Design, Build and Run an Effective IT (Service) Strategy to Business Needs

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The "Deliver Business Value with IT" series provides a good overview and actionable material of the ways a CIO can provide valuable and effective support to your company strategy and leverages business model concepts to deliver business value from IT. Martin Palmgren propose an extremely solid piece of work that comes across as the A-Z reference of how to execute and implement IT strategy from a CEO and CIO level perspective."

Executive Summary:

The CIO and the IT Department need to position as premium provider of IT services and focus on value to cost.

In order to avoid the "do we really need a CIO and IT department to bother us with technology when we can use the cloud?" the CIO has to ensure that the business strategy and business objectives are supported by IT (from a Business and IT architecture perspective). Where the IT Strategy support Strategy execution, "Time to Market", Cost Effectiveness and stakeholder expectations from an Executive, Business Unit, IT Management and IT Risk Management perspective.

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Design, Build and Run an Effective IT (Service) Strategy to Business Needs

  1. 1. . Copyright 2013 COMMUNICATE! Design, Build and Run an Effective IT (Service) Strategy to business needs! - To Deliver Business Value with IT! !! By Martin Palmgren, IT Strategy and Transformation Executive @ .COMMUNICATE 1  
  2. 2. . Copyright 2013 COMMUNICATE! CEO, CFO, CIO, CTO, SVP, Architects, Strategy, Business Executives and the IT function in general. ! Target Audience! 3  
  3. 3. . Copyright 2013 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 IT Bottom line! 5  
  4. 4. . Copyright 2013 COMMUNICATE! In order to avoid the "do we really need a CIO and IT department to bother us with technology when we can use the cloud?" the CIO has to ensure that the business strategy and business objectives are supported by IT (from a Business and IT Architecture perspective).! Where the IT Strategy support Business Strategy execution, "Time to Market", Cost Effectiveness and Stakeholder Expectations from an Executive, Business Unit, IT Management and IT Risk Management perspective. Focus on added value! 7  
  5. 5. . Copyright 2013 COMMUNICATE!  ! We execute the IT (service) strategy to business needs: Design - Spell out IT Activities from a demand and supplier side,  Build - Set IT processes and key performance indicators,  Run - Aligned to described ITIL V3 activities and processes with full IT Financial Management. Once services defined we can then decide where to run the application that support the IT and or Business Services (servers / internal / external cloud / outsourced provider).! Design, Build and Run an effective IT (Service) Strategy to Business Needs! 9  
  6. 6. . Copyright 2013 COMMUNICATE! Martin Palmgren, EVP  .COMMUNICATE  – Deliver Business Value with IT / martin.palmgren@pscommunicate.com (mail)! Deliver Business Value with IT (the book) https://www.smashwords.com/books/view/290604  (the blog) http://deliverbusinessvaluewithit.wordpress.com /! CONTACT! 11  
  7. 7. . Copyright 2013 COMMUNICATE! Differentiation and Cost (That is, how does IT provide a competitive advantage for the business), (How does the IT Department deliver IT Services cost effectively) ! ACCENTURE Point of View 2012, Reimagining Enterprise IT for an Uncertain Future! We identified 2 key trends for the CIO to focus on:! 13  
  8. 8. Strategy Execution! IT Infrastructure Portfolio Management! Application Portfolio Management! Service Portfolio Management! Enterprise Portfolio Management:! Process based IT Architecture! Project Portfolio Management ! Performance Management:! Process based Business Architecture ! Product / service life cycle management! Business Strategic Intent! Strategy Articulation! Time to Market! . Copyright 2013 COMMUNICATE! Cost Effectiveness! Cycle Time! Time to Market (Governance: Performance & Conformity)! Business (IT) Strategy Road Map (How)! Time to Market, Cost Effectiveness , Cycle Time! 15  
  9. 9. . Copyright 2013 COMMUNICATE! •  Strength! •  Opportunity! •  Weakness! •  Threat! Spell out Advantages & Constraints! 17  
  10. 10. . Copyright 2013 COMMUNICATE! As Is (where we are today)! As Is! 19  
  11. 11. . Copyright 2013 COMMUNICATE! How to go there! How to go there! 21  
  12. 12. . Copyright 2013 COMMUNICATE! Milestones, Timelines ! Milestones, Timelines ! 23  
  13. 13. . Copyright 2013 COMMUNICATE! Constraints (Weakness, Threat)! Constraints (Weakness, Threat) ! 25  
  14. 14. . Copyright 2013 COMMUNICATE! Go to market! Go to market ! 27  
  15. 15. . Copyright 2013 COMMUNICATE! We would like to increase sales by 25% how can the IT Department support the Business in this effort and what will be the impact on the budget of the IT Department?! Business objectives! 29  
  16. 16. . Copyright 2013 COMMUNICATE! At the end of the day Business Executives take the decision to out / cloud source when:! •  •  •  •  •  IT is not perceived to understand stakeholder expectations,! IT is not perceived to contribute to business objectives,! IT is not perceived to deliver value to cost, ! IT is not perceived to deliver services to business needs,! The IT department is unable to deliver services in a time to market perspective,! •  IT propose an effective service portfolio that correspond to Demand and Cost drivers ! Deliver IT services to business needs! 31  
  17. 17. . Copyright 2013 COMMUNICATE! •  Is the initiative political or Business Case driven (TCO with Cost, Consumption and Chargeback)?! •  How do we support IT (IT (service) Strategy, Delivery Capability (Governance), Architecture and Security) and Business objectives and processes.! •  Are investments demand and / or cost driven and how do we support new business initiatives! •  If we start with mail and infrastructure how do we make the services available (Business / IT Service Catalogue) and how do we follow up on delivery (tickets) and cost to consumed services (TCO with Cost, Consumption and Chargeback)?! •  How do we cloud (source) services (internal, external (near, far) cloud, hosted provider)?! •  How do we leverage (external) cloud capabilities to rapidly support new services / business initiatives where applications can be operational within days (demand driven)? These can then continue to run on an an external cloud be brought inside the firewall to run on an internal cloud / server. ! Leveraged by a Cloud Business Model ! 33  
  18. 18. . Copyright 2013 COMMUNICATE! We have identified the following critical risk factors:! •  As we break services out, how do we manage data integration! •  Re integration of data if we decide to in source or change cloud / out sourcing partner (switching cost)! •  How do we recuperate data if the cloud / outsourcing partner is attacked / goes out of business (cloud, hosted provider).! •  Total cost of ownership! & Long term risk is established! 35  
  19. 19. . Copyright 2013 COMMUNICATE! •  •  •  •  •  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 are customers currently paying for these services ?! –  What is the backlog of new unfulfilled IT demands ?! What processes does IT perform ?! –  How do these processes compare to best practices ?! –  What are the cost drivers on an activity basis ?! IT Cost is spelled out ! 37  
  20. 20. . Copyright 2013 COMMUNICATE! IT is effectively managed:! ! ! Establish Baseline ! ! Cost, Consumption, Chargeback ! ! ! Build a service based business model of IT! ! Based on IT Service Management! ! ! Perform Business Case & Best Practise Bench Mark! ! GAP (As Is, To Be, ROI) ! ! Track Realisation of ROI Outcomes! IT Decisions are ROI Based ! 39  
  21. 21. . Copyright 2013 COMMUNICATE! • 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 and defined services (Run) ! We Design, Build and Run the IT (Service) Strategy! 41  
  22. 22. . Copyright 2013 COMMUNICATE! Business Drivers & Processes! ! !             ! ! Cost Effectiveness! Cycle Time! Manage information technology
 Manage the Business of Information Technology! ! ! Develop the enterprise IT strategy Build  strategic  intelligence           Iden0fy  long-­‐term  IT  needs  of  the  enterprise  in  collabora0on  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  organiza0on  and  processes             Build  strategic  plan  to  support  business  objec0ves     ! ! ! ! ITIL: SERVICE CATALOGUE MANAGEMENT COBIT: PO1 Define a Strategic IT Plan
 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
 ! Articulated! 43  
