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The Enterprise Architects Dilemma: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Service Strategy

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

This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here:
http://flevy.com/browse/business-document/the-enterprise-architects-dilemma-deliver-business-value-with-it-run-aligned-to-described-itil-activities-and-processes-with-a-service-strategy-385

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 Enterprise Architects Dilemma: Deliver Business Value with IT! - Run - Aligned to described ITIL activities and processes with a Service Strategy? provides a breakout for those that would like to focus on this area.

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

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  • 1. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Title: The Enterprise Architects Dilemma: Deliver Business Value with IT! - Run Aligned to described ITIL activities and processes with a Service Strategy ISBN: Official website: http://deliverbusinessvaluewithit.com/ AUTHOR Martin PALMGREN, EVP .COMMUNICATE Copyright The Enterprise Architects Dilemma: Deliver Business Value with IT! - Run Aligned to described ITIL activities and processes with a Service Strategy AUTHOR Martin PALMGREN, EVP .COMMUNICATE 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  
  • 2. Copyright 2013 Martin Palmgren EVP .COMMUNICATE group dedicated to deliver business value with IT with + 850 international on invitation only CXO's. If you are in IT operations and you are a not a CEO / CIO / IT Executive I would encourage you to join the “Governance Office ” @ http://www.linkedin.com/groups?groupDashboard=&gid=2479146 a group dedicated to deliver business value with IT from a non executive perspective. If you believe to be among the top 100 IT or Business leaders that leverage business value with IT "Deliver Business Value with IT" - The editorial council http://www.linkedin.com/groups/Deliver-Business-Value-IT-editorial-3807899/about is a forum dedicated to the finest business and IT academics. Cheers Martin What the reviewers said “ The “Deliver Business Value with IT” series is an extremely solid piece of work that comes across as the A-Z reference of how to execute and implement IT strategy from a CIO level perspective. The reader will learn robust approaches to deliver services designed to support IT and Business drivers. The perspective that Martin spells out permits an overview of how to leverage existing frameworks but also to effectively support the execution of an IT Strategy aligned with the Business Strategy.” (Jean-Louis Leignel, Ex CIO of the Schneider Electric Group ; past vice-chairman of ISACA (Information System Audit and Control Association), of ISACA’s IT Governance Committee and of the AFAI association (ISACA’s french chapter)). “The focus that Martin takes in the “Deliver Business Value with IT” series will help in tackling the seven main non-technical challenges any CIO or other senior IT 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?  
  • 3. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Where do you/your customers normally turn for information about or solutions to business problems? Gartner, Forrester, ACCENTURE, McKinsey, Booz Allen (Top 3). What do you see as the role of the book in the modern world of immediate online content? Where an article is an excellent opportunity to share a reflection or an observation the longer book format permit and end to end observation on a subject where a blog post or article would be to short. In my case I have used articles and blog post to reflect on different aspects and deliver them in a crisp format. The articles / blog posts have then been combined with other aspects of the story to form the book. The book can then be delivered in a paper, electronic or audio format. The question is not weather the book is valid as format or not, the challenge is to find writers capable to synthesis the big picture and deliver it in a chewable format and still retain the attention of the reader. But then again this is not only the challenge of the book format where most articles and blog posts are “journalistic sensational” and few address questions where you need to dig in most likely due to the lack of competence / knowledge on the subject hence the social media or cloud, next fad frenzy where few of the “writers” would be able to describe the landscape with ROI to back up the logics of an investment. All that you would like to know in regards of the “Deliver Business Value with IT” series What is it about the topic that will get readers excited? After the “how do we align business needs to how IT works” (that is Business IT Alignment) clearly seen in SAP implementations the focus of the CIO need to be on how do we support / “leverage the execution of the business strategy with IT” where the IT Department supports new emerging business initiatives that will eventually form the business strategy as they succeed of fail. That said the IT department has not only the responsibility but should be held accountable for how well they help the business side understand how to leverage existing technology solutions (buy / make) effectively hence the notion of service delivery defined not as basic help desk but as a full fledged business partner and this would include IT Financial Management. Why do you think this book would be welcomed by potential customers? Deliver Business Value with IT will help the IT Department to move from a mere third party provider of Information Technology to a position of a full fledged business partner with a comprehension of business needs, stakeholder expectations and strategy execution and how to support the latter. How do you see your book being different from any existing or competing titles? We help the reader evolve from a position of “there are business needs and stakeholder expectations” (see COBIT 5 that is today one of the few IT frameworks that has included the notion “the needs of the business” and stakeholder expectations) to a potential position of a a full fledged business partner with a comprehension of business needs, stakeholder expectations and strategy execution and how to support the latter. For COBIT 5 practintioners the perspective presented in ”Deliver Business Value with IT” pulls the logics presented in COBIT 5 together that you can effectively leverage with the IT Scorecard.  
  • 4. Copyright 2013 Martin Palmgren EVP .COMMUNICATE (Actionable Story Boards) @ Flevy https://flevy.com /seller/mpalmgre/ref=mpalmgre Why flevy? Flevy is a market place for premium business document. Share actionable storyboards and documents that I use with my high level clients. Flick out flick out the document / slide set on a pad / smart phone / lap top and start to share with your Colleagues, CIO, Business Executives and Board on the spot. Related Publications by Martin Palmgren in a Storyboard Format A Story Board is an actionable document conceived in .ppt and often presented in PDF that permit you to flick out the slide set on a pad / smart phone / lap top and start to share with your CIO, Executives and Board on the spot. Design, Build and Run an Effective IT (Service) Strategy to Business Needs https://flevy.com/browse/business-document/design-build-and-run-an-effective-it-service-strategy-to-business-needs-279/ref=mpalmgre Get Your Cloud Strategy Right https://flevy.com/browse/business-document/get-your-cloud-strategy-right-286/ref=mpalmgre Leverage Business Strategy Execution with IT https://flevy.com/browse/business-document/leverage-business-strategy-execution-with-it-281/ref=mpalmgre Logics for IT Sourcing (Internal, Shared service center, Out, Cloud) https://flevy.com/browse/business-document/logics-for-it-sourcing-internal-shared-service-center-out-cloud-285/ref=mpalmgre Build an IT Service Strategy Leveraged by ITIL V2 & 3 Design - Spell out IT Activities from a Demand and Supplier Side 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 How to Build a CIO Office  
  • 5. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 9. Build - Set IT processes and key performance indicators. This is an introduction with a full version to be published on a stand alone basis. 10. Run - Aligned to described ITIL activities and processes with a Service Strategy, Service Design, Service Transition, Service Operation: - Function, - Process, Service Improvement. 11. To leverage IT for Strategic Advantage Each chapter has been conceived to be able to stand a consultation on a stand alone basis and cover key points. This might give to those that will read “Deliver Business Value with IT” end to end an impression of “deja vu” earlier in the book. Highlight: Focus on the BIG PICTURE! 1: To deliver Business Value with IT we need to Design, Build and Run an Effective IT (Service) Strategy to business needs We will take the reader and the business and IT executive team out of their “ivory tower” and in to “the valley of death” where we confront current “best in class IT practices” to what should be done that is to “support the execution of the business strategy with IT” as opposed to “how do we align business needs to how IT works” (that is Business IT Alignment) which is current best in class. We will leverage business models and concepts to permit the CIO and the IT department to meet the needs of the business (As Is, To Be). List of topics that will be covered in the chapter: 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.  
  • 6. Copyright 2013 Martin Palmgren EVP .COMMUNICATE These are then Broken down in to Key Activities Performed to Responsibility and Accountability Charts (RACI). The logics in chapter 4 clearly links back to CobIT 4.1, ValIT, RiskIT. List of topics that will be covered in the chapter: We understand: -­‐ -­‐ -­‐ -­‐ That IT support business objectives and processes with Investment Management The need for Process Management A coherent Business Architecture The need for a defined direction and Market Position 5: Cloud computing thunder or lightening? How to draw the fluff out of the cloud and effectively support business objectives with IT The introductory material in this chapter is developed to provide pragmatic guidance on how to develop and execute your IT Strategy with effective “Cloud” Sourcing (Computing) to support the Business Strategy and Business Objectives. List of topics that will be covered in the chapter: We understand: -­‐ -­‐ -­‐ -­‐ How to build and effective cloud strategy That to cloud is a traditional “to make or to buy” decision That a decision should either be demand or cost driven, if it is political this should be recognized. 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  
  • 7. Copyright 2013 Martin Palmgren EVP .COMMUNICATE demand and supplier side (Design the IT Strategy) to support the Business Strategy and Business Objectives. List of topics that will be covered in the chapter: We understand how to: -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ “Canvas” the IT Service Strategy, Develop a High level picture of the Business (IT) Strategy, Articulate the Business (IT) Strategy, Develop the Business (IT) Service Strategy, Build the Business (IT) Service Strategy, Govern the Business (IT) Service Strategy, Design the Technology Architecture, Build the Sourcing Strategy, Develop the Program Plan, Leverage Business Strategy Execution 9: Build - Set IT processes and key performance indicators. The introductory material in this chapter is developed to provide pragmatic guidance on how to develop and execute your IT Strategy as you Set IT processes and key performance indicators (Build the IT Strategy) to support the Business Strategy and Business Objectives. List of topics that will be covered in the chapter: We understand how to: -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ -­‐   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
  • 8. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Figures Figure 0: IT supports the run and emerging business initiatives: http://deliverbusinessvaluewithit.wordpress.com/2013/03/19/the-very-reason-why-most-it-strategies-fail-and-miserably/ Figure 1: We articulate the Value proposition with a storyboard: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/we-articulate-the-value-proposition-with-a-storyboard/ Figure 2: Time to Market, Cost Effectiveness, CycleTime: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/time-to-market-cost-effectiveness-cycle-time/ Figure 3: Connect information: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/connect-information/ Figure 4: IT support Business Objectives: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/it-support-business-objectives/ Figure 5: Deliver effective business strategy execution: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/deliver-effective-business-strategy-execution/ Figure 6: The roadmap reflects stakeholder expectations: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-roadmap-reflects-stakeholder-expectations/ Figure 7: The ServiceStrategy support Business Drivers: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-service-strategy-support-business-drivers/ Figure 8: End to end industrialisation of business processes: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/end-to-end-industrialisation-of-business-processes/ Figure 9: The Business Strategy is executed by IT: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-business-strategy-is-executed-by-it/ Figure 10: Confirm business vision: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/confirm-business-vision/ Figure 11: Articulate the Business Value Proposition: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/articulate-the-business-value-proposition/ Figure 12: Deliver the Business Architecture: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/deliver-the-business-architecture/ 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/  
  • 9. Copyright 2013 Martin Palmgren EVP .COMMUNICATE the Business (IT) Strategy and how the IT department can deliver effectively to business objectives, that is to deliver business value with IT: - What is the Business’s strategy and plans? , - What is the current business model that IT has to support? ,Where could IT make a significant impact on the business? ,- Are there any further opportunities to use IT? , - How do we provide IT Services as we meet demand and cost drivers where the decision is to make (internal) or to buy (external service provider)? We have identified 2 key trends for the CIO to focus on: - Differentiation (That is, how does IT provide a competitive advantage for the business), and - Cost (How does the IT Department deliver IT Services cost effectively). To do so we need to Build an effective IT Delivery Model to meet business needs and expectations as we leverage business strategy execution and business processes supported by an IT Service strategy (ITIL, IT – CMF, CobIT 5 (ValIT, CobIT 4.1, RiskIT), ISO 38 500, TOGAF and ISO 9001, ISO 27 001, COSO) delivered in a Business IT roadmap; that is how do we support business objectives and processes leveraged by IT and an effective IT Services strategy. Within this scope we would by definition address how we execute the IT service strategy (ITIL) Design - Spell out IT Activities from a demand and supplier side, Build - Set IT processes and key performance indicators, Run - Aligned to described ITIL activities and processes and full IT Financial Management (supported by delivery capability IT CMF, COBIT 5). Once services defined we can then decide where to run the application that support the IT and or Business Services (server / internal / external cloud / outsourced provider). Within the frame of an acquisition up to 80% of the value realisation is (can be) on the IT side. The failure to address IT and the IT strategy can be an additional (1 out of 3) reason to M & A failure. If we assume that to deliver business value with IT we need to support business objectives, the integration of a new entity is an optimisation of the current IT strategy (how we support business objectives and processes). We would obviously need to understand (and hopefully have the opportunity) how the current IT run before the purchase (IT due diligence) with full IT Financial Management to figure out the actual cost of delivered IT services (cost, consumption, chargeback). Once services defined we can then decide where to run the applications that support the IT and or Business Service (server / internal / external cloud / outsourced provider). We also need to define the purpose of the purchase (invest / divest) in the overall corporate strategy where it is of little use and a significant cost to integrate all systems 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.  
