The document discusses IT business alignment and how creating dependence between IT and business leaders is necessary to achieve alignment. It outlines challenges to alignment like focusing only on how IT aligns to business, a lack of tools to measure maturity, and traditional technology-focused solutions. The document proposes an IT2x framework that takes a process-centric approach involving both IT and business to identify projects supporting business goals. This framework aims to eliminate waste, allow more budget for innovation, and provide metrics to improve efficiency and alignment through a shared understanding of goals.
Creating A Necessary Dependence - IT Business Alignment
1. IT Business Alignment
Creating a Necessary Dependence
Eliminating Waste
Budgeting for Innovation
Glenn Whitfield – Director Of Business Integration, New Age
Technologies
June 2009
2. Agenda
• 2009 Current State
• IT Business Alignment
• History
• Challenges / Difficulties
• Necessary Condition
• IT2x Framework
• Eliminating Waste
• Allow more budget for innovation
• Questions
3. 2009 IT Trends
Top 2009 Technology Priorities
35%
31% 28%
Creating or Standardizing or Improving IT
Improving Strategic Consolidating IT Security &
Applications Infrastructure Continuity
Source: CIO Insight / Ziff Davis survey of 222 IT Executives Nov 2008
4. 2009 IT Trends
Top 2009 Business Priorities
42%
41%
38%
Improving Business Delivering Better Cutting Costs
Processes Customer Service
Source: CIO Insight / Ziff Davis survey of 222 IT Executives Nov 2008
5. 2009 IT Trends
Top 2009 Management Priorities
61%
37% 37%
Improving Alignment Improving IT Planning Reducing ROI Costs
with Business Processes
Objectives
Source: CIO Insight / Ziff Davis survey of 222 IT Executives Nov 2008
6. IT Budgets Falling
IT Budget Increase
83%
60%
47%
March 2008 October 2008 January 2009
Source: CIO.com March/October 2008 /Jan 2009 survey of 243 IT Executives
7. IT Budget Allocation
Innovation & Growth
Existing Systems / Maintenance
80%
20%
80% of IT budget spent
on maintenance
Source: IDC
8. The Result
More Pressure and Opportunity for IT
Innovation -
Meet Escalating Business Needs
• Simplify Working Together
• Find Information
• Improve Business Insight
• Secure and Manage Content
Operations –
Improve Efficiency
• Drive Value from IT Investments
• Manage Deployment, Operations and
Support Costs
• Maintain Security and Control
10. Nothing New
Issue was 1st documented in 19771
32 Years Ago
1 Ephraim McLean & John Soden, Strategic Planning for MIS
11. Still an Issue
IT Business Alignment
Society of Information Management (SIM) annual survey
of top issues facing CIOs:
1980 – 1994: Top 10
1994 – 2008: #1 or #2
2008?
#1
12. Why is Business Alignment so Difficult?
1) The alignment paradigm. The paradigm has
focused only on how IT is aligned to
1
Business, not Business to IT
2) Silver Bullet Mentality
3) Lack of Effective tool to gauge maturity of IT to
business alignment
4) Traditional approach to implementing
technology solutions
1 Luftman & Kempaiah, “An Update on Business-IT Alignment,” MIS Quarterly Vol.6 No. 3, Sep 2007
15. The Alignment Paradigm
IT is usually a department
Sales
Marketing
Business is a collection of
Operations
departments
Finance
IT
Technology is woven
IT
through
16. The Alignment Paradigm
From concept to reality Public
Relations
Telecom Marketing
Design
Inside
Servers Sales
IT Sales
Outside
Sales
Materials
Desktop
Shipping
Operations
Assembly
Quality
PMO
Accts
Payable
Accts
Receivable
Finance
Help Desk
Treasury
Budgeting
Financial
Reporting
HR
Benefits
Emp.
Relations
18. The Alignment Paradigm
It is a Two – Way street
IT Leaders must seek to
understand the business
Business Leaders must seek
to understand technology
21. Silver Bullet Mentality
N=2
First Part Good
Last Part Good
Then
Batch is Good
Oh – forgot to
mention, this is only
after you have your
process under control 1982
after months of
detailed analysis
24. Lack of Effective Tool
S ta g e d
S e le c te d M a tu r it y L e v e l
M a t u r it y L e v e l 5
Capability Maturity Model
M a t u r it y L e v e l 4
M a t u r it y L e v e l 3
M a t u r it y L e v e l 2
Integration (Carnegie Mellon)
CM
PPQ A
MA
S AM
PM C
PP
REQM
= G ro u p s o f p ro c e s s a r e a s c h o s e n fo r p ro c e s s im p ro v e m e n t to a c h i e v e m a tu rity le v e l 3
Strategic Alignment Maturity
Model (Luftman)
Infrastructure Optimization
Assessment (Microsoft)
25. Approach to Technology
Traditional Approach
Focus on the Glance at the Blind to the
Technology Process People
26. Approach to Technology
A New Approach
Focus on the Involve & Prepare for
Process Engage the Technology
People
27. Business Alignment Vision
The vision is an organization where:
• People are empowered with access to
information when they need it
• Processes are automated and aligned with
business goals
• IT technology/services can easily be adapted
to changing business needs
29. Taking a Step Back
Up to now, we have dealt with:
• A vision of what IT Business Alignment looks
like in an organization
• Barriers to achieving Alignment
• Approaches and Tools to break down those
barriers
30. Taking a Step Back
? Tools & IT Business
Techniques Alignment
What is driving these Approaches?
31. Taking a Step Back
What necessary condition should be in
place to drive the achievement of IT
Business Alignment?