  23. 23. . Copyright 2013 COMMUNICATE! ! ! ! Key Performance Indicators! ! - Time in weeks to complete projects that address an identified business exposure or opportunity (More than 80% of total annual revenue)! - Time in weeks to close an identified IT skill or capability gap! - Average time in weeks to fulfill a simple information need! - Average time in weeks to fulfill a medium information need! - Average time in weeks to fulfill a complex information need! - Average time in weeks to create the enterprise information management strategic plan! - Time in weeks to report on compliance status of the information architecture! - Average time in weeks to set up a simple technical interface for a user of a defined data content source! ! ! ! ! ! ! ! Cycle Time! 45  
  24. 24. . Copyright 2013 COMMUNICATE! ! ! ! Key Performance Indicators! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! - Personnel cost of the process "perform enterprise data and content management" per $1,000 revenue! - Systems cost of the process "perform enterprise data and content management" per $100,000 revenue! - Personnel cost of the process "develop and maintain information technology solutions" per $1,000 revenue! - Systems cost of the process "develop and maintain information technology solutions" per $100,000 revenue! - Personnel cost of the process "deploy IT solutions" per $1,000 revenue! - Systems cost of the process "deploy IT solutions" per $100,000 revenue! - Personnel cost of the process "deliver and support IT services" per $1,000 revenue! - Systems cost of the process "deliver and support IT services" per $100,000 revenue! - Total cost of the process "manage the business of IT" per $1,000 revenue! - Total cost of the process "develop and manage IT customer relationships" per $1,000 revenue! - Total cost of the process "manage business resiliency and risk" per $1,000 revenue! - Total cost of the process "manage IT knowledge" per $1,000 revenue! - Total cost of the process "develop information and content management strategies" per $1,000 revenue! - Total cost of the process "define enterprise information architecture" per $1,000 revenue! - Total cost of the process "manage information and IT knowledge resources" per $1,000 revenue! ! ! Cost Effectiveness! 47  
  25. 25. . Copyright 2013 COMMUNICATE! ! ! 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 ! Corporate Contribution! 49  
  26. 26. . Copyright 2013 COMMUNICATE! ! ! 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 ! Operational Excellence! 51  
  27. 27. . Copyright 2013 COMMUNICATE! •  Set Business processes and key performance indicators (Build)! • Develop vision and strategy! • Develop and manage products and services! • Market and sell products and services! • Deliver products and services! • Manage customer services! • Develop and manage Human Capital! • Manage information technology! • Manage financial resources! • Acquire, construct and manage property! • Manage environmental health and safety ! • Manage external relationships! • Manage knowledge, improvement and change! To support the business Strategy! 53  
  28. 28. . Copyright 2013 COMMUNICATE! Projects! Contracts! Financial Budget! and Actuals! Business Cases! !! Business goal! alignment! Chargebacks! IT Metrics! Resource! Allocation! IT Assets! IT Services! With an IT Financial Management model! 55  
  29. 29. . Copyright 2013 COMMUNICATE! 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” ! ! ! Provide competitive leverage! 57  
  30. 30. . Copyright 2013 COMMUNICATE! 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). ! “This is how we deliver IT services to the business” ! 59  
  31. 31. . Copyright 2013 COMMUNICATE! Executive Management! Business Unit Management! IT Management! IT Risk Management! Stakeholder Expectations! Drives! Business (IT) Objectives! Delivers! Business (IT) Road Map! Executes! Employees & Organisation! Strategy Execution! Time to Market (Governance: Performance & Conformity)! Business (IT) Strategy Road Map (How)! The Roadmap reflects stakeholder expectations! 61  
  32. 32. . Copyright 2013 COMMUNICATE! Priorities from an Executive Management Perspective:! ! - IT supports the achievement of strategic business objectives! ! - IT Delivers value to expenditure! ! - IT cost is managed effectively! ! - IT risk is identified and managed! ! - Targeted inter company IT synergies deliver to schedule! ! - We have a clear vision towards which we expect the IT department to deliver! IT provides competitive leverage! 63  
  33. 33. . Copyright 2013 COMMUNICATE! Priorities from an IT Management Perspective:! ! - We understand stakeholder expectations and propose a service portfolio that correspond to both Demand and Cost drivers with a focus on perfect order business transactions ! ! - We develop the professional competencies needed for successful service delivery! ! - We capture organisational knowledge to continuously improve performance! ! - The IT and Stakeholder departments have clear objectives, processes and indicators with clear accountability and responsibility to deliver to set objectives! The IT Strategy support Business objectives! 65  
  34. 34. . Copyright 2013 COMMUNICATE! Business (IT) Value Proposition! (IT) Business Model! “This is how we support business objectives with services in a time to market perspective” ! “This is how we deliver IT services to the business” ! Business Strategy:! Business Architecture :! IT Strategy:! IT Architecture:! -  -  -  -  -  -  -  -  Vision! Articulate! Deliver! Strategy Execution! IT Vision! Baseline! Roadmap! Design! Build ! Time to Market (Governance: Performance & Conformity)! The business strategy is executed by IT! 67  
  35. 35. . Copyright 2013 COMMUNICATE! Build an effective IT Delivery Model to meet Business Needs! - To deliver to set business strategy and objectives ! !! Break Out or How do we do this! 69  
  36. 36. . Copyright 2013 COMMUNICATE! 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. ! Business Bottom Line! 71  
  37. 37. . Copyright 2013 COMMUNICATE! Build a clear problem statement: what problem do we solve and how!! As Is! (where we are today) ! ! ! ! ! To Be! (where we would like to be in 6, 12, 18 months)! •  How to go there! ! ! •  Critical Success Factors! •  Milestones, Timelines! ! •  Advantages (Strength, Opportunity) ! •  Constraints (Weakness, Threat)! ! •  Business Model (eliminate-reduce-raise-create)! •  Go to market! •  Next steps ! We articulate the Value Proposition with a StoryBoard! 73  
  38. 38. . Copyright 2013 COMMUNICATE! We would like to increase sales by 25% how can the IT Department support the Business in this effort and what will be the impact on the budget of the IT Department?! Business objectives! 75  
  39. 39. . Copyright 2013 COMMUNICATE! Leverage business strategy execution! •  Deliver IT Services to Business needs ()! ! ! !! !! ! ! - IT contributes to business objectives ()! ! - and provides competitive leverage ()! ! ! - Deliver effective business strategy execution ()! ! ! - Build an IT Service Strategy ()! ! ! - Delivered to business needs ()! 77  
  40. 40. . Copyright 2013 COMMUNICATE! 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)! •  New technological solutions that could change how current business is performed are explored, proposed and implemented.! ! ! IT contributes to business objectives! 79  
  41. 41. . Copyright 2013 COMMUNICATE! Design, Build, Run! •  Define “to be” state with established KPIʼs ()! ! ! ! ! ! ! ! ! !! !! !! !! !! !! !! !! ! ! ! ! ! ! ! ! - Articulated ()! - Key Performance Indicators ()! - Cycle Time ()! - Cost Effectiveness ()! - Corporate Contribution ()! - User Orientation ()! - Operational Excellence ()! - Future Orientation ()! ! 81  
  42. 42. . Copyright 2013 COMMUNICATE! ! ! ! Key Performance Indicators! ! ! ! ! ! ! ! ! ! ! - Time in months to break even for new or enhanced IT services (Investment < $100,000)! - Time in months to break even for new or enhanced IT services (Investment b/w $100,000 and $250,000)! - Time in months to break even for new or enhanced IT services (Investment b/w $250,000 and $500,000)! - Time in months to break even for new or enhanced IT services (Investment b/w $500,000 and $1,000,000)! - Time in months to market for new or enhanced IT services (Investment < $100,000)! - Time in months to market for new or enhanced IT services (Investment b/w $100,000 and $250,000)! - Time in months to market for new or enhanced IT services (Investment b/w $250,000 and $500,000)! - Time in months to market for new or enhanced IT services (Investment b/w $500,000 and $1,000,000)! - Time in months to respond to major business shifts! - Time in weeks to complete projects that address an identified business exposure or opportunity (< 20% of total annual revenue)! - Time in weeks to complete projects that address an identified business exposure or opportunity (20-40% of total annual revenue)! - Time in weeks to complete projects that address an identified business exposure or opportunity (40-60% of total annual revenue)! - Time in weeks to complete projects that address an identified business exposure or opportunity (60-80% of total annual revenue)! ! ! ! Cycle Time! 83  
