market - Benchmark and measure apples to apples Create demand In a recent conversation that I had with David Giambruno, CIO Revlon, he mentioned his ability to get the business hooked on new services and products as he actively propose new solutions to the business to leverage competitive advantage and keep the run in perfect shape. But the role as “gatekeeper of technology” to create business value can only be valid as the infrastructure runs smoothly. David has over they years shifted the focus of to use 80 % of the budget for workarounds and fire fighting the 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.  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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. To support business strategy execution The execution of the defined business strategy is often a mystery (missing link) both on the Business and the IT side. The truth is that regardless of how well the executive team draws out the strategy in the boardroom the bottom line is that the business initiatives that were supported by clients succeeds, those not supported by clients (that do not get it) fail and disappear. The CIO and IT department hence needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated. IT contributes to business objectives The IT service proposition is aligned to the business strategy as: Stakeholder expectations are understood and IT propose a service portfolio that correspond to Demand and Cost drivers, Business Contribution, Cost, Consumption & Chargeback is identified, Focus is on perfect order business transactions, Services are effective (demand and cost drivers identified), Services are competitive (Benchmark Industry Market Forces) and New technological solutions that could change how current business is performed are explored, proposed and implemented. IT provides competitive leverage  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE The Collaboration Theme Scorecard Sets process objectives, Identifies: levers for joint actions and wins, metrics and initiatives on a short, middle & long term basis. Objectives: - Set process objectives,- Identify levers for joint actions and wins,Identify metrics, Identify initiatives on a short, middle and long term basis. Levers: Joint: Steering committee, development committee, project teams, crossfunctional teams, process improvement teams and functional improvement teams. The do-or-die questions boards should ask about technology In the “The do-or-die questions boards should ask about technology” (http://www.mckinsey.com/Insights/Business_Technology/The_do-or-die_questions_boards_should_ask_about_technology?cid=other-eml-alt-mip-mck-oth-1306 ) Paul Willmott raises a number of questions that well recapitualtes what we have seen in this chapter: 1. How will IT change the basis of competition in our industry? Questions to ask: - Who are our emerging competitors? - How is technology helping us win against traditional and new competitors? - How can we use technology to enter new markets? 2. What will it take to exceed our customers’ expectations in a digital world? Questions to ask: - How does our customer experience compare with that of leaders in other sectors? - What will our customers expect in the future, and what will it take to delight them? - Do we have clear plans for how to meet or exceed their expectations? 3. Do our business plans reflect the full potential of technology to improve our performance? Questions to ask: - Has the P&L opportunity and threat from IT been quantified by business unit and by market?  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE - 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? - How, when, and to whom should they be communicated? The CIO and the IT Department need to position as premium provider of IT services and focus on value to cost. In order to avoid the "do we really need a CIO and IT department to bother us with technology when we can use the cloud?" the CIO has to ensure that the business strategy and business objectives are supported by IT (from a Business and IT architecture perspective). Where the IT Strategy support Strategy execution, "Time to Market", Cost Effectiveness and stakeholder expectations from an Executive, Business Unit, IT Management and IT Risk Management perspective. To deliver business value with IT we need to Focus on the Business Bottom Line: How fast can we get our products and services to market “Time to Market” &  
  • Copyright 2013 Martin Palmgren EVP .COMMUNICATE If we assume that to deliver business value with IT we need to support business objectives, the integration of a new entity is an optimisation of the current IT strategy (how we support business objectives and processes). We would obviously need to understand (and hopefully have the opportunity) how the current IT run before the purchase (IT due diligence) with full IT Financial Management to figure out the actual cost of delivered IT services (cost, consumption, chargeback). Once services defined we can then decide where to run the applications that support the IT and or Business Service (server / internal / external cloud / outsourced provider). We also need to define the purpose of the purchase (invest / divest) in the overall corporate strategy where it is of little use and a significant cost to integrate all systems in to a common backbone if the company is to be divested only a few years later. We could use an IT Scorecard to ensure that stakeholder expectations are met from an executive management, business line management, IT management and IT risk management perspective. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated.