Your SlideShare is downloading. ×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

The Enterprise Architects Dilemma: Deliver Business Value with IT! - Design, Build and Run Effective IT Strategy execution to business needs

165
views

Published on

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

This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here:
http://flevy.com/browse/business-document/the-enterprise-architects-dilemma-deliver-business-value-with-it-design-build-and-run-effective-it-strategy-execution-to-business-needs-379

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 Enterprise Architects Dilemma: Deliver Business Value with IT ! series is a reply to the request from Enterprise Architects of an introduction of ?How do we deliver to the business strategy? and ?How do we deliver business value with IT and provide an effective Business and IT Architecture?.
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.

Published in: Business, Technology

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
165
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Title: The Enterprise Architects Dilemma: Deliver Business Value with IT! - Design, Build and Run Effective IT Strategy execution to business needs ISBN: Official website: http://deliverbusinessvaluewithit.com/ AUTHOR Martin PALMGREN, EVP .COMMUNICATE Copyright The Enterprise Architects Dilemma: Deliver Business Value with IT! - Design, Build and Run Effective IT Strategy execution to business needs Martin PALMGREN Published by .COMMUNICATE Publications at Smashwords Edition Inc Copyright 2013 .COMMUNICATE Publications KEY WORDS: TOGAF, Enterprise Architecture, Business Architecture, IT Architecture, IT Strategy, Business Strategy, Deliver Business Value with IT 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).  
  • 2. 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 of “Differentiation” and “Cost” are a perfect example of this.  
  • 3. 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 full fledged business partner with a comprehension of business needs, stakeholder expectations and strategy execution and how to support the latter. For COBIT 5 practitioners 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.  
  • 4. 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  
  • 5. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 10. Run - Aligned to described ITIL activities and processes with a Service Strategy, Service Design, Service Transition, Service Operation: - Function, - Process, Service Improvement. 11. To leverage IT for Strategic Advantage Each chapter has been conceived to be able to stand a consultation on a stand alone basis and cover key points. This might give to those that will read “Deliver Business Value with IT” end to end an impression of “deja vu” earlier in the book. Highlight: Focus on the BIG PICTURE! 1: To deliver Business Value with IT we need to Design, Build and Run an Effective IT (Service) Strategy to business needs We take the reader and the business and IT executive team out of their “ivory tower” and in to “the valley of death” where we confront current “best in class IT practices” to what should be done that is to “support the execution of the business strategy with IT” as opposed to “how do we align business needs to how IT works” (that is Business IT Alignment) which is current best in class. We will leverage business models and concepts to permit the CIO and the IT department to meet the needs of the business (As Is, To Be). List of topics that will be covered in the chapter: We understand: -­‐ -­‐ -­‐ -­‐ The need for an “IT value proposition” (an IT Business Model and a Business (IT) Value Proposition), that is the competitive advantage that IT confer The criticality to acquire IT services end to end The need for IT Accountability The reason why IT strategies fail, and miserably 2: To avoid the “Marshmallow” momentum, focus on the business model We spell out the irregularities of the current IT Innovation process and the loss of competitive advantage for both the IT and the Business Side. List of topics that will be covered in the chapter:  
  • 6. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 4.1, ValIT, RiskIT. List of topics that will be covered in the chapter: We understand: -­‐ -­‐ -­‐ -­‐ That IT support business objectives and processes with Investment Management The need for Process Management A coherent Business Architecture The need for a defined direction and Market Position 5: Cloud computing thunder or lightening? How to draw the fluff out of the cloud and effectively support business objectives with IT The introductory material in this chapter is developed to provide pragmatic guidance on how to develop and execute your IT Strategy with effective “Cloud” Sourcing (Computing) to support the Business Strategy and Business Objectives. List of topics that will be covered in the chapter: We understand: -­‐ -­‐ -­‐ -­‐ How to build and effective cloud strategy That to cloud is a traditional “to make or to buy” decision That a decision should either be demand or cost driven, if it is political this should be recognized. That all cloud initiatives should have a clear business case (financial + roadmap) where the IT department should be held accountable to the successful delivery and within the set cost frame 6: To leverage Business Strategy execution with IT we Focus on the IT (Service) Strategy The reader will learn the criticality for the CIO and the IT Department to position as premium provider of IT services and to focus on value to cost. “In order to avoid the "do we really need a CIO and IT department to bother us with technology when we can use the cloud?" the CIO has to ensure that the business strategy and business objectives are supported by IT (from a Business and IT Architecture perspective). Where the IT Strategy support Business Strategy execution, "Time to Market", Cost Effectiveness and Stakeholder Expectations from an Executive, Business Unit, IT Management and IT Risk Management perspective.”  
  • 7. Copyright 2013 Martin Palmgren EVP .COMMUNICATE and Business Objectives. List of topics that will be covered in the chapter: We understand how to: -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ “Canvas” the IT Service Strategy, Develop a High level picture of the Business (IT) Strategy, Articulate the Business (IT) Strategy, Develop the Business (IT) Service Strategy, Build the Business (IT) Service Strategy, Govern the Business (IT) Service Strategy, Design the Technology Architecture, Build the Sourcing Strategy, Develop the Program Plan, Leverage Business Strategy Execution 9: Build - Set IT processes and key performance indicators. The introductory material in this chapter is developed to provide pragmatic guidance on how to develop and execute your IT Strategy as you Set IT processes and key performance indicators (Build the IT Strategy) to support the Business Strategy and Business Objectives. List of topics that will be covered in the chapter: We understand how to: -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ Define the “to be” state with established KPI’s, Design the IT Plan with a project portfolio, Build An Effective (IT) Business Model, Manage the Business of IT, Develop & Manage IT Customer Relationships, Manage Business Resiliency and Risk, Manage Enterprise Information, Develop and Manage IT Solutions, Deploy Information Technology Services, Deliver and Support IT Services, Manage IT Knowledge 10: Run - Aligned to described ITIL activities and processes with a Service Strategy,  
  • 8. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Figure 0: IT supports the run and emerging business initiatives: http://deliverbusinessvaluewithit.wordpress.com/2013/03/19/the-very-reason-why-most-it-strategies-fail-and-miserably/ Figure 1: We articulate the Value proposition with a storyboard: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/we-articulate-the-value-proposition-with-a-storyboard/ Figure 2: Time to Market, Cost Effectiveness, CycleTime: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/time-to-market-cost-effectiveness-cycle-time/ Figure 3: Connect information: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/connect-information/ Figure 4: IT support Business Objectives: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/it-support-business-objectives/ Figure 5: Deliver effective business strategy execution: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/deliver-effective-business-strategy-execution/ Figure 6: The roadmap reflects stakeholder expectations: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-roadmap-reflects-stakeholder-expectations/ Figure 7: The ServiceStrategy support Business Drivers: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-service-strategy-support-business-drivers/ Figure 8: End to end industrialisation of business processes: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/end-to-end-industrialisation-of-business-processes/ Figure 9: The Business Strategy is executed by IT: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-business-strategy-is-executed-by-it/ Figure 10: Confirm business vision: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/confirm-business-vision/ Figure 11: Articulate the Business Value Proposition: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/articulate-the-business-value-proposition/ Figure 12: Deliver the Business Architecture: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/deliver-the-business-architecture/ Figure 13: Translate the Business Vision to an IT Vision: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/translate-the-business-vision-to-an-it-vision/ Figure 14: Set the IT Value Proposition Baseline: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/set-the-it-value-proposition-baseline/ Figure 15: Draw the Roadmap: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/draw-the-roadmap/ Figure 16: Design the IT Value Proposition: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/design-the-it-value-proposition/ Figure 17: Build the IT Value Proposition: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/build-the-it-value-proposition/  
  • 9. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Where could IT make a significant impact on the business? ,- Are there any further opportunities to use IT? , - How do we provide IT Services as we meet demand and cost drivers where the decision is to make (internal) or to buy (external service provider)? We have identified 2 key trends for the CIO to focus on: - Differentiation (That is, how does IT provide a competitive advantage for the business), and - Cost (How does the IT Department deliver IT Services cost effectively). To do so we need to Build an effective IT Delivery Model to meet business needs and expectations as we leverage business strategy execution and business processes supported by an IT Service strategy (ITIL, IT – CMF, COBIT 5 (ValIT, CobIT 4.1, RiskIT), ISO 38 500, TOGAF and ISO 9001, ISO 27 001, COSO) delivered in a Business IT roadmap; that is how do we support business objectives and processes leveraged by IT and an effective IT Services strategy. Within this scope we would by definition address how we execute the IT service strategy (ITIL) Design - Spell out IT Activities from a demand and supplier side, Build - Set IT processes and key performance indicators, Run - Aligned to described ITIL activities and processes and full IT Financial Management (supported by delivery capability IT CMF, COBIT 5). Once services defined we can then decide where to run the application that support the IT and or Business Services (server / internal / external cloud / outsourced provider). Within the frame of an acquisition up to 80% of the value realisation is (can be) on the IT side. The failure to address IT and the IT strategy can be an additional (1 out of 3) reason to M & A failure. If we assume that to deliver business value with IT we need to support business objectives, the integration of a new entity is an optimisation of the current IT strategy (how we support business objectives and processes). We would obviously need to understand (and hopefully have the opportunity) how the current IT run before the purchase (IT due diligence) with full IT Financial Management to figure out the actual cost of delivered IT services (cost, consumption, chargeback). Once services defined we can then decide where to run the applications that support the IT and or Business Service (server / internal / external cloud / outsourced provider). We also need to define the purpose of the purchase (invest / divest) in the overall corporate strategy where it is of little use and a significant cost to integrate all systems in to a common backbone if the company is to be divested only a few years later. We could use an IT Scorecard to ensure that stakeholder expectations are met from an executive management, business line management, IT management and IT risk management perspective. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic 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  
  • 10. Copyright 2013 Martin Palmgren EVP .COMMUNICATE ISACA (Information System Audit and Control Association), of ISACA’s IT Governance Committee and of the AFAI association (ISACA’s french chapter)) “The “Deliver business value with IT” series gives an excellent practitioner’s view on how to realize value from IT investments. Martin successfully introduces the core theories and practices regarding this topic that recently had a lot of attention from both academics and practitioners. The material in his book also gives for CIO’s a good overview of the most popular IT governance and IT management frameworks including the relative new ones such as ISO 38500 and COBIT 5. This publication may help CIO’s and senior IT people to better understand that the only goal of IT is to support the business and that it is the business that ultimately will make profit from developed applications.” (Prof. dr. Wim Van Grembergen, University of Antwerp & Antwerp Management School, Information Technology Alignment and Governance Research Institute) “The focus that Martin takes in the “Deliver Business Value with IT” series will help in tackling the seven main non-technical challenges any CIO or other senior IT business leaders will face: 1. How and what should I communicate to whom in what way? 2. What to think of when it comes to competences needed to provide my IT services? 3. How to provide the best value at the best cost? 4. What to think of when ensuring efficient and effective delivery of projects? 5. How to establish a sourcing strategy and determining how to manage your vendors? 6. What are the best practices for managing my operations, and what to think of? 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 of “Differentiation” and “Cost” are a perfect example of this. Further to this the focus and examples of non-technical KPIs used, provides a good framework for the CIO to communicate the state of how services are provided and how the company is maximizing its value of their IT assets.” (Alex van der Kruit, is a senior IT executive with extensive experience in building  
  • 11. Copyright 2013 Martin Palmgren EVP .COMMUNICATE “Deliver Business Value with IT” correctly states that the value of IT is even growing over years and becomes the beating heart in the Business processes. Efficiency and effectiveness are more than ever the key concepts of IT management driven by the business needs. By bridging the key elements of best practice IT management Cobit, ITIL, Togaf, COSO, … he provides us with an excellent approach to IT management of the 21 century.” (Bjorn Gronquist, Audit of IT Governance and Cobit compliance, he has also held the position as Chief Security Officer & Enterprise Architect @ a Capgemini Group Level) " I am honored to have the opportunity to review the “Deliver Business Value with IT” series, which I found to be very comprehensive and to the point. With the proliferation of public form of Cloud Computing, CIO's are threatened of their survival in the corporate world. Business units can readily meet their compute needs by purchasing services directly from service providers without using IT. These services come with predictable cost at given service levels with high degree of agility. IT organizations, on the other hand, are order takers. Martin's publication on designing, building and running an effective IT Strategy to meet business needs was developed to help CIOs create business value by addressing the following mega IT challenges: 1. How to transform IT from an order taker to a product and service organization; 2. How to make IT more agile to create value from a time-to-market perspective; 3. How to develop product and services that are fully aligned with business needs and, then, offer them at predictable cost with given service levels 4. How to provide effective IT Governance. There will be times when it will be more effective to buy services directly from Service Providers as opposed to building them in house. But those decisions should be made in a more methodical way. But, this will require for IT to administer a very effective and sound IT governance process. IT should be the keeper of the product and service catalog. “Deliver Business Value with IT” provides an excellent opportunity for CIO's to develop an effective IT Delivery model. Martin, thanks again for giving me the opportunity to review your publication. You really have done an excellent job with this publication. Good luck" (Rajesh Kumar, is a senior IT executive specialised in cloud, IT Transformation and IT Financial Management. He has held positions such as SVP Bank of America, IT Infrastructure and Finance and Director, Rackspace). “The “Deliver Business Value with IT” series is a comprehensive, concise and KPI focused publication. I have always agreed with the fact that IT services are a profit center. I call this "a business within a business" in actual fact a component of the business' federation of services. The CIO must only be a supporter and a facilitator  
  • 12. Copyright 2013 Martin Palmgren EVP .COMMUNICATE The execution of the defined business strategy is often a mystery (missing link) both on the Business and the IT side. The truth is that regardless of how well the executive team draws out the strategy in the boardroom the bottom line is that the business initiatives that were supported by clients succeeds, those not supported by clients (that do not get it) fail and disappear. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated. Author Introduction Martin Palmgren is a seasoned Senior Business / IT Strategy and Transformation Executive that has addressed Strategy formulation and roll out for fortune 500 businesses internationally with a focus on how to ensure that the business strategy and objectives are supported by IT with an effective IT Strategy and Governance (that is how do we support business objectives and processes leveraged by IT and an effective IT strategy). Martin is an expert in “how to deliver business value with IT” where he works with both Business and IT Executives to reach this objectives and has delivered best in class practice with major actors in the Pharma, Bank, Manufacturing and Insurance Sector to articulate the “IT Business Model” “This is how we deliver effective IT services to the business” and the “Business (IT) Value proposition” “This is how we support business objectives with services in a time to market perspective”. He has over the last 2 years also addressed how to build an effective “Cloud Business Model” to take full advantage of the flexibility and cost advantage that new cloud solutions permit to improve “Time to Market”, “Cost Effectiveness” and “Cycle Time”. Martin has accompanied a number of IT consulting companies and editors in their “Go to Market” with Client acquisition, (Large) Account Introductions, Alliances (notably with BIG 5 consultancies), Market Position (Forrester, Gartner, Bright Talk) and position of the “Value Proposition” (discovery, competitive analysis of market offerings, road map to realign solutions portfolio and transform sales and delivery operations, develop new market strategy and execution plans, and drive sales transformation, acquisition of smaller actors).  
  • 13. Copyright 2013 Martin Palmgren EVP .COMMUNICATE In 2002 (– 2006) Martin joins a team of outgoing Gemini Consulting Business consultants to accelerate the development of ADSAP as Executive Vice President and associate (a start up specialised in the resale of industrial equipment (online market place) and Enterprise Portal Development) with the objective to accompany the executive management, identify business opportunities and to ensure the development of concordant solutions in the industrial equipment segment. He sells his parts in 2006 within the frame of the acquisition by a major US based actor within the online market place segment. Mission: Portal conception and solution development: structure, content, classification system elaboration (profession and functional oriented taxonomy: 56 000 lines, 7 languages, compatible with UNSPSC, ECCMA & ECLASS). Position and offer: target and operational marketing identification (price, geographical zone, mix). Partner & competition bench. Development of an international partner program (+ 30 000 ads on a monthly basis). Martin also held the role of general secretary to the CEO the former CFO of a listed large French group and actively contributed to the overall strategy and was key to international development. Martin joins CAP GEMINI ERNST & YOUNG (Cap Gemini SA) in 1999 (– 2002) as an expatriate project manager affiliated to CGE & Y Sweden and direct report to the Chief Knowledge Officer (later CIO) on a group level. Objective: To leverage the groups presence, shorten go to market and win additional market share through best in class solutions to: deliver, share references, blue prints, delivered solutions, find experts and staff internationally. Mission: Client needs identification (audit, definition). Active participation in the conception and development and roll out of collaborative tools: my office, my connections (expert identification search database: 6000 competencies, 56 000 competency profiles with daily updates to local HR databases). Other assignments: Group initiative proposition articulation (business development): Cost optimization in the aerial, energy and utility sector (CA 20 M€), IAS (International Accounting Standards): development, implementation, evaluation and sector reporting. Client portfolio development: trend, brand and market analysis (CGE & Y, Buenos Aires, Argentina, 2002). CRM pilot offer group (CGE & Y Sweden, 2000 – 2002). Chapter 1. To deliver Business Value with IT we need to Design, Build and Run an Effective IT (Service) Strategy to business needs. Please find an actionable story board format designed to permit you to flick out the slide set on a pad / smart phone / lap top and start to share with your CIO, Executives and Board on the spot @ Design, Build and Run an Effective IT (Service) Strategy to Business Needs https://flevy.com/browse/business-document/design-build-and-run-an-effective-it-service-strategy-to-business-needs-279/ref=mpalmgre  
  • 14. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Clients need to step up to buy a full value portfolio of services (em)powered by the purchase department (this is yet to be done) on the other side large service providers should leverage their international organisations to sell and deliver end to end solutions to their clients. This will also permit significant cross selling with an increase in the added value perceived (that will take the said actors out of the equation to compete on cost only). How poor IT Financial Management (accountability) set your business, CIO and IT department up for failure! If you owned an airline company would you accept that when you asked how many passengers that had been transported, which distances where the most profitable, how many tickets sold and at what price and if time tables and destination where kept as promised and the amount of gas consumed the reply that the planes had been kept in the air and that any constraints would hamper creativity (innovation). This is however the case for most businesses where the IT department on the premise that they "keep the lights on" should not be held accountable neither for cost nor delivery and IT Financial management is a bean counting mentality (when I spoke to a friend in a top 3 audit firm in regards of this phenomena he told me that whenever a client told him the to keep records of his business was a bean counting mentality he would by definition look closer and 10 times out of 10 would find the records to be revised and basic rules broken) and that to have clear accountability would hamper creativity (innovation). The bottom line is that most outsourcing is performed not to optimise cost but to get a minimum level of service delivered (and at least the illusion of service level agreements to be met). When you sign up as a student in business administration you learn how to assign cost, read and build a balance sheet, calculate and optimise cost in production (later as a business controller in the production chain you would project budgets based on ongoing business cost that is clearly spelled out). The question of IT budgets and IT controlling never came on the table and had it I believe that most students would have found it difficult to understand that cost, consumption and chargeback of a service (product) would not be defined and that business entities and subcontractors (tier outsourcing parties) would not define the cost of execution (manufacturing) and the validity of the information used for the billing (chargeback). The very reason why most IT Strategies fail and miserably The IT department needs to perform 3 things well: 1) understand the needs of the business, 2) how to build and run applications that meets the needs of the business and 3) to run an effective infrastructure.  