  • 10. Copyright 2013 Martin Palmgren EVP .COMMUNICATE permits an overview of how to leverage existing frameworks but also to effectively support the execution of an IT Strategy aligned with the Business Strategy.” (Jean-Louis Leignel, Ex CIO of the Schneider Electric Group ; past vice-chairman of ISACA (Information System Audit and Control Association), of ISACA’s IT Governance Committee and of the AFAI association (ISACA’s french chapter)) “The “Deliver business value with IT” series gives an excellent practitioner’s view on how to realize value from IT investments. Martin successfully introduces the core theories and practices regarding this topic that recently had a lot of attention from both academics and practitioners. The material in his book also gives for CIO’s a good overview of the most popular IT governance and IT management frameworks including the relative new ones such as ISO 38500 and COBIT 5. This publication may help CIO’s and senior IT people to better understand that the only goal of IT is to support the business and that it is the business that ultimately will make profit from developed applications.” (Prof. dr. Wim Van Grembergen, University of Antwerp & Antwerp Management School, Information Technology Alignment and Governance Research Institute) “The focus that Martin takes in the “Deliver Business Value with IT” series will help in tackling the seven main non-technical challenges any CIO or other senior IT business leaders will face: 1. How and what should I communicate to whom in what way? 2. What to think of when it comes to competences needed to provide my IT services? 3. How to provide the best value at the best cost? 4. What to think of when ensuring efficient and effective delivery of projects? 5. How to establish a sourcing strategy and determining how to manage your vendors? 6. What are the best practices for managing my operations, and what to think of? 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  
  • 11. Copyright 2013 Martin Palmgren EVP .COMMUNICATE The end-to-end service delivery still remains under the responsibility of the CIO. And companies most valuable assets, knowledge and information, getting distributed over the cloud, require higher security measures. “Deliver Business Value with IT” correctly states that the value of IT is even growing over years and becomes the beating heart in the Business processes. Efficiency and effectiveness are more than ever the key concepts of IT management driven by the business needs. By bridging the key elements of best practice IT management Cobit, ITIL, Togaf, COSO, … he provides us with an excellent approach to IT management of the 21 century.” (Bjorn Gronquist, Audit of IT Governance and Cobit compliance, he has also held the position as Chief Security Officer & Enterprise Architect @ a Capgemini Group Level) " I am honored to have the opportunity to review the “Deliver Business Value with IT” series, which I found to be very comprehensive and to the point. With the proliferation of public form of Cloud Computing, CIO's are threatened of their survival in the corporate world. Business units can readily meet their compute needs by purchasing services directly from service providers without using IT. These services come with predictable cost at given service levels with high degree of agility. IT organizations, on the other hand, are order takers. Martin's publication on designing, building and running an effective IT Strategy to meet business needs was developed to help CIOs create business value by addressing the following mega IT challenges: 1. How to transform IT from an order taker to a product and service organization; 2. How to make IT more agile to create value from a time-to-market perspective; 3. How to develop product and services that are fully aligned with business needs and, then, offer them at predictable cost with given service levels 4. How to provide effective IT Governance. There will be times when it will be more effective to buy services directly from Service Providers as opposed to building them in house. But those decisions should be made in a more methodical way. But, this will require for IT to administer a very effective and sound IT governance process. IT should be the keeper of the product and service catalog. “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).  
  • 12. Copyright 2013 Martin Palmgren EVP .COMMUNICATE compliance check list, validate that a process is measured and managed or if IT has a dashboard, but to ensure that business process and notably those of support functions such as IT support new and ongoing business initiatives. The execution of the defined business strategy is often a mystery (missing link) both on the Business and the IT side. The truth is that regardless of how well the executive team draws out the strategy in the boardroom the bottom line is that the business initiatives that were supported by clients succeeds, those not supported by clients (that do not get it) fail and disappear. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated. Author Introduction Martin Palmgren is a seasoned Senior Business / IT Strategy and Transformation Executive that has addressed Strategy formulation and roll out for fortune 500 businesses internationally with a focus on how to ensure that the business strategy and objectives are supported by IT with an effective IT Strategy and Governance (that is how do we support business objectives and processes leveraged by IT and an effective IT strategy). Martin is an expert in “how to deliver business value with IT” where he works with both Business and IT Executives to reach this objectives and has delivered best in class practice with major actors in the Pharma, Bank, Manufacturing and Insurance 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  
  • 13. Copyright 2013 Martin Palmgren EVP .COMMUNICATE It is also within this frame that Martin founds the CIO Office 2.0 that sports + 850 on invitation only CIO's and CEO’s that focus on how to deliver business value with IT. In 2002 (– 2006) Martin joins a team of outgoing Gemini Consulting Business consultants to accelerate the development of ADSAP as Executive Vice President and associate (a start up specialised in the resale of industrial equipment (online market place) and Enterprise Portal Development) with the objective to accompany the executive management, identify business opportunities and to ensure the development of concordant solutions in the industrial equipment segment. He sells his parts in 2006 within the frame of the acquisition by a major US based actor within the online market place segment. Mission: Portal conception and solution development: structure, content, classification system elaboration (profession and functional oriented taxonomy: 56 000 lines, 7 languages, compatible with UNSPSC, ECCMA & ECLASS). Position and offer: target and operational marketing identification (price, geographical zone, mix). Partner & competition bench. Development of an international partner program (+ 30 000 ads on a monthly basis). Martin also held the role of general secretary to the CEO the former CFO of a listed large French group and actively contributed to the overall strategy and was key to international development. Martin joins CAP GEMINI ERNST & YOUNG (Cap Gemini SA) in 1999 (– 2002) as an expatriate project manager affiliated to CGE & Y Sweden and direct report to the Chief Knowledge Officer (later CIO) on a group level. Objective: To leverage the groups presence, shorten go to market and win additional market share through best in class solutions to: deliver, share references, blue prints, delivered solutions, find experts and staff internationally. Mission: Client needs identification (audit, definition). Active participation in the conception and development and roll out of collaborative tools: my office, my connections (expert identification search database: 6000 competencies, 56 000 competency profiles with daily updates to local HR databases). Other assignments: Group initiative proposition articulation (business development): Cost optimization in the aerial, energy and utility sector (CA 20 M€), IAS (International Accounting Standards): development, implementation, evaluation and sector reporting. Client portfolio development: trend, brand and market 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  
  • 14. Copyright 2013 Martin Palmgren EVP .COMMUNICATE adhoc projects in regards of opportunities to do so with the client. On the client side fire fighting that is to solve problems on an adhoc basis, where focus is on work arounds and throwing man hours and conceive ideal solutions on paper (encouraged by most consulting companies) leaves most businesses with a poor industrialization of business and IT processes. Clients need to step up to buy a full value portfolio of services (em)powered by the purchase department (this is yet to be done) on the other side large service providers should leverage their international organisations to sell and deliver end to end solutions to their clients. This will also permit significant cross selling with an increase in the added value perceived (that will take the said actors out of the equation to compete on cost only). How poor IT Financial Management (accountability) set your business, CIO and IT department up for failure! If you owned an airline company would you accept that when you asked how many passengers that had been transported, which distances where the most profitable, how many tickets sold and at what price and if time tables and destination where kept as promised and the amount of gas consumed the reply that the planes had been kept in the air and that any constraints would hamper creativity (innovation). This is however the case for most businesses where the IT department on the premise that they "keep the lights on" should not be held accountable neither for cost nor delivery and IT Financial management is a bean counting mentality (when I spoke to a friend in a top 3 audit firm in regards of this phenomena he told me that whenever a client told him the to keep records of his business was a bean counting mentality he would by definition look closer and 10 times out of 10 would find the records to be revised and basic rules broken) and that to have clear accountability would hamper creativity (innovation). The bottom line is that most outsourcing is performed not to optimise cost but to get a minimum level of service delivered (and at least the illusion of service level agreements to be met). When you sign up as a student in business administration you learn how to assign cost, read and build a balance sheet, calculate and optimise cost in 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).  
  • 15. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Michael Porter (http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1) identified competitive advantage by differentiation or cost. The value equation norm in the industrial world has since become differentiation and cost . The IT department as provider of services can no longer focus on one or the other. Standardisation both from a service and process perspective is a must. Each business is unique but the processes used to deliver to business objectives are to 80% the same across sectors. Within manufacturing standardisation is key, the IT department should move down the same path. If Salesforce.com or box.net, Oracle and SAP can deliver cross industry and sector we need to define the amount of “tailor made” that we are ready to pay for and how “Agile” do we need to be? To manufacture a product or build a building we specify the description to the needs of the client, deliver a blue print and produce / build. Changes in the production are costly, yet this is the very basis for “Agile” reason why most IT Contractors would not accept a set cost frame for a contract where the blue print was not defined well enough to produce to the needs of the client in the first place (moving target dilemma). The bottom line is that we need to rapidly be able to understand modelise and deliver to the needs of the business and business objectives. If standardised solutions cover 80 % of the needs that would most likely be enough. To systematically capture (modelise) unique “tailored” business processes in a modelisation tool that are not industrialised is not only a waste of time but of enterprise resources (unless this would be required by the audit team). A coherent approach would be to identify business processes that support activities that could be industrialied with IT when needed and modelised if we cannot find a standardised solution off the shelf. Google, box.com, Salesforce and other hosted providers dispose of resources that most IT departments could only dream of to address specific subjects such as mail, document storage, CRM. Why reinvent the wheel when we can extrapolate on hundreds of manyears of cumulated knowledge (not to mention budgets funded by IPO’s) all in the name of “security”? Even my tailor (one of the finest in Paris) has moved forward to a model of “tailor made” to half custom made where he has realised that a person that does not know what he needed in the first place will systematically be disappointed and want 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  
  • 16. Copyright 2013 Martin Palmgren EVP .COMMUNICATE provide cost transparency on an ongoing basis, nor do they deliver to the above set objectives. You need to pull together an end-to-end perspective of IT Spend to: - Present a full granular IT Financial Management Model and "as a service”, - Align Project Spend with Service Spend, - Provide a transversal view that is an IT sub ledger that break out cost, consumption, show - / chargeback not only a “macro perspective”, Efficiency of each Service, - Leverage / consolidate the initiatives that you have already put in place, - Optimise the service portfolio as we identify opportunities to remove unused services (licenses) incremental cumulation, the time of the “silver bullet magical solutions” is over (if it ever existed), and take decisions based on economical logics and business needs rather than the “fad” of the moment, - Meet stakeholder expectations from an executive and business management perspective would this be among your current priorities You need to demonstrate how you Create Business Value and Optimise IT’s contribution to the business: - Service Portfolio optimised around business value - IT spend streamlined through in depth cost transparency - Measure IT performance with financial KPIs - Model customer consumption of IT services – chargeback - Optimise internal processes, controls, organisation - Demonstrate the value that IT contributes to the business - In the follow business critical areas: - Budget – Strategic Planning - IT Controlling - Simulate scenarios - M & A, data center consolidation, etc - Demonstrate IT’s contribution to the business - ITIL v3 implementations, BSM projects Where the Bottom line is that: IT Management needs to transform their business model: - 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  
  • 17. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 90 percent of our corporate workload sits on our internal cloud, and it runs most of our footprint globally. The cloud ecosystem has delivered the ability to say yes and get more done faster, better, cheaper. What triggered Revlon’s cloud move? The company went through a server refresh, and chose to only replace 20% of its hardware resources. The remaining budget would go into private cloud technologies, such as VMWare. The first step was a storage area network in which data was pooled across enterprise hardware. The second step was to put applications on it. The approach was incremental a crawl, walk, run strategy to gradually introduce the cloud to the enterprise. We did not spend more we changed how we spent our money. Revlon was also able to take charge of its own disaster recovery. We internalized our DR. As we reduced external expenditure we were able to give it back to the business to invest in revenue driving initiatives. For Revlon, the more money R&D has to develop new products to get to our consumers and for marketing to tell our “product story” and get it out to our channels and use the media to talk about our glamorous products the more succesfull the business. Another change for Revlon is that it has become a cloud provider itself as we push our cloud out to suppliers and contractors. At the end of the day, we needed to rapidly collaborate with our eco system that is our community of vendors and suppliers, and enable them to interact with us easily where the bottom line is to drive growth for Revlon.” Govern It is crucial to build governance in to the execution of the Business and subsequently the IT Strategy. COBIT 5 helps IT leaders provide a business view of IT’s ability to create value and support enterprise goals through effective IT processes and build process capability and can be used to: Develop process improvement, Deliver value to the business, Measure the achievement of current or projected business goals, Benchmark and deliver consistent reporting, and ensure organisational compliance. Shift focus from customers to non-customers 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  
  • 18. Copyright 2013 Martin Palmgren EVP .COMMUNICATE analytical tools and frameworks such as the strategy canvas, the four actions framework and the eliminate-reduce-raise-create grid. The second part describes the four principles of blue ocean strategy formulation: how to create uncontested market space by reconstructing market boundaries, as we focus on the big picture, reach beyond existing demand and get the strategic sequence right. These four formulation principles address how an organisation can create blue oceans as we look across the six conventional boundaries of competition (Six Paths Framework), reduce planning risk by following the four steps of visualizing strategy, create new demand as we unlock the three tiers of noncustomers and launch a commercially-viable blue ocean idea as we align unprecedented utility of an offer with strategic price and target cost and by overcoming adoption hurdles. “Blue Ocean Strategy” looks across industries to demonstrate how to break out of traditional competitive (structuralist) strategic thinking and to grow demand and profits for the company and the industry as we use blue ocean (reconstructionist) strategic thinking. The third and final part describes the two key implementation principles of blue ocean strategy that would include tipping point leadership and fair process, essential for leaders to overcome the four key organisational hurdles that can prevent even the best strategies from being executed. The four key hurdles comprise the cognitive, resource, motivational and political hurdles that prevent people involved in strategy execution to understand the need to break from status quo, find the resources to implement the new strategic shift, keep your people committed to implementing the new strategy, and from overcome the powerful vested interests that may block the change. In the book the authors draw the attention of their readers towards the correlation of success stories across industries and the formulation of strategies that provide a solid base create unconventional success – a strategy termed as “Blue Ocean Strategy”. Unlike the “Red Ocean Strategy”, the conventional approach to business to beat competition derived from the military organisation, the “Blue Ocean Strategy” tries to align innovation with utility, price and cost positions. The book questions the phenomena of conventional choice between product / service differentiation and lower cost, but rather suggests that both differentiation and lower cost are achievable simultaneously. The authors ask “What is the best unit of analysis of profitable growth? Company? Industry?” – a fundamental question without which any strategy for profitable growth is not worthwhile. The authors justify with original and practical ideas that neither the 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.  
  • 19. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Step 5 - Implement: Implement the ideas that suit to the budget constraints. Implement the ideas collaborating closely with the staff. Inform staff and patients of the undergoing change. Be receptive to direct feedback. If I now describe what can happen in an IT project (all examples are fictional, for educational purpose and any similarity to a real IT project would be coincidental). Phase 1. - To support business processes and enhance the customer experience we: (this is where we tie back to the IDEO project journey): Step 1 - Observe: (Context A) A vendor of a process modelisation tool manages to convince the business or IT executive team that to provide a modelised version of business and IT processes was business critical and would demonstrate that the IT Strategy is business centric and that the IT department understands the Business, Business objectives and the Business strategy. (Context B) A business or IT internal client wants to industrialise a process or a bundle of services with IT. We decided to use the same consultants as for the six sigma initiative (below) to capture business processes. The problem is that the business people are to busy to do their job (and might not be able to formalise their processes). And if their work is automatised we might chuck their work out on the cloud or an outsourced provider as well (the last time they spoke to a consultant their colleague was fired (sorry made redundant, sorry given the opportunity to seek new challenges))? Obviously they do not get it. Step 2 - Synthesize: (Context A) The captured processes are modelised in a process modelisation tool and will sit in a cuppord. (Context B) The captured processes (in the case of the industrialisation effort) delivered by the somewhat reluctant users are translated by a business analyst in to user requirements. These are then transferred to managment for verification. The 300 pages document sit on a disk somewhere for 3 weeks to 3 months before it is shipped of for programming. Step 3 - Generate Ideas: The user requirements are programmed. Step 4 - Refine: The end user team is brought in 18 months after to validate the application. Hmm they might not have gotten it either. At least we avoided a fist fight… 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.  
  • 20. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Best case scenario: We engage a top 1 team of consultants, that will manage a top 2 team of consultants, that will in turn manage a top 3 team of consultants to deliver change and new revolutionarry projects to be presented to the board. A transversal Big Change programme is announced and consultants from the top 1, 2 and 3 consulting companies an invited and provided with the possibility to bring in new ideas. The business, IT and endusers are not consulted and business is delivered as usual. After a year or so the conclusions of the programme is delivered, the cover looked smashing but we did not have the time so we put it (burried it) in a drawer for a moment where we would have more time on our hands. Worst case scenario: We read this really good article by the guy who used to be the top hen for IT for the US government that decided to chuck IT out to the cloud not to have to run an IT department and IT resources (By the way I wonder why he stayed for such a short time before he went on to evangelise the cloud for salesforce). I wonder if we can chuck the IT department out to the cloud. Then the cloud provider could deal with users that are not happy. I wonder if the cost cutting genious that we brought in last year is available. On his recommendation we consitently cut the cost of IT for the (mobile) sales force. At the end of the day as they did not have an office or a fix computer why should they need a lap top? Not to forget that we made substantial economies on software licenses and storage space. Phase 4. - Set direction: We have the impression that we might not be on top of things and should add a bit of governance. The Internal audit department confirmed this impression as they confirmed that we clearly lacked focus due to the absence of an IT Dashboard. Best case scenario: As we where quite happy with the Big Change report , the first page does after all look smashing, and the weight of the paper makes my table more stable. We decide to once more bring in our favourite consultants. At the end of the day if the six sigma task force initiative had a few bumps it was not due to the fact that the principles that where implemented where directly applied from the Toyota production chain (they are after all very good at car construction) but certainly due to the fact that the users did not get it. Even though the delivery cycle now takes 180 days compared to 30 before at least it is measured and we can bench cost to competition. 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)  
  • 21. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Business focused technology can be a make or break factor as we innovate or reinvent a brand and business model Business focused technology can be a make or break factor as we innovate or reinvent a brand and business model. Angela Ahrendts for Harvard Business Review: “When I became the CEO of Burberry, in July 2006, luxury was one of the fastestgrowing sectors in the world. With its rich history, centered on trench coats that were recognized around the world, the Burberry brand should have had many advantages. But as I watched my top managers arrive for our first strategic planning meeting, something struck me right away. They had flown in from around the world to classic British weather, gray and damp, but not one of these more than 60 people was wearing a Burberry trench coat. I doubt that many of them even owned one. If our top people weren’t buying our products, despite the great discount they could get, how could we expect customers to pay full price for them?” Read the full article @ http://hbr.org/2013/01/burberrys-ceo-on-turning-an-aging-british-icon-into-a-global-luxury-brand/ar/1     Burburry have taken the a lead in the how to leverage business innovation with IT, notably with social as a key enabler through a “Facebook” driven platform that drives innovation bottom up where employess connect to share best practise on how to set up stores and sell products and even compete internally on a daily basis who sold more in “discussion groups” set up by the teams not by management. I would invite you to discover an interview @ http://blogs.hbr.org/video/2012/12/how-burberry-manages-talent.html?cm_mmc=email-_-newsletter-_cant_miss_update-_-hbrcm020813&referral=01087&utm_source=newsletter_cant_miss_update&utm_medium=email&utm_campaign=hbrcm020813 To support business strategy execution The execution of the defined business strategy is often a mystery (missing link) both on the Business and the IT side. The truth is that regardless of how well the executive team draws out the strategy in the boardroom the bottom line is that the business initiatives that were supported by clients succeeds, those not supported by clients (that do not get it) fail and disappear. The CIO and IT department hence needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. 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.  