  43. 43. . Copyright 2013 COMMUNICATE! ! ! ! Key Performance Indicators! ! ! ! ! ! ! ! ! ! - Total IT budget as a percentage of revenue! - Total IT budget per FTE! - IT expense per FTE! - Personnel cost of the process "manage the business of IT" per $1,000 revenue! - Systems cost of the process "manage the business of IT" per $100,000 revenue! - Personnel cost of the process "develop and manage IT customer relationships" per $1,000 revenue! - Systems cost of the process "develop and manage IT customer relationships" per $100,000 revenue! - Personnel cost of the process "manage business resiliency and risk" per $1,000 revenue! - Systems cost of the process "manage business resiliency and risk" per $100,000 revenue! ! ! ! ! ! ! ! ! - Personnel cost of the process "manage IT knowledge" per $1,000 revenue! - Systems cost of the process "manage IT knowledge" per $100,000 revenue! - Personnel cost of the process "develop information and content management strategies" per $1,000 revenue! - Systems cost of the process "develop information and content management strategies" per $100,000 revenue! - Personnel cost of the process "define enterprise information architecture" per $1,000 revenue! - Systems cost of the process "define enterprise information architecture" per $100,000 revenue! - Personnel cost of the process "manage information and IT knowledge resources" per $1,000 revenue! - Systems cost of the process "manage information and IT knowledge resources" per $100,000 revenue! Cost Effectiveness! 85  
  44. 44. . Copyright 2013 COMMUNICATE! ! ! ! Key Performance Indicators! ! - 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! ! ! ! ! ! Cost Effectiveness! 87  
  45. 45. . Copyright 2013 COMMUNICATE! ! ! 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! User Orientation! 89  
  46. 46. . Copyright 2013 COMMUNICATE! ! ! Key Performance Indicators! ! ! ! ! ! ! ! ! - Training and education of staff! - Number of educational days per person ! - Education budget as a % of total IT budget ! - Expertise of the IT staff ! - Number of years of IT experience per staff member ! - Age pyramid of the IT staff ! - Research into emerging technologies ! - % of budget spent on IT research General Business Management! Future Orientation! 91  
  47. 47. . Copyright 2013 COMMUNICATE! Projects! Contracts! Financial Budget! And Actuals! Business Cases! ?! Business goal! alignment! Chargebacks! IT Metrics! Resource! Allocation! IT Assets! IT Services! Connect information! 93  
  48. 48. . Copyright 2013 COMMUNICATE! How do we: - Deliver services to the needs of the business on target in a “Time to Market” perspective (Business (IT) Value Proposition) and demonstrate contribution, - Conduct a constructive budget dialogue with the business: Total Cost of Ownership (TCO) with Cost Consumption and Chargeback / Showback, - Build and run an effective IT Business Model to Best Practice Frameworks. To Address Critical Success Factors! 95  
  49. 49. Service strategy ! Delivery capability! Architecture! Security! Strategy Execution! “This is how we support business objectives with services in a time to market perspective” ! “This is how we deliver IT services to the business” ! Business (IT) Value Proposition! . Copyright 2013 COMMUNICATE! (IT) Business Model! ! 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
 ! Time to Market (Governance: Performance & Conformity)! Business (IT) Strategy Road Map (How)! Deliver effective business strategy execution! 97  
  50. 50. . Copyright 2013 COMMUNICATE! 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). ! “This is how we deliver IT services to the business” ! 99  
  51. 51. . Copyright 2013 COMMUNICATE! ! Develop vision and strategy
 Business Service Catalogue! ! 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
 Business (IT) Value Proposition! “This is how we support business objectives with services in a time to market perspective” ! ! Strategy Execution! Time to Market (Governance: Performance & Conformity)! Business (IT) Strategy Road Map (How)! Delivered to business needs! 101  