  • 15. Copyright 2013 Martin Palmgren EVP .COMMUNICATE manufacturing standardisation is key, the IT department should move down the same path. If Salesforce.com or box.net, Oracle and SAP can deliver cross industry and sector we need to define the amount of “tailor made” that we are ready to pay for and how “Agile” do we need to be? To manufacture a product or build a building we specify the description to the needs of the client, deliver a blue print and produce / build. Changes in the production are costly, yet this is the very basis for “Agile” reason why most IT Contractors would not accept a set cost frame for a contract where the blue print was not defined well enough to produce to the needs of the client in the first place (moving target dilemma). The bottom line is that we need to rapidly be able to understand modelise and deliver to the needs of the business and business objectives. If standardised solutions cover 80 % of the needs that would most likely be enough. To systematically capture (modelise) unique “tailored” business processes in a modelisation tool that are not industrialised is not only a waste of time but of enterprise resources (unless this would be required by the audit team). A coherent approach would be to identify business processes that support activities that could be industrialied with IT when needed and modelised if we cannot find a standardised solution off the shelf. Google, box.com, Salesforce and other hosted providers dispose of resources that most IT departments could only dream of to address specific subjects such as mail, document storage, CRM. Why reinvent the wheel when we can extrapolate on hundreds of manyears of cumulated knowledge (not to mention budgets funded by IPO’s) all in the name of “security”? Even my tailor (one of the finest in Paris) has moved forward to a model of “tailor made” to half custom made where he has realised that a person that does not know what he needed in the first place will systematically be disappointed and want 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  
  • 16. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - Provide a transversal view that is an IT sub ledger that break out cost, consumption, show - / chargeback not only a “macro perspective”, Efficiency of each Service, - Leverage / consolidate the initiatives that you have already put in place, - Optimise the service portfolio as we identify opportunities to remove unused services (licenses) incremental cumulation, the time of the “silver bullet magical solutions” is over (if it ever existed), and take decisions based on economical logics and business needs rather than the “fad” of the moment, - Meet stakeholder expectations from an executive and business management perspective would this be among your current priorities You need to demonstrate how you Create Business Value and Optimise IT’s contribution to the business: - Service Portfolio optimised around business value - IT spend streamlined through in depth cost transparency - Measure IT performance with financial KPIs - Model customer consumption of IT services – chargeback - Optimise internal processes, controls, organisation - Demonstrate the value that IT contributes to the business In the follow business critical areas: - Budget – Strategic Planning - IT Controlling - Simulate scenarios - M & A, data center consolidation, etc - Demonstrate IT’s contribution to the business - ITIL v3 implementations, BSM projects Where the Bottom line is that: IT Management needs to transform their business model: - 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  
  • 17. Copyright 2013 Martin Palmgren EVP .COMMUNICATE remaining budget would go into private cloud technologies, such as VMWare. The first step was a storage area network in which data was pooled across enterprise hardware. The second step was to put applications on it. The approach was incremental a crawl, walk, run strategy to gradually introduce the cloud to the enterprise. We did not spend more we changed how we spent our money. Revlon was also able to take charge of its own disaster recovery. We internalized our DR. As we reduced external expenditure we were able to give it back to the business to invest in revenue driving initiatives. For Revlon, the more money R&D has to develop new products to get to our consumers and for marketing to tell our “product story” and get it out to our channels and use the media to talk about our glamorous products the more succesfull the business. Another change for Revlon is that it has become a cloud provider itself as we push our cloud out to suppliers and contractors. At the end of the day, we needed to rapidly collaborate with our eco system that is our community of vendors and suppliers, and enable them to interact with us easily where the bottom line is to drive growth for Revlon.” Govern It is crucial to build governance in to the execution of the Business and subsequently the IT Strategy. COBIT 5 helps IT leaders provide a business view of IT’s ability to create value and support enterprise goals through effective IT processes and build process capability and can be used to: Develop process improvement, Deliver value to the business, Measure the achievement of current or projected business goals, Benchmark and deliver consistent reporting, and ensure organisational compliance. Shift focus from customers to non-customers Salesforce.com have over the last year demonstrated the ability to shift focus from the traditional customer (that in most cases had no desire to implement the “hosted provider solution” as it would significantly reduce the dependency on legacy applications that stakeholders and a significant number of employees had build their career on). A recent acquisition by the business management at France’s major airline permitted a major improvement to the business both from a capability and performance perspective to a fraction of the cost, and provided the IT department with 600 resources to perform other tasks. The IT department will have to rapidly shift their business model from “reward and remuneration in concordance to how many people that I manage” to a model related to the value delivered to the business with a Focus on the Business Bottom Line that is: How fast can we get our products and services to market “Time to Market” &  
  • 18. Copyright 2013 Martin Palmgren EVP .COMMUNICATE on the big picture, reach beyond existing demand and get the strategic sequence right. These four formulation principles address how an organisation can create blue oceans as we look across the six conventional boundaries of competition (Six Paths Framework), reduce planning risk by following the four steps of visualizing strategy, create new demand as we unlock the three tiers of noncustomers and launch a commercially-viable blue ocean idea as we align unprecedented utility of an offer with strategic price and target cost and by overcoming adoption hurdles. “Blue Ocean Strategy” looks across industries to demonstrate how to break out of traditional competitive (structuralist) strategic thinking and to grow demand and profits for the company and the industry as we use blue ocean (reconstructionist) strategic thinking. The third and final part describes the two key implementation principles of blue ocean strategy that would include tipping point leadership and fair process, essential for leaders to overcome the four key organisational hurdles that can prevent even the best strategies from being executed. The four key hurdles comprise the cognitive, resource, motivational and political hurdles that prevent people involved in strategy execution to understand the need to break from status quo, find the resources to implement the new strategic shift, keep your people committed to implementing the new strategy, and from overcome the powerful vested interests that may block the change. In the book the authors draw the attention of their readers towards the correlation of success stories across industries and the formulation of strategies that provide a solid base create unconventional success – a strategy termed as “Blue Ocean Strategy”. Unlike the “Red Ocean Strategy”, the conventional approach to business to beat competition derived from the military organisation, the “Blue Ocean Strategy” tries to align innovation with utility, price and cost positions. The book questions the phenomena of conventional choice between product / service differentiation and lower cost, but rather suggests that both differentiation and lower cost are achievable simultaneously. The authors ask “What is the best unit of analysis of profitable growth? Company? Industry?” – a fundamental question without which any strategy for profitable growth is not worthwhile. The authors justify with original and practical ideas that neither the company nor the industry is the best unit of analysis of profitable growth; rather it is the strategic move that creates “Blue Ocean” and sustained high performance. The book examines the experience of companies in areas as diverse as watches, wine, cement, computers, automobiles, textiles, coffee makers, airlines, retailers, and even the circus, to answer this fundamental question and builds upon the argument about “Value Innovation” being the cornerstone of a blue ocean strategy. Value Innovation is necessarily the alignment of innovation with utility, price and cost positions. This creates uncontested market space and makes competition irrelevant. Business Model Generation by Alex Osterwalder & Yves Pigneur also provides models based on the concepts brought forward by blue ocean strategy.  
  • 19. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Phase 1. - To support business processes and enhance the customer experience we: (this is where we tie back to the IDEO project journey): Step 1 - Observe: (Context A) A vendor of a process modelisation tool manages to convince the business or IT executive team that to provide a modelised version of business and IT processes was business critical and would demonstrate that the IT Strategy is business centric and that the IT department understands the Business, Business objectives and the Business strategy. (Context B) A business or IT internal client wants to industrialise a process or a bundle of services with IT. We decided to use the same consultants as for the six sigma initiative (below) to capture business processes. The problem is that the business people are to busy to do their job (and might not be able to formalise their processes). And if their work is automatised we might chuck their work out on the cloud or an outsourced provider as well (the last time they spoke to a consultant their colleague was fired (sorry made redundant, sorry given the opportunity to seek new challenges))? Obviously they do not get it. Step 2 - Synthesize: (Context A) The captured processes are modelised in a process modelisation tool and will sit in a cuppord. (Context B) The captured processes (in the case of the industrialisation effort) delivered by the somewhat reluctant users are translated by a business analyst in to user requirements. These are then transferred to managment for verification. The 300 pages document sit on a disk somewhere for 3 weeks to 3 months before it is shipped of for programming. Step 3 - Generate Ideas: The user requirements are programmed. Step 4 - Refine: The end user team is brought in 18 months after to validate the application. Hmm they might not have gotten it either. At least we avoided a fist fight… Step 5 - Implement: The project sponsor refuses to sign off the project budget because the coulour of beige of the application is not right. We and they know that this is due to the fact that the modelisation did not correspond to the needs of the client in the first place and certainly not 18 or 36 months down the road (not to mention thousands of man hours). Phase 2. - Solve the problem: We realise that the customer experience and the services delivered by IT does not work / might not be perceived to be effective and the green light red light charts that we produce to demonstrate that we are able to keep the lights on during critical periods of the run performs the effect that we thought it would. Best case scenario: We convince the executive team to leverage social media and post the business strategy via facebook and twitter for the IT personnel to appreciate it in a crisp 140 characters format. Next best case scenario: Walk your dead dog. This scenario would typically implicate a subject matter expert that would come in for an hour or 2 compare the  
  • 20. Copyright 2013 Martin Palmgren EVP .COMMUNICATE looked smashing but we did not have the time so we put it (burried it) in a drawer for a moment where we would have more time on our hands. Worst case scenario: We read this really good article by the guy who used to be the top hen for IT for the US government that decided to chuck IT out to the cloud not to have to run an IT department and IT resources (By the way I wonder why he stayed for such a short time before he went on to evangelise the cloud for salesforce). I wonder if we can chuck the IT department out to the cloud. Then the cloud provider could deal with users that are not happy. I wonder if the cost cutting genious that we brought in last year is available. On his recommendation we consitently cut the cost of IT for the (mobile) sales force. At the end of the day as they did not have an office or a fix computer why should they need a lap top? Not to forget that we made substantial economies on software licenses and storage space. Phase 4. - Set direction: We have the impression that we might not be on top of things and should add a bit of governance. The Internal audit department confirmed this impression as they confirmed that we clearly lacked focus due to the absence of an IT Dashboard. Best case scenario: As we where quite happy with the Big Change report , the first page does after all look smashing, and the weight of the paper makes my table more stable. We decide to once more bring in our favourite consultants. At the end of the day if the six sigma task force initiative had a few bumps it was not due to the fact that the principles that where implemented where directly applied from the Toyota production chain (they are after all very good at car construction) but certainly due to the fact that the users did not get it. Even though the delivery cycle now takes 180 days compared to 30 before at least it is measured and we can bench cost to competition. Now to the point, as the audit team requires an IT dash board we asked our consultants to deliver one that looks smashing and the audit team is satisfied. The best part is that we now feel that we have effective governance in place and that they did not have to bother neither the IT executive team nor the business or the IT team. Worst case scenario: We had a meeting with the business consultant that convinced us that for IT to demonstrate that we support the business we should modelise all 15 00 business processes (I wonder why executive management put an end to this effort ?) This time we will demonstrate how we execute the IT strategy to the business strategy as we will implement a full audit framework! The execution of the defined business strategy is often a mystery (missing link) both on the Business and the IT side. The truth is that regardless of how well the executive team draws out the strategy in the boardroom the bottom line is that the business initiatives that were supported by clients succeeds, those not supported by clients (that do not get it) fail and disappear. The CIO and IT department needs to support the run of the current business  
  • 21. Copyright 2013 Martin Palmgren EVP .COMMUNICATE recognized around the world, the Burberry brand should have had many advantages. But as I watched my top managers arrive for our first strategic planning meeting, something struck me right away. They had flown in from around the world to classic British weather, gray and damp, but not one of these more than 60 people was wearing a Burberry trench coat. I doubt that many of them even owned one. If our top people weren’t buying our products, despite the great discount they could get, how could we expect customers to pay full price for them?” Read the full article @ http://hbr.org/2013/01/burberrys-ceo-on-turning-an-aging-british-icon-into-a-global-luxury-brand/ar/1     Burburry have taken the a lead in the how to leverage business innovation with IT, notably with social as a key enabler through a “Facebook” driven platform that drives innovation bottom up where employess connect to share best practise on how to set up stores and sell products and even compete internally on a daily basis who sold more in “discussion groups” set up by the teams not by management. I would invite you to discover an interview @ http://blogs.hbr.org/video/2012/12/how-burberry-manages-talent.html?cm_mmc=email-_-newsletter-_cant_miss_update-_-hbrcm020813&referral=01087&utm_source=newsletter_cant_miss_update&utm_medium=email&utm_campaign=hbrcm020813 To support business strategy execution The execution of the defined business strategy is often a mystery (missing link) both on the Business and the IT side. The truth is that regardless of how well the executive team draws out the strategy in the boardroom the bottom line is that the business initiatives that were supported by clients succeeds, those not supported by clients (that do not get it) fail and disappear. The CIO and IT department hence needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. 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. Figure 1: We articulate the Value proposition with a storyboard: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/we-articulate-the-value-proposition-witha-storyboard/ IT contributes to business objectives  
  • 22. Copyright 2013 Martin Palmgren EVP .COMMUNICATE processes: Speed, process innovation and growth, Executed by - Employees and organisation: Collaboration that deliver strategy execution. Strategy Canvas Articulated in a Strategy Canvas The Stakeholder Strategy Map Formalises stakeholder outcomes to deliver value for all parties. The strategy canvas allow the teams to articulate and formulate objectives on a project / program basis for improved execution with an extended GAP, risk and added value analysis captured in a DARCI (Decision taker, Accountable, Responsible, Consulted & Informed). A Collaboration Theme Scorecard The Collaboration Theme Scorecard Sets process objectives, Identifies: levers for joint actions and wins, metrics and initiatives on a short, middle & long term basis. Objectives: - Set process objectives,- Identify levers for joint actions and wins,Identify metrics, Identify initiatives on a short, middle and long term basis. Levers: Joint: Steering committee, development committee, project teams, crossfunctional teams, process improvement teams and functional improvement teams. To deliver Business Value with IT, we need to integrate the notion of effective IT delivery as a core process across the organisation. With the contribution of Jerry Luftman I have earlier referred to Michael Porter. In terms of Porter’s Value Chain (http://hbr.org/product/competitive-advantage-the-value-chain-and-your-p-l-applying-michael-porter-s-value-chain-framework-to-your-business/an/8890BC-PDF-ENG ), IT has to become a part of the core processes instead of being a separate support function. The role of the IT Department and the business stakeholders need to change to a strategic partnership, rather than service provider and internal customer. We need to view the IT portfolio as an integrated portfolio of enterprise services. Total Value of Ownership of IT (IT TVO) is a notion that is if not more at least as important as Return on Investment (ROI) and Total Cost of Ownership (TCO). Positive IT TVO could concern: - Greater customer satisfaction, - A more differentiated service offer, - Stronger customer relationship, - Increased ability to meet the needs of the business and clients, - Lower direct cost, - Better use of assets, Faster cycle time, - Increased accuracy, - Higher level of customisation or precision, Higher added value, - Simplified processes, - Higher customer retention, - Greater market share, - Ability to execute on set strategy and enter new markets. Priorities from an Executive Management Perspective: - The investment leverages the execution of the business strategy, - Enhance the value of the business, - Improve customer retention and increase the market share.  
  • 23. Copyright 2013 Martin Palmgren EVP .COMMUNICATE We deliver to the needs of the business and on target: IT and business management work together to identify and ensure the delivery of benefits. The relationship is essential to effectively support business objectives with IT (Business IT Alignment). The organisation moves from a pure cost center perspective to emphase value creation that is a profit center or investment center perspective. Managers evaluate and coordinate a portfolio of projects with an effective IT governance process. This would include for IT and business leaders to share accountability. This approach permit effective allocation of resources as we provide participants the opportunity to better understand the problems and opportunities that exist and how projects can be leveraged across the organisation to facilitate the integration of IT and support business objectives and processes and hence enhance the value of the business. As we leverage IT to: - Substantially reduce the cost of business processes, - Lower the costs of customers and suppliers, - Differentiate, - Develop new IT features to differentiate products and services, - Reduce the differentiation advantages of competitors, - Focus products and services at selected market niches, - Create new products and services that include IT components, - Develop unique new markets or market niches with the help of IT, - Make radical changes to business processes with IT that dramatically cut cost, improve quality, efficiency, or customer service and shorten time to market, - Manage regional and global business expansion, - Diversify and integrate into other products and services, - Create virtual organisations of business partners, - Develop inter enterprise information systems that support strategic business relationships with customers, suppliers, subcontractors, and other stakeholders. IT must be responsible for profit and loss from a business perspective By Daud Santosa (Chief Technology Officer, Member of the Board @ the Open Group and Distinguished Chief IT Open Group) “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. “Deliver Business Value with IT” has inspired me to approach the "how" differently, that is to think differently for the future development of IT services and the Enterprise (Business, IT) Architecture to support business processes, with IT processes (aggregated as services), applications and infrastructure.” IT must be responsible for profit and loss from a business perspective and be managed like a business. The fact is the technology will play a bigger role in order for business to thrive in the future. The level of implication of IT varies as it depends on the nature of the business. The more the business rely on technologies the more the business needs to include technology as a part of the business strategy. Further the IT Department and the (Enterprise) Architecture team must  
  • 24. Copyright 2013 Martin Palmgren EVP .COMMUNICATE but few have seen immediate result / business value with their EA program. A program must have both short and long term strategy in order to show immediate value to the business / LoBs. I also believe that the mentioned frameworks must change in the future in order to accommodate new emerging technologies and the need for business agility. We must be able provide business value in a short time frame. We need to focus on the area of the architecture that can provide short term business solutions and result. Many architecture practitioners face challenges of where to begin to implement EA to deliver immediate business results. We would typically start to implement EA in different domains of the architecture. It all depends on where the needs of the organisation, culture, and skill set resides. The common challenges that I have seen in most organisations would be that the: - Line of Business continues to develop new projects or add new features with the current existing business applications, IT organisation continues to replace old hardware and add new hardware / software to support new business requirements, has no standard technologies & IT governance, continues to adopt new emerging technologies. We begin our EA journey as we address the spelled out points on a short and long term basis. The primary focus of EA would be to support the future business and new projects first. Based on the drivers, we can begin to create future IT services, shared infrastructure, Enterprise Solution and new cost model to deliver sustainable growth and premier services as we focus on: The Business Bottom Line that is How fast we can get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. *A shared service centre has 2 objectives 1) to provide unique talent as we pool resources that can focus on core competency rather than to have multiple service delivery centres where resources would spend 1/ 25 of their time on a competency or be underused. 2) we increase service delivery quality and reduce the cost of delivery of a service. To do so we need to define services (activity + process + business oriented KPI’s) with cost. A decision to put in place a shared service centre can only be valid as we have a clear business case with ROI and total cost of ownership (cost, consumption, chargeback) and can follow up on the actual cost of service delivered and benchmark the latter to competition / the market. Chapter 3. "Do we really need a CIO and IT department to bother us with technology when we can use the cloud?" The CIO and the IT Department need to position as premium provider of IT services and focus on value to cost.  
  • 25. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Run - Aligned to described ITIL activities and processes and full IT Financial Management (supported by delivery capability IT CMF, COBIT 5). Once services defined we can then decide where to run the application that support the IT and or Business Services (server / internal / external cloud / outsourced provider). Within the frame of an acquisition up to 80% of the value realisation is (can be) on the IT side. The failure to address IT and the IT strategy can be an additional (1 out of 3) reason to M & A failure. If we assume that to deliver business value with IT we need to support business objectives, the integration of a new entity is an optimisation of the current IT strategy (how we support business objectives and processes). We would obviously need to understand (and hopefully have the opportunity) how the current IT run before the purchase (IT due diligence) with full IT Financial Management to figure out the actual cost of delivered IT services (cost, consumption, chargeback). Once services defined we can then decide where to run the applications that support the IT and or Business Service (server / internal / external cloud / outsourced provider). We also need to define the purpose of the purchase (invest / divest) in the overall corporate strategy where it is of little use and a significant cost to integrate all systems in to a common backbone if the company is to be divested only a few years later. We could use an IT Scorecard to ensure that stakeholder expectations are met from an executive management, business line management, IT management and IT risk management perspective. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated. See also: “Get your IT Service Strategy right” http://www.brighttalk.com/community/it-service-management/webcast/534/23630 “Leverage Strategy with IT” http://www.brighttalk.com/community/it-service-management/webcast/534/22934 “Run IT as a Service Business!” http://www.brighttalk.com/community/it-service-management/webcast/534/21389  
  • 26. Copyright 2013 Martin Palmgren EVP .COMMUNICATE and enterprises. The principle is to provide storage space and services (Infrastructure as a Service (Iaas), Platform as a Service PaaS, Software as a Service (SaaS) outside the firewall on which the enterprise can run applications (in an architecture as a bundle of services). The public cloud can be used to either leverage cost or to rapidly develop new application architectures that can then continue to run on a public cloud or be brought in house to a server or a bundle of servers (private cloud). Where the needs of the business and the business strategy should drive the IT Strategy, the IT Department can leverage the business strategy with an effective IT Service Strategy that would spell out how the roadmap for how the IT Department will cost effectively run the IT Function but also how to support the business function where the IT Department support the business functions to simplify processes that can then be industrialised (automatised) when needed and on the cloud (external or internal) for speed / cost effectiveness when applicable. “Social media and the cloud” - Social media applications can either be run as in example 1) by an external provider to whom you outsource the data (Facebook* would be one example) or as in example 2) where an application / a bundle of applications that respond to the needs of the business “for example to interact with our customers” would run on an external or internal cloud. “Make or buy” – To outsource / cloud source (cloud) is a traditional “make or buy decision”, that is “do we perform this well internally at benchmarked cost or do we outsource for success”. One of the critical decisions in apple’s current success was to outsource a manufacturing that was defunct (cost / quality) and did not meet the expectations of the final customers. But to outsource / cloud source effectively as well as to validate the successful set up of a shared service centre, we need to understand the cost of the service delivered before and after the set up function (the cost to change provider should be taken in to account in the business case). “Cost and Demand drivers” – With “to keep the lights on”, to optimise the cost of the services delivered is among the critical functions of the IT Department. Demand drivers are linked to the business emerging needs to support the execution of the business strategy with IT when needed. “An IT Business Model and Value Proposition” – To obtain funds in the business world an investor would require a good business case with a clear “Business Model” and “Value Proposition”. Our experience is that an IT department that does not have a clear “business model” defined as “This is how we deliver IT services to the business” and “Value Proposition” defined as “This is how we support business objectives with services in a time to market perspective” will continuously find it difficult to obtain sufficient funds from executive management and the board for the above mentioned reasons. “An IT service Strategy” – In order to effectively communicate with the business the IT department need to adopt the notion of services a bundle of applications to be run cost effectively and set up in a time to market logics in accordance to cost and  
  • 27. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - IT is not perceived to understand stakeholder expectations, IT is not perceived to contribute to business objectives, IT is not perceived to deliver value to cost, IT is not perceived to deliver services to business needs, The service is a commodity and cost is the primary driver - The IT department is unable to deliver in a time to market perspective This is why a shared services or outsourcing solution is put in place since it forces the business to define services and service level agreements (as well as cost, consumption, chargeback) with an IT Business Model that is if not optimised at least focused on immediate business priorities and drivers (demand and cost). Build and demonstrate IT success To build and demonstrate IT Success we need to focus on the Business IT roadmap; that is how do we (as CIO, IT Department) support business objectives and processes leveraged by IT and an effective IT Service strategy. Where we Focus on the Business Bottom Line: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. This is achieved as Business objectives and Processes (captured in the Business Architecture) are supported by a strategy execution focused IT architecture where Business objectives: We would like to increase sales by 25%, how can the IT Department support the Business in this effort and what will be the impact on the budget of the IT Department? , are supported by IT objectives: This would translate in to, on the business (IT) side: 1) which business processes are concerned with the increase and how do we support them today and how do we anticipate the increase (applications, infrastructure, support)? 2) Is there an opportunity to further industrialise processes (off the shelf applications, build)? 3) Supported by hardware (laptop, (i)pad, smart phone)? 4) Can we spell out the cost? On the IT side we need to understand 1) which services that are concerned (increase / decrease in demand) and if we need to modify / provide new service bundles, 2) do we provide a cost effective and secure IT architecture and that permit the rapid development of new business services 3) Business cases, that is can we spell out the cost? 4) can we ensure that services / applications are up and running (business continuity)…. Deliver effective IT services to business needs We Deliver effective IT services to business needs as we understand that At the end of the day Business Executives take the decision to out / cloud source when: IT is not perceived to understand stakeholder expectations, IT is not perceived to  
  • 28. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - What are my IT resources and what do they cost? - What services do I provide to the customer: - What do these services cost? - What was their intended value proposition? - What is the quality of the service delivery? - Who consumes the IT services: - What is the consumption on a per unit, - Per seat, basis, - How does customers currently pay for these services, - What is the backlog of new unfulfilled IT demands? - What processes does IT perform? : - How do these processes compare to best practices? - What are the cost drivers on an activity basis? IT Decision are based on Total cost of ownership As Customers pay for services that they use decisions are made based upon cost, not politics. IT is incented to reduce cost and compete and users do not request unnecessary demands. KPI’s become established to measure performance SLA are put in place. IT Decisions are ROI Based IT is effectively managed as we a Establish Baseline with Cost, Consumption, Chargeback. Build a service based business model of IT that is based on IT Service Management. Perform Business Case & Best Practise Bench Mark with GAP (As Is, To Be, ROI) and Track Realisation of ROI Outcomes. The IT Strategy is Effectively Leveraged As Initiatives are effective and stakeholder oriented we can perform effective: Mergers and Acquisitions (M&A) with Data room Development and Synergies & consolidation options, - Data Centre Migration with GAP (As Is, To Be, ROI), - IT Organisational Transformation Towards a Service Based Logic with GAP (As Is, To Be, ROI), - Shared Service Centres, Outsource, Cloud & Benchmark with GAP (As Is, To Be, ROI).  