  • 22. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Strategy Map Captured in a Strategy Map that Formalises stakeholder outcomes to deliver value. The Stakeholder Strategy Roadmap set the scope with Objectives: - Formalise stakeholder outcomes: To deliver value for all parties (partnership), Which drives Customer value: For effective and satisfied end users, That deliver - Business processes: Speed, process innovation and growth, Executed by - Employees and organisation: Collaboration that deliver strategy execution. Strategy Canvas Articulated in a Strategy Canvas The Stakeholder Strategy Map Formalises stakeholder outcomes to deliver value for all parties. The strategy canvas allow the teams to articulate and formulate objectives on a project / program basis for improved execution with an extended GAP, risk and added value analysis captured in a DARCI (Decision taker, Accountable, Responsible, Consulted & Informed). A Collaboration Theme Scorecard The Collaboration Theme Scorecard Sets process objectives, Identifies: levers for joint actions and wins, metrics and initiatives on a short, middle & long term basis. Objectives: - Set process objectives,- Identify levers for joint actions and wins,Identify metrics, Identify initiatives on a short, middle and long term basis. Levers: Joint: Steering committee, development committee, project teams, crossfunctional teams, process improvement teams and functional improvement teams. To deliver Business Value with IT, we need to integrate the notion of effective IT delivery as a core process across the organisation. With the contribution of Jerry Luftman I have earlier referred to Michael Porter. In terms of Porter’s Value Chain (http://hbr.org/product/competitive-advantage-the-value-chain-and-your-p-l-applying-michael-porter-s-value-chain-framework-to-your-business/an/8890BC-PDF-ENG ), 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, -  
  • 23. Copyright 2013 Martin Palmgren EVP .COMMUNICATE projects. Bottom line: We focus on value impact: As we focus on business objectives and processes that will have the most value impact as they are industrialised. We ensure success: A business executive sponsor and business champions is committed to the successful delivery of identified business objectives and process to be supported / industrialised. We select: The information technology was selected to best enable the process changes to generate the greatest value to the business. We deliver to the needs of the business and on target: IT and business management work together to identify and ensure the delivery of benefits. The relationship is essential to effectively support business objectives with IT (Business IT Alignment). The organisation moves from a pure cost center perspective to emphase value creation that is a profit center or investment center perspective. Managers evaluate and coordinate a portfolio of projects with an effective IT governance process. This would include for IT and business leaders to share accountability. This approach permit effective allocation of resources as we provide participants the opportunity to better understand the problems and opportunities that exist and how projects can be leveraged across the organisation to facilitate the integration of IT and support business objectives and processes and hence enhance the value of the business. As we leverage IT to: - Substantially reduce the cost of business processes, - Lower the costs of customers and suppliers, - Differentiate, - Develop new IT features to differentiate products and services, - Reduce the differentiation advantages of competitors, - Focus products and services at selected market niches, - Create new products and services that include IT components, - Develop unique new markets or market niches with the help of IT, - Make radical changes to business processes with IT that dramatically cut cost, improve quality, efficiency, or customer service and shorten time to market, - Manage regional and global business expansion, - Diversify and integrate into other products and services, - Create virtual organisations of business partners, - Develop inter enterprise information systems that support strategic business relationships with customers, suppliers, subcontractors, and other stakeholders. IT must be responsible for profit and loss from a business perspective By Daud Santosa (Chief Technology Officer, Member of the Board @ the Open Group and Distinguished Chief IT Open Group) “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. ”  
  • 24. Copyright 2013 Martin Palmgren EVP .COMMUNICATE To deliver effective Business and IT services supported by EA (Enterprise Architecture): There are numerous EA frameworks: TOGAF, DODAF, FEAF, Zachman that provide guidance to implement EA to business needs. Government and the private sector have spent millions of dollars with long life cycle to develop their EA programs and yet we still struggle to identify short term added value / result to the Business. On the other hand, technologies have changed rapidly and the business has to react quickly in order to beat competition. Numerous companies have started to build their EA program in order to support the business / Lines of Business (LoBs) but few have seen immediate result / business value with their EA program. A program must have both short and long term strategy in order to show immediate value to the business / LoBs. I also believe that the mentioned frameworks must change in the future in order to accommodate new emerging technologies and the need for business agility. We must be able provide business value in a short time frame. We need to focus on the area of the architecture that can provide short term business solutions and result. Many architecture practitioners face challenges of where to begin to implement EA to deliver immediate business results. We would typically start to implement EA in different domains of the architecture. It all depends on where the needs of the organisation, culture, and skill set resides. The common challenges that I have seen in most organisations would be that the: - Line of Business continues to develop new projects or add new features with the current existing business applications, IT organisation continues to replace old hardware and add new hardware / software to support new business requirements, has no standard technologies & IT governance, continues to adopt new emerging technologies. We begin our EA journey as we address the spelled out points on a short and long term basis. The primary focus of EA would be to support the future business and new projects first. Based on the drivers, we can begin to create future IT services, shared infrastructure, Enterprise Solution and new cost model to deliver sustainable growth and premier services as we focus on: The Business Bottom Line that is How fast we can get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. *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.  
  • 25. Copyright 2013 Martin Palmgren EVP .COMMUNICATE TOGAF and ISO 9001, ISO 27 001, COSO) delivered in a Business IT roadmap; that is how do we support business objectives and processes leveraged by IT and an effective IT Services strategy. Within this scope we would by definition address how we execute the IT service strategy (ITIL) Design - Spell out IT Activities from a demand and supplier side, Build - Set IT processes and key performance indicators, Run - Aligned to described ITIL activities and processes and full IT Financial Management (supported by delivery capability IT CMF, COBIT 5). Once services defined we can then decide where to run the application that support the IT and or Business Services (server / internal / external cloud / outsourced provider). Within the frame of an acquisition up to 80% of the value realisation is (can be) on the IT side. The failure to address IT and the IT strategy can be an additional (1 out of 3) reason to M & A failure. If we assume that to deliver business value with IT we need to support business objectives, the integration of a new entity is an optimisation of the current IT strategy (how we support business objectives and processes). We would obviously need to understand (and hopefully have the opportunity) how the current IT run before the purchase (IT due diligence) with full IT Financial Management to figure out the actual cost of delivered IT services (cost, consumption, chargeback). Once services defined we can then decide where to run the applications that support the IT and or Business Service (server / internal / external cloud / outsourced provider). We also need to define the purpose of the purchase (invest / divest) in the overall corporate strategy where it is of little use and a significant cost to integrate all systems in to a common backbone if the company is to be divested only a few years later. We could use an IT Scorecard to ensure that stakeholder expectations are met from an executive management, business line management, IT management and IT risk management perspective. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated. See also: “Get your IT Service Strategy right” http://www.brighttalk.com/community/it-service-management/webcast/534/23630 “Leverage Strategy with IT”  
  • 26. Copyright 2013 Martin Palmgren EVP .COMMUNICATE internally. Google has over the years enhanced their portfolio of application that run on their servers where individuals can use an email function (Gmail) to drive trafic to their search engine. This function was later made available to enterprises together with an office suite and google +. As Amazon (and Google) have become highly effective over time to negotiate storage space they at one point decided to leverage this ability to procure and run storage space less expensively available to individuals and enterprises. The principle is to provide storage space and services (Infrastructure as a Service (Iaas), Platform as a Service PaaS, Sofrtware as a Service (SaaS) outside the firewall on which the enterprise can run applications (in an architecture as a bundle of services). The public cloud can be used to either leverage cost or to rapidly develop new application architectures that can then continue to run on a public cloud or be brought in house to a server or a bundle of servers (private cloud). Where the needs of the business and the business strategy should drive the IT Strategy, the IT Department can leverage the business strategy with an effective IT Service Strategy that would spell out how the roadmap for how the IT Department will cost effectively run the IT Function but also how to support the business function where the IT Department support the business functions to simplify processes that can then be industrialised (automatised) when needed and on the cloud (external or internal) for speed / cost effectiveness when applicable. “Social media and the cloud” - Social media applications can either be run as in example 1) by an external provider to whom you outsource the data (Facebook* would be one example) or as in example 2) where an application / a bundle of applications that respond to the needs of the business “for example to interact with our customers” would run on an external or internal cloud. “Make or buy” – To outsource / cloud source (cloud) is a traditional “make or buy decision”, that is “do we perform this well internally at benchmarked cost or do we outsource for success”. One of the critical decisions in apple’s current success was to outsource a manufacturing that was defunct (cost / quality) and did not meet the expectations of the final customers. But to outsource / cloud source effectively as well as to validate the successful set up of a shared service centre, we need to understand the cost of the service delivered before and after the set up function (the cost to change provider should be taken in to account in the business case). “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  
  • 27. Copyright 2013 Martin Palmgren EVP .COMMUNICATE existent (demand and cost drivers not understood or not communicated well enough). At the end of the day, business executives take the decision to outsource / cloud source when: - IT is not perceived to understand stakeholder expectations, IT is not perceived to contribute to business objectives, IT is not perceived to deliver value to cost, IT is not perceived to deliver services to business needs, The service is a commodity and cost is the primary driver - The IT department is unable to deliver in a time to market perspective This is why a shared services or outsourcing solution is put in place since it forces the business to define services and service level agreements (as well as cost, consumption, chargeback) with an IT Business Model that is if not optimised at least focused on immediate business priorities and drivers (demand and cost). Build and demonstrate IT success To build and demonstrate IT Success we need to focus on the Business IT roadmap; that is how do we (as CIO, IT Department) support business objectives and processes leveraged by IT and an effective IT Service strategy. Where we Focus on the Business Bottom Line: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. This is achieved as Business objectives and Processes (captured in the Business Architecture) are supported by a strategy execution focused IT architecture where Business objectives: We would like to increase sales by 25%, how can the IT Department support the Business in this effort and what will be the impact on the budget of the IT Department? , are supported by IT objectives: This would translate in to, on the business (IT) side: 1) which business processes are concerned with the increase and how do we support them today and how do we anticipate the increase (applications, infrastructure, support)? 2) Is there an opportunity to further 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)….  