  52. 52. . Copyright 2013 COMMUNICATE! Leverage business strategy execution! ! ! ! ! !! !! !! !! •  Focus on strategy articulation ()! ! - IT support Business Objectives ()! ! - Processes ()! ! - and activities ()! ! - to deliver competitive services to strategic focus ()! ! ! - Aligned ()! ! ! - With a focus on Investment ()! ! ! - and Process Management ()! 103  
  53. 53. . Copyright 2013 COMMUNICATE! IT Service Catalogue! Enterprise Portfolio Management:! Process based IT Architecture! Performance Management:! Process based Business Architecture ! Business Service Catalogue! Strategy Execution! Time to Market (Governance: Performance & Conformity)! Business (IT) Strategy Road Map (How)! IT support Business Objectives ! 105  
  54. 54. Deliver products and services
 ! ! ! ! ! Acquire, construct and manage property
 ! Create and manage organizational performance strategy
 Benchmark performance
 Develop enterprise-wide knowledge management (KM) capability
 Manage change! Manage knowledge, improvement and change
 Build investor relationships
 Manage government and industry relationships
 Manage relations with board of directors
 Manage legal and ethical issues
 Manage public relations program
 Manage external relationships
 Determine environmental health and safety impacts
 Develop and execute environmental health and safety program
 Train and educate employees
 Monitor and manage environmental health and safety management program
 Ensure compliance with regulations
 Manage remediation efforts
 Manage environmental health and safety ! Design and construct/acquire nonproductive assets
 Maintain nonproductive assets
 Obtain, install, and plan maintenance for productive assets
 Dispose of productive and nonproductive assets
 Manage physical risk
 Perform planning and management accounting
 Perform revenue accounting
 Perform general accounting and reporting
 Manage fixed-asset project accounting
 Process payroll
 Process accounts payable and expense reimbursements Manage treasury operations
 Manage internal controls Manage taxes
 Manage international funds/consolidation
 Manage financial resources
 Manage the Business of Information Technology
 Develop and Manage IT Customer Relationships
 Manage Business Resiliency and Risk
 Manage Enterprise Information
 Develop and Manage Information Technology Solutions
 Deploy Information Technology Solutions
 Deliver and Support Information Technology Services
 Manage IT Knowledge
 Manage information technology
 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
 ! ! Develop and manage Human Capital
 ! Develop customer care/customer service strategy
 Plan and manage customer service operations
 Measure and evaluate customer service operations
 Manage customer 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
 Understand markets, customers, and capabilities
 Develop marketing strategy
 Develop sales strategy
 Develop and manage marketing plans
 Develop and manage sales plans
 Market and sell products and services
 Manage product and service portfolio
 Develop products and services
 Develop and manage products and services
 Develop vision and strategy
 Define the business concept and long-term vision
 Develop business strategy
 Manage strategic initiatives
 ! ! Time to Market! . Copyright 2013 COMMUNICATE! Cost Effectiveness! Cycle Time! and activities! 107  
  55. 55. Copyright 2013 COMMUNICATE! Business Objectives Business Processes . Defined in the Business Service Catalog Requirements Information Defined in the IT Service Catalog IT Objectives IT Processes Broken down in to ITILv2&3 workflows Controlled by Measured by Audited with Key Activities Control Derived from Control Outcome Objectives tests Performed to For performance For Maturity For Outcome Responsibility and Accountability Charts (RACI) Performance indicators Outcome Measures Audited with Maturity Models Embedded Business Activity Monitoring (BAM) Audit Workflows & Reports Implemented with Control Based on Control Practices Design Test Embedded in Service Catalog per Service CMMI, ITIL continuous process improvement Aligned! 109  
  56. 56. . Copyright 2013 COMMUNICATE! We align and lever operating, management and support processes through the effective implementation of IT.! - Do we perform them in the right manner? - The architecture question! - The investment:! ! ! ! ! - Is in line with our architecture,! - Is consistent with our architectural principles,! - Contributes to the population of our architecture.! - Do we perform them well? - The delivery question! - We have: ! ! ! ! ! - Effective and disciplined management, delivery and change management processes,! ! - Competent and available technical and business resources to deliver:! ! - The required capabilities,! ! - Organisational change required to lever capabilities.! Process Management! 111  