  • 29. Copyright 2013 Martin Palmgren EVP .COMMUNICATE architecture and development standards, Define strategic vendors for IT components, Establish IT governance organisation and processes, Build strategic plan to support business objectives, Develop and Manage IT Customer Relationships, Manage Business Resiliency and Risk, Manage Enterprise Information, Develop and Manage Information Technology Solutions, Deploy Information, Technology Solutions, Deliver and Support Information Technology Services, Manage IT Knowledge. Cycle Time (Key Performance Indicators): - Time in months to break even for new or enhanced IT services (Investment < €100,000), - Time in months to break even for new or enhanced IT services (Investment b/w €100,000 and €250,000), - Time in months to break even for new or enhanced IT services (Investment b/w €250,000 and €500,000), - Time in months to break even for new or enhanced IT services (Investment b/w €500,000 and €1,000,000), - Time in months to market for new or enhanced IT services (Investment < €100,000), - Time in months to market for new or enhanced IT services (Investment b/w €100,000 and €250,000), - Time in months to market for new or enhanced IT services (Investment b/w €250,000 and €500,000), - Time in months to market for new or enhanced IT services (Investment b/w €500,000 and €1,000,000), - Time in months to respond to major business shifts, - Time in weeks to complete projects that address an identified business exposure or opportunity (< 20% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (20-40% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (4060% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (60-80% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (More than 80% of total annual revenue), - Time in weeks to close an identified IT skill or capability gap, - Average time in weeks to fulfill a simple information need, - Average time in weeks to fulfill a medium information need, Average time in weeks to fulfill a complex information need, - Average time in weeks to create the enterprise information management strategic plan, - Time in weeks to report on compliance status of the information architecture, - Average time in weeks to set up a simple technical interface for a user of a defined data content source. Cost Effectiveness (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  
  • 30. Copyright 2013 Martin Palmgren EVP .COMMUNICATE applications, - User satisfaction, - Index of user friendliness of applications, - Index of user satisfaction Process Management. Operational Excellence (Key Performance Indicators): - Efficient software development, - Average days late in delivering software, Average unexpected budget increase, - Percentage of projects performed within SLA, - Percentage of maintenance activities, - Efficient computer operations, - Percentage unavailability of network, - Response times per category of users, - Percentage of jobs done within time, - Efficient help desk function, - Average answer time of help desk, Percentage of questions answered within time. Future Orientation (Key Performance Indicators): - Training and education of staff, - Number of educational days per person, Education budget as a % of total IT budget, - Expertise of the IT staff, - Number of years of IT experience per staff member, - Age pyramid of the IT staff, - Research into emerging technologies, - % of budget spent on IT research General Business Management. To support the business Strategy Set Business processes and key performance indicators (Build): Develop vision and strategy, Develop and manage products and services, Market and sell products and services, Deliver products and services, Manage customer services, Develop and manage Human Capital, Manage information technology, Manage financial resources, Acquire, construct and manage property, Manage environmental health and safety, Manage external relationships, Manage knowledge, improvement and change. Figure 3: Connect information: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/connect-information/ Connect information to take qualified decisions We Connect information to take qualified decisions as Financial, Budget and Actuals, Projects, Contracts, Business Cases, Resource Allocation, IT Assets, IT Services, IT Metrics, Chargeback, Business goal Alignment information is structured in an IT Financial Management Model that can be used to support the prices set in the Business and IT service catalogue.  
  • 31. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Develop and manage products and services, Market and sell products and services, Deliver products and services, Manage customer services, Develop and manage Human Capital, Manage information technology, Manage financial resources, Acquire, construct and manage property, Manage environmental health and safety, Manage external relationships, Manage knowledge, improvement and change). Figure 6: The roadmap reflects stakeholder expectations: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-roadmap-reflects-stakeholderexpectations/ A Roadmap The Roadmap (derived from the logics presented in “Managing Alliances with the Balanced Scorecard”, by Kaplan, Norton, Rugelsjoen, Harvard Business Review, January–February 2010, p. 114 – 120) http://hbr.org/2010/01/managing-alliances-with-the-balanced-scorecard/ar/1 reflects stakeholder expectations from an Executive Management, Business Unit Management, IT Management and IT Risk Management perspective where: Stakeholder Expectations Drives Business (IT) Objectives that Delivers the Business (IT) Road Map executed by Employees & Organisation. Figure 7: The Service Strategy support Business Drivers: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-service-strategy-support-businessdrivers/ The Service Strategy support Business Drivers as Business (IT) Drivers Drives Demand and Cost Drivers and Delivers the (IT) Service Strategy that is Executed towards Metrics. IT provides competitive leverage. Priorities from an Executive Management Perspective: IT supports the achievement of strategic business objectives, IT Delivers value to expenditure, IT cost is managed effectively, IT risk is identified and managed, Targeted inter company IT synergies deliver to schedule, We have a clear vision towards which we expect the IT department to deliver. IT delivers to demand and cost drivers. Priorities from a Business Unit Management Perspective: IT supports the achievement of tactical business objectives, IT delivers perceived added value services and at a reasonable cost, IT delivers to operational and service level agreements (commitments), IT investments positively affect business productivity and the customer experience, We have a clear process vision to which we expect the IT department to deliver. The IT Strategy support Business objectives as we meet Priorities from an IT Management Perspective: We understand stakeholder expectations and propose a service portfolio that correspond to both Demand and Cost drivers with a focus on  
  • 32. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Manage customer services: - Develop customer care/customer service strategy, Plan and manage customer service operations, - Measure and evaluate customer service operations Develop and manage Human Capital: - Develop and manage human resources (HR) planning policies, and strategies, - Recruit, source, and select employees, Develop and counsel employees, - Reward and retain employees, - Redeploy and retire employees, - Manage employee information Manage information technology: - Manage the Business of Information Technology, - Develop and Manage IT Customer Relationships, - Manage Business Resiliency and Risk, - Manage Enterprise Information, - Develop and Manage Information Technology Solutions, - Deploy Information Technology Solutions, Deliver and Support Information Technology Services, - Manage IT Knowledge Manage financial resources: - Perform planning and management accounting, Perform revenue accounting, - Perform general accounting and reporting, - Manage fixed-asset project accounting, - Process payroll, - Process accounts payable and expense reimbursements, - Manage treasury operations, - Manage internal controls, Manage taxes, - Manage international funds/consolidation Acquire, construct and manage property: - Design and construct/acquire nonproductive assets, - Maintain nonproductive assets, - Obtain, install, and plan maintenance for productive assets, - Dispose of productive and nonproductive assets, - Manage physical risk Manage environmental health and safety: - Determine environmental health and safety impacts, - Develop and execute environmental health and safety program, Train and educate employees, - Monitor and manage environmental health and safety management program, - Ensure compliance with regulations, - Manage remediation efforts Manage external relationships: - Build investor relationships, - Manage government and industry relationships, - Manage relations with board of directors, - Manage legal and ethical issues, - Manage public relations program Manage knowledge, improvement and change: - Create and manage organisational performance strategy, - Benchmark performance, - Develop enterprise-wide knowledge management (KM) capability, Manage change Run the IT Business effectively To run the IT business effectively and leverage the execution of the business Strategy and objectives with IT we need to make educated investments (on paper compliance and KPI indications is nice to have but not enough!): 100% of the value impact is in the execution of the process of the supported services over the entire service life cycle “order to bill”.  
  • 33. Copyright 2013 Martin Palmgren EVP .COMMUNICATE supported by internationally recognised standards such as ITIL and COBIT 5 IT Financial management is yet to be broadly applied and standardised. Chapter 4. IT support business objectives and processes We align to Business Objectives and Business Processes the latter are Defined in the Business Service Catalogue, Requirements Information with IT Objectives and IT Processes are Defined in the IT Service Catalogue and supported by ITILv2 & 3 workflows. These are then Broken down in to Key Activities Performed to Responsibility and Accountability Charts (RACI). The logics in chapter 4 clearly links back to CobIT 4.1, ValIT, RiskIT. They are then Measured by Performance indicators (Embedded in Service Catalogue per Service), Outcome Measures, Maturity Models (CMMI, ITIL continuous process improvement) Audited with Control Outcome tests Derived from Control Objectives Audited with Control Design Test Implemented with Control Practices. IT support business objectives and processes with Investment Management We align and lever operating, management and support processes through the effective implementation of IT. Do we do the right things? The strategic question: The investment Is in line with our vision, Is consistent with our business principles, Contributes to our strategic objectives, Provides optimal value, at affordable cost, at an acceptable level of risk. Do we reap the benefits? The value question: We have A clear and shared understanding of the expected benefits, Clear accountability for realising the benefits, Relevant metrics, An effective benefits realisation process over the full economic life cycle of the investment. Process Management We align and lever operating, management and support processes through the effective implementation of IT. Do we perform them in the right manner? The architecture question: The investment: Is in line with our architecture, Is consistent with our architectural principles, Contributes to the population of our architecture.  
  • 34. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Translate the Business Vision to an IT Vision: Vision of IT “to be state”: “where we need to go”, “where we are now” & “how we need to proceed”, Regulatory requirements, Technology guiding principles, IT Governance guiding principles (process & organise decisions). Figure 14: Set the IT Value Proposition Baseline: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/set-the-it-value-proposition-baseline/ Set the IT Value Proposition Baseline: Set fundamentals of a service business, Process view, Establish Total Cost of Ownership and IT baseline with cost/value/risk, Activity based financial view, Service portfolio view, Value contribution view, Customer consumption view. Figure 15: Draw the Roadmap: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/draw-the-roadmap/ Draw the Roadmap: Construct the IT Business Model and Value Proposition, Define IT “to be state”: “where we need to go”, “where we are now” & “how we need to proceed” with established KPI’s, Report gap analysis findings, Design IT plan through a project portfolio, Cost out the plan (budget), Develop consensus, business case for change. Figure 16: Design the IT Value Proposition: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/design-the-it-value-proposition/ Design the IT Value Proposition: Design the service strategy, Articulate governance principles, Define project teams, Engage customer ‘buy in’, Design KPI’s, Define & validate service pricing, Design the performance measurement system. Figure 17: Build the IT Value Proposition: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/build-the-it-value-proposition/ Build the IT Value Proposition: Implement the project portfolio, Engage Organisational change, Control IT (measure outcome to set objectives), Capture KPI’s & Measure performance, Enforce governance.  
  • 35. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Execution There is a understanding of the: Clarity of the IT Strategy roll out, Extent to which the IT Strategy responds to industry and competitive environment, Extent to which the IT Strategy responds to internal capabilities, Extent to which Critical Success Factors are clearly identified, the Clarity of implementation plan. Objectives and Plans There is a understanding of the: Extent to which long term plans are coherent and logical, Extent to which short term plans are appropriately costed and timetabled and the Consistency with overall goals and objectives. Financial plans Appropriateness of detail, Clarity with which assumptions have been stated, Extent to which profit / return criteria has been evaluated, Evidence of appropriate scenario and sensitivity analysis, Evidence of appropriate key performance indicators. Communication and buy in There is an understanding of the Extent to which the strategy has been communicated and the Extent to which staff performance towards the business IT strategy is recognised. Meet stakeholder expectations There is an understanding of the Suitability of the IT strategy, Feasibility of the IT strategy and the Acceptability of the IT strategy. Deliver IT services to business needs We understand that At the end of the day Business Executives take the decision to out / cloud source when: IT is not perceived to understand stakeholder expectations, IT is not perceived to contribute to business objectives, IT is not perceived to deliver value to cost, IT is not perceived to deliver services to business needs, The IT department is unable to deliver services in a time to market perspective, IT propose an effective service portfolio that correspond to Demand and Cost drivers.  
  • 36. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Captured in a Strategy Map that Formalises stakeholder outcomes to deliver value. The Stakeholder Strategy Roadmap set the scope with Objectives: - Formalise stakeholder outcomes: To deliver value for all parties (partnership), Which drives Customer value: For effective and satisfied end users, That deliver - Business processes: Speed, process innovation and growth, Executed by - Employees and organisation: Collaboration that deliver strategy execution. Strategy Canvas Articulated in a Strategy Canvas The Stakeholder Strategy Map Formalises stakeholder outcomes to deliver value for all parties. The strategy canvas allow the teams to articulate and formulate objectives on a project / program basis for improved execution with an extended GAP, risk and added value analysis captured in a DARCI (Decision taker, Accountable, Responsible, Consulted & Informed). A Collaboration Theme Scorecard The Collaboration Theme Scorecard Sets process objectives, Identifies: levers for joint actions and wins, metrics and initiatives on a short, middle & long term basis. Objectives: - Set process objectives,- Identify levers for joint actions and wins,Identify metrics, Identify initiatives on a short, middle and long term basis. Levers: Joint: Steering committee, development committee, project teams, crossfunctional teams, process improvement teams and functional improvement teams. To leverage business strategy execution with IT 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  
  • 37. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - Has the P&L opportunity and threat from IT been quantified by business unit and by market? - Will our current plans fully capture the opportunity and neutralize the threat? - What is the time horizon of these plans, and have they been factored into future financial projections for both business and IT? 4. Is our portfolio of technology investments aligned with opportunities and threats? Questions to ask: - How well is our IT-investment portfolio aligned with business value with regard to opportunities and threats? - How well does the portfolio balance short-term and long-term needs? - Do we have effective value-assurance processes in place to mitigate execution risk? 5. How will IT improve our operational and strategic agility? Questions to ask: - How does our business and IT agility measure up with that of our competitors? - How do our IT plans increase our business and IT agility? - Are our sourcing relationships increasing or reducing our agility? 6. Do we have the capabilities required to deliver value from IT? Questions to ask: - Do we have the capabilities needed to drive full value from our existing IT systems? - What are the weakest links in our capabilities? - Do we have enough IT-literate executives? - What is our plan for upgrading capabilities? 7. Who is accountable for IT and how do we hold them to account?  
  • 38. 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. 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  
  • 39. Copyright 2013 Martin Palmgren EVP .COMMUNICATE http://www.brighttalk.com/community/it-service-management/webcast/534/21892 How to get your Cloud Strategy Right! Cloud computing (cloud sourcing) is now a part of the IT strategy landscape and an understanding of how to leverage the "cloud" will become prerequisite for decision makers both on the IT and the business side. We will provide the necessary tools to draw an IT strategy leveraged by the cloud to: - Establish an appropriate Cloud sourcing strategy, - Identify capabilities that could be cloud sourced, - Develop appropriate approaches for cloud sourcing activities, - Manage risks throughout their cloud sourcing activities, - Identify, select and negotiate with service providers, - Conduct service provider governance and performance management, - Manage relationships with service providers. We Cloud Source to: Meet Demand and Cost drivers, Focus on “Time to market”, Cost effectiveness and Cycle Time, Provide an optimised Sourcing Strategy and Leverage Business Strategy execution. Peer see competitive advantage of the cloud? Is there a peer see competitive advantage in the adaptation of the cloud? In a recent conversation with a CIO the obvious question of the peer see competitive advantage in the adaptation of the cloud was raised. The cloud (external cloud defined as owned / leased (SAAS) applications, bundled in to services with an underlying architecture, that run on a server provided by an external provider that run outside the firewall) are either driven by cost effectiveness (cost) or the need to set up services rapidly (demand) and cost effectively that can then run on the external cloud or be brought inside the firewall to an internal cloud. The competitive advantage of the external cloud lays above all with 1) the corporate teams ability to negotiate effective contracts (volume, peak, exit) where total cost of ownership (TCO) should be clearly visible with the possibility to renegotiate contracts as prices fall over time, 2) the IT departments ability to provide effective IT services to their internal clients. In order to back up the investment we need to provide a business case with TCO of the current run as well as future build and run. This would also be valid for outsourcing and shared service centre initiatives. If the decision to move to the external cloud is not backed by a clear business case (BC) with TCO for the existing run future cloud solution that would include cost of exit you might want to ask a few more questions before you move ahead. Meet Demand and Cost drivers  
  • 40. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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. “Public” versus “Private” cloud Within the current Cloud Business Model we would find 1) hosted applications contracted to run data (salesforce.com, gmail) provided by an external application provider, 2) the external (Public) cloud (servers provided by a cloud provider outside the firewall) and 3) the internal (Private) cloud (servers provided inside the firewall). We have over the last 12 months seen 2 trends for cloud deployment 1) cost (optimisation) confirmed with Total Cost of Ownership (TCO), 2) demand (to deliver to new business needs to which we are not able to cater within the existing perimeter). To meet business needs as they emerge, we can identify a hosted application provider to cater to the identified demand where salesforce.com, box.net among others would be examples that could rapidly enhance the IT Value Proposition. The creation of an external cloud (applications bundled in to services with an underlying architecture) where the needs of the client can be modelled and stabilised permit to rapidly meet “go to market” constraints. These can then be brought to an internal cloud if desired (NASA first started to use the external cloud to model emerging demand for the Mars mission, that was later brought on to an internal cloud). This is particularly true for businesses that do not have the necessary resources to build services. In this case a “Business Solution Network” of cloud providers or “a consortium of business partners” could modelise, formalise and provide services in direct relationship to the business that would sit on an external cloud. Business Drivers  
  • 41. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Develop vision and strategy: - Define the business concept and long-term vision, Develop business strategy, - Manage strategic initiatives, Develop and manage products and services: - Manage product and service portfolio, Develop products and services, Market and sell products and services: - Understand markets, customers, and capabilities,- Develop marketing strategy, - Develop sales strategy, - Develop and manage marketing plans, - Develop and manage sales plans, Deliver products and services: - Plan for and acquire necessary resources (Supply Chain Planning), - Procure materials and services, - Produce/Manufacture/Deliver product, - Deliver service to customer, - Manage logistics and warehousing Manage customer services: - Develop customer care/customer service strategy, Plan and manage customer service operations, - Measure and evaluate customer service operations Develop and manage Human Capital: - Develop and manage human resources (HR) planning policies, and strategies, - Recruit, source, and select employees, Develop and counsel employees, - Reward and retain employees, - Redeploy and retire employees, - Manage employee information Manage information technology: - Manage the Business of Information Technology, - Develop and Manage IT Customer Relationships, - Manage Business Resiliency and Risk, - Manage Enterprise Information, - Develop and Manage Information Technology Solutions, - Deploy Information Technology Solutions, Deliver and Support Information Technology Services, - Manage IT Knowledge Manage financial resources: - Perform planning and management accounting, Perform revenue accounting, - Perform general accounting and reporting, - Manage fixed-asset project accounting, - Process payroll, - Process accounts payable and expense reimbursements, - Manage treasury operations, - Manage internal controls, Manage taxes, - Manage international funds/consolidation Acquire, construct and manage property: - Design and construct/acquire nonproductive assets, - Maintain nonproductive assets, - Obtain, install, and plan maintenance for productive assets, - Dispose of productive and nonproductive assets, - Manage physical risk Manage environmental health and safety: - Determine environmental health and safety impacts, - Develop and execute environmental health and safety program, Train and educate employees, - Monitor and manage environmental health and safety management program, - Ensure compliance with regulations, - Manage remediation efforts Manage external relationships: - Build investor relationships, - Manage government and industry relationships, - Manage relations with board of directors, - Manage legal and ethical issues, - Manage public relations program  
  • 42. Copyright 2013 Martin Palmgren EVP .COMMUNICATE The higher up the cloud stack you go (IaaS->PaaS->SaaS->BPO), the greater the value delivery possible, but also the higher lock-in potential. Software as a Service (SaaS) Software as a service sometimes referred to as "on-demand software", is a software delivery model in which software and associated data are centrally hosted on the cloud (Internal, External). Do we buy or do we lease (Investment or operational expenditure)? Platform as a Service (PaaS) In the PaaS model, cloud providers deliver a computing platform that would typically include operating system, programming language execution environment, database, and web server. Application developers can develop and run their software solutions on a cloud platform without the cost and complexity to buy and manage the underlying hardware and software layers. With some PaaS offers, the underlying computer and storage resources scale automatically to match application demand such that cloud user does not have to allocate resources manually. Infrastructure as a Service (IaaS) In this most basic cloud service model, cloud providers offer computers, as physical or more often as virtual machines Private (Internal) 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. Hosted Applications We leverage Hosted Applications, as the application is contracted and sit on a provider internal /external Cloud with the application provider (Gmail, Google Apps for Business, Google + Salesforce.com, dropbox). The provider performs some form of services (infrastructure, security, maintenance, upgrades, helpdesk) but there is no business process execution. Transversal Cloud Perspective Internal (Private) Cloud  
  • 43. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - 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 Cloud Model you need to perform an in depth analysis of business needs to understand Total Cost of Ownership with Cost, Consumption and Chargeback. IT Cost is spelled out - What are my IT assets and what do they cost? - What are my IT resources and what do they cost? - What services do I provide to the customer: - What do these services cost? - What was their intended value proposition? - What is the quality of the service delivery? - Who consumes the IT services: - What is the consumption on a per unit, - per seat, basis, - How does customers currently pay for these services? - What is the backlog of new unfulfilled IT demands? - What processes does IT perform: - How do these processes compare to best practices? - What are the cost drivers on an activity basis? IT Decision are based on Total cost of ownership As Customers pay for services that they use decisions are made based upon cost, not politics. IT is incented to reduce cost and compete and users do not request unnecessary demands. KPI’s become established to measure performance SLA are put in place IT Decisions are ROI Based IT is effectively managed as we a Establish Baseline with Cost, Consumption and Chargeback. Build a service based business model of IT that is based on IT Service Management. Perform Business Case & Best Practise Bench Mark with GAP (As Is, To Be, ROI) and Track Realisation of ROI Outcomes. The IT Strategy is Effectively Leveraged As Initiatives are effective and stakeholder oriented we can perform effective: Mergers and Acquisitions (M&A) with Data room Development and Synergies & consolidation options, - Data Centre Migration with GAP (As Is, To Be, ROI), - IT  