  • 28. Copyright 2013 Martin Palmgren EVP .COMMUNICATE IT Cost is spelled out - What are my IT assets and what do they cost? - What are my IT resources and what do they cost? - What services do I provide to the customer: - What do these services cost? - What was their intended value proposition? - What is the quality of the service delivery? - Who consumes the IT services: - What is the consumption on a per unit, - Per seat, basis, - How does customers currently pay for these services, - What is the backlog of new unfulfilled IT demands? - What processes does IT perform? : - How do these processes compare to best practices? - What are the cost drivers on an activity basis? IT Decision are based on Total cost of ownership As Customers pay for services that they use decisions are made based upon cost, not politics. IT is incented to reduce cost and compete and users do not request unnecessary demands. KPI’s become established to measure performance SLA are put in place. IT Decisions are ROI Based IT is effectively managed as we a Establish Baseline with Cost, Consumption, Chargeback. Build a service based business model of IT that is based on IT Service 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  
  • 29. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Articulated from a Cost Effectiveness and Cycle Time perspective where IT Business Drivers & Processes are clearly spelled out: Manage information technology: To Manage the Business of Information Technology we: Develop the enterprise IT strategy, Build strategic intelligence, Identify long-term IT needs of the enterprise in collaboration with stakeholders, Define strategic standards, guidelines, and principles, Define and establish IT architecture and development standards, Define strategic vendors for IT components, Establish IT governance organisation and processes, Build strategic plan to support business objectives, Develop and Manage IT Customer Relationships, Manage Business Resiliency and Risk, Manage Enterprise Information, Develop and Manage Information Technology Solutions, Deploy Information, Technology Solutions, Deliver and Support Information Technology Services, Manage IT Knowledge. Cycle Time (Key Performance Indicators): - Time in months to break even for new or enhanced IT services (Investment < €100,000), - Time in months to break even for new or enhanced IT services (Investment b/w €100,000 and €250,000), - Time in months to break even for new or enhanced IT services (Investment b/w €250,000 and €500,000), - Time in months to break even for new or enhanced IT services (Investment b/w €500,000 and €1,000,000), - Time in months to market for new or enhanced IT services (Investment < €100,000), - Time in months to market for new or enhanced IT services (Investment b/w €100,000 and €250,000), - Time in months to market for new or enhanced IT services (Investment b/w €250,000 and €500,000), - Time in months to market for new or enhanced IT services (Investment b/w €500,000 and €1,000,000), - Time in months to respond to major business shifts, - Time in weeks to complete projects that address an identified business exposure or opportunity (< 20% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (20-40% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (4060% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (60-80% of total annual revenue), - Time in weeks to complete projects that address an identified business exposure or opportunity (More than 80% of total annual revenue), - Time in weeks to close an identified IT skill or capability gap, - Average time in weeks to fulfill a simple information need, - Average time in weeks to fulfill a medium information need, Average time in weeks to fulfill a complex information need, - Average time in weeks to create the enterprise information management strategic plan, - Time in weeks to 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  
  • 30. Copyright 2013 Martin Palmgren EVP .COMMUNICATE User Orientation (Key Performance Indicators): - Preferred IT supplier, - Percentage of applications managed by IT, - Percentage of applications delivered by IT, - Partnership with users, - Index of user involvement in strategic applications, - Applications index of user involvement in developing new applications, - User satisfaction, - Index of user friendliness of applications, - Index of user satisfaction Process Management. Operational Excellence (Key Performance Indicators): - Efficient software development, - Average days late in delivering software, Average unexpected budget increase, - Percentage of projects performed within SLA, - Percentage of maintenance activities, - Efficient computer operations, - Percentage unavailability of network, - Response times per category of users, - Percentage of jobs done within time, - Efficient help desk function, - Average answer time of help desk, Percentage of questions answered within time. Future Orientation (Key Performance Indicators): - Training and education of staff, - Number of educational days per person, Education budget as a % of total IT budget, - Expertise of the IT staff, - Number of years of IT experience per staff member, - Age pyramid of the IT staff, - Research into emerging technologies, - % of budget spent on IT research General Business Management. To support the business Strategy Set Business processes and key performance indicators (Build): Develop vision and strategy, Develop and manage products and services, Market and sell products and services, Deliver products and services, Manage customer services, Develop and manage Human Capital, Manage information technology, Manage financial resources, Acquire, construct and manage property, Manage environmental health and safety, Manage external relationships, Manage knowledge, improvement and change. Figure 3: Connect http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/connect-information/ Connect information to take qualified decisions   information:
  • 31. Copyright 2013 Martin Palmgren EVP .COMMUNICATE firewall on a server or mutualised servers (internal / private cloud) or outside the firewall on a mutualised server (external / public cloud), Security (ISO 9001, ISO 27 001, COSO where business continuity is ensured by risk and control objectives). A Business (IT) Value Proposition “This is how we support business objectives with services in a time to market perspective” where Business processes (bundled Business services) are supported by applications (Develop vision and strategy, Develop and manage products and services, Market and sell products and services, Deliver products and services, Manage customer services, Develop and manage Human Capital, Manage information technology, Manage financial resources, Acquire, construct and manage property, Manage environmental health and safety, Manage external relationships, Manage knowledge, improvement and change). Figure 6: The roadmap reflects stakeholder expectations: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-roadmap-reflects-stakeholderexpectations/ A Roadmap The Roadmap (derived from the logics presented in “Managing Alliances with the Balanced Scorecard”, by Kaplan, Norton, Rugelsjoen, Harvard Business Review, January–February 2010, p. 114 – 120) http://hbr.org/2010/01/managing-alliances-with-the-balanced-scorecard/ar/1 reflects stakeholder expectations from an Executive Management, Business Unit Management, IT Management and IT Risk Management perspective where: Stakeholder Expectations Drives Business (IT) Objectives that Delivers the Business (IT) Road Map executed by Employees & Organisation. Figure 7: The Service Strategy support Business Drivers: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/the-service-strategy-support-businessdrivers/ 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  
  • 32. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 Manage knowledge, improvement and change: - Create and manage organisational performance strategy, - Benchmark performance, - Develop enterprise-wide knowledge management (KM) capability, Manage change  
  • 33. Copyright 2013 Martin Palmgren EVP .COMMUNICATE clear enough to distribute cost (charge) the users / business units that consumed the service. ROI and the total cost of services delivered are difficult to validate as contract conditions in regards of the cost of termination / exit that would include a secure migration of data or applications tend not to be transparent. To conclude IT Financial Management is a critical part of a successful IT Strategy and the effective delivery of IT Services. Though the notion of service delivery is supported by internationally recognised standards such as ITIL and CobIT 5 IT Financial management is yet to be broadly applied and standardised. Chapter 4. IT support business objectives and processes We align to Business Objectives and Business Processes the latter are Defined in the Business Service Catalogue, Requirements Information with IT Objectives and IT Processes are Defined in the IT Service Catalogue and supported by ITILv2 & 3 workflows. These are then Broken down in to Key Activities Performed to Responsibility and Accountability Charts (RACI). The logics in chapter 4 clearly links back to CobIT 4.1, ValIT, RiskIT. They are then Measured by Performance indicators (Embedded in Service Catalogue per Service), Outcome Measures, Maturity Models (CMMI, ITIL continuous process improvement) Audited with Control Outcome tests Derived from Control Objectives Audited with Control Design Test Implemented with Control Practices. IT support business objectives and processes with Investment Management We align and lever operating, management and support processes through the effective implementation of IT. 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  
  • 34. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Deliver the Business Architecture: Translate Business Architecture Vision to Business Architecture, Vision of Business Architecture “to be”: state “where we need to go”, “where we are now” & “how we need to proceed”. Figure 13: Translate the Business Vision to an IT Vision: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/translate-the-business-vision-to-an-itvision/ Translate the Business Vision to an IT Vision: Vision of IT “to be state”: “where we need to go”, “where we are now” & “how we need to proceed”, Regulatory requirements, Technology guiding principles, IT Governance guiding principles (process & organise decisions). Figure 14: Set the IT Value Proposition Baseline: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/set-the-it-value-proposition-baseline/ Set the IT Value Proposition Baseline: Set fundamentals of a service business, Process view, Establish Total Cost of Ownership and IT baseline with cost/value/risk, Activity based financial view, Service portfolio view, Value contribution view, Customer consumption view. Figure 15: Draw the Roadmap: http://deliverbusinessvaluewithit.wordpress.com/2013/03/02/draw-the-roadmap/ Draw the Roadmap: Construct the IT Business Model and Value Proposition, Define IT “to be state”: “where we need to go”, “where we are now” & “how we need to proceed” with established KPI’s, Report gap analysis findings, Design IT plan through a project portfolio, Cost out the plan (budget), Develop consensus, business case for change. 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.  
  • 35. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Talent Appreciation of the implications for the strategy of Resources, Skills and competencies, Appropriate development / recruitment plans, Shared direction, Extent of buy-in to shared vision by key managers, Barriers / commitment to change, Structure of the organisation. Execution There is a understanding of the: Clarity of the IT Strategy roll out, Extent to which the IT Strategy responds to industry and competitive environment, Extent to which the IT Strategy responds to internal capabilities, Extent to which Critical Success Factors are clearly identified, the Clarity of implementation plan. Objectives and Plans There is a understanding of the: Extent to which long term plans are coherent and logical, Extent to which short term plans are appropriately costed and timetabled and the Consistency with overall goals and objectives. Financial plans Appropriateness of detail, Clarity with which assumptions have been stated, Extent to which profit / return criteria has been evaluated, Evidence of appropriate scenario and sensitivity analysis, Evidence of appropriate key performance indicators. Communication and buy in 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.  
  • 36. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Business (IT) Context We Define Market Position with New entrants, Suppliers, Substitute products or Services, Buyers, Existing Competitors. http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1 Strategy Map Captured in a Strategy Map that Formalises stakeholder outcomes to deliver value. The Stakeholder Strategy Roadmap set the scope with Objectives: - Formalise stakeholder outcomes: To deliver value for all parties (partnership), Which drives Customer value: For effective and satisfied end users, That deliver - Business processes: Speed, process innovation and growth, Executed by - Employees and organisation: Collaboration that deliver strategy execution. Strategy Canvas Articulated in a Strategy Canvas The Stakeholder Strategy Map Formalises stakeholder outcomes to deliver value for all parties. The strategy canvas allow the teams to articulate and formulate objectives on a project / program basis for improved execution with an extended GAP, risk and added value analysis captured in a DARCI (Decision taker, Accountable, Responsible, Consulted & Informed). A Collaboration Theme Scorecard The Collaboration Theme Scorecard Sets process objectives, Identifies: levers for joint actions and wins, metrics and initiatives on a short, middle & long term basis. Objectives: - Set process objectives,- Identify levers for joint actions and wins,Identify metrics, Identify initiatives on a short, middle and long term basis. Levers: Joint: Steering committee, development committee, project teams, crossfunctional teams, process improvement teams and functional improvement teams. To 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  
  • 37. Copyright 2013 Martin Palmgren EVP .COMMUNICATE - 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: - 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:  
  • 38. Copyright 2013 Martin Palmgren EVP .COMMUNICATE To conclude The CIO and the IT Department need to position as premium provider of IT services and focus on value to cost. In order to avoid the "do we really need a CIO and IT department to bother us with technology when we can use the cloud?" the CIO has to ensure that the business strategy and business objectives are supported by IT (from a Business and IT architecture perspective). Where the IT Strategy support Strategy execution, "Time to Market", Cost Effectiveness and stakeholder expectations from an Executive, Business Unit, IT Management and IT Risk Management perspective. To deliver business value with IT we need to Focus on the Business Bottom Line: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. The IT Bottom line is that up to 40 % of current IT spend occurs outside the IT budget (CRM, Cloud). The IT department needs to position itself as a facilitator to IT services and effectively address emerging needs, market opportunities and demonstrate that the current Business Model is supported effectively. The IT department should facilitate the access to IT services to support new and current business initiatives. The business strategy emerge out of a number of initiatives that are successful or not. The IT department need to support the “Run” of day-to-day operations as well as new projects. The Cloud might particularly be of interest within this frame. We believe that in order for the CIO and the IT Department to position as premium provider of IT services and focus on value to cost we need to understand the Business (IT) Strategy and how the IT department can deliver effectively to business objectives, that is to deliver business value with IT: - What is the Business’s strategy and plans? , - What is the current business model that IT has to support? , - Where could IT make a significant impact on the business? , - 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,  
