I-DigitalTEK Agile Development IT Solutions for Growing Business Business Value of IT “ The Five Pillars…” I-DigitalTEK K

Business Value of IT “ Whatever you can do or dream ,You can do. Begin it! Boldness has genius, power and magic in it.” Ref: Goethe “ The accumulation of more information about variables related to the weather: wind speed, Humidity, temp., lunar Cycles .. Do not help increase the accuracy of long range weather forecasts .. Dynamic and complex systems, like the weather, are composed of many interacting elements, and the slightest perturbation has a significant impact on future patterns.” Ref: Edward Lorenz, MIT

“ Whatever you can do or dream ,You can do. Begin it! Boldness has genius, power and magic in it.”

Ref: Goethe

“ The accumulation of more information about variables related to the weather: wind speed, Humidity, temp., lunar Cycles .. Do not help increase the accuracy of long range weather forecasts .. Dynamic and complex systems, like the weather, are composed of many interacting elements, and the slightest perturbation has a significant impact on future patterns.”

Ref: Edward Lorenz, MIT

Business Value of IT Strategic Alignment Corporate or Brand Image, public perceptions Enhanced linkages w/customers and/or suppliers Business Processes: Ability of technology to cope with changing business processes Ability of technology to support new organizational structures Ability of technology to be supported by internal expertise Architecture: Levels of Security and DRP Level of compatibility with preferred database standard Level of compatibility with preferred networking standard Risk: Organizational experience with major IT initiative Maturity of technological area under consideration Project scale – the larger the more difficult Timeframe to implement decision – the longer the greater the risk Ref: “5 Pillars of Benefits Realization”

Strategic Alignment

Corporate or Brand Image, public perceptions

Enhanced linkages w/customers and/or suppliers

Business Processes:

Ability of technology to cope with changing business processes

Ability of technology to support new organizational structures

Ability of technology to be supported by internal expertise

Architecture:

Levels of Security and DRP

Level of compatibility with preferred database standard

Level of compatibility with preferred networking standard

Risk:

Organizational experience with major IT initiative

Maturity of technological area under consideration

Project scale – the larger the more difficult

Timeframe to implement decision – the longer the greater the risk

Ref: “5 Pillars of Benefits Realization”

What is technology innovation? "Anything that creates new resources, processes, or values or improves a company's existing resources, processes, or values. Obvious innovations include new or improved products, processes, and services. New delivery mechanisms, customer service strategies, and business models are all other forms of innovation.“ “ This concept of technology therefore extends beyond engineering and manufacturing to encompass a range of marketing, investment, and managerial processes. Innovation refers to a change in one of these technologies.” Ref: What's Next: Using the Theories of Innovation to Predict Industry Change, Christensen et al. (p 293). HBS .

"Anything that creates new resources, processes, or values or improves a company's existing resources, processes, or values. Obvious innovations include new or improved products, processes, and services. New delivery mechanisms, customer service strategies, and business models are all other forms of innovation.“

“ This concept of technology therefore extends beyond engineering and manufacturing to encompass a range of marketing, investment, and managerial processes. Innovation refers to a change in one of these technologies.”

Ref: What's Next: Using the Theories of Innovation to Predict Industry Change, Christensen et al. (p 293). HBS .

Competitive Battles and Strategic Choices Signals of change : “Are there signs that someone is capitalizing on opportunities for change?” Signs that companies are introducing new-market disruptive innovations. Signs that companies are Introducing up-market sustaining innovations. Signs that companies are introducing low-end disruptions, displacements, or moving closer to consumers. Signs that nonmarket players are taking action to increase or decrease barriers to innovation.

Signals of change : “Are there signs that someone is capitalizing on opportunities for change?”

Signs that companies are introducing new-market disruptive innovations.

Signs that companies are Introducing up-market sustaining innovations.

Signs that companies are introducing low-end disruptions, displacements, or moving closer to consumers.

Signs that nonmarket players are taking action to increase or decrease barriers to innovation.

Resources – Processes - Values Resources: Things or assets that organizations can buy or sell, build or destroy: Technology People Products Equipment Information Cash Brand Distribution channels Processes: Established ways companies turn resources into products or services: Hiring and training Product development Manufacturing Planning and budgeting Market research Resource allocation Values: The criteria by which prioritized decisions are made: Cost structure Income statement Customer demands Size of opportunity Ethics

Resources:

Things or assets that

organizations can buy

or sell, build or destroy:

Technology

People

Products

Equipment

Information

Cash

Brand

Distribution channels

Processes:

Established ways

companies turn

resources into

products or services:

Hiring and training

Product development

Manufacturing

Planning and budgeting

Market research

Resource allocation

Values:

The criteria by which prioritized decisions are made:

Cost structure

Income statement

Customer demands

Size of opportunity

Ethics

Speed to Market Global Reach Recession Proofing Increased Organization Ability Reduced Unit Cost IT Value Achievement Strategic Alignment Business Process Impact Architecture Direct Payback Risk Business Context Globalization Mergers, Acquisitions, and Takeovers Changing Rules of Competition Recession E-business Figure 2.1 The Pillars, Tony Murphy Achieving Business Value from IT

Strategic Alignment “ Will this investment help us achieve our strategic goals?” Business Process Impact “ What is the impact on our ability to transform Business processes?” Architecture “ What is the impact on our IT architecture?” Risk “ What business and technology risks could arise from this investment?” Direct Payback “ Will this investment help deliver more revenue, cost savings, or better management information?” Figure 2.2 The Five Pillars of Benefits Realization, Tony Murphy Achieving Business Value from IT

Conversion Effectiveness “ IT investment should be examined through the assessment of appropriate IT assets, followed by an examination that the IT assets did indeed lead to IT impacts on the intended business function, and finally whether the business function impacted the organization’s bottom line. “ Conversion effectiveness – “an enterprise’s ability to convert IT investments into profit.” “ Are there signs that someone is capitalizing on opportunities for change?” Ref: P.147 IT PAYOFF

“ IT investment should be examined through the assessment of appropriate IT assets, followed by an examination that the IT assets did indeed lead to IT impacts on the intended business function, and finally whether the business function impacted the organization’s bottom line. “

Conversion effectiveness – “an enterprise’s ability to convert IT investments into profit.”

“ Are there signs that someone is capitalizing on opportunities for change?”

Ref: P.147 IT PAYOFF

Reference Material I-DigitalTek http://www.i-digitaltek.net What's Next: Using the Theories of Innovation to Predict Industry Change, Christensen et al. “ 5 Pillars of Benefits Realization” Tony Murphy - 2002 - Business & Economics “ The defeated estimate before the war, but they do not consider everything. Estimating completely creates victory. Estimating incompletely causes failure.” Sun Tzu

I-DigitalTek http://www.i-digitaltek.net

What's Next: Using the Theories of Innovation to Predict Industry Change, Christensen et al.

“ 5 Pillars of Benefits Realization” Tony Murphy - 2002 - Business & Economics

“ The defeated estimate before the war, but they do not consider everything. Estimating completely creates victory. Estimating incompletely causes failure.” Sun Tzu