  • 44. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 The best outsourcing agreement is not necessarily the one with the lowest price. In fact, successful outsourcing contracts are those that strike a balance and focus on the primary goal of meeting business needs on day one and throughout the life of the contract. Five guidelines to help companies align their outsourcing agreements with internal strategies and requirements: 1. Contract Terms – It is important for you to fully understand the terms and conditions you will live with for many years to come. Governance, delivery locations, and clear termination language are critical pieces of a successful outsourcing agreement. 2. Statement of Work (SOW) – SOWs should clearly define the roles and responsibilities of the provider as well as the client side. We recommends organizing the SOW into market-based towers, such as Server Management, Contact Center Management, Applications Development, etc. which results in easier ‘apples to apples’ comparisons of competing providers. Setting up the SOW this way also makes it much easier to benchmark the price of services periodically over the term of the contract. 3. Service Levels – It is imperative to have a Service Level Agreement (SLA), set up so that the provider will provide you with significant service level credits in the event  
  • 45. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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, Software as a Service (SaaS) outside the firewall on which the enterprise can run applications (in an architecture as a bundle of services). The public cloud can be used to either leverage cost or to rapidly develop new application architectures that can then continue to run on a public cloud or be brought in house to a server or a bundle of servers (private cloud). Where the needs of the business and the business strategy should drive the IT Strategy, the IT Department can leverage the business strategy with an effective IT Service Strategy that would spell out how the roadmap for how the IT Department will cost effectively run the IT Function but also how to support the business function where the IT Department support the business functions to simplify processes that can then be industrialised (automatised) when needed and on the cloud (external or internal) for speed / cost effectiveness when applicable. “Social media and the cloud” - Social media applications can either be run as in example 1) by an external provider to whom you outsource the data (Facebook* would be one example) or as in example 2) where an application / a bundle of applications that respond to the needs of the business “for example to interact with our customers” would run on an external or internal cloud. “Make or buy” – To outsource / cloud source (cloud) is a traditional “make or buy decisions”, that is “do we perform this well internally at benchmarked cost or do we outsource for success”. One of the critical decisions in apple’s current success was to outsource a manufacturing that was defunct (cost / quality) and did not meet the expectations of the final customers. But to outsource / cloud source effectively as well  
  • 46. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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). “How do we leverage Business Strategy execution with IT?” To leverage the execution of the Business Strategy with IT to set business objectives we drive standardised business processes end-to-end and build effective governance (both on the IT and Business Side), provide greater flexibility to scale global operations, improved access to IT support functions and drive out immediate operating cost! We need to do this with full picture, full granular service and item costing with comprehensive financial accounting that would include services delivered by internal, shared service centers as well as outsourced and cloud  
  • 47. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Stakeholder Expectations Drive Business (IT) Objectives that are delivered by the Business (IT) Road map that is Executed by Employees & Organisation. Business (IT) Drivers Drive Demand and Cost Drivers that deliver the IT Service Strategy that is executed to set Metrics. As we capture the IT Service Strategy we ensure the effective roll out of the IT Roadmap and Service Strategy with Expectations and Drivers. Stakeholder (IT) priorities: IT provides competitive leverage: From an Executive Management Perspective it is important to understand that: – – – – – – IT supports the achievement of strategic business objectives, IT Delivers value to expenditure, IT cost is managed effectively, IT risk is identified and managed, Targeted inter company IT synergies deliver to schedule, We have a clear vision towards which we expect the IT department to deliver. IT delivers to demand and cost drivers: From a Business Unit Management Perspective it is important to understand that: – – – – – IT supports the achievement of tactical business objectives, IT delivers perceived added value services and at a reasonable cost, IT delivers to service level agreements (commitments), IT investments positively affect business productivity and the customer experience, We have a clear process vision towards which we expect the IT department to deliver. Business Objectives are reflected in the IT Strategy roadmap: 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 the set strategy. Business Continuity is ensured: From an IT Risk Management Perspective it is important to understand that: – – – – The organisation’s assets and operations are protected, Key business and technology risk is effectively managed, Effective process, practice and controls are in place, We have clear security objectives to which we expect IT to deliver. “Time to Market”, business drivers, cost effectiveness & cycle time: As the business focus on “Time to Market” it is imperative for IT to support business drivers  
  • 48. Copyright 2013 Martin Palmgren EVP .COMMUNICATE based costing related to IT projects. With the introduction of COBIT 5 the notion of IT Service Delivery and the use of IT Service Management will become a standard exercise beyond helpdesk, problem and change management. 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 CIO’s and CFO’s understand a well conceived 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 under consume services due to a non effective cost allocation model other heavy users tend to over consume 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 CIO and the CFO to deliver to a coherent financial model based on effective consumption that 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. “Do we deliver IT Services effectively and how can we leverage the cloud?” For the IT Department to become a full fledged business partner with the means (and the ends) to deliver to the business strategy together with operations (business lines) we need to introduce Total Cost of Ownership (TCO) with Cost, Consumption and Chargeback as point of departure (to ensure the necessary means and ends). We also need to define a clear “IT Business Model” (“This is how we deliver IT services to the business”) defined in the IT Service Catalogue and “Business (IT) Value proposition” (“This is how we support business objectives with services in a time to market perspective”) defined in the Business Service Catalogue. The reason to build a shared service centre is often to ensure competency but also to optimise cost. In order to validate if the implementation meets expectations you would need to set a clear BC before you start off the logics would also be valid for a cloud initiative. Our experience is that where IT is perceived to fail to deliver to business expectations  
  • 49. Copyright 2013 Martin Palmgren EVP .COMMUNICATE spelled out business objectives to which the IT organisation can deliver with an effective Service Strategy to leverage IT in the execution of the business strategy. Where security is important, and I would think twice on the data that I would choose to put on the cloud, Time to Market and Cost Effectiveness are the critical success factors. Time to Market should not only include “how fast do we get IT services set” but how can we leverage the business strategy execution with IT as we support the end to end delivery of new products / services to market. The impact of Cost Effectiveness can be measured only as Total Cost of Ownership with cost, consumption and chargeback is objective. We also need to define a clear IT Service Strategy with 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”). “Is the cloud business model the solution to effective IT innovation?” Within the current Cloud Business Model we would find 1) hosted applications to which we outsource data (salesforce.com is one example), 2) the external cloud (servers provided by a cloud provider outside the firewall) and 3) the internal cloud (servers provided inside the firewall). We have over the last 36 months seen 2 trends for cloud deployment 1) cost (optimisation) confirmed with Total Cost of Ownership (TCO), 2) demand (to deliver to new business needs to which we are not able to cater within the existing perimeter). To meet the emerging business needs, we can identify a hosted application provider to cater to the identified demand where salesforce.com, box.net among others would be examples that could rapidly enhance the IT Value Proposition or the creation of an external cloud (applications bundled in to services with an underlying architecture) where the needs of the client can be modelled and stabilised rapidly to meet “go to market” constraints. These can then be brought to an internal cloud if desired (NASA first started to use the external cloud to model emerging demand, that was later brought on to an internal cloud). In “The cost of innovation and outsourcing” (http://www.enterprisecioforum.com/en/blogs/goddardd/cost-innovation-andoutsourcing) Doug Goddard points out the lack of innovation within the outsourcing sector. The reason from my point of view is the lack of incentive as none of the outsourcer that I have talked to are able to brake down their cost model TCO (total cost of ownership), and even if they could clients are not prepared to pay for improvement. With an external cloud business model, the innovation* of a new service model that would reply to emerging business needs can be tested and validated / discarded with a minimum amount of investment.  
  • 50. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - Spell out IT Activities from a demand and supplier side (Design), - Set IT processes and key performance indicators (Build), - Aligned to described ITIL activities and processes with a Service Strategy (Run), Service Design, Service Transition, Service Operation: - Function, - Process, Service Improvement. Please find an actionable story board format designed to permit you to flick out the slide set on a pad / smart phone / lap top and start to share with your CIO, Executives and Board on the spot. @ Leverage Business Strategy Execution with IT https://flevy.com/browse/business-document/leverage-business-strategy-execution-with-it-281/ref=mpalmgre Demonstrate how IT contributes to Business Objectives To demonstrate how IT contributes to Business Objectives we need to build a Blueprint (Road Map) to meet business objectives and stakeholder expectations leveraged by an effective IT Service Strategy. It should support an end-to-end perspective on how to get the IT strategy right, “Canvassed”, with and support Service Strategy (ITIL), Delivery Capability (IT – CMF, COBIT 5 (ValIT, CobIT, RiskIT, CMMI, eSCM), Architecture (TOGAF) Security (ISO 9001, 20 000, 27 001). To deliver IT Services to business needs as we meet stakeholder expectations, we Focus on the Business (IT) Strategy Execution to Leverage strategy with IT and Build a Business (IT) Service Strategy where we Design the IT Service Strategy & Portfolio, Perform Effective IT Management with a strategy execution focused IT Service Strategy as we “Canvas” the Business (IT) Vision. We will demonstrate how IT contributes to business objectives with: - A common problem statement, - A common problem context, - A proposition, - A Business (IT) Strategy Statement (What), - A Business (IT) Strategy Road Map (How), - A Business (IT) Service Strategy, - An (IT) Business Model and A Business (IT) Value Proposition. Common Problem Statement Scope: To provide a perspective on how to leverage strategy with IT and design an IT Service strategy that focus on strategy execution to: - Support the development of a Business oriented IT strategy, - Work with business entities to understand their business strategies and processes and ensure alignment of their IT strategies with the corporate IT strategy, - Drive the development and implementation of IT policies and standards, - Work with Audit and Internal Control to ensure compliance to set policies and standards, - Implement IT governance forums, processes and controls, and manage the necessary communication channels and tools, - Implement Project Portfolio Management and deploy the necessary Project Management tools and practices, - Capitalise experience and define IT guidelines for Mergers & Acquisitions and Build strong organisational capabilities for strategic planning and IT governance. Objective of the session is to follow up on the call I had with Martin regarding the Global IT planning needs:  
  • 51. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Step 4 Build (confirm) the IT Business Model to ensure that the local IT departments deliver to set standards from a Service Strategy, Delivery capability, Architecture and Security perspective. A Business (IT) Value Proposition Step 5 Design and Build the Business (IT) Value Proposition to ensure a focus on Strategy Execution, Business Drivers, Business Objectives, Business Processes and Metrics. As we meet Stakeholder Expectations Business drivers support Strategy Execution To deliver business value with IT we need to Focus on the Business Bottom Line: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. 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  
  • 52. Copyright 2013 Martin Palmgren EVP .COMMUNICATE IT provides competitive leverage Priorities from an Executive Management Perspective: - IT supports the achievement of strategic business objectives, - IT Delivers value to expenditure, - IT cost are managed effectively, - IT risks are identified and managed, - Targeted inter company IT synergies deliver to schedule, - We have a clear vision towards which we expect the IT department to deliver: ISO 38 500, VALIT IT delivers to demand and cost drivers Priorities from a Business Unit Management Perspective: - IT supports the achievement of tactical business objectives, - IT delivers perceived added value services and at a reasonable cost, - IT delivers to service level agreements (commitments), - IT investments positively affect business productivity and the customer experience, - We have a clear process vision towards which we expect the IT department to deliver: ISO 38 500, VALIT, COBIT, RISKIT, ITIL Business objectives are reflected in the IT Strategy Roadmap 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: ISO 38 500, ITIL, VALIT, COBIT, TOGAF Business Continuity is ensured Priorities from an IT Risk Management Perspective: - The organisations assets and operations are protected, - Key business and technology risk is effectively managed, - Effective process, practise and controls are in place, - We have clear security objectives to which we expect IT to deliver: VALIT, COBIT, RISKIT, COSO, ISO 9001 ISO 20 000 / 27 000.  
  • 53. Copyright 2013 Martin Palmgren EVP .COMMUNICATE To effectively manage IT as a Service Business: Establish Baseline with “Total Cost of Ownership” Cost, Consumption, Chargeback as we 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). Effective execution (is) built and “Aligned” with a focus on Governance, Risk, Compliance As IT Services are effective and stakeholder oriented to support: Mergers and Acquisitions (M&A) Data room Development Synergies & consolidation options Data Centre Migration, virtualization IT Transformation, To a Service Based IT Business Model Shared Service Centres -, Outsource -, Cloud solutions & Benchmark GAP (As Is, To Be, ROI). “Total Cost of Ownership” established with Cost, Consumption, Chargeback To Leverage strategy with IT Build a Business (IT) Service Strategy, - A Confirmed Business (IT) Value Proposition, - Business drivers support Strategy Execution, - Set business objectives, - Formalise outcome, - A “Canvassed” roll out, - “Steered” with Drivers, - To Stakeholder Expectations, - An Effective (IT) Business Model, - Defined (IT) Business Drivers, - & Benchmark Best Practise, with, - ROI Driven Business Cases (GAP), - To Measure (IT) Strategy Effectiveness Set business objectives An Articulated Business (IT) Strategy with an IT strategy statement and plan, an “IT Strategy Roadmap” support business objectives. To Develop the Business (IT) strategy we Translate the strategy, Plan operations, Execute processes and initiatives, Monitor and learn, Hold strategy reviews, Test and adapt the strategy. Formalise outcome We formalise outcome with a Strategy map that captures stakeholder expectations to Develop the Business (IT) strategy: - Define mission, vision and values, - Conduct strategic analysis, - Formulate strategy. Translate the strategy: - Define strategic objectives and themes, - Select measures and targets, - Select strategic initiatives,  
  • 54. Copyright 2013 Martin Palmgren EVP .COMMUNICATE (VALIT, COBIT, RISKIT, CMMI, eSCM, ITDB), Architecture (TOGAF), Security (ISO 9000, 20/ 27 000). ROI Driven Business Cases (GAP) With a possibility to validate return on investment of the roll out of the steps of the IT Service Strategy to confirm business cases for qualified decision making. Business (IT) Drivers : ISO 38 500, COSO, ISO 20 000 / 27 000, VALIT, COBIT, RISKIT, ITIL with Service Strategy, Financial Management for IT Services, Service Portfolio Management, Demand Management, Service Design, Service Transition, Service Operation: - Function, - Process, Service Improvement, Continuous Improvement, Measure & Report, TOGAF, CMMI, IT CMF, eSCM, Six Sigma, Project Management: PMI, Prince 2. To Measure (IT) Strategy Effectiveness Key Performance Indicators are put in place to measure the impact of an IT investment on business activities from a Cost Effectiveness and Cycle Time perspective Business (IT) Drivers. To leverage business strategy execution we focus on demand and cost drivers The IT department deliver effective and defined services with a Clearly defined portfolio of products and services and aligned to business goals and priorities, Cost is understood for each service with a TDABC analysis for resource capacity, Asset consumption by service is established, Best practice Asset Management practices are in place and IT leverages frameworks. Provide best in class services to business needs and solutions as needed Market definition : Customer base and demand is clearly defined: - Who consumes what services, Prices / SLA’s for services are established and Internal rates compared to outside marketplace for IT (Make or Buy). Focus is on business value and the business proposition : Options are presented to management: In-house, shared services, outsourcing, cloudsourcing, etc. Key IT projects deliver value as planned, Strategic IT opportunities are identified but not articulated, The Board will be presented with risk assessment decisions on critical initiatives, Position IT services in relation to the competition and industry, IT analyse competitor's IT initiatives. To leverage competitive advantage we provide clear guidelines Governance is in place, Best practices processes continuously improved Governance blueprint designed and operating. The IT investments reflect: The strategic intent of  
  • 55. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Chapter 7. Logics for IT Sourcing (Internal, Shared service center, Out, Cloud) To source “right” has become business critical. We Source IT to: Meet Demand and Cost drivers, Focus on “Time to market”, Cost effectiveness and Cycle Time, Provide an optimised Sourcing Strategy and Leverage Business Strategy execution. 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. @ Logics for IT Sourcing (Internal, Shared service center, Out, Cloud) https://flevy.com/browse/business-document/logics-for-it-sourcing-internal-shared-service-center-out-cloud-285/ref=mpalmgre This is an introduction to the subject with a full version to be published on a stand alone basis. The material in this chapter is developed to provide pragmatic guidance on how to develop and execute your IT Strategy with effective “Sourcing to support the Business Strategy and Business Objectives. How to get your IT Sourcing Strategy Right! We will provide the necessary tools to draw an IT strategy leveraged by effective IT Sourcing to: - Establish an appropriate sourcing strategy, - Identify capabilities that could be sourced, - Develop appropriate approaches for sourcing activities, - Manage risks throughout their sourcing activities, - Identify, select and negotiate with service providers, - Conduct service provider governance and performance management, - Manage relationships with service providers We Source to: Meet Demand and Cost drivers, Focus on “Time to market”, Cost effectiveness and Cycle Time, Provide an optimised Sourcing Strategy and Leverage Business Strategy execution. Peer see competitive advantage of the cloud? Is there a peer see competitive advantage in the adaptation of the cloud? In a recent conversation with a CIO the obvious question of the peer see competitive advantage in the adaptation of the cloud was raised. The cloud (external cloud defined as owned / leased (SAAS) applications, bundled in to services with an underlying architecture,  
  • 56. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 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). We leverage Hosted Applications, as the application is contracted and sit on a provider internal /external Cloud with the application provider (Gmail, Google Apps for Business, Google + Salesforce.com, dropbox). The provider performs some form of services (infrastructure, security, maintenance, upgrades, helpdesk) but there is no business process execution. Where the needs of the business and the business strategy should drive the IT Strategy, the IT Department can leverage the business strategy with an effective IT Service Strategy that would spell out how the roadmap for how the IT Department will cost effectively run the IT Function but also how to support the business function. Leveraged by a Cloud Business Model - 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. “Public” versus “Private” cloud Within the current Cloud Business Model we would find 1) hosted applications  
  • 57. Copyright 2013 Martin Palmgren EVP .COMMUNICATE In the case of an external Cloud the setup of a service on an external infrastructure (IaaS) can shorten the “Time to Market” that is the time needed to deliver the service (application or bundle of applications) to the client. The application can then be brought to an internal cloud (or server) or continue to run on an external cloud as needed. As we meet Stakeholder Expectations Business drivers support Strategy Execution To deliver business value with IT we need to Focus on the Business Bottom Line: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. Develop vision and strategy: - Define the business concept and long-term vision, Develop business strategy, - Manage strategic initiatives, Develop and manage products and services: - Manage product and service portfolio, Develop products and services, Market and sell products and services: - Understand markets, customers, and capabilities,- Develop marketing strategy, - Develop sales strategy, - Develop and manage marketing plans, - Develop and manage sales plans, Deliver products and services: - Plan for and acquire necessary resources (Supply Chain Planning), - Procure materials and services, - Produce/Manufacture/Deliver product, - Deliver service to customer, - Manage logistics and warehousing Manage customer services: - Develop customer care/customer service strategy, Plan and manage customer service operations, - Measure and evaluate customer service operations Develop and manage Human Capital: - Develop and manage human resources (HR) planning policies, and strategies, - Recruit, source, and select employees, Develop and counsel employees, - Reward and retain employees, - Redeploy and retire employees, - Manage employee information Manage information technology: - Manage the Business of Information Technology, - Develop and Manage IT Customer Relationships, - Manage Business Resiliency and Risk, - Manage Enterprise Information, - Develop and Manage Information Technology Solutions, - Deploy Information Technology Solutions, Deliver and Support Information Technology Services, - Manage IT Knowledge  
  • 58. Copyright 2013 Martin Palmgren EVP .COMMUNICATE We Source externally (Outsource) to perform the execution of a process that can be manual or industrialised with IT. Delivery is performed by and external provider. The client data sit on the provider’s servers (provider internal cloud) or on a hosted application (provider external cloud / Hybrid). Public (external) Cloud We leverage the Public (external) Cloud, as an internal provider perform process execution on an external (public) cloud provided by a “storage provider” such as Google, Amazon and the applications (bought or leased (Software as a Service (SaaS)) run on one or several mutualised servers outside the firewall) on a public (external) cloud that is run by a cloud provider. The latter deliver a bundle of services (Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Software as a Service (SaaS) outside the firewall on which the enterprise can run applications (in an architecture). Trends have over the last 12 months seen the evolution of a hybrid Cloud Model that can be defined as an outsourced provider that runs applications on a provider external cloud. The higher up the cloud stack you go (IaaS->PaaS->SaaS->BPO), the greater the value delivery possible, but also the higher lock-in potential. Software as a Service (SaaS) Software as a service sometimes referred to as "on-demand software", is a software delivery model in which software and associated data are centrally hosted on the cloud (Internal, External). Do we buy or do we lease (Investment or operational expenditure)? Platform as a Service (PaaS) In the PaaS model, cloud providers deliver a computing platform that would typically include operating system, programming language execution environment, database, and web server. Application developers can develop and run their software solutions on a cloud platform without the cost and complexity to buy and manage the underlying hardware and software layers. With some PaaS offers, the underlying computer and storage resources scale automatically to match application demand such that cloud user does not have to allocate resources manually. Infrastructure as a Service (IaaS) In this most basic cloud service model, cloud providers offer computers, as physical or more often as virtual machines.  