  • 39. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Please find an actionable story board format designed to permit you to flick out the slide set on a pad / smart phone / lap top and start to share with your CIO, Executives and Board on the spot. @ Get Your Cloud Strategy Right https://flevy.com/browse/business-document/get-your-cloud-strategy-right-286/ref=mpalmgre This is an introduction to the subject with a full version to be published on a stand alone basis. See also “Get your cloud strategy right” http://www.brighttalk.com/community/it-service-management/webcast/534/29211 as well as “Cloud Computing: Fluff or Lightening?” http://www.brighttalk.com/community/it-service-management/webcast/534/21892 How to get your Cloud Strategy Right! Cloud computing (cloud sourcing) is now a part of the IT strategy landscape and an understanding of how to leverage the "cloud" will become prerequisite for decision makers both on the IT and the business side. We will provide the necessary tools to draw an IT strategy leveraged by the cloud to: - Establish an appropriate Cloud sourcing strategy, - Identify capabilities that could be cloud sourced, - Develop appropriate approaches for cloud sourcing activities, - Manage risks throughout their cloud sourcing activities, - Identify, select and negotiate with service providers, - Conduct service provider governance and performance management, - Manage relationships with service providers. We Cloud Source to: Meet Demand and Cost drivers, Focus on “Time to market”, Cost effectiveness and Cycle Time, Provide an optimised Sourcing Strategy and Leverage Business Strategy execution. Peer see competitive advantage? 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  
  • 40. Copyright 2013 Martin Palmgren EVP .COMMUNICATE understand the Business (IT) Strategy and how the IT department can deliver effectively to business objectives, that is to deliver business value with IT: - What is the Business’s strategy and plans? - What is the current business model that IT has to support? - Where could IT make a significant impact on the business? - Are there any further opportunities to use IT? - How do we provide IT Services as we meet demand and cost drivers where the decision is to make (internal) or to buy (external service provider)? - Spell out IT Activities from a demand and supplier side (Design), - Set IT processes and key performance indicators (Build), - Aligned to described ITIL activities and processes with a Service Strategy (Run), Service Design, Service Transition, Service Operation: - Function, - Process, Service Improvement. Please find an actionable story board format designed to permit you to flick out the slide set on a pad / smart phone / lap top and start to share with your CIO, Executives and Board on the spot. @ Leverage Business Strategy Execution with IT https://flevy.com/browse/business-document/leverage-business-strategy-execution-with-it-281/ref=mpalmgre Demonstrate how IT contributes to Business Objectives To demonstrate how IT contributes to Business Objectives we need to build a Blueprint (Road Map) to meet business objectives and stakeholder expectations leveraged by an effective IT Service Strategy. It should support an end-to-end perspective on how to get the IT strategy right, “Canvassed”, with and support Service Strategy (ITIL), Delivery Capability (IT – CMF, COBIT 5 (ValIT, CobIT, RiskIT, CMMI, eSCM), Architecture (TOGAF) Security (ISO 9001, 20 000, 27 001). To deliver IT Services to business needs as we meet stakeholder expectations, we Focus on the Business (IT) Strategy Execution to Leverage strategy with IT and Build a Business (IT) Service Strategy where we Design the IT Service Strategy & 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  
  • 41. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Step 3 Design the Business (IT) Service Strategy to demonstrate how IT supports tactical business objectives with total cost of ownership (cost, consumption, chargeback) per user to set the logics for shared services centers, outsourcing, cloud (sourcing). An (IT) Business Model Step 4 Build (confirm) the IT Business Model to ensure that the local IT departments deliver to set standards from a Service Strategy, Delivery capability, Architecture and Security perspective. A Business (IT) Value Proposition Step 5 Design and Build the Business (IT) Value Proposition to ensure a focus on Strategy Execution, Business Drivers, Business Objectives, Business Processes and Metrics. As we meet Stakeholder Expectations Business drivers support Strategy Execution To deliver business value with IT we need to Focus on the Business Bottom Line: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. 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  
  • 42. Copyright 2013 Martin Palmgren EVP .COMMUNICATE competencies are at least equal to the competition, - IT pricing is fair and clearly aligned with consumption, - IT services are clearly defined and benchmarked. To get the IT Service Management Fundamentals right: Focus on demand and cost drivers in a business perspective: - Run IT as an effective service business, Meet your customer needs, where - Demand drivers are critical in the roll out of IT Service Management Deliver strategy execution. IT provides competitive leverage Priorities from an Executive Management Perspective: - IT supports the achievement of strategic business objectives, - IT Delivers value to expenditure, - IT cost are managed effectively, - IT risks are identified and managed, - Targeted inter company IT synergies deliver to schedule, - We have a clear vision towards which we expect the IT department to deliver: ISO 38 500, VALIT IT delivers to demand and cost drivers Priorities from a Business Unit Management Perspective: - IT supports the achievement of tactical business objectives, - IT delivers perceived added value services and at a reasonable cost, - IT delivers to service level agreements (commitments), - IT investments positively affect business productivity and the customer experience, - We have a clear process vision towards which we expect the IT department to deliver: ISO 38 500, VALIT, COBIT, RISKIT, ITIL 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  
  • 43. Copyright 2013 Martin Palmgren EVP .COMMUNICATE We Source to: Meet Demand and Cost drivers, Focus on “Time to market”, Cost effectiveness and Cycle Time, Provide an optimised Sourcing Strategy and Leverage Business Strategy execution. Make or Buy We make (provide IT services internally) when the service provides a competitive advantage, can be provided to a lesser or equal cost or legal constraints impose data control. We buy (provide IT services externally) when the service does not provide a competitive advantage and the services can be acquired for a lesser cost externally. In the case of an external Cloud the setup of a service on an external infrastructure (IaaS) can shorten the “Time to Market” that is the time needed to deliver the service (application or bundle of applications) to the client. The application can then be brought to an internal cloud (or server) or continue to run on an external cloud as needed. As we meet Stakeholder Expectations Business drivers support Strategy Execution To deliver business value with IT we need to Focus on the Business Bottom Line: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed. 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  
  • 44. Copyright 2013 Martin Palmgren EVP .COMMUNICATE execution is performed by an internal provider and the applications can sit on an internal (private) or external (public) cloud. Subcontract We Subcontract to perform punctual tasks delivered by an external provider but there is no process execution. Source externally (Outsource) We Source externally (Outsource) to perform the execution of a process that can be manual or industrialised with IT. Delivery is performed by and external provider. The client data sit on the provider’s servers (provider internal cloud) or on a hosted application (provider external cloud / Hybrid). Public (external) Cloud We leverage the Public (external) Cloud, as an internal provider perform process execution on an external (public) cloud provided by a “storage provider” such as Google, Amazon and the applications (bought or leased (Software as a Service (SaaS)) run on one or several mutualised servers outside the firewall) on a public (external) cloud that is run by a cloud provider. The latter deliver a bundle of services (Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Software as a Service (SaaS) outside the firewall on which the enterprise can run applications (in an architecture). Trends have over the last 12 months seen the evolution of a hybrid Cloud Model that can be defined as an outsourced provider that runs applications on a provider external cloud. The higher up the cloud stack you go (IaaS->PaaS->SaaS->BPO), the greater the 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  
  • 45. Copyright 2013 Martin Palmgren EVP .COMMUNICATE • Internal (Private) Cloud • External (Public) Cloud Outsourced Providers Run software that they have bought (built) or leased on an • Internal (Private) Cloud • and External (Public) Cloud (Hybrid model) Chapter 8. Design - Spell out IT Activities from a demand and supplier side To design the Business (IT) Value Proposition we need to: - “Canvas” the IT Service Strategy, Develop a High level picture of the Business (IT) Strategy, Articulate the Business (IT) Strategy, Develop the Business (IT) Service Strategy, Build the Business (IT) Service Strategy, Govern the the Business (IT) Service Strategy, Design the Technology Architecture, Build the Sourcing Strategy, Develop the Program Plan, Leverage Business Strategy Execution. Please find an actionable story board format designed to permit you to flick out the slide set on a pad / smart phone / lap top and start to share with your CIO, Executives 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  
  • 46. Copyright 2013 Martin Palmgren EVP .COMMUNICATE scope/focus of the IT strategy engagement, it is important to develop a sense of the business environment and future direction. This understanding of the organisation’s present and future is documented and is used to determine how IT will be leveraged. It should be clearly understood that this activity is not intended to build the business vision but to support the roll out of an established business vision. The purpose of this activity is to understand the business, its internal and external environment and make explicit any unstated or inadequately articulated business values and vision elements to build a firm platform for the project. Develop an understanding of the Business (IT) Strategy and how the IT department will deliver effectively to support strategy execution: It is critical to develop a clear and comprehensive understanding of the business strategy and the operating environment: - What is the Business’s strategy and plans? What is the current business model that IT has to support? Where could IT make a significant impact on the business? Are there any further opportunities to use IT? 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.  
  • 47. Copyright 2013 Martin Palmgren EVP .COMMUNICATE IT customer relationships" per €100,000 revenue, - Personnel cost of the process "manage business resiliency and risk" per €1,000 revenue, - Systems cost of the process "manage business resiliency and risk" per €100,000 revenue, - Personnel cost of the process "manage IT knowledge" per €1,000 revenue, - Systems cost of the process "manage IT knowledge" per €100,000 revenue, - Personnel cost of the process "develop information and content management strategies" per €1,000 revenue, - Systems cost of the process "develop information and content management strategies" per €100,000 revenue, - Personnel cost of the process "define enterprise information architecture" per €1,000 revenue, - Systems cost of the process "define enterprise information architecture" per €100,000 revenue, - Personnel cost of the process "manage information and IT knowledge resources" per €1,000 revenue, Systems cost of the process "manage information and IT knowledge resources" per €100,000 revenue, - Personnel cost of the process "perform enterprise data and content management" per €1,000 revenue, - Systems cost of the process "perform enterprise data and content management" per €100,000 revenue, - Personnel cost of the process "develop and maintain information technology solutions" per €1,000 revenue, - Systems cost of the process "develop and maintain information technology solutions" per €100,000 revenue, - Personnel cost of the process "deploy IT solutions" per €1,000 revenue, - Systems cost of the process "deploy IT solutions" per €100,000 revenue, - Personnel cost of the process "deliver and support IT services" per €1,000 revenue, - Systems cost of the process "deliver and support IT services" per €100,000 revenue, - Total cost of the process "manage the business of IT" per €1,000 revenue, Total cost of the process "develop and manage IT customer relationships" per €1,000 revenue, - Total cost of the process "manage business resiliency and risk" per €1,000 revenue, - Total cost of the process "manage IT knowledge" per €1,000 revenue, Total cost of the process "develop information and content management strategies" per €1,000 revenue, - Total cost of the process "define enterprise information architecture" per €1,000 revenue, - Total cost of the process "manage information and IT knowledge resources" per €1,000 revenue, - Total cost of the process "perform enterprise data and content management" per €1,000 revenue, - Total cost of the process group "manage enterprise information" per 1,000 revenue, - Total cost of the process "develop and maintain information technology solutions" per €1,000 revenue, - Total cost of the process "deploy IT solutions" per €1,000 revenue, - Total cost of the process "deliver and support IT services" per €1,000 revenue, - Total IT cost per €1,000 revenue Corporate Contribution 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 Invetment, Net Present Value.  
  • 48. 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  
  • 49. Copyright 2013 Martin Palmgren EVP .COMMUNICATE Aligned on business requirements. Service Portfolio Management: Levers formulated operating processes with portfolio management. Software Asset Management. Application Portfolio Management: formulated operating processes application portfolio management solutions. Levers Infrastructure Asset Management. IT Infrastructure Portfolio Management: Levers formulated operating processes with IT infrastructure portfolio management. An Effective (IT) Business Model An Effective (IT) Business Model where we Manage Information Technology. To Manage Information Technology Business Drivers & Processes from a Cost 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. 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 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 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 This is an introduction to the subject with a full version to be published on a stand alone basis. Understand and meet your stakeholders expectations Our experience is that where IT is perceived to fail to deliver to business expectations the Business (IT) Model (IT delivery capabilities to strategy execution) and Value proposition (Services) is often broken or non-existent (demand and cost drivers not understood or not communicated well enough). 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).  