  57. 57. . Copyright 2013 COMMUNICATE! Executive Management! Business Unit Management! IT Management! IT Risk Management! Stakeholder Expectations! Drives! Business (IT) Objectives! Delivers! Business (IT) Road Map! Executes! Employees & Organisation! Strategy Execution! Time to Market (Governance: Performance & Conformity)! Business (IT) Strategy Road Map (How)! The Roadmap reflects stakeholder expectations! 113  
  58. 58. . Copyright 2013 COMMUNICATE! Priorities from an Executive Management Perspective:! ! - IT supports the achievement of strategic business objectives! ! - IT Delivers value to expenditure! ! - IT cost is managed effectively! ! - IT risk is identified and managed! ! - Targeted inter company IT synergies deliver to schedule! ! - We have a clear vision towards which we expect the IT department to deliver! IT provides competitive leverage! 115  
  59. 59. . Copyright 2013 COMMUNICATE! Priorities from an IT Management Perspective:! ! - We understand stakeholder expectations and propose a service portfolio that correspond to both Demand and Cost drivers with a focus on perfect order business transactions ! ! - We develop the professional competencies needed for successful service delivery! ! - We capture organisational knowledge to continuously improve performance! ! - IT and Stakeholder departments have clear objectives, processes and indicators with clear accountability and responsibility to deliver to set objectives! Business objectives are reflected in the IT Strategy! 117  
  60. 60. . Copyright 2013 COMMUNICATE! Leverage business strategy execution! •  Deliver effective (IT) Performance Management ()! ! ! ! ! !! !! !! !! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! - Confirm Business Vision ()! - Articulate the Business Value Proposition ()! - Deliver the Business Architecture ()! - Translate the Business Vision to an IT Vision ()! - Set the IT Value Proposition Baseline ()! - Construct the IT Business Model ()! - Design the IT Value Proposition ()! - Build the IT Value Proposition ()! - To Perform Effective IT Governance ()! - Deliver IT services to business needs ()! ! ! - IT contributes to business objectives ()! ! ! - Provide competitive leverage ()! ! ! - Deliver effective business strategy execution ()! 119  
  61. 61. . Copyright 2013 COMMUNICATE! Vision! Articulate! Deliver! IT Vision! Baseline! Roadmap! Design! Build! Transform the Business Model! Vision! Vision:! -  -  -  Articulate strategic intent! Business objectives! Business drivers! Confirm Business Vision! 121  
  62. 62. . Copyright 2013 COMMUNICATE! Vision! Articulate! Deliver! IT Vision! Baseline! Roadmap! Design! Build! Transform the Business Model! Deliver! Deliver:! -  -  -  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”! Deliver the Business Architecture! 123  
  63. 63. . Copyright 2013 COMMUNICATE! Vision! Articulate! Deliver! IT Vision! Baseline! Roadmap! Design! Build! Transform the Business Model! Baseline! Baseline:! -  -  -  -  -  -  -  -  Set the IT Value Proposition Baseline! Set fundamentals of a service business! Process view! Establish Total Cost of Ownership and IT baseline with cost/value/risk! Activity based financial view! Service portfolio view! Value contribution view! Customer consumption view! Set the IT Value Proposition Baseline! 125  
  64. 64. . Copyright 2013 COMMUNICATE! Vision! Articulate! Deliver! IT Vision! Baseline! Roadmap! Design! Build! Transform the Business Model! Design! Design:! -  -  -  -  -  -  -  -  Design the IT Value Proposition! Design the service strategy! Articulate governance principles! Define project teams! Engage customer ʻbuy inʼ ! Design KPIʼs ! Define & validate service pricing! Design the performance measurement system! Design the IT Value Proposition! 127  
  65. 65. . Copyright 2013 COMMUNICATE! Vision! Articulate! Deliver! IT Vision! Baseline! Roadmap! Design! Build! Transform the Business Model! Transform! Transform:! -  -  -  -  -  -  -  -  Transform the IT Business Model! Measure KPI trends and targets! Meet business objectives! Control costs! Measure Delivery performance! Manage change! Continuous service & process improvement! Process roll out (articulation & integration)! -  Execute strategic intent! To Perform Effective IT Governance! 129  