  • 59. 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 Cloud Model you need to perform an in depth analysis of business needs to understand Total Cost of Ownership with Cost, Consumption and Chargeback. IT Cost is spelled out - What are my IT assets and what do they cost? - What are my IT resources and what do they cost? - What services do I provide to the customer: - What do these services cost? - What was their intended value proposition? - What is the quality of the service delivery? - Who consumes the IT services: - What is the consumption on a per unit, - per seat, basis, - How does customers currently pay for these services? - What is the backlog of new unfulfilled IT demands? - What processes does IT perform: - How do these processes compare to best practices? - What are the cost drivers on an activity basis? IT Decision are based on Total cost of ownership  
  • 60. Copyright 2013 Martin Palmgren EVP .COMMUNICATE “bundled” for optimal delivery and identify services provided internally by parts of the organisation or by external providers. Key performance indicators to monitor and manage each service ‘bundle’ are developed for the effective management of services. 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 The best outsourcing agreement is not necessarily the one with the lowest price. In fact, successful outsourcing contracts are those that strike a balance and focus on the  
  • 61. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - Articulate the Business (IT) Strategy, Develop the Business (IT) Service Strategy, Build the Business (IT) Service Strategy, Govern the the Business (IT) Service Strategy, Design the Technology Architecture, Build the Sourcing Strategy, Develop the Program Plan, Leverage Business Strategy Execution. Please find an actionable story board format designed to permit you to flick out the slide set on a pad / smart phone / lap top and start to share with your CIO, Executives and Board on the spot. @ 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 This is an introduction to the subject with a full version of the chapter to be published on a stand alone basis. Design the Business (IT) Value Proposition, as we understand demand and cost drivers the IT department deliver effective services. Define services: - Clearly defined portfolio of products and services and aligned to business goals and priorities, Cost is understood for each service with a TDABC analysis for resource capacity, Asset consumption by service is established, - Best practice Asset Management practices are in place and IT leverages frameworks. We provide best in class services to business needs Market definition: - Customer base and demand is clearly defined: - Who is consuming what services, - Prices / SLA’s for services are established and Internal rates compared to outside marketplace for IT (Make or Buy). And solutions as needed with a focus on business value Business proposition: - Options are presented to management: In-house, shared services, outsourcing, cloud sourcing, - Key IT projects deliver value as planned, Strategic IT opportunities are identified but not articulated, - The Board will be presented with risk assessment decisions on critical initiatives, - Position IT services in relation to the competition and industry, - IT analyse competitor's IT initiatives. To leverage competitive advantage we provide clear guidelines Governance is in place: - Best practices processes continuously improved, Governance blueprint designed and operating. IT investments reflect: - The strategic intent of the Board, - Business goal and priorities, - A clear IT portfolio of projects and services, - A Service Portfolio alignment to business goals and priorities, - IT  
  • 62. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - Are there any further opportunities to use IT? Develop an understanding of the Business (IT) Strategy and how the IT department will deliver effectively to support strategy execution: It is critical to develop a clear and comprehensive understanding of the business strategy and the operating environment: - What is the Business’s strategy and plans? What is the current business model that IT has to support? Where could IT make a significant impact on the business? Are there any further opportunities to use IT? Confirm business vision It is important to understand both the vision and the extent to which it has been communicated throughout the organisation and “bought in to” by Stakeholder, key influencers and end users. In the event of a nonarticulated vision for the organisation, it should be agreed that a consensus approach is required to build one. A visioning workshop should be conducted with key stakeholders. The Business Direction and Structure: - What is the Business 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 further opportunities to use IT? Confirm External Environment The Business Profile developed should have identified a large number of organisational and industry key issues. These will set the direction and focus of the review of the strategic analysis and highlight material areas which have not been considered / ignored in the development of the Business (IT) Strategy plan. An analysis of the external environment will involve: political, economic, social and technological forces impact the business, suppliers and customers, threat of new entrants, possible substitution effects, the competitive arena and the business relative positioning. Confirm linkages to partners To identify and document business drivers and objectives linkages that the organisation has with partners (suppliers and customers) and to establish whether  
  • 63. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Does IT support strategy execution with a clear IT Business Model and Value Proposition articulated in a service strategy? Focus on the validation of the IT strategy and direction. Where certain areas are less focused, dispersed or contradict elements of the Business (IT) strategy it is necessary to undertake incremental strategic analysis. The extent to which this is necessary or desirable depend on if the area of concern is fundamental to the entire Business Strategy & impact on the Business (IT) Strategy. Develop a high level picture of the Business (IT) Strategy A high level picture of the Business (IT) Strategy contains a description of the Business Strategy with Business Drivers and Objectives, how IT support strategy execution, the needed competencies and resources. This picture is developed as we consider a number of aspects of the Business (IT) Strategy such as the subsequent value chain, process architecture, information/data architecture, organisation charts and skills and competencies. ‘As-Is’ model To develop a high level picture of the Business (IT) Strategy in terms of how it is organised and where activities are carried out we conceive a strategy articulation 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. Identify Focus Areas  
  • 64. Copyright 2013 Martin Palmgren EVP .COMMUNICATE stakeholders informed and to demonstrate the benefits case as it develops with the delivery of quick wins. Summarise analysis An agreement to the business design/transformation principles reached, it is important to document the analysis undertaken and prepare a short summary report. The report will be useful as a signed off document that can be revisited during the engagement where the ‘To-Be’ model is developed. We articulate the Business (IT) Strategy We articulate the current Business (IT) Service Strategy with an IT Business Model & Value Proposition with Service strategy (ITIL), Delivery capability (VALIT, COBIT, RISKIT, CMMI, eSCM, ITDB), Architecture (TOGAF) and Security (ISO 9000, 20/ 27 000). Assess the As – Is of the Business (IT) Service Strategy 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. IT Review An assessment of the existing IT Business Model and Value proposition with a Service Strategy, IT Delivery Capability, Architecture and Security model is an essential and integral part of the IT strategy engagement. The nature and extent of the assessment will vary in each engagement. This assessment provides the ‘As-Is’ picture that will be the point of departure for the Business (IT) Strategy. Inventory of the existing IT and plan review scope and detail As a first step, the IT Value Baseline is set with Demand and Cost Drivers that is how well does IT support strategy execution and the Total Cost of Ownership per user with Cost, Consumption and Chargeback. This information is used to develop a high level picture of the IT organisation. The scope of the review should be established in terms of the components to be included and the depth of analysis to be carried out. The proposal itself should, in most cases, identify the components and the level of detail for the review. IT business issues identified in the stakeholder dialogue should be highlighted. Understand and assess overall Alignment of IT to the business  
  • 65. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 workshop with IT and business representatives (or separately if needed) - any significant differences in views can be a measure of misalignment between IT and the business. User satisfaction across different services provided by IT such as Operations, Supply of solutions and Support can be measured and assessed with Key Performance Indicators. Review of Information Assets The detailed review of the information assets is used to determine the extent to which assets match the importance that the business attach to them. The review of IT resources of an organisation covers the assessment of the quality, security, accessibility and availability of information. Assess IT Talent and Organisational Skills In order to develop an IT skills and competency profile to support the development of the IT strategy, it is important to undertake an assessment of the skills and competencies of the IT staff. This review can be completed with an activity analysis of staff to support the development of a talent profile. An IT skills survey questionnaires can be appropriately conceived and distributed. An activity questionnaire can also be distributed or alternatively, timesheets can be analysed. The results should be analysed and staff experience, skills, competency and activity profiles prepared and results summarised. Results should clearly identify strengths and weaknesses of existing staff in the context of the relevant business strategy. An understanding of the nature of existing and planned technology, how it is organised and the extent to which it is used, contributes to a complete understanding of IT resources. Any assessment of the existing and planned technology should cover hardware platforms, operating systems, systems software and development tools, networks and any other components including third party solutions.  
  • 66. Copyright 2013 Martin Palmgren EVP .COMMUNICATE A range of different scenario, based on a combination of strategic objectives and business drivers and technology will be created to start with. The benefit / risk / cost / time profile associated with each of the scenarios can be used to eliminate less attractive propositions. Sourcing alternatives should also be considered while developing the ‘To-Be’ Business IT model. If consistent with business principles and priorities, it is possible that certain ‘non-core’ services should be a candidate for outsourced supply based on Demand and Cost Drivers (internal / external shared service centre, outsourced or cloud(out)sourced). Set stretch targets A preliminary benefits case is assembled with stretch targets for a management high level view. The objective of this benefits argument is to provide management with an overview to assess different opportunities. The benefits argument is used by management to prioritise opportunities (technological and other constraints such as resources may limit the range of available alternatives) and categorised into: Quick wins and significant longer term benefit opportunities. Quick wins deliver result in a short timeframe in an early stage of the programme and is necessary to gain the momentum needed to obtain buy-in and commitment necessary for a larger change 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.  
  • 67. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Build the Business (IT) Service Strategy Build the Business (IT) Service Strategy, - Build the Business (IT) service strategy, Develop the Information Architecture, - Develop the Information Architecture, Develop Applications Architecture, - Define Information/Applications Architecture Implementation Policies/ Principles & Standards, - Revisit and update business cases. Question: What is the structure of services, applications, information and data needed to support the business in the future? 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. Applications are to support a sub-set of the business architecture with a clear demand cost drivers benefit logic. Software availability and industry practice should be clearly linked to the benefits logic. Applications architecture workshops should be conducted around business processes to develop the architecture through the participation of IT business analysts and business representatives. This process may require several  
  • 68. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 relate to how it supports the Execution of the Business Strategy. Define Critical Success Factors and Performance Metrics Define critical success factors and subsequent performance metrics. Industry best practice is used to identify performance targets and metrics. The performance of the IT function is then measured to the identified metrics. Compensation services can develop a reward and recognition program to encourage and support performance, retention, morale, shared learning and organisational development. It is critical to focus on perfect order transactions. Metrics should be cascaded top down to support strategy execution rather than bottom up. Define the IT Organisational structure Define the IT organisational structure with the distribution of IT staff and the identification of line and staff reporting relationships in line with the overall IT management principles defined earlier.  
  • 69. Copyright 2013 Martin Palmgren EVP .COMMUNICATE The architecture framework defines the general design principles that will the guide development of the technology blueprints. In addition to establishing common approaches to general architectural requirements such as flexibility and scalability, the framework provides standards and guidelines for a number of common system design and integration issues. These are based on the application of industry and technology best practices to the overall business information requirements that have been defined in previous activities. The framework also identifies technology standards that will be used to implement the infrastructure. Identify “best practice” and “key trends” The purpose of this activity is to gain a complete understanding of what are considered to be best practices with regard to IT architecture, both from the point of view of the client's industry, and from the point of view of key trends in the IT industry itself. As we conduct systematic research through relevant public and private sources we identify and assesses key trends in the application of specific information technologies and approaches by competitors and other key players (customers, suppliers, etc.) in the industry. IT trends may be related to a variety of industryspecific factors: Changes in business architecture as a result of process redesign and organisational restructuration; Widespread adoption of specific technologies; Changing industry dynamics requiring closer integration of value chains, etc. We focus on the impact of business change on best practice in regards of IT infrastructure design to complement performed research of business and technology sources. The team will review and confirms result, conduct follow-up research as needed, and then documents findings in the form of a summary of best practices that highlights impact on the architecture framework and blueprints. Define technical constraints To understand the technology gaps developed we use the As – Is To – Be to identify technical constraints. All relevant factors that may have an impact on the technical architecture are considered: Business/information and data architecture, technology architecture, plans for major enterprise package solutions, vendor/product commitments, legal/regulatory requirements. We identify, analyse, and document constraints on the definition of guidelines and design principles, and the selection of technologies. As we work with project sponsors and relevant stakeholders (primarily in IT management) to identify potential impact we conduct interviews and review existing documentation as necessary to determine what the actual constraints are, how they affect the infrastructure, and under what conditions they might be overcome.  
  • 70. Copyright 2013 Martin Palmgren EVP .COMMUNICATE architecture will be able to deliver, cost and risks involved in the construction. This reassessment may lead to modifications in the proposed architecture. Define Core Technology We define the core technology components to form the technology infrastructure with hardware, operating systems, systems software and networking components (communications protocols, standards and security considerations). The definition will include technology infrastructure standards at the enterprise and site levels and clearly identify preferred growth and integration paths. It will also include a definition of the technology to be used to interface with supplier /customer systems and outsourced service providers. Define Site Technology Models As we define the technology at different sites we identify boundaries between technology owned by business divisions and external services. Captured in a blueprint they form the site technology model. As the architecture is completed and describe the functionality, topology, and technology for all of the applications, databases, and common services within the scope of the initiative, we turn to the definition of technology components upon which the applications and data will be deployed across the enterprise. As the architecture describe the "upper" layers of technology, the technology blueprint defines the "lower" layers: Data management, access and security, Operating system, Messaging, Network, Hardware. We define the site technology models in two steps. Step one: the team develops a series of site models, each of which defines the configuration of technologies that will be used for each platform component (workstations, servers, LANs, etc.) in a specific type of site (site types are defined as logical locations with similar technological requirements). For example, the logical location "branch office" may turn out to represent two site types, "large branch" and "small branch" if the difference in the number of employees leads to the use of different technologies to support the same applications and data.) Step 2: As the site models are defined, the team completes the overall blueprint by the development of an enterprise model for how network technology (hardware, software, and services) will be used to connect the various sites. 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  
  • 71. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Objective: The objective is to create a model to meet the IT services strategy required by the organisation and how it should be packaged for optimal delivery. This leads to a definition of the resources (skills and competencies) required to support and manage defined services effectively. Service levels and key performance indicators to monitor and manage each service ‘bundle’ are also developed to ensure the effective management services. Benefit: Define the value of services required to support the business requirements and identify the best sourcing options for IT to meet business performance objectives. The IT sourcing strategy identifies IT services required by the organisation and the resources (skills and competencies) required to support and manage services effectively. The sourcing strategy also specifies how the required services will be “bundled” for optimal delivery and identify services provided internally by parts of the organisation or by external providers. Key performance indicators to monitor and manage each service ‘bundle’ are developed for the effective management of services. 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  
  • 72. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 5. Pricing – Expect your outsourcing cost to go down over time. One of the best ways to ensure the long-term success of your outsourcing agreement is to start with an agreement based on market prices. This means you are starting the relationship in the right place, and any future pricing adjustments (such as benchmark adjustments) will not be as extreme or emotional as they otherwise might be. Develop the Program Plan Develop the Program Plan, - Update Business Cases, - Establish Program Management Principles, - Develop a Strategy Implementation Plan, - Develop a Change Program to set target, - Identify and prioritise work streams and projects, Identify and plan for required skills and competencies, - Prepare the implementation plan, - Prepare for program implementation, - Set up program organisation, - Set up program monitoring and management mechanism. 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. Establish Program Management Principles Program management principles are established to provide guidance to the implementation team of the effective management and administration of all projects in the program. A workshop is conducted to identify all program risks, barriers and critical success factors for successful implementation. Appropriate lifecycle methodologies, work breakdown standards and project management tools are also identified in this workshop.  
  • 73. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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. Chapter 9. Build - Set IT processes and key performance indicators To set IT processes and key performance indicators we : - Define the “to be” state with established KPI’s, - Design the IT Plan with a project portfolio, - Build An Effective (IT) Business Model, - Manage the Business of IT, - Develop & Manage IT Customer Relationships, - Manage Business Resiliency and Risk, - Manage Enterprise Information, - Develop and Manage IT Solutions, - Deploy Information Technology Services, - Deliver and Support IT Services, - Manage IT Knowledge 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. @ 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 This is an introduction to the subject with a full version to be published on a stand alone basis.  
  • 74. Copyright 2013 Martin Palmgren EVP .COMMUNICATE process "manage business resiliency and risk" per €100,000 revenue, - Personnel cost of the process "manage IT knowledge" per €1,000 revenue, - Systems cost of the process "manage IT knowledge" per €100,000 revenue, - Personnel cost of the process "develop information and content management strategies" per €1,000 revenue, - Systems cost of the process "develop information and content management strategies" per €100,000 revenue, - Personnel cost of the process "define enterprise information architecture" per €1,000 revenue, - Systems cost of the process "define enterprise information architecture" per €100,000 revenue, - Personnel cost of the process "manage information and IT knowledge resources" per €1,000 revenue, Systems cost of the process "manage information and IT knowledge resources" per €100,000 revenue, - Personnel cost of the process "perform enterprise data and content management" per €1,000 revenue, - Systems cost of the process "perform enterprise data and content management" per €100,000 revenue, - Personnel cost of the process "develop and maintain information technology solutions" per €1,000 revenue, - Systems cost of the process "develop and maintain information technology solutions" per €100,000 revenue, - Personnel cost of the process "deploy IT solutions" per €1,000 revenue, - Systems cost of the process "deploy IT solutions" per €100,000 revenue, - Personnel cost of the process "deliver and support IT services" per €1,000 revenue, - Systems cost of the process "deliver and support IT services" per €100,000 revenue, - Total cost of the process "manage the business of IT" per €1,000 revenue, Total cost of the process "develop and manage IT customer relationships" per €1,000 revenue, - Total cost of the process "manage business resiliency and risk" per €1,000 revenue, - Total cost of the process "manage IT knowledge" per €1,000 revenue, Total cost of the process "develop information and content management strategies" per €1,000 revenue, - Total cost of the process "define enterprise information architecture" per €1,000 revenue, - Total cost of the process "manage information and IT knowledge resources" per €1,000 revenue, - Total cost of the process "perform enterprise data and content management" per €1,000 revenue, - Total cost of the process group "manage enterprise information" per 1,000 revenue, - Total cost of the process "develop and maintain information technology solutions" per €1,000 revenue, - Total cost of the process "deploy IT solutions" per €1,000 revenue, - Total cost of the process "deliver and support IT services" per €1,000 revenue, - Total IT cost per €1,000 revenue Corporate Contribution Corporate Contribution Key Performance Indicators would include: - 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 Return On Investment, Net Present Value.  
  • 75. 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 CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. Develop vision and strategy: - Define the business concept and long-term vision, Develop business strategy, - Manage strategic initiatives, Develop and manage products and services: - Manage product and service portfolio, Develop products and services, Market and sell products and services: - Understand markets, customers, and capabilities,- Develop marketing strategy, - Develop sales strategy, - Develop and manage marketing plans, - Develop and manage sales plans, Deliver products and services: - Plan for and acquire necessary resources (Supply Chain Planning), - Procure materials and services, - Produce/Manufacture/Deliver product, - Deliver service to customer, - Manage logistics and warehousing Manage customer services: - Develop customer care/customer service strategy, Plan and manage customer service operations, - Measure and evaluate customer service operations Develop and manage Human Capital: - Develop and manage human resources (HR) planning policies, and strategies, - Recruit, source, and select employees, Develop and counsel employees, - Reward and retain employees, - Redeploy and retire employees, - Manage employee information Manage information technology: - Manage the Business of Information Technology, - Develop and Manage IT Customer Relationships, - Manage Business Resiliency and Risk, - Manage Enterprise Information, - Develop and Manage Information Technology Solutions, - Deploy Information Technology Solutions, Deliver and Support Information Technology Services, - Manage IT Knowledge Manage financial resources: - Perform planning and management accounting, Perform revenue accounting, - Perform general accounting and reporting, - Manage fixed-asset project accounting, - Process payroll, - Process accounts payable and expense reimbursements, - Manage treasury operations, - Manage internal controls, Manage taxes, - Manage international funds/consolidation Acquire, construct and manage property: - Design and construct/acquire nonproductive assets, - Maintain nonproductive assets, - Obtain, install, and plan maintenance for productive assets, - Dispose of productive and nonproductive assets, - Manage physical risk  
  • 76. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Software Asset Management. Application Portfolio Management: formulated operating processes application portfolio management solutions. Levers Infrastructure Asset Management. IT Infrastructure Portfolio Management: Levers formulated operating processes with IT infrastructure portfolio management. An Effective (IT) Business Model An Effective (IT) Business Model where we Manage Information Technology. To Manage Information Technology Business Drivers & Processes from a Cost Effectiveness and Cycle Time perspective we need to: Manage the Business of Information Technology, - Develop and Manage IT Customer Relationships, Manage Business Resiliency and Risk, Manage Enterprise Information, Develop and Manage Information Technology Solutions, Deploy Information Technology Solutions, Deliver and Support Information Technology Services and Manage IT Knowledge. Manage the Business of IT To Manage the Business of IT we need to: - set Key Performance Indicators, Develop the Enterprise IT Strategy, - Define the Enterprise Architecture, - Manage the IT Portfolio, - Perform IT Research and Innovation, - Perform IT Financial Management, - Evaluate and Communicate IT business value and Performance, Perform IT Staff Management, - Manage IT Suppliers and Contracts. Key Performance Indicators To manage the business of information technology we need to define and maintain the relevance of IT to the enterprise and its mission, communicate the strategy and role of IT within the enterprise, establish the enterprise architecture and guiding principles, define the IT management system and governance model, and manage the strategic activities that help ensure the delivery of IT value. Key performance indicators for this process group typically include: - Number of IT FTEs to manage the business of IT per €1 billion revenue, - Total cost of the process to “manage the business of IT” per €1,000 revenue, - For application development projects and enhancements completed, percentage of projects delivered on time, - For application development projects and enhancements completed, percentage of projects delivered on or below budget, - For application development projects and enhancements completed, percentage of initial functionality delivered. Develop the Enterprise IT Strategy To develop the enterprise IT strategy we address the activities required to define and maintain a business focused enterprise IT strategy. This would include to build  
  • 77. Copyright 2013 Martin Palmgren EVP .COMMUNICATE To perform IT financial management we establish granular visibility into the cost of services in order to provide internal customers with the possibility to manage demand which requires to publish service rates and cost structures and to establish project based accounting. IT financial management interlocks project and functional expense accounting, tying project funding to business case development checkpoints. Actions to take: - Develop and maintain IT services and solutions cost transparency, - Establish and maintain accounting process, - Tie project funding to business case decision checkpoints. Evaluate and Communicate IT business value and Performance To evaluate and communicate IT business value and performance we establish key performance measures, monitor trends and key performance indicators, link business technology investments to business outcomes, and communicate business technology value contributions. Actions to take: - Establish and monitor key performance indicators, - Evaluate IT plan performance, - Communicate IT value. Perform IT Staff Management To perform IT staff management we organise staff development activities to foster business technology leadership, develop IT staff skills, and administer HR performance. To develop business technology leadership includes to identify highpotential staff for leadership positions; provide training, rotations, and project-based work experience; and manage a leadership succession plan. To develop IT staff we establish role-specific competency requirements, provide opportunities to develop technical and business skills, and manage the IT staff development plan. HR performance is defined by compensation of the leadership team based on business outcomes realized and compensation of the IT staff based on business technology performance achieved. Actions to take: - Develop IT leadership and staff, - Manage IT staff performance. Manage IT Suppliers and Contracts To manage IT suppliers and contracts include activities such as to identify and negotiate with suppliers, negotiate contracts, and assess the performance of suppliers and contracts. Performance assessment for suppliers is typically based on a standard performance scorecard, whereas the assessment of contracts requires to establish targets or objectives. The assessment and identification of possible trends and issues for suppliers and contracts are then communicated to the appropriate parties. The role of the IT organisation as we negotiate with suppliers is to identify contractual terms and conditions, outstanding issues and propose issue resolutions, and negotiate contract terms and conditions.  