  • 50. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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. IT must be responsible for profit and loss from a business perspective and be managed like a business. The fact is the technology will play a bigger role in order for business to thrive in the future. The level of implication of IT varies as it depends on the nature of the business. The more the business rely on technologies the more the business needs to include technology as a part of the business strategy. We believe that in order for the CIO and the IT Department to position as premium provider of IT services and focus on value to cost we need to understand the Business (IT) Strategy and how the IT department can deliver effectively to business objectives, that is to deliver business value with IT: - What is the Business’s strategy and plans? , - What is the current business model that IT has to support? ,Where could IT make a significant impact on the business? ,- Are there any further opportunities to use IT? , - How do we provide IT Services as we meet demand and cost drivers where the decision is to make (internal) or to buy (external service provider)? We have identified 2 key trends for the CIO to focus on: - Differentiation (That is, how does IT provide a competitive advantage for the business), and - Cost (How does the IT Department deliver IT Services cost effectively). To do so we need to Build an effective IT Delivery Model to meet business needs and expectations as we leverage business strategy execution and business processes supported by an IT  
  • 51. Copyright 2013 Martin Palmgren EVP .COMMUNICATE “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? On the IT side we need to understand 1) which service 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 contribute to business objectives, IT is not perceived to deliver value to cost, IT is not perceived to deliver services to business needs, The IT department is unable to deliver services in a time to market perspective, IT propose an effective service portfolio that correspond to Demand and Cost drivers. IT contributes to business objectives as The IT service proposition is aligned to the business strategy: Stakeholder expectations are understood and IT propose a  
  • 52. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 Perspective: The organisations assets and operations are protected, Key business and technology risk is effectively managed, Effective process, practise and controls are in place, We have clear security objectives to which we expect IT to deliver. Where the Bottom Line is that to leverage competitive advantage with new technology is “nice to have”, to keep the business systems running is mission critical! 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  
  • 53. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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. 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 comprehension of the expected benefits, Clear accountability to realise the benefits, Relevant metrics, An effective benefits realisation process over the full economic life cycle of the investment. Process Management  
  • 54. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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. 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.  
  • 55. 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. 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. We deliver effective business strategy execution 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 (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),  
  • 56. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 functionality of an IT Service from the Customer perspective (what the service does). Accounting Centre: Cost inputs with some elements of budget (no billing). Recovery Centre: Accounts fully for all IT spend and recover cost from the customer. Profit Centre: The IT organisation operates as a separate business unit. Notional Charging: Notional Charging creates cost-awareness without the physical exchange of money. “If we were going to charge you, this is how much you would have to pay”. Differential Charging: To try to influence behavior use of services at peak times may attract penalty fees and likewise use of services at non-peak times attracts overall lower charges for the customer. Cost: The cost fall into 3 broad categories: - Staff administration for Financial Management, - Extra hardware and book keeping software, - Support Tools. As cost is visible, and particularly when charge back is in place, the demand for some services may fall. Service Portfolio management Added Value: The purpose of a Service Portfolio is to describe a provider’s services  
  • 57. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 providers. It is important to study the customers business to identify, analyse and understand such patterns to provide a sufficient foundation for capacity management. The fact to analyse and track activity patterns of the business process make it possible to predict demand for services in the catalogue that support the process. Additional demand generated by business activity is allocated to a unit of service capacity. Activity based Demand Management can link the demand patterns to ensure that the customer’s business plans are synchronised with the service management plans of the service provider. Terminology: Business Relationship Manager (BRM): A role responsible for maintaining the relationship with one or more customers. Often combined with the Service Level Manager role. Core service: An IT service that delivers basic outcomes desired by one or more customers. Pattern of Business Activity (PBA): A workload profile of one or more business activities. Patterns of business activity help the IT Service Provider understand and plan for different levels of business activity. Service Level Package (SLP): A defined level of utility and warranty for a particular service package. Each SLP is designed to meet the needs of a particular pattern of business activity. User Profile: A pattern of user demand for IT Services. Each user profile includes patterns of business activity.  
  • 58. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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. Objectives: To maintain and improve IT Service quality, through an effort to define, monitor and report IT Service achievements and plan in line with business needs and budget. As this is done a better relationship between IT and its Customers is developed. The objectives of SLM are to: - Define, document, agree, monitor, measure, report and review the level of IT services provided, - Provide and improve the relationships and communication with the business and customers, - Ensure that specific and measurable targets are developed for all IT services, - Monitor and improve customer satisfaction with the quality of service delivered, - Ensure that IT and the customers have a clear and unambiguous expectation of the level of service to be delivered, - Provide proactive measures to improve the levels of service delivered are implemented wherever it is cost justifiable to do so. Bench: Capability to meet SLA’s and OLA’s Activities: - Determine, negotiate, document and agree requirements for new or changed services in SLRs, and manage and review them through the service, Monitor and measure service performance achievements of all operational services against targets within SLAs, - Define, measure and improve customer satisfaction, Produce service reports, - Conduct service review and initiate improvements within  
  • 59. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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, Manage and control threshold, - Manage demand, - Model and trend, - Application size adaptation. Iterative Activities (Performance Management): - Analyse, - Tune, Implement, - Monitor. Other Activities: - Manage demand, - Adapt application size, Model, - Store Capacity Data, - Capacity Plan development and maintenance. Input: - Business information, - Service and IT information, - Component performance and capacity information, - Service performance issues, - Service information, - Financial information, - Change information, - Performance information, - CMS, - Workload information. Output: - The Capacity Management Information System (CMIS), - The Capacity Plan, - Service performance information and reports, - Workload analysis and reports, - Ad hoc capacity and performance reports, - Forecasts and predictive reports, Thresholds, alerts and events. Terminology: Capacity: The maximum throughput that a Configuration Item or IT Service can deliver as it meets agreed Service Level Targets. Capacity Plan : A Capacity plan is used to manage the resources required to deliver IT Services. The plan contains scenarios for different predictions of business demand, and cost options  
  • 60. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 occurrence of a fault and service recovery (or the downtime), - Mean Time Between Failures (MTBF): mean time between the recovery from one incident and the occurrence of the next incident, - Mean Time Between System Incidents (MTBSI): mean time between the occurrences of two consecutive incidents. The MTBSI = MTTR+MTBF. The ratio of MTBF to MTBSI shows if there are many minor faults or just a few major faults. Availability reports may include the following metrics: Rate of availability (or unavailability) in terms of MTRS, MTBF and MTBSI, Overall uptime and downtime, number of faults, - Additional information about faults which actually or potentially result in unavailability. Cost: - Personnel: Staff (set-up and ongoing), - Accommodation: Physical location (set-up and ongoing), also for documentation, - Software: Tools (set-up and ongoing), monitoring and reporting Tools, - Hardware: Infrastructure (set-up and ongoing), perhaps you need a dedicated database, - Education: Training (set-up and ongoing), Procedures: External consultants etc. (set-up).  
  • 61. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 Management Information System, - Revised security risk assessment processes and reports, - A set of security controls, - Security audits and audit reports, - Security test schedules and plans, - Reviews and reports of security breaches and major incidents, Policies, processes and procedures for managing partners and suppliers and their access to services and information. Terminology: Confidentiality: Protect information against unauthorised access and use. Integrity: Accuracy, completeness and timeliness of the information. Availability: The information should be accessible at any agreed time. This depends on the continuity provided by the information processing systems. Security Baseline: The security level adopted by the IT organisation for its own security and from the point of view of good ‘due diligence’. Security Incident: Any incident that may interfere with achieving the SLA security requirements, a threat. Verifiability: Ability to verify that information is used correctly and that security measures are effective. Security Baseline: The security level adopted by the IT organisation for its own security and from the point of view of good ‘due diligence’. Relationship with other ITIL processes: - Information Security Management sets  
  • 62. Copyright 2013 Martin Palmgren EVP .COMMUNICATE (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 customer, contract portfolios, - Scope: inclusions and exclusions, - Applicable standards, agreements, legal, regulatory and contractual requirements, - Organisations and stakeholders involved, - Framework for Service Transition, - Criteria, people and approach, - Deliverables from transition activities including mandatory and optional documentation, - Schedule of milestones, - Financial requirements. Prepare for Service Transition : - Review and acceptance of inputs from other service lifecycle stages, - Review and check the input deliverables, e.g. SDP, Service Acceptance Criteria and evaluation report, - Identify, raise and schedule Request For Change, Check that the configuration baselines are recorded in Configuration Management before the start of Service Transition, - Check transition readiness. Plan and coordinate Service Transition : - Plan on individual Service Transition, - Integrate planning, - Adopt program and project management best practices, - Review plans. Terminology: Request for Change (RFC): A formal proposal for a change to be made. An RFC includes details of the proposed change, and may be recorded on paper or electronically. Service Acceptance Criteria (SAC): A set of criteria used to ensure that an IT Service meets its functionality and quality requirements and that the IT Service Provider is ready to operate the new IT service when it has been deployed.  
  • 63. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 (setup)), - Education (Training (set-up and ongoing)), - Procedures (External consultants etc. (set-up)). The two major cost items for Change Management are for staff and software tools support. Service Asset and Configuration Management Added Value: This process ensures the integrity of service assets and configuration in order to support the effective management of the IT organisation. Objectives: The objective is to define and control the components of services and infrastructure and maintain accurate configuration information on the historical, planned and current state of the services and infrastructure. Bench: Cost effectiveness, cycle time, capacity to understand customer needs, business contribution.  