  66. 66. . Copyright 2013 COMMUNICATE! 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)! •  New technological solutions that could change how current business is performed are explored, proposed and implemented.! IT contributes to business objectives! 131  
  67. 67. Service strategy ! Delivery capability! Architecture! Security! Strategy Execution! “This is how we support business objectives with services in a time to market perspective” ! “This is how we deliver IT services to the business” ! Business (IT) Value Proposition! . Copyright 2013 COMMUNICATE! (IT) Business Model! ! 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
 ! Time to Market (Governance: Performance & Conformity)! Business (IT) Strategy Road Map (How)! Deliver effective business strategy execution! 133  
  68. 68. . Copyright 2013 COMMUNICATE! Provides clear, meaningful Business (IT) Vision / Mission:! •  Is realistic and achievable,! •  Is articulated,! •  Is communicated! ! ! ! ! The business (IT) strategy is effective! 135  
  69. 69. . Copyright 2013 COMMUNICATE! There is a understanding of:! •  Competitive Positioning,! •  Strengths and weaknesses,! •  Strategies and relative positioning! ! ! ! ! Competitive Advantage! 137  
  70. 70. . Copyright 2013 COMMUNICATE! There is a understanding of:! •  The Customer value proposition,! •  Customer needs,! •  Customer segmentation ! ! ! ! ! Customer value proposition! 139  
  71. 71. . Copyright 2013 COMMUNICATE! 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,! •  Clarity of implementation plan ! ! ! Execution! 141  
  72. 72. . Copyright 2013 COMMUNICATE! Appropriateness of detail:! •  •  •  •  Clarity with which assumptions have been stated,! Extent to which profit / return criteria has been evaluated,! Evidence of appropriate scenario and sensitivity analysis,! Evidence of appropriate key performance indicators! ! ! ! ! Financial plans! 143  
  73. 73. . Copyright 2013 COMMUNICATE! There is a understanding of the:! •  Suitability of the IT strategy,! •  Feasibility of the IT strategy,! •  Acceptability of the IT strategy! ! ! ! ! Meet stakeholder expectations! 145  
  74. 74. . Copyright 2013 COMMUNICATE! Link Strategy and Operations! 1.  2.  3.  4.  Develop the Strategy! Translate the Strategy! Plan Operations! Monitor and Learn! 5.  Test and Adapt the Strategy! Execute Procedures and Initiatives! ! ! !! !! ! ! ! ! Business (IT) Strategy, link to operations! 147  
  75. 75. . Copyright 2013 COMMUNICATE! Define Market Position! 1.  2.  3.  4.  New entrants! Suppliers! Substitute products or Services! Buyers! 5.  Existing Competitors! ! ! !! !! ! ! ! ! Business (IT) Context! 149  
  76. 76. . Copyright 2013 COMMUNICATE! ! ! 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).! & Canvas, articulated in a! 151  
  77. 77. . Copyright 2013 COMMUNICATE! Leverage business strategy execution! •  Conceived in to a solid story ()! ! ! ! ! ! ! ! ! ! ! - Deliver IT Services to Business Needs () ! - IT contributes to business objectives ()! - and provides competitive leverage ()! - Deliver effective business strategy execution ()! ! 153  
  78. 78. . Copyright 2013 COMMUNICATE! At the end of the day Business Executives take the decision to out / cloud source when:! •  •  •  •  •  IT is not perceived to understand stakeholder expectations,! IT is not perceived to contribute to business objectives,! IT is not perceived to deliver value to cost, ! IT is not perceived to deliver services to business needs,! The IT department is unable to deliver services in a time to market perspective,! •  IT propose an effective service portfolio that correspond to Demand and Cost drivers ! Deliver IT services to business needs! 155  
  79. 79. . Copyright 2013 COMMUNICATE! 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” ! ! ! and provides competitive leverage! 157  
  80. 80. . Copyright 2013 COMMUNICATE! We work with a number of large French and International groups on the Business IT roadmap;  that is how do we (as CIO, IT Department) support business objectives and processes leveraged by IT and an effective IT Services strategy.! .COMMUNICATE! 159  

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