  • 78. Copyright 2013 Martin Palmgren EVP .COMMUNICATE organisational use of IT; establish and maintain an IT governance structure; articulate strategic assumptions for IT strategy development; and develop and track the resulting IT plan, which optimises the use of technologies, resources, and alliances to improve business agility. Actions to take : - Research IT services and solutions to address business and user requirements, - Translate business and user requirements into IT services and solutions requirements, - Formulate IT services and solutions strategic initiatives, Coordinate strategies with internal stakeholders to ensure alignment, - Evaluate and select IT services and solutions strategic initiatives. Develop and manage IT service levels To develop and manage IT service levels we create and maintain the IT service and solutions catalogue, establish and maintain business and IT service level agreements, evaluate and report service level attainment results, and communicate business and IT service level improvement opportunities. Actions to take : - Create and maintain the IT services and solutions catalog, Establish and maintain business and IT service level agreements, - Evaluate and report service-level attainment results, - Communicate business and IT service-level improvement opportunities. Perform Demand Side Management (DSM) for IT Services To perform DSM for IT services we need to understand IT services and solutions consumption and use, develop and implement incentive programs that improve consumption effectively, and develop the volume per unit forecast for IT services and solutions. To develop IT services and solutions we model the effect of incentive programs on the baseline forecast and generate a DSM-influenced volume per unit forecast. Actions to take : - Analyse IT services and solutions consumption and use, - Develop and implement incentive programs that improve consumption efficiency, - Develop volume/unit forecast for IT services and solutions. Manage IT Customer Satisfaction To manageme IT customer satisfaction we capture and analyse customer satisfaction and assess and communicate customer satisfaction patterns. To capture and analyse customer satisfaction we manage and monitor IT customer complaints and feedback, conduct qualitative and quantitative assessments, and identify customer satisfaction issues and opportunities for improvement. To assess and communicate customer satisfaction patterns we evaluate satisfaction with IT services and solutions, evaluate satisfaction with complaint resolution, and determine IT customer loyalty/lifetime value.  
  • 79. Copyright 2013 Martin Palmgren EVP .COMMUNICATE To develop and manage business resilience we need to build the business resilience strategy, perform continuous business operations planning, and maintain continuous business operations. To develop the business resilience strategy we identify and prioritize overall risk to business, determine how risk relate to critical business processes, and create and maintain a risk mitigation strategy. To perform continuous business operations planning we evaluate the current continuity, availability, and recovery capabilities of the enterprise architecture ; identify gaps between current capabilities and desired state; and design and implement resilient enterprise architecture to enable continuous business operations. To maintain continuous business operations we execute business resiliency projects, test and maintain the business resiliency plan, and execute the recovery plan. Actions to take : - Develop the business resilience strategy, - Perform continuous business operations planning, - Test continuous business operations, - Maintain continuous business operations. Develop and Manage Regulatory Compliance To develop and manage regulatory compliance, we develop the regulatory compliance strategy, establish regulatory compliance controls, and manage regulatory compliance remediation. Some of the tasks required to develop and manage regulatory compliance include to institute technology-based strategies to meet regulatory requirements; establish and maintain compliance objectives and strategies to maintain an audit-ready posture; assess the ability of current policies, procedures, and architectures to meet compliance requirements; establish compliance monitoring and reporting procedures; execute compliance management projects; test compliance controls; and perform compliance audits and produce reports. Actions to take : - Develop the regulatory compliance strategy, - Establish regulatory compliance controls, - Manage regulatory compliance remediation. Perform Integrated Risk Management To perform integrated risk management we develop an integrated risk strategy and manage integrated risk. To develop an integrated risk strategy we identify the risk related to information security, business continuity, project management, regulatory compliance, and sourcing; evaluate the ability of current architectures and processes to mitigate risks; and create integrated strategies to mitigate risk. To manage integrated risks we track risk related to information security, business continuity, project management, regulatory compliance, and sourcing; create and implement procedures and architectures to mitigate risk; and perform risk monitoring and reporting. Actions to take : - Develop an integrated risk strategy and approach, - Manage integrated risks.  
  • 80. Copyright 2013 Martin Palmgren EVP .COMMUNICATE To define the enterprise information architecture we formulate information elements, composite structure, logical relationships, constraints, and derivation rules, define information access requirements; and establish data custodianship. Actions to take: - Define information elements, composite structure, logical relationships and constraints, taxonomy, and derivation rules, - Define information access requirements, - Establish data custodianship, - Manage changes to content data architecture requirements. Manage Information Resources To manage information resources includes to define the enterprise information / data policies and standards as well as to develop and implement data and content administration. Actions to take: - Define the enterprise information / data policies and standards, Develop and implement data and content administration. Perform Enterprise Data and Content Management To Perform enterprise data and content management we require the IT organisation to ensure that the collection, storage, and the use of information and data are in accordance with the established information / data policies. Tasks include to monitor control, and manage exceptions per policies and standards. Actions to take: - Define sources and destinations of content data, - Manage technical interfaces to users of content, - Manage retention, revision, and retirement of enterprise information. Develop and Manage IT Solutions To Develop and Manage IT Solutions : - Key Performance Indicators, - Develop the IT Development Strategy, - Perform IT Services and Solutions Life Cycle Planning, Develop and Maintain IT Services and Solutions Architecture, - Create IT Services and Solutions, - Maintain IT Services and Solutions. Key Performance Indicators To develop and manage information technology solutions we need to produce, develop, and test new, enhanced, and improved solutions; enable services that meet all confirmed requirements, maintain and manage solutions, support services to continue to meet all confirmed requirements, and retire solutions / discontinuing services that are no longer needed.  
  • 81. Copyright 2013 Martin Palmgren EVP .COMMUNICATE integrate components, test the solution or service, and gain customer acceptance and certification. Actions to take: - Understand confirmed requirements, - Design IT services and solutions, - Acquire / Develop IT service/solution components, - Train services and solutions resources, - Test IT services / solutions, - Confirm customer acceptance. Maintain IT Services and Solutions To maintain IT services and solutions we need to upkeep, repair, and develop minor (as defined by enterprise policy) enhancements to existing solutions or services and ensure that existing services or solutions continue to meet requirements. Tasks include to understand requirements or defect analysis, modify the design of the service or solution, integrate newly required components, test the change to a solution or service, and gain customer acceptance and certification. Actions to take: - Understand upkeep/enhance requirements and defect analysis, Design change to existing IT service/solution, - Acquire/develop changed IT service/solution component, - Test IT service/solution change, - Retire solutions and services. Deploy Information Technology Services To Deploy Information Technology Services : - Key Performance Indicators, Develop the IT Deployment Strategy, - Plan and Implement Changes, - Plan and Manage Releases. Key Performance Indicators To deploy information technology solutions we need to introduce new, enhanced, or improved functionality into the environment with minimal or no disruption to the services scheduled, to ensure consideration of appropriate security and contractual constraints, and properly balance business benefit with technical and business risk. Key performance indicators for this process group typically include: - Number of IT FTEs to deploy IT solutions per €1 billion revenue, - Total cost of the process to “deploy IT solutions” per €1,000 revenue, - Percentage of unscheduled outages from change requests, - Percentage of unscheduled outages from release introductions, Average time in weeks to make a change to the production environment, - Average time in weeks to deploy a new release into the production environment. Develop the IT Deployment Strategy To develop the IT deployment strategy we need to create a consistent approach to the introduction of changes and releases into the IT environment, examine feedback from completed changes to ensure a successful deployment, and develop policies specific  
  • 82. Copyright 2013 Martin Palmgren EVP .COMMUNICATE To deliver and support information technology services we need to deliver IT services and solutions within the budget provided, meet service commitments as measured by customer defined service criteria and achieve customer satisfaction targets. Key performance indicators for this process group typically include: - Number of IT FTEs to develop and maintain IT solutions per €1 billion revenue, - Total cost of the process to “deliver and support IT services” per €1,000 revenue, - Average time (in hours) to resolve a service commitment disruption. Develop the IT Services and Solutions Delivery Strategy To develop the IT services and solutions strategy we need to define the organisational approach for IT service and delivery. Tasks include to develop a strategy to deliver IT infrastructure services and determine sourcing strategies. Actions to take: - Establish sourcing strategy for IT delivery, - Define delivery processes, procedures, and tools standards, - Select delivery methodologies and Tools. Develop the IT Support Strategy To develop the IT support strategy we define the organisational approach to deliver key services and assist in the use of information technology. This strategy would address help desk activities, desk-side support, and third- level technical support. Tasks include the coordination of vendor support and evaluation of sourcing alternatives. Actions to take: - Establish sourcing strategy for IT support, - Define IT support services. Manage IT Infrastructure Resources To manage IT infrastructure resources we maintain the physical computing assets, hardware and software. Tasks include to identify configuration items to be maintained, establish the information management system, collect the configuration item information, populate the database, and ensure that information is available to other components. Other tasks include preventive maintenance, facilities management, configuration management, and inventory (asset) management. Actions to take: - Manage IT inventory and assets, - Manage IT resource capacity Manage IT Infrastructure Operations To manage IT infrastructure operations we need to manage the organisational workload and operation of physical assets, irrespective of their physical location. This includes to provide and execute the requested services, prepare and handle customer  
  • 83. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Key performance indicators for this process group typically include: - Number of IT FTEs to manage IT knowledge per €1 billion revenue, - Total cost of the process to “manage IT knowledge” per €1,000 revenue. Develop the IT Knowledge Management Strategy To develop the IT knowledge management strategy we need to understand IT knowledge needs and the current IT knowledge flow, coordinate the strategy and roles with the enterprise KM function, and plan the IT knowledge management actions and priorities. Actions to take : - Understand IT knowledge needs, - Understand current IT knowledge flow, - Coordinate strategy and roles with the enterprise KM function, Plan IT knowledge management actions and priorities. Develop and Maintain IT Knowledge Map To develop and maintain the IT knowledge map we need to define knowledge elements, logical relationships and constraints, and currency rules, identify IT knowledge sources and repositories, identify IT knowledge-sharing opportunities, and define IT knowledge processes and approaches. Actions to take: - Define knowledge elements, logical relationships and constraints, and currency rules, - Identify IT knowledge sources and repositories, - Identify IT knowledge sharing opportunities, - Define IT knowledge processes and approaches. Manage the IT Knowledge Life Cycle To manage the IT knowledge life cycle we need to gather knowledge elements from IT knowledge sources : - evaluate, create and codify knowledge elements, - deploy codified IT knowledge, - update and retire IT knowledge, - and evaluate and improve IT knowledge strategies and processes. Actions to take: - Gather knowledge elements from IT knowledge sources, Evaluate, create, and codify knowledge elements, - Deploy codified IT knowledge, Update and retire IT knowledge, - Evaluate and improve IT knowledge strategies and processes. Chapter 10. Run - Aligned to described ITIL activities and processes with a Service Strategy, Service Design, Service Transition, Service Operation: - Function, - Process, Service Improvement. Please find an actionable story board format designed to permit you to flick out the  
  • 84. Copyright 2013 Martin Palmgren EVP .COMMUNICATE From an IT Risk Management Perspective it is important to understand that: Business continuity is ensured, - The organisations assets and operations are protected, - Key business and technology risk is effectively managed, - Effective process, practise and controls are in place, - We have clear security objectives to which we expect IT to deliver. “Time to Market”, business drivers, cost effectiveness & cycle time. As the business focus on “Time to Market” it is imperative for IT to support business drivers and objectives from a cycle time and cost effectiveness perspective over time. To align IT with the business is not enough. The IT department needs to actively accompany the execution of the strategy. To do so requires a significant comprehension of the business and it’s needs from a business driver (demand & cost) and strategy execution perspective. With “Total cost of ownership”, Cost, Consumption, Chargeback. To build effective services and delivery capabilities it is imperative that the IT department is “Run as a service business” that is to the to the logics of a shared service centre with clearly defined services and cost, consumption and chargeback defined by user. Build an effective IT Delivery Model to meet business needs and expectations as we leverage business strategy execution and business processes supported by an IT Service strategy The CIO and the IT Department need to position as premium provider of IT services and focus on value to cost. In order to avoid the "do we really need a CIO and IT department to bother us with technology when we can use the cloud?" the CIO has to ensure that the business strategy and business objectives are supported by IT (from a Business and IT architecture perspective). Where the IT Strategy support Strategy execution, "Time to Market", Cost Effectiveness and stakeholder expectations from an Executive, Business Unit, IT Management and IT Risk Management perspective. To deliver business value with IT we need to Focus on the Business Bottom Line: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. The IT Bottom line is that up to 40 % of current IT spend occurs outside the IT budget (CRM, Cloud). The IT department needs to position itself as a facilitator to IT services and effectively address emerging needs, market opportunities and demonstrate that the current Business Model is supported effectively. The IT 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.  
  • 85. 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. See also: “Get your IT Service Strategy right” http://www.brighttalk.com/community/it-service-management/webcast/534/23630 “Leverage Strategy with IT” http://www.brighttalk.com/community/it-service-management/webcast/534/22934 “Run IT as a Service Business!” http://www.brighttalk.com/community/it-service-management/webcast/534/21389 Build and demonstrate IT success To build and demonstrate IT Success we need to focus on the Business IT roadmap, that is how do we (as CIO, IT Department) support business objectives and processes leveraged by IT and an effective IT Service strategy. Where we Focus on the Business Bottom Line: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. This is achieved as Business objectives and Processes (captured in the Business Architecture) are supported by a strategy execution focused IT architecture where Business objectives: We would like to increase sales by 25%, how can the IT Department support the Business in this effort and what will be the impact on the budget of the IT Department? are supported by IT objectives: This would translate in to, on the business (IT) side: 1) which business processes are concerned with the increase and how do we support them today and how do we anticipate the increase (applications, infrastructure, support)? 2) Is there an opportunity to further industrialise processes (off the shelf applications, build)? 3) Supported by hardware (laptop, (i)pad, smart phone)? 4) Can we spell out the cost?  
  • 86. Copyright 2013 Martin Palmgren EVP .COMMUNICATE servers (internal / private cloud) or outside the firewall on a mutualised server (external / public cloud), Security (ISO 9001, ISO 27 001, COSO where business continuity is ensured by risk and control objectives). A Business (IT) Value Proposition “This is how we support business objectives with services in a time to market perspective” where we support business processes (Develop vision and strategy, Develop and manage products and services, Market and sell products and services, Deliver products and services, Manage customer services, Develop and manage Human Capital, Manage information technology, Manage financial resources, Acquire, construct and manage property, Manage environmental health and safety, Manage external relationships, Manage knowledge, improvement and change) where Business processes (bundled Business services) are supported by applications. A Roadmap The Roadmap reflects stakeholder expectations from an Executive Management, Business Unit Management, IT Management and IT Risk Management perspective where: Stakeholder Expectations Drives Business (IT) Objectives that Delivers the Business (IT) Road Map executed by Employees & Organisation. The Service Strategy support Business Drivers as Business (IT) Drivers Drives Demand and Cost Drivers Delivers the (IT) Service Strategy that is Executed towards Metrics. IT provides competitive leverage. Priorities from an Executive Management Perspective: IT supports the achievement of strategic business objectives, IT Delivers value to expenditure, IT cost is managed effectively, IT risk is identified and managed, Targeted inter company IT synergies deliver to schedule, We have a clear vision towards which we expect the IT department to deliver. IT delivers to demand and cost drivers. Priorities from a Business Unit Management Perspective: IT supports the achievement of tactical business objectives, IT delivers perceived added value services and at a reasonable cost, IT delivers to operational and service level agreements (commitments), IT investments positively affect business productivity and the customer experience, We have a clear process vision to which we expect the IT department to deliver. The IT Strategy support Business objectives as we meet Priorities from an IT Management Perspective: We understand stakeholder expectations and propose a service portfolio that correspond to both Demand and Cost drivers with a focus on perfect order business transactions, We develop the professional competencies needed for successful service delivery, We capture organisational knowledge to continuously improve performance, The IT and Stakeholder departments have clear objectives, processes and indicators with clear accountability and responsibility to deliver to set objectives. Business Continuity is ensured. Priorities from an IT Risk Management  
  • 87. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Information Technology Solutions, - Deploy Information Technology Solutions, Deliver and Support Information Technology Services, - Manage IT Knowledge Manage financial resources: - Perform planning and management accounting, Perform revenue accounting, - Perform general accounting and reporting, - Manage fixed-asset project accounting, - Process payroll, - Process accounts payable and expense reimbursements, - Manage treasury operations, - Manage internal controls, Manage taxes, - Manage international funds/consolidation Acquire, construct and manage property: - Design and construct/acquire nonproductive assets, - Maintain nonproductive assets, - Obtain, install, and plan maintenance for productive assets, - Dispose of productive and nonproductive assets, - Manage physical risk Manage environmental health and safety: - Determine environmental health and safety impacts, - Develop and execute environmental health and safety program, Train and educate employees, - Monitor and manage environmental health and safety management program, - Ensure compliance with regulations, - Manage remediation efforts Manage external relationships: - Build investor relationships, - Manage government and industry relationships, - Manage relations with board of directors, - Manage legal and ethical issues, - Manage public relations program Manage knowledge, improvement and change: - Create and manage organisational performance strategy, - Benchmark performance, - Develop enterprise-wide knowledge management (KM) capability, Manage change Run the IT Business effectively To run the IT business effectively and leverage the execution of the business Strategy and objectives with IT we need to make educated investments (on paper compliance and KPI indications is nice to have but not enough!): 100% of the value impact is in the execution of the process of the supported services over the entire service life cycle “order to bill”. IT support business objectives and processes We align to Business Objectives and Business Processes Defined in the Business Service Catalogue Requirements Information with IT Objectives and IT Processes Defined in the IT Service Catalogue supported by ITILv2 & 3 workflows Broken down in to Key Activities Performed to Responsibility and Accountability Charts (RACI). Measured by Performance indicators (Embedded in Service Catalogue per Service), Outcome Measures, Maturity Models (CMMI, ITIL continuous process improvement) Audited with Control Outcome tests Derived from Control Objectives Audited with Control Design Test Implemented with Control Practices.  
  • 88. Copyright 2013 Martin Palmgren EVP .COMMUNICATE requirements, Technology guiding principles, IT Governance guiding principles (process & organise decisions). Set the IT Value Proposition Baseline: Set fundamentals of a service business, Process view, Establish Total Cost of Ownership and IT baseline with cost/value/risk, Activity based financial view, Service portfolio view, Value contribution view, Customer consumption view. Draw the Roadmap: Construct the IT Business Model and Value Proposition, Define IT “to be state”: “where we need to go”, “where we are now” & “how we need to proceed” with established KPI’s, Report gap analysis findings, Design IT plan through a project portfolio, Cost out the plan (budget), Develop consensus, business case for change. Design the IT Value Proposition: Design the service strategy, Articulate governance principles, Define project teams, Engage customer ‘buy in’, Design KPI’s, Define & validate service pricing, Design the performance measurement system. Build the IT Value Proposition: Implement the project portfolio, Engage Organisational change, Control IT (measure outcome to set objectives), Capture KPI’s & Measure performance, Enforce governance. To Perform Effective IT Governance: Transform the IT Business Model, Measure KPI trends and targets, Meet business objectives, Control cost, Measure Delivery performance, Manage change, Continuous service & process improvement, Process roll out (articulation & integration), Execute strategic intent. Direction The business (IT) strategy is effective and Provides clear, meaningful Business (IT) Vision / Mission: as it is realistic and achievable, articulated, communicated. Defined Market Position: Industry structure with New entrants, Suppliers, Substitute products or Services, Buyers (customers), Existing Competitors Competitive Advantage: There is an understanding of Competitive Positioning, Strengths and weaknesses, Strategies and relative positioning External environment: There is an understanding of the Political, Environmental, Social, Technological external environment. Customer value proposition: There is an understanding of The Customer value 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.  