  • 64. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 design options and considerations: ‘Big Bang’ vs. Phased Push & Pull Automation vs. Manual. Input: - Authorised RFC, - Service package, SLP, - SDP, including service model and SAC, - IT service continuity plan and related business continuity plan, - Service management and operations plans and standards, - Technology and procurement standards and catalogues, - Acquired service assets, - Build models and plans, Environment requirements and specs for build, test, release, training, disaster recovery, pilot and deployment Release policy and release design from Service Design, - Release and deployment models including template plans, - Exit and entry criteria for each stage of release and deployment. Output: - Release and deployment plan, - Completed RFCs for release and deployment activities, - Service notification, - Updated service catalogue with the relevant information about the new or changed service, - 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 service level requirements, - SLA, underpinning OLAs and  
  • 65. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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). Evaluation Added Value: Evaluation is a generic process that considers whether the performance of something is acceptable, value for money etc. – and whether it will be proceeded with, accepted into use, paid for, etc. Evaluation is concerned with value. Specifically, effective evaluation will establish the use made of resources in terms of delivered benefit and this information will allow a more accurate focus on value in future service development and Change Management. Objectives: The objective of this process is to: Evaluate the intended effects of a service change and as much of the unintended effects as is reasonably practical given capacity, resource and organisational constraints, Provide good quality outputs from the evaluation process so that Change Management can expedite an effective decision whether a service change is to be approved or not. Bench: Service change to objectives Activities: - Service evaluation terms, - Evaluation process, - Evaluation plan, -  
  • 66. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 procédures, - 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. Service Desk Added Value: Effective cost reduction is imperative in today's economy and internal support groups are a frequent cost reduction target. Service Desks and desktop support teams need to ensure that their services are clearly defined and aligned with business needs. The Service Desk is a single point of contact (SPOC) for end-users who need help. Without this single point of contact an organisation would face major losses in time spent on looking for ways to fix issues and get help. Objectives: The objective of the Service Desk is to restore the ‘normal service’ to the users as quickly as possible. This could involve anything that is required to allow the users to return to working satisfactorily. The main types of Service Desks are: Call Centre: only call dispatching, no other activities done, Helpdesk: managing, coordinating and resolving incidents, Service Desk: extends the range of services, handle incidents, problems and questions and to provide an interface to other ITIL processes such as Service Level Management, Change Management, Availability Management, Capacity Management and Financial Management for IT. There are 4 different Service Desk structures: Local Service Desk: service desk per geographic  
  • 67. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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. Objectives: This function plays a key role to identify functional and manageability requirements for application software, and to decide whether an application will be built in-house or purchased from an external source. Executed with Technical Management, Applications Management ensures the knowledge required to design, test, manage and improve IT services is identified, developed and refined. Application Management ensure that the organisation has access to the right type and level of human resources to manage applications and therefore meet business objectives. This starts in Service Strategy and is expanded in Service Design, tested in Service Transition and refined in Continual Service Improvement. Activities: IT Operations Managements has two unique functions, which are usually organised in the following structure: Operations Control: oversees the execution and monitoring of the operational activities and events in the IT infrastructure : console management, job scheduling, backup and restore, print and output management, and maintenance activities. Facilities Management: management of the physical IT environment, usually data centers or computer rooms. In some organisations, many physical components have been outsourced and Facilities Management may include  
  • 68. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 behavior 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: Informational refers to an event that does not require any action and does not represent an exception. They are typically stored in the system or service log files and kept for a predetermined period. - Warning: A warning is an event that is generated when a service or device is approaching a threshold. Warnings are intended to notify the appropriate person, process or tool so that the situation can be checked and appropriate action taken to avoid an exception. Exception: An exception means that a service or device is currently operating abnormally. Typically this means that an OLA or SLA has been breached and the business has been impacted. Exceptions could represent a total failure, impaired functionality or degraded performance. Event Correlation – If an event is significant, a decision has to be made about exactly what the significance is and what actions need to be taken to deal with it. It is here that the meaning of the event is determined. Trigger – If the correlation activity recognizes an event, a response will be required. The mechanism used to initiate that response is also called a trigger. There are many different types of triggers, each designed specifically for the task it has to initiate. Some examples could include: - Incident triggers that generate a  
  • 69. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 customer - verbally or, preferably, by email, - All details applicable to this phase of the incident control are recorded, such that: - The customer is satisfied - Cost-centre project codes are allocated, - The time spent on the incident is recorded, - The person, date and time of closure are recorded. Input: The interfaces with Incident Management include: - Problem Management, Configuration Management, - Change Management, - Capacity Management, Availability Managem SLM. Request Fulfillment Added Value: Request Fulfillment address Service Requests : the upper part lowerrisk changes initially reported to the Service Desk. For something to be a Service Request, prerequisites must be defined and met. That is it needs to be proven, repeatable, pre-approved, and made into a procedure. In order to resolve one or more incidents, problems or known errors, some form of change may be necessary.  
  • 70. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 development environment: After every major problem a review should be conducted to learn any lessons for the future. Specifically the review should examine: - Those things that were done correctly, - Those things that were done wrong, - What could be done better in the future, - How to prevent recurrence - Whether there has been any third-party responsibility and whether follow up actions are needed. Process related: The primary relationship is between Problem Management and Incident Management. Other key interfaces include the following: Service Transition: - Change Management, - Configuration Management, - Release and Deployment Management. Service Design: - Availability Management, - Capacity Management, IT Service Continuity. Continual Service Improvement: - Service Level Management. Service Strategy: - Financial Management. Access Management Added Value: Access Management is the process of granting authorised users the  
  • 71. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 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 you hava an action monitor in place, through various tools. If quality is the key objective, then monitor should focus on the effectiveness of the data you gather. Define who is gathering data, how it is gathered, regularity of data gathered, data integrity. Step Four: Process data. This step is used to develop insight into the performance of the service process. Use report generating technologies, key issues include frequency of processing data, format for output, and accuracy of data. Step Five: Analyse data. Data Analysis transforms the information gathered into actionable knowledge. Verify against goals and objectives is expected here to validate objectives and that value is added. Step Six: Present and use data. This step required you to turn your knowledge actionable via reports, graphs etc. Through a consideration of the audience (Business, Senior IT Mgt, Internal IT), information is shared so that all levels can gain insight into their needs and expectation. Step Seven: Implement corrective action. The last step requires you to use the knowledge gained to optimize, improve and correct services, as part of its Continuous Service Improvement process. Value added: Service Measurement is the process responsible to define how to measure IT Service Management and IT Service improvements. Service Measurement  
  • 72. Copyright 2013 Martin Palmgren EVP .COMMUNICATE This is also true for the non brick and mortar references that have emerged from silicon valley. Amazon sells books and online store space. Google the opportunity to find things + run applications on a cloud (mutualised storage space outside the firewall) + hosted services such as email (the opportunity to communicate in writing and keep a trace). Ebay enables the exchange of goods. Twitter provides a tool for self promotion and advertisement. Facebook fills the void of distance and keep the contact with your friends and the opportunity to make new acquantainces. Linkedin the opportunity to keep up to date with your professional network + some promotional features. The business model sets the direction enabled by best in class technology. Why it is critical for the business to acquire the IT Service Portfolio End to End I was recently contacted by a large Editor (as most of you like know I have accompanied a number of IT consulting companies and editors in their “Go to Market” with Client acquisition, (Large) Account Introductions, Alliances (notably with BIG 5 consultancies), Market Position (Forrester, Gartner, Bright Talk) and position of the “Value Proposition” (discovery, competitive analysis of market offerings, road map to realign solutions portfolio and transform sales and delivery operations, develop new market strategy and execution plans, and drive sales transformation, acquisition of smaller actors)) to help them in their go to market. Where an IT strategy that support business objectives should demonstrate a coherent technology solution this is rarely the case. Most editors or consulting business sell adhoc projects in regards of opportunities to do so with the client. On the client side fire fighting that is to solve problems on an adhoc basis, where focus is on work arounds and throwing man hours and conceive ideal solutions on paper (encouraged by most consulting companies) leaves most businesses with a poor industrialization of business and IT processes. Clients need to step up to buy a full value portfolio of services (em)powered by the purchase department (this is yet to be done) on the other side large service providers should leverage their international organisations to sell and deliver end to end solutions to their clients. This will also permit significant cross selling with an increase in the added value perceived (that will take the said actors out of the equation to compete on cost only). Value Innovation, that is Differentiation and Cost! If apple inc is one of the highest valued business it is because the deliver best in class technology but above all due to the fact that they deliver a superior customer experince at the right cost to value.  
  • 73. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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 productivity improvement you need to invest. Our experience is that where some clients underconsume services due to a non effective cost allocation model other heavy users tend to overconsume services and do so the more willingly as they do no not pay for their consumption (are not charged back). An allocation model based on delivered services will hence accord the CFO to deliver a coherent financial model based on effective consumption and reflect user behaviour. Most IT Financial Management solutions tend to "massage" the general ledger and do not provide an effective integration to the IT Service Strategy over time. As a result they do not provide cost transparency on an ongoing basis, nor do they deliver to the above set objectives. You need to pull together an end-to-end perspective of IT Spend to: - Present a full granular IT Financial Management Model and "as a service”, - Align Project Spend with Service Spend, - Provide a transversal view that is an IT sub ledger that break out cost, consumption,  
  • 74. Copyright 2013 Martin Palmgren EVP .COMMUNICATE value can only be valid as the infrastructure runs smoothly. David has over they years shifted the focus of to use 80 % of the budget for workarounds and fire fighting the keep the lights on and 20 % to propose new solutions to the business to an opposite 80 / 20 where 80 % of the budget is used to enhance the capability of the business. He also clearly indicated that where the logics spelled out in ITIL are excellent they are are a minimum requirement to build an effective IT Strategy to the needs of the business where the perspective has to be completed with a Design (Demand and Supply) and Build (supported by IT processed with clear KPI’s) phase to tie the strategic value piece with the operational elements of IT service delivery. Govern It is crucial to build governance in to the execution of the Business and subsequently the IT Strategy. COBIT 5 helps IT leaders provide a business view of IT’s ability to create value and support enterprise goals through effective IT processes and build process capability and can be used to: Develop process improvement, Deliver value to the business, Measure the achievement of current or projected business goals, Benchmark and deliver consistent reporting, and ensure organisational compliance. 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” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective or will see the go to market trend with the business as direct customer grow significantly. Transform the IT Business Model A number of approaches to strategy execution have evolved over the last years, but have not been effectively adapted to the execution of the IT Strategy. The Balanced Scorecard by Kaplan and Norton that I have to some extent addresses earlier is one, The Blue Strategy Ocean by W. Chan Kim and Renée Mauborgne is another.  
  • 75. Copyright 2013 Martin Palmgren EVP .COMMUNICATE The IT service proposition is aligned to the business strategy as: Stakeholder expectations are understood and IT propose a service portfolio that correspond to Demand and Cost drivers, Business Contribution, Cost, Consumption & Chargeback is identified, Focus is on perfect order business transactions, Services are effective (demand and cost drivers identified), Services are competitive (Benchmark Industry Market Forces) 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 We Define Market Position with New entrants, Suppliers, Substitute products or Services, Buyers, Existing Competitors. http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1 Strategy Map Captured in a Strategy Map that Formalises stakeholder outcomes to deliver value. The Stakeholder Strategy Roadmap set the scope with Objectives: - Formalise stakeholder outcomes: To deliver value for all parties (partnership), Which drives Customer value: For effective and satisfied end users, That deliver - Business processes: Speed, process innovation and growth, Executed by - Employees and organisation: Collaboration that deliver strategy execution.  
  • 76. Copyright 2013 Martin Palmgren EVP .COMMUNICATE 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: - 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?  
  • 77. Copyright 2013 Martin Palmgren EVP .COMMUNICATE In order to avoid the "do we really need a CIO and IT department to bother us with technology when we can use the cloud?" the CIO has to ensure that the business strategy and business objectives are supported by IT (from a Business and IT architecture perspective). Where the IT Strategy support Strategy execution, "Time to Market", Cost Effectiveness and stakeholder expectations from an Executive, Business Unit, IT Management and IT Risk Management perspective. To deliver business value with IT we need to Focus on the Business Bottom Line: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective. The IT Bottom line is that up to 40 % of current IT spend occurs outside the IT budget (CRM, Cloud). The IT department needs to position itself as a facilitator to IT services and effectively address emerging needs, market opportunities and demonstrate that the current Business Model is supported effectively. The IT department should facilitate the access to IT services to support new and current business initiatives. The business strategy emerge out of a number of initiatives that are successful or not. The IT department need to support the “Run” of day-to-day operations as well as new projects. The Cloud might particularly be of interest within this frame. IT must be responsible for profit and loss from a business perspective and be managed like a business. The fact is the technology will play a bigger role in order for business to thrive in the future. The level of implication of IT varies as it depends on the nature of the business. The more the business rely on technologies the more the business needs to include technology as a part of the business strategy. We believe that in order for the CIO and the IT Department to position as premium provider of IT services and focus on value to cost we need to understand the Business (IT) Strategy and how the IT department can deliver effectively to business objectives, that is to deliver business value with IT: - What is the Business’s strategy and plans? , - What is the current business model that IT has to support? ,Where could IT make a significant impact on the business? ,- Are there any further opportunities to use IT? , - How do we provide IT Services as we meet demand and 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,  

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