  • 89. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Operations, Monitor and Learn, Test and Adapt the Strategy, Execute Procedures and Initiatives Business (IT) Tactics: We Map Strategic Themes from a Financial Perspective, Customer, Process, Learning & Growth Perspective as we Create a High Performance Culture. See also http://hbr.org/2008/01/mastering-the-management-system/ar/1 Business (IT) Context: We Define Market Position with New entrants, Suppliers, Substitute products or Services, Buyers, Existing Competitors. http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1 Captured in a Strategy Map that Formalises stakeholder outcomes to deliver value. The Stakeholder Strategy Roadmap set the scope with Objectives: - Formalise stakeholder outcomes: To deliver value for all parties (partnership), Which drives Customer value: For effective and satisfied end users, That deliver - Business processes: Speed, process innovation and growth, Executed by - Employees and organisation: Collaboration that deliver strategy execution. A Strategy Canvas, articulated in a The Stakeholder Strategy Map Formalises stakeholder outcomes to deliver value for all parties. The strategy canvas allow the teams to articulate and formulate objectives on a project / program basis for improved execution with an extended GAP, risk and added value analysis captured in a DARCI (Decision taker, Accountable, Responsible, Consulted & Informed). A Collaboration Theme Scorecard The Collaboration Theme Scorecard Sets process objectives, Identifies: levers for joint actions and wins, metrics and initiatives on a short, middle & long term basis. 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, cross functional teams, process improvement teams and functional improvement teams.  
  • 90. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Consumption and Chargeback per user captured in an IT Baseline. The review covers spend on technology, people and services. Spend figures are then benchmarked against similar organisations and current business goals/strategies. The IT Services market can be divided by the primary methods of purchase made by end users and service providers: - Discrete - Project-specific contractual arrangement, with a predetermined scope of work to be completed within a given time period, Outsourcing : Annuity-based contractual arrangement that details how an organisation will provide services on an ongoing basis at a specified level of competency. Outsourcing arrangements usually last between two and five years, but may be either shorter or longer. Objective: To provide cost effective stewardship of IT assets and resources used to provide IT Services: - To be able to fully account for the spend on IT Services and to be able to assign cost to services delivered, - To assist management decisions on IT investment with detailed cost analysis for changes to IT Services. Bench: Cost recovery, Chargeback, Financial Management Execution: Plan, Analyse, Design, Implement, Measure, Control Improve Activities: Service Valuation: - Direct versus indirect cost, - Labour cost, - Variable cost elements, - Translation from cost account data to service value. Service provisioning models and analysis: - Managed services, - Shared services, - Utilitybased provisioning, - On-shore, off shore or near-shore, - Service provisioning cost analysis. Funding model alternatives: - Rolling plan funding, - Trigger-based plans, Zero-based funding. Business Impact Analysis (BIA): - Service Level Management: IT Needs of the Business Activities, - Financial Management: Identify Financial Objectives (IT Plans including Budgets), Cost Control Methods (Accounting), Charging Methods (Charging): Feedback on planned charges. Input: IT Financial Management responsibilities do not exist solely within the IT finance and accounting domain. All parts of the enterprise interact to generate and consume IT financial information: - Service valuation: quantifies, in financial terms, the funding sought by the business and IT for services delivered, based on the agreed value of services, - Provisioning Value, - Service Value Potential, - Demand modeling, - Service portfolio management, - Service provisioning optimization, Planning confidence, - Service investment analysis, - Accounting, - Compliance, Variable cost dynamics. Key Decisions: - Cost recovery, value centre or accounting centre, - Chargeback: to charge or not to charge, - Financial Management implementation checklist: - Plan, Analyse, - Design, - Implement, - Measure. Terminology: Service Asset: A Service Asset is a capability or a resource of a service provider. Service Valuation: A measurement of the total cost to deliver an IT Service, and the total value the IT Service. Service valuation is used to help the business and the IT Service provider agree on the value of the IT Service. Service Warranty: Service warranty for a service provides the customer a level of reassurance and guarantee to meet agreed requirements. Service Utility: Service Utility defines the  
  • 91. Copyright 2013 Martin Palmgren EVP .COMMUNICATE resources services. Decisions are communicated via a clear and unambiguous report that includes detailed plans for implementation. Input: Decisions relate to budget and financial plans (budget allocations enforce the good use of resources). In this exercise Service Portfolio Management will engage with: - Newly chartered services are promoted to Service Design, - Existing services will be refreshed in the Service Catalogue, - Retired services are forwarded to Service Transition. Terminology: Service Asset: A Service Asset is a capability or resource of a service provider. Assets are used by an organisation to create value in the form of goods and services. Service Valuation: Service Valuation provide the business and IT with measurement on the perceived value of IT Services (cost vs. benefit analysis). Business case: A model of what a service is expected to achieve to meet business objectives. The assessment of service investments in terms of potential benefits and the resources and capabilities required to provision and maintain it. Utility: Functionality offered by a product or service to meet a particular need. Warranty: A promise or guarantee that a product or service will meet its agreed requirements. Key words: Transform the Business (TTB), Run the Business (RTB), Grow the Business (GTB). Service Pipeline: A database or structured document listing all IT services that are Under consideration or development, but are not yet available to customers. Service Catalogue: Database or structured document with information on IT Services, available for deployment, and available to customers. Retired Services: Decommissioned Services. Value: Utility: - Is performance Supported? - Are constraints removed? Warranty: Is the service available in accordance to business needs (SLA / OLA)? - Do we have enough capacity? - Is the service delivery continuous? - Is the service secure? Cost: - Personnel: Release staff, - Accommodation: Physical location (set-up and ongoing), - Software: Tools (set-up and ongoing), - Hardware: Infrastructure (set-up), - Education: Training (set-up and ongoing), - Procedures: External consultants etc. (set-up). Demand Management Added Value: Demand Management is a critical aspect of service management. Objectives: Demand Management is responsible to understand and strategically respond to business demands for services by: Analysis of patterns of activity and user profiles, and provide capacity in line with strategic objectives. Bench: Effective service Management Activities: Activity-based Demand Management, The arrival of demand can be influenced by financial constraints or price incentives. Business activity patterns and user profiles: Business processes are the primary source of demand for services. Patterns of business activity (PBA) influence the demand patterns seen by the service  
  • 92. Copyright 2013 Martin Palmgren EVP .COMMUNICATE the dependencies of business units and their business processes with the supporting IT services, contained within the Business Service Catalogue, - Interface with support teams, suppliers and Configuration management on interfaces and dependencies between IT services and the support services, components and CI contained within the Technical Service Catalogue, - Interface with Business Relationship management and Service Level management to ensure information is aligned to the business process. Input: - Business information from the organisation’s business and IT strategy, plans and financial plans, and information on their current and future requirements from the Service Portfolio, - Business Impact Analysis, that provide information on the impact, priority and risk associated with each service or changes to service requirements, Business requirements, - The Service Portfolio, - The CMS, - Feedback from all other processes. Output: - The documentation and agreement of a ‘definition of the service, - Updates to the Service portfolio, - The Service Catalogue: should contain details and the status of every live and transitioning service. Terminology: Operational Level Agreement (OLA): A written agreement between an IT Service Provider and another part of the same organisation. Service Level Agreement (SLA): Agreement between an IT Service Provider and a customer. Service Level Requirement (SLR): A customer requirement for an aspect of an IT Service. SLRs are based on business objectives and are used to negotiate agreed Service Level Targets. Business Impact Analysis (BIA): BIA is the activity in Business Continuity Management that identify vital business functions and their dependencies. Configuration Item (CI): Any component that needs to be managed in order to deliver an IT Service. Cost: - Personnel (Release staff), - Accommodation (location (set-up and ongoing)), Software (Tools (set-up and ongoing)), - Hardware (Infrastructure (set-up)), Education (Training (set-up and ongoing)), - Procedures (External consultants (setup)). Service Level Management Added Value: As enterprises become increasingly dependent on IT, they demand a higher quality of service. By the creation of an IT Service Management (ITSM) strategy, enterprises are able to maximize end-user productivity, improve operational effectiveness and enhance overall business performance. In addition, the effort creates a forum for communication between the IT organisation and the business units. An ITSM strategy provides the basis to integrate IT measurement into operational and strategic IT management. In most cases, however, service management is not welldefined or not defined at all. Service Level Management principles form the basis on how to contribute to an ITSM culture to ensure that the right services with the appropriate quality are delivered, at the right cost, to end-users. Although Service Level Management (SLM) is focused heavily on CSI, this process also plays a major part in the Service Design book, involvement in Service Catalogue Management and Supplier Management.  
  • 93. Copyright 2013 Martin Palmgren EVP .COMMUNICATE but strategically linked Management information for steering the IT organisation Process parameters of the Service Management processes and the operational management Key Performance Indicators: - Incident Management: resolution times for levels of impact. Change Management: Processing times and cost of routine changes. Underpinning Contract (UC): A contract between an IT Service provider and a third party. The third party provides goods or services that support delivery of an IT service to a customer service design. Cost: The cost associated with the implementation and execution of an SLM include: - Staff (salary, training, recruitment cost, consultancy - if needed), both initial and ongoing, - Accommodation (physical space for staff, documentation space, etc.), Support tools (monitoring and reporting, plus some element of integrated Service Management tools), - Hardware on which to run tools, - The production of the Service Catalogue. The cumulative effect of Change Management should lead to a gradual improvement in service quality and an overall reduction in the cost of service provision. Capacity Management Added Value: All applications put demand on the IT environment. The continuous spread of applications for enterprise resource planning (ERP), supply chain management, human-resources management and social media will impact IT with their heavy demands for bandwidth. Finally, additional applications are required to support the growing IT infrastructure of an organisation (remote storage of back-up data, for example). Failure to consider these issues will lead to negative effects on the business, as the capacity of the IT Environment simply does not match the requirements of the business. Objective: Ensures that all the current and future Capacity and performance aspects of the business requirements are provided cost effectively. Defined as the Capacity Management process of business requirements (the required Service Delivery), the organisation's operation (the current Service Delivery) and the IT Infrastructure (the means of Service Delivery). Bench: Effective Service Delivery Activities: Business Capacity Management : This sub-process is responsible to ensure that the future business requirements for IT Services are considered, planned and implemented in a timely fashion. Service Capacity Management: The focus of this sub-process is the management of the performance of the live, operational IT Services used by the Customers. It is responsible for ensuring that the performance of all services, as detailed in the targets in the SLAs and SLRs, is monitored and measured, and that the collected data is recorded, analysed and reported. Component Capacity Management: The focus in this sub-process is the management of the individual components of the IT Infrastructure. It is responsible to ensure that all components within the IT Infrastructure that have finite capacity are monitored and measured, and that the collected data is recorded, analysed and reported. The underpinning activities of Capacity Management: - Tune and optimise activities, - Monitor utilisation, -  
  • 94. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Objectives: To optimise the capability of the IT Infrastructure, services and the support organisation to deliver a cost effective and sustained level of availability that matches or exceeds the current and future needs of the business. Bench: Availability to cost Activities: The Availability Management process has two key elements: reactive and proactive activities. Reactive Activities: - Monitor the actual availability delivered versus agreed targets, - Establish measures of availability and define availability targets with the business, - Identify unacceptable levels of availability that impact the business and users, - Review availability with the IT support organisation, Continually improvement activities to optimize availability. Proactive Activities: Identify Vital Business functions (VBFs), - Design for availability, - Base product and components, - Systems management, - Service management processes, - Highavailability design, - Special solutions with full redundancy, - Root cause analysis of low availability, - Relationship with the Problem Management process, - Produce & maintain an Availability Plan Report, - Availability % = (Agreed Service Time Downtime / Agreed Service Time) X 100% service design. Input: - Business information, - Business impact information, - Previous Risk Analysis, - Service information, - Financial Information, - Change and release information, - Configuration management, - Service targets, - Component information, - Technology information, - Past performance, - Unavailability and failure information. Output: - Availability Management Information System (AIMS), - The Availability Plan for the proactive improvement of IT services and technology, - Availability and recovery design criteria and proposed service targets for new or changed services, Service availability, reliability and maintainability reports of achievements against targets, including input for all service reports, - Component availability, - Revised risk analysis reviews and reports, - Monitoring, management and reporting requirements for IT services and components, - Availability management test Schedule, - Planned and preventative maintenance schedules, - Projected Service Outage (PSO). Terminology: Availability: Key indicator of the service provided. It should be defined in the Service Level Agreement. Reliability: Reliability of the service is made up out of the reliability of Service Components and the resilience of the IT Infrastructure. Serviceability: Contractual arrangements with 3rd parties in regards to maintenance. Maintainability: The ability of the IT group to maintain the IT infrastructure in operational state and available according to the agreed service levels. Security: Confidentiality, Integrity and Availability (CIA) of data. Vital Business Function: The business critical element of the business process that is supported by the IT service. Resilience: The ability of individual components to absorb or be flexible in times of stress. Process Relationships: The connection between Incident Management (detection), Problem Management (diagnosis), Change Management (repair time) and Availability Management. The following metrics are commonly used in Availability Management: - Mean Time to Restore Services (MTTRS): average time between the  
  • 95. Copyright 2013 Martin Palmgren EVP .COMMUNICATE impact Analysis exercises and reports, - Risk Analysis and Management reviews and reports, - An ITSCM testing Schedule, - ITSCM test scenarios, - ITSCM test reports and reviews. Terminology: Recovery Options: Do Nothing: Sometimes the business can function without this service. Manual Work around Administrative actions, takes a large amount of resource to enter data back into systems. Reciprocal Arrangements: Agree to use the infrastructure of another organisation for batch processing. Gradual Recovery (cold standby): An empty room available (in house or outsourced service), mobile or fixed, where IT infrastructure can be rebuilt. (Takes longer than 72 hours to recover). Intermediate Recovery (warm standby): A contract with 3rd party recovery organisation to use their infrastructure in a contingency situation. Backup tapes should be available at the crisis site at all times. (Takes 24 to 72 hours to recover). Immediate Recovery (hot standby): Rent floor space at the recovery site with infrastructure available and data mirrored from the operational systems. Or have a full duplication of system (components) for instantaneous recovery (or near to). (Takes up to 4 hours to recover) Cost: - Produce the evacuation plan, - Risk analysis and execution of continuity planning, - Take measures for risk management, - Provide options for replacement, Maintain the plan, - Test and review the plan, - Educate staff. Information Security Management Added Value: Security defines how the IT Business will ensure IT Risk and Business Continuity in the future. The Security perspective provides the basis to identify projects and standards required to achieve to the desired future state. Objectives: To align IT security with business security and ensure that information security is effectively managed in all service and Service management activities. Bench: Cost effectiveness, cycle time, capacity to understand customer needs, business contribution. Activities: - Produce, review and revision an overall Information Security Policy and support policies, - Communicate, implement and enforce security policies, - Assess and classify all information assets and documentation, - Implementation, review, revision and improvement of security controls and risk assessment and responses, Monitor and manage of all security breaches and major security incidents, - Analyse, report and reduce volumes and impact of security breaches and Schedule and completion of security reviews, audits and penetration tests. Input: - Business information, - Corporate governance and business security policies and guidelines, - IT information, - Service information, - Risk Analysis processes and reports, - Details of all security events and breaches, - Change information, Configuration Management System, - Details of partner and supplier access. Output: - An overall information Security management Policy, - Security  
  • 96. Copyright 2013 Martin Palmgren EVP .COMMUNICATE complete set of reference information for all Supplier Management procedures and activities. Although Supplier Management is firmly placed within the Service Design Phase of the Lifecycle, some of the activities are carried out in the other Lifecycle Phases : - Supplier categorization and maintenance of the Supplier and Contract Database (occurs within the Service Design phase), - Evaluate and setup of new suppliers and contracts (occurs within the Service Design phase), - Establish new suppliers (occurs within the Service Transition phase), - Supplier and Contract Management and performance (occurs within the Service Operation phase), - Contract renewal and termination (occurs within the Service Operation phase). Terminology: Supplier and Contract Database (SCD): A database or structured document used to manage supplier contracts throughout their lifecycle. Service Level Agreement (SLA): An agreement between an IT Service Provider and a customer. Service Level Requirement (SLR): A customer requirement for an aspect of an IT service. Underpinning Contract (UC): A contract between an IT Service Provider and a third party. Cost: - Personnel / Staff: (set-up and ongoing), - Accommodation: Physical location (set-up and ongoing), - Software Tools: (set-up and ongoing), - Hardware: Infrastructure (set-up), - Education: Training (set-up and ongoing), - Procedures: External consultants etc. (set-up). Service Transition Service Transition : - Transition Planning and Support, - Change Management, Service Asset & Configuration Management, - Release & Deployment Management, Service Validation and Testing, - Evaluation, - Knowledge Management. Transition Planning and Support Added Value: Effective Transition Planning and Support can significantly improve a service provider’s ability to handle high volumes of change and releases across its customer base. An integrated approach to planning improves the alignment of the Service Transition plans with the customer, supplier and business change Project Plans. Objectives: The objective of this process is to: - Plan and coordinate the resources to establish successfully a new or changed service into production within the predicted cost, quality and time estimates, - Ensure that all parties adopt the common framework of standard re-usable processes and supporting systems in order to improve the effectiveness and efficiency of integrated planning and coordination activities, - Provide clear and comprehensive plans that enable the customer and business change projects to align their activities with the Service Transition plans. Bench: Time to delivery and cost Activities: Transition strategy: - Purpose, goals and objectives, - Context e.g. service  
  • 97. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Objectives: The objective of the Change Management process is to ensure that standardised methods and procedures are used to effectively handle all changes, in order to minimise the impact of change related Incidents on service quality, and consequently to improve the day-to-day operations of the organisation. Change Management cover the questions that must be answered for all changes : Who requested the change, Reason for the change, Return required from the change?, Risk involved in the change?, Resources required to deliver the change?, Responsible for the build, test and implementation of the change?, Relationship between this change and other changes? Bench: Cost effectiveness, cycle time, capacity to understand customer needs, business contribution Activities: - Plan and control changes, - Change and release scheduling, Communications, - Change decision making and change authorization, - Ensure there are remediation plans, - Measurement and control, - Management reporting, Understand the impact of change, - Continual improvement. Input: - Policy and strategies for change and release, - Request for change, - Change proposal, - Plans: change, transition, release, deployment, test, evaluation and remediation, - Current change schedule and PSO, - Current assets or configuration items that is base line, service package, release package, - As-planned configuration Baseline, - Test results, test report and evaluation report. Output: - Rejected Request For Change, - Approved Request For Change, - Change the services, service or infrastructure resulting from approved Request For Change, New, changed or disposed assets or configuration items, e.g. baseline, service package, release package, - Change Schedule, - Revised PSO, - Authorised change plans, - Change decisions and actions, - Change documents and records, - Change Management reports. Terminology: Normal Change: A change that follows all of the steps of the change process. Standard Change: A pre-approved change that is low risk, common and follows a procedure or work instruction. Emergency Change: A change that must be introduced as soon as possible, e.g. to resolve a major incident or implement a security patch. Requests for Change: Every change to the IT Infrastructure has to go through Change Management. A Request for Change (RFC): is formally issued for every change request. Change Manager: Responsible for the Change Management process and authorizes all changes. Change Advisory Board (CAB): A dynamic group of people (depending on the change) that approve Changes with medium to high priority, risk and impact. Change Advisory Board Emergency Committee (CABEC): approves and authorizes changes with high urgency, risk and impact. Change models: Some organisations use change models prior to implementation to estimate the impact of the change. Change Management and Capacity management work together on this. Forward Schedule of change (FSC): contains details of all approved changes and their proposed implementation date. IT Executive Committee (ITEC): made up of members from the organisations senior management. Cost: - Personnel: Staff (set-up and ongoing), - Accommodation (set-up and ongoing), - Software Tools (set-up and ongoing), - Hardware: (Infrastructure (set-  
  • 98. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Output: - Release and deployment plans, - Completed RFCs for the release and deployment activities, - Service notification, Updated service catalogue, - New tested service capability and environment, - New or changed Service Management documentation, - Service package that defines the requirements from the business/customer for the service, - SLP that defines the service level requirements, SLA, underpinning OLAs, and contracts, - Service model, New or changed service reports, - Tested continuity plans, - Complete and accurate configuration item list, Service capacity plan that is aligned to the relevant business plans, - Service Transition Report. Cost: - Personnel (Audit verification staff, database management team (set-up and ongoing)), - Accommodation (Physical location (set-up and ongoing)), - Software (Tools (set-up and ongoing)), - Hardware (Infrastructure (set-up)), - Education (Training (set-up and ongoing)), - Procedures (External consultants etc. (set-up)). Release and Deployment Management Added Value: IT operations groups continue to struggle with the incorporation of application, infrastructure, and operational changes into their IT production environments. IT operations groups will increasingly seek to maintain/improve change management service levels as they formalise and adopt processes that enable improved acceptance of change into the production environment (production acceptance, production control, quality assurance, release management). Objectives: The Objective of Release and Deployment Management is to build, test and deliver the capability to provide the services specified by Service Design. This includes the processes, systems and functions to package, build, test and deploy a release into production and prepare for Service Operation. Bench: Cost effectiveness, cycle time, capacity to understand customer needs, business contribution Activities: -Plan, - Release and deployment plans, - Pass/fail criteria, - Build and test prior to production, - Planning pilots, release packaging and build, - Deployment planning, - Financial/commercial planning, - Preparation for build, test and deployment, - Build and test, - Release and build documentation, Acquire and test input configuration items and components, Release packaging, - Build and manage the test environments, - Service testing and pilots, - Service rehearsals, Plan, Do, Check, - Act – take action following the rehearsal, Pilots, - Prepare and plan for deployment, - Perform transfer, deployment and retirement, - Verify Deployment, Early life support, - Review and close a deployment, - Review and close Service Transition. Release management should be used for: - Large or critical hardware deployment, especially when there is a dependency on a related software Change in the business systems, i.e. not every single PC needs to be installed, - Major software deployment, especially initial instances of new applications along with accompanying software distribution and support procedures for subsequent use if required, Bundling or batching related sets of Changes into manageable-sized units, - Release  
  • 99. Copyright 2013 Martin Palmgren EVP .COMMUNICATE elements and mismatches between what was wanted and what was delivered, impact on business support. Service Desk calls for assistance : services that does not function as intended are inherently less intuitive and cause higher support requirements. Problems and errors : that are harder to diagnose in the live environment. Cost : since errors are more expensive to fix in production than if found in testing. Services : - that are not used effectively by the users to deliver the desired value. Objectives: The objectives of this process are to: Provide confidence that a release will create a new or changed service or service offerings that deliver the expected outcomes and value for the customers within the projected cost, capacity and constraints, Validate that a service is ‘fit for purpose’: that IT will deliver the required performance with desired constraints removed, Assure a service is ‘fit for use’: it meets certain specifications under the specified terms and conditions of use, Confirm that the customer and stakeholder requirements for the new or changed service are correctly defined and remedy any errors or variances early in the service lifecycle as this is considerably cheaper than fixing errors in production. Bench: Time to market and customer expectations, Cost Effectiveness, Cycle Time Activities: - Validation and test management, - Plan and design test, - Verify test plan and test design, - Prepare test environments, - Perform tests, - Evaluate exit criteria and report, - Test clean up and closure. Input: - The service package, - SLP, - Service provider interface definitions, - The Service Design package, - Release and deployment plans, - Acceptance Criteria, RFCs Output: - Configuration baseline of the testing environment, - Testing carried out, Results from those tests, - Analysis of the results. Terminology: Acceptance: Formal agreement that an IT service, process, plan or other deliverable is complete, accurate reliable and meets its specified requirements. Acceptance is usually preceded by evaluation or testing and is often required before proceeding to the next stage of a project or process. Evaluation: Responsible for assessing a new or changes IT service to ensure that risks have been managed and to help determine whether to proceed with the change. Fit for Purpose Describes whether the process, CI, IT service etc. is capable of meeting its objectives or service levels. Test: The activity that verifies that a CI, IT Service, process etc. meets its specified or agreed requirements. Validation: The activity that ensures a new or changed IT service, process, plan or other deliverable meets the needs of the business. Validation ensures that business requirements are met even though these may have changed since the original design phase. Cost: - Personnel: Audit verification staff, database management team (set-up and ongoing), - Accommodation: Physical location (set-up and ongoing), - Software: Tools (set-up and ongoing), - Hardware: Infrastructure (set-up), - Education: Training (set-up and ongoing), - Procedures: External consultants etc. (set-up).  
  • 100. Copyright 2013 Martin Palmgren EVP .COMMUNICATE The primary purpose is to improve efficiency by the reduction of the need to rediscover knowledge. This is achieved as we enable the service provider to be more effective and improve the quality of the service, reduce cost, increase satisfaction, Ensure that staff have a clear and shared understanding of the value that their services provide to customers and how benefits are realized, Ensuring that, as required, service provider staff have adequate information on: Who currently use their services, The current states of consumption, Service delivery constraints, Difficulties faced by customers in realizing the expected benefits from a service. Bench: Service provider effectiveness, Activities: - Knowledge Management strategy: specifically Knowledge Management will identify and plan for the capture of relevant knowledge and the consequential information and data that will support it, - Knowledge transfer : this is the activity through which one unit (e.g. group or department) is affected by the experiences of another. The form of knowledge transfer must suit those who will use it, examples of criteria /examples that can be used are: - Learning styles, - Knowledge visualization, Drive behaviour, - Seminars, webinars and advertising, - Journals and newsletters, Data and information management : knowledge rests on the management of the information and data that underpins it. For this process to be efficient it requires answers to some key input questions, such as how the data and information will be used, what conditions will need to be monitored, what data is available, what are the associated cost, legislative and requirements : - Data and Information requirements, Data and information management procedures, - Evaluation and improvement. Input: - Service package, - SDP and SAC, - Test results and report Output: - Evaluation report for Change Management Terminology: Service Knowledge Management System (SKMS): A set of tools and databases used to manage knowledge and information. Configuration Management System (CMS): A set of tools and databases used to manage an IT Service Provider’s configuration data. Known Error Database (KEDB): A database containing all Known Error Records. Definitive Media Library (DML): One or more locations in which the definitive and approved versions of all software configuration items are securely stored. Cost: - Personnel (Release staff), - Accommodation (Physical location (set-up and ongoing)), - Software Tools (set-up and ongoing), - Hardware (Infrastructure (setup)), - Education (Training (set-up and ongoing)). Service Operation: Function Service Operation: Function, - Service Desk Function, - Technical Management Function, - IT Operations Management Function, - Application Management Function.  
  • 101. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Physical location (set-up and ongoing), - Software: Tools (set-up and ongoing), Hardware: Infrastructure (set-up), - Education: Training (set-up and ongoing), Procedures: External consultants etc. (set-up). Technical Management Added Value: As the custodian of technical knowledge and expertise related to manage the IT Infrastructure, the Technical Management function provides technical skills and resources needed to support the ongoing operation of the IT Infrastructure. Technical Management also plays an important role as they provide the resources to support the IT Service Management lifecycle. It ensures resources are effectively trained and deployed to design, build, transition, operate and improve the technology to deliver and support IT Services. Objectives: To help plan, implement and maintain a stable technical infrastructure to support the organisation’s business processes through: Well designed and highly resilient, cost-effective topology, The use of adequate technical skills to maintain the technical infrastructure in optimum condition, Swift use of technical skills to speedily diagnose and resolve any technical failures that do occur. Bench: Process support: Design, resilience, topology Activities: We - Identify the knowledge and expertise required to manage and operate the IT infrastructure and to deliver IT services, - Document skills that exist in the organisation, as well as those that need to be developed, - Initiate training programs to develop and refine the skills in the appropriate technical resources and maintaining training records for all technical resources, - Design and deliver training for users, the Service Desk and other groups, - Recruit or contract resources with skills that cannot be developed internally, or where there are insufficient resources to perform the required Technical Management activities, - Procure skills for specific activities where the required skills are not available internally or in the open market, or where it is more cost-effective to do so, - Research and develop solutions which can be used to simplify, automate or reduce cost as well as Model and forecast workload. Cost: - Personnel: To staff the Service Desk (set-up and ongoing), Accommodation (Physical location (set-up and ongoing)), - Software (Tools (set-up and ongoing)), - Hardware (Infrastructure (set-up)), - Education (Training (set-up and ongoing)), - Procedures (External consultants etc. (set-up)). IT Operations Management Added Value: IT Operations is the function responsible for the daily operational activities needed to manage the IT Infrastructure. This is done according to the performance standards defined during Service Design. In some organisations this is a single, centralized department, while in others some activities and staff are centralized and some are provided by distributed and specialized departments.  
  • 102. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Hardware (Infrastructure (set-up)), - Education (Training (set-up and ongoing)), Procedures (External consultants etc. (set-up)). Service Operation: Process Service Operation: Process, - Event Management, - Incident Management, - Request Fulfilment, - Problem Management, - Access Management. Event Management Added Value: An event can be defined as any detectable or discernable occurrence that has significance for the management of the IT Infrastructure or the delivery of IT service and evaluation of the impact a deviation might cause to the services. Events are typically notifications created by an IT service, Configuration Item (CI) or monitoring tool. Effective Service Operation is dependent on knowing the status of the infrastructure and detecting any deviation from normal or expected operation. This is provided by good monitoring and control systems, which are based on two types of tools: - Active monitoring tools that poll key CIs to determine their status and availability. Any expectations will generate an alert that needs to be communicated to the appropriate tool or team for action, and - Passive monitoring tools that detect and correlate operational alerts or communications generated by CIs. Objectives: The objective of Event Management is to provide the entry point for the execution of many Service Operation processes and activities. In addition, it provides a way of comparing actual performance and behaviour against design standards and SLAs. Bench: Performance to design standards and SLA’s Activities: Event Occurs: Events occur continuously, but not all of them are detected or registered. It is therefore important that everybody involved in designing, developing, managing and supporting IT services and the IT infrastructure that they run on understands what kind of events need to be detected. Event Notification – Most CIs are designed to communicate certain information about themselves in one of two ways: - A device is interrogated by a management tool, which collects certain targeted data (polling), - The CI generates a notification when certain conditions are met. The ability to produce these notifications has to be designed and built into the CI, for example, a programming hook inserted into an application. Event Detection : As an Event notification has been generated, it will be detected by an agent running on the same system, or transmitted directly to a management tool specifically designed to read and interpret the meaning of the event. Event Filtering : The purpose of filtering is to decide whether to communicate the event to a management tool or to ignore it. If ignored, the event will usually be recorded in a log file on the device, but no further action will be taken. Significance of Events – Every organisation will have its own categorization of the significance of an event, but it is suggested that at least these three broad categories be represented:  
  • 103. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Close Event : Some events will remain open until a certain action takes place, for example an event that is linked to an open incident. However, most events are not ‘opened’ or ‘closed’. Informational events are simply logged and then used as input to other processes, such as Backup and Storage Management. Auto-response events will typically be closed by the generation of a second event. Input: Interface with business applications and/or business processes to allow potentially significant business events to be detected and acted upon : - The primary ITSM relationships are with Incident, Problem and Change Management, - Capacity and Availability Management are critical in defining what events are significant, what appropriate thresholds should be and how to respond to them, - Configuration Management is able to use events to determine the current status of any CI in the infrastructure, - Asset Management can use Event Management to determine the lifecycle status of assets, - Events are a rich source of information that can be processed to inclusion in Knowledge Management systems. Incident Management Added Value: While efficiencies can be made from process improvement (e.g. outsourcing and staff reductions), mechanisms need to be in place to determine baselines and ongoing measurements of performance. Fundamental evolution from a reactive help desk support model, to a consolidated IT service desk with Incident Management, brings the need to demonstrate the value of service quality. That quality is inextricably linked to IT customer satisfaction. Objectives: To restore normal service operation as quickly as possible and minimize the adverse impact on business operations, thus ensuring that the best possible levels of service quality and availability are maintained. Bench: Restore, service quality & availability Activities: Incident identification and logging (Service Desk responsibility): - Record basic details of the incident, - Alert specialist support group(s) as necessary, Categorization, prioritization and initial diagnosis, - Categorize Incidents, - Assigning impact and urgency, and thereby defining priority, - Match against Known Errors and problems, - Informing Problem Management of the existence of new problems and of unmatched or multiple incidents, - Assessing related configuration details (daily verification), - Providing initial support (assess Incident details, find quick resolution), - Close the incident or routing to a specialist support group, and informing the user(s). Investigation and diagnosis : - Assessment of the incident details, Collection and analysis of all related information, and resolution (Including any workaround) or a route to in-line support, - Functional or hierarchical escalation where necessary Resolution and recovery, - Resolve the incident using the solution/workaround or, alternatively, to raise an RFC (including a check for resolution), - Take recovery actions. Incident closure (Service Desk responsibility), When the Incident has been resolved, the Service Desk should ensure that: - Details of the action taken to resolve the incident are concise and readable - Classification is complete and accurate according to root cause : - Resolution/action is agreed with the  
  • 104. Copyright 2013 Martin Palmgren EVP .COMMUNICATE specialist groups and/or suppliers for fulfillment. Some organisations may have specialist fulfillment groups, or they may outsource some fulfillment activities to a third party supplier. The Service Desk will monitor and chase progress and keep users informed throughout, regardless of the actual fulfillment source. Closure: When the Service Request has been fulfilled it must be referred back to the Service Desk for closure. The Service Desk will check that the user is satisfied with the outcome. Input: The primary interfaces with Request Fulfillment are: - Service Desk/Incident Management, - Asset Management, Release Management and Configuration Management. Problem Management Added Value: In ITIL terms we refer to these as incidents. A pattern of incidents is a problem. Failure to halt the recurrence of incidents leads to lost time and frustrated users. Users who have to ask for the same issue to be fixed day after day will quite rightly lose their patience. Effective Problem Management halts the recurrence of incidents and has benefits to the individual and the organisation as a whole. Objectives: The objective of Problem Management is to minimize the adverse impact of incidents and problems on the business that are caused by errors within the IT Infrastructure, and to prevent recurrence of incidents related to these errors. Bench: Business Impact of incidents, recurrence Activities: Problem Management consists of two major processes: Reactive Problem Management: generally executed as part of Service Operation. Proactive Problem Management: initiated in Service Operation, but generally driven as part of Continual Service Improvement. The activities are: Problem detection and logging: - Use incident guidelines for problem identification - Log all relevant details of a problem so that a full historic record exists - Other processes (e.g. Availability, Security) could log problems prior to incident occurring. Problem categorization and prioritization: Categorize the problem by functional areas of the IT organisation, - Assess urgency frequency and impact to assign priority. Problem Investigation and Diagnosis, Assign to IT functional area for further investigation, - Apply appropriate level of resources and expertise to find a resolution proportionate to priority level. Workarounds and raising a Known Error Record: - In cases where a workaround is found, it is important that the problem record remains open, and details of the workaround are always documented within the Problem Record. As soon as the diagnosis is complete, and particularly where a workaround has been found (even though it may not be a permanent resolution), a Known Error Record must be raised and placed in the KEDB – so if further incidents or problems arise, they can be identified and the service restored more quickly. Problem resolution: - Problem record closed when known error located and workaround identified. Problem closure: - Problem record closed when known error located and workaround identified. Major Problem Review and errors detected in the  
  • 105. Copyright 2013 Martin Palmgren EVP .COMMUNICATE respond to requests. It is also responsible for ensuring that the rights that they have provided are being properly used. Information Security Management plays a vital role in detecting un Authorised access and comparing it with the rights that were provided by Access Management. Access Management may also be required to provide a record of access for specific services during forensic investigations. If a user is suspected of breaches of policy, inappropriate use of resources, or fraudulent use of data, Access Management may be required to provide evidence of dates, times and even content of that user’s access to specific services. Removing or restricting rights – Just as Access Management provides rights to use a service, it is also responsible for revoking those rights. Again, this is not a decision that it makes on its own. Access Management will execute the decisions and policies made during Service Strategy and Design and also decisions made by managers within the organisation. Removing access is usually done in the following circumstances: Death, - Resignation, - Dismissal, or - User has changed roles etc. Input: - Human Resources, - Change Management, - Information Security Management, - Service Level Management Output: - Configuration Management. Service Improvement Service Improvement, - Continuous Improvement, - Measure & Report Continuous Improvement Value Added: Fundamental to Continual Service Improvement (CSI) is the concept of measurement. At the beginning of the Service Lifecycle, Service Strategy and Service Design will identify this information. Continual Service Improvement uses this information to define the “As Is” and “To Be” for both business and IT. Objectives: Fundamental to Continual Service Improvement (CSI) is the concept of measurement where we use the an Improvement Process. At the beginning of the Service Lifecycle, Service Strategy and Service Design will identify this information. Continual Service Improvement uses this information to find where we are now and identify the ideal situation for both business and IT. Bench: Cost effectiveness, cycle time, capacity to understand customer needs, business contribution Activities: Step One: Define what you need to measure. Talk to the business, find out what your customer’s needs are and discuss with IT Management how those needs can be met. The Service Catalogue is a customer facing tool that can be used in discussion with customer’s service level requirements. Step Two: Define what you can measure. Each organisation has limitations on what it can measure. If you cannot measure, it should not appear in an SLA. Identify what tools you have in place to measure, and what they actually do measure. Step Three: Gather data. This requires  
  • 106. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Chapter 11. To leverage IT for Strategic Advantage Value, Profit, People – What is your unique competitive advantage? To leverage IT to execute on the set business strategy we need to effectively focus on: Value, Profit and people aligned to create a unique competitive advantage. The tandem is an excellent metaphor for the Business IT relationship. Where Information Technology can accellerate “Go to market”, “Cycle time” and “Cost effectiveness” it is for the Business to set direction and for the IT Department to support the business model. This is also true for the non brick and mortar references that have emerged from silicon valley. Amazon sells books and online store space. Google the opportunity to find things + run applications on a cloud (mutualised storage space outside the firewall) + hosted services such as email (the opportunity to communicate in writing and keep a trace). Ebay enables the exchange of goods. Twitter provides a tool for self promotion and advertisement. Facebook fills the void of distance and keep the contact with your friends and the opportunity to make new acquantainces. Linkedin the opportunity to keep up to date with your professional network + some promotional features. The business model sets the direction enabled by best in class technology. Why it is critical for the business to acquire the IT Service Portfolio End to End I was recently contacted by a large Editor (as most of you like know I have accompanied a number of IT consulting companies and editors in their “Go to Market” with Client acquisition, (Large) Account Introductions, Alliances (notably with BIG 6 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  
  • 107. Copyright 2013 Martin Palmgren EVP .COMMUNICATE reasons why an internal client can refuse to sign off the delivery of an application because the colour of beige is not right where he most likely know that the definition did not correspond to the needs of the business in the first place and certainly less so 18 or 36 months (processes modelled and defined by a consultant, translated and programmed) down the road. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated. Reconstruct Boundries Would you sign up to run a retail business operation where you do not know what clients consume which product / service at a specified quantity and subsequently be billed for their consumption (nor how you will finance the future run and build)? This is however the reality for most CIO's! The focus of a service based model is to demonstrate how IT Delivers Value to the business, that is delivers services to business needs (cost effectively, or at least at a specified cost rate that permit to take qualified decisions) over time with an effective IT Business Model and Value Proposition. We see Total Cost of Ownership (TCO) as the corner stone to move further from "IT generates to much cost" where we can demonstrate who consumes what services (and should subsequently pay for what they consume) to obtain the means (investments) and ends (budgets). To run a cost effective IT Operation that delivers to business expectations and leverages the execution of the set strategy (1) you would need to build a clear IT Service Strategy (what services do we deliver to the business) with Total Cost of Ownership per user with: cost (how much does each service cost), consumption (how much does the individual user consume) and chargeback (consumed services are allocated "charged back" on an effective cost basis to the business units) (2) in order to be able to provide the means (necessary investments) and ends ( budget). With the right support (best in class technology) this can be done in weeks with a top down (General Ledger), Bottom Up (effective cost) (3) analysis and tied to the roll out of an 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  
  • 108. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - 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 a minimum requirement to build an effective IT Strategy to the needs of the business where the perspective has to be completed with a Design (Demand and Supply) and Build (supported by IT processed with clear KPI’s) phase to tie the strategic value piece with the operational elements of IT service delivery. Govern It is crucial to build governance in to the execution of the Business and subsequently the IT Strategy. COBIT 5 helps IT leaders provide a business view of IT’s ability to create value and support enterprise goals through effective IT processes and build process capability and can be used to: Develop process improvement, Deliver value to the business, Measure the achievement of current or projected business goals, Benchmark and deliver consistent reporting, and ensure organisational compliance. Shift focus from customers to non-customers Salesforce.com have over the last year demonstrated the ability to shift focus from the traditional customer (that in most cases had no desire to implement the “hosted provider solution” as it would significantly reduce the dependency on legacy applications that stakeholders and a significant number of employees had build their career on). A recent acquisition by the business management at France’s major airline permitted a major improvement to the business both from a capability and performance perspective to a fraction of the cost, and provided the IT department with 600 resources to perform other tasks. The IT department will have to rapidly shift their business model from “reward and  
  • 109. Copyright 2013 Martin Palmgren EVP .COMMUNICATE The CIO and IT department hence needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated. IT contributes to business objectives The IT service proposition is aligned to the business strategy as: Stakeholder expectations are understood and IT propose a service portfolio that correspond to Demand and Cost drivers, Business Contribution, Cost, Consumption & Chargeback is identified, Focus is on perfect order business transactions, Services are effective (demand and cost drivers identified), Services are competitive (Benchmark Industry Market Forces) and New technological solutions that could change how current business is performed are explored, proposed and implemented. IT provides competitive leverage As the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated in: An IT Business Model “This is how we deliver IT services to the business” and a Business IT Value proposition “This is how we support business objectives with services in a time to market perspective”. The Business (IT) Strategy, link to operations We Link Strategy and Operations as we Develop the Strategy, Translate the Strategy, Plan Operations, Monitor and Learn, Test and Adapt the Strategy, Execute Procedures and Initiatives. Business (IT) Tactics 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  
  • 110. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - How is technology helping us win against traditional and new competitors? - How can we use technology to enter new markets? 2. What will it take to exceed our customers’ expectations in a digital world? Questions to ask: - How does our customer experience compare with that of leaders in other sectors? - What will our customers expect in the future, and what will it take to delight them? - Do we have clear plans for how to meet or exceed their expectations? 3. Do our business plans reflect the full potential of technology to improve our performance? Questions to ask: - Has the P&L opportunity and threat from IT been quantified by business unit and by market? - Will our current plans fully capture the opportunity and neutralize the threat? - What is the time horizon of these plans, and have they been factored into future financial projections for both business and IT? 4. Is our portfolio of technology investments aligned with opportunities and threats? Questions to ask: - How well is our IT-investment portfolio aligned with business value with regard to opportunities and threats? - How well does the portfolio balance short-term and long-term needs? - Do we have effective value-assurance processes in place to mitigate execution risk? 5. How will IT improve our operational and strategic agility? Questions to ask:  
  • 111. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 9. Are we making the most of our technology story? Questions to ask: - What are the key messages we should communicate? - How, when, and to whom should they be communicated? The CIO and the IT Department need to position as premium provider of IT services and focus on value to cost. In order to avoid the "do we really need a CIO and IT department to bother us with technology when we can use the cloud?" the CIO has to ensure that the business strategy and business objectives are supported by IT (from a Business and IT architecture perspective). Where the IT Strategy support Strategy execution, "Time to Market", Cost Effectiveness and stakeholder expectations from an Executive, Business Unit, IT Management and IT Risk Management perspective. To deliver business value with IT we need to Focus on the Business Bottom Line: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. The IT Bottom line is that up to 40 % of current IT spend occurs outside the IT budget (CRM, Cloud). The IT department needs to position itself as a facilitator to IT services and effectively address emerging needs, market opportunities and demonstrate that the current Business Model is supported effectively. The IT department should facilitate the access to IT services to support new and current business initiatives. The business strategy emerge out of a number of initiatives that are successful or not. The IT department need to support the “Run” of day-to-day operations as well as new projects. The Cloud might particularly be of interest within this frame. IT must be responsible for profit and loss from a business perspective and be managed like a business. The fact is the technology will play a bigger role in order for business to thrive in the future. The level of implication of IT varies as it depends on 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? ,-  
  • 112. Copyright 2013 Martin Palmgren EVP .COMMUNICATE and innovative technology solutions to improve competitiveness, demonstrated and articulated.  

×