32. The Necessary Condition
IT Business Alignment requires that
Business leaders and IT leaders are:
• Dependent on each other to meet the
organization’s goals and objectives
and
• Dependence is mutually recognized and
acted upon
33. The Necessary Condition
Logical Evaluation
• IF IT and Business leaders are dependent upon
each other for success, THEN shared
goals, objectives and metrics will be in place
• IF shared goals, objectives and metrics are in
place, THEN approaches and solutions can be
developed jointly
• IF approaches and solutions are developed and
executed jointly, THEN the outcomes of IT
Business Alignment will be met
• IF the outcomes of IT Business Alignment are
met, THEN we are aligned.
34. The Fundamental Principle
and Necessary Condition
Yes – It is inherently simple
Yes – Everyone thinks they are doing it
Yes – It is Common Sense
It is not Common Practice
36. SM
IT2x Framework
• Process centric approach involving IT and
Business helping create a necessary dependence
and partnership with each other for success.
• Alignment between IT initiatives and the business
objectives.
• Identifies IT projects that are supportive of the
business goals
• Provides ROI and a roadmap prioritization that
maps to the business goals.
39. Business Process Assessment (BPA)
Definition:
An analysis of a process in the organization required to
bring a product or service to the customer.
40. Business Process Assessment (BPA)
• Key Leaders / Subject Matter Experts
• Document and analyze the current state
• Identify waste / Non-value added activities
• Brainstorm improvements
• Develop the future state
• Develop Implementation/Action Plan
42. Technology Infrastructure Assessment
Infrastructure Assessment
• Drives for more secure, well-managed and
proactive infrastructure
• Enables reduction in overall IT costs
• Better utilized IT resources
• Helps make IT a strategic asset for the
business
43. Technology Infrastructure Assessment
Business Technology Assessment
• Assessment of the Technology behind the
business processes
• Set of technologies to streamline the
management and control of
content, data, and processes
• Simplifies how people work
together, improving the quality of business
insight
44. New Age Deliverables
• A summary aligning Implement the Use of Electronic Forms
IT projects to the IT Projects: SharePoint electronic forms (BTA)
Server Consolidation (IA)
technology behind
Processes Impacted: Deed Process (reviewed as part of BPA)
the organization’s IT Server Backup and Maintenance (not reviewed, but typically impacted by server
business process consolidation projects)
based on the Benefits: Eliminates walking deeds from courthouse to PVA office and the manual transfer
of deeds within the office. Also allows for identification of status of deeds within
business need the process, and reduces time to process a deed by 30%.
identified by the Investment: $110,000
BPA. ROI: 118% with a productivity factor adjusted average annual benefit of $138,000.
Suggested Metrics: Decrease time to process deeds (residential and commercial)
Delivery Agent: New Age Technologies
45. New Age Deliverables
• ROI based on benefits
for each business need
identified by the BPA.
46. New Age Deliverables
• Organization’s current
status in each of the
sub-categories to
assess IT’s capability as
an asset to the
organization.
47. New Age Deliverables
• Visual depiction of the Current State and Future States.
XYZ Corporation Widget Process
Customer
Customer Places
Receive Widgets A Receive invoice Pay XYZ Corp
Order
Meet with
Customer
Sales
Sales faxes order
Order entry enters
to sales order
order into system
entry
Purchasing /
Materials
Materials
Fax material Management
Receive order Determine material Send notification
requirements to evaluates and
from Sales requirements to Operations
suppliers schedules
production
Operations
Review schedule
Produce widgets
for expedited items Receive materials Set up Machine for Transport widgets Ship to customer
to order
and modify as from supplier production run Enter production to warehouse and enter data
specification
needed data
Finance
Receive
Process data in Send invoice to
production & A Receive payment
system cutomer
shipping data
48. New Age Deliverables
• Gantt chart of IT projects illustrating
the priority as they meet the
alignment to the business needs.
49. SM
IT2x Framework Results
• Actionable roadmap is provided to help an
organization move from reactive to
proactive, enabling the alignment of it’s business
processes to IT.
• Reduced IT costs and improved efficiencies through
the elimination of wasteful activities
• Ability to provide more funds toward innovation and
growth initiatives
• A more agile business better capable of responding
to the needs of an ever changing market.
50. Linking it Together
Improve
Operations &
Alignment with
Business
Eliminate Waste Innovation &
/ Improve Growth Budget
Efficiencies
51. What Next?
• Take a look at your processes. Look at the sequence
in which things happen and the interactions
between people, process, and technology.
• What steps in your process add value? What steps
are waste? How do you eliminate the waste?
• Look at your technology and how it interfaces with
the process. Was the technology designed to
support the process or the process to support the
technology? Does your technology support your
business objectives?
53. Want more information?
Glenn Whitfield – Director of Business
Integration
glenn.whitfield@newat.com
Or
Tony Fink – Vice President
tony.fink@newat.com
502.412.6681
Slide Objective: Emphasize that these challenges are typical for IT and create deep interest in the solution/opportunity. Set up the need for convergence and long term optimization.Key points: Deeply engage the audience in how the classic IT balancing act and challenge of supporting innovation and running operations can be turned into an opportunity. Technology convergence enables innovation and reduces cost. Create excitement on how a comprehensive and converged Business Productivity Infrastructure can deliver business innovation, reduce IT cost, and improve security/control. Detailed speaker notes:What you see on this slide is a classic IT situation. All of you are faced with this in your organization. The business expects IT agility to support innovation. IT is also burdened with keeping the “Lights On” at lower costs and higher security. It seems logical that the more siloed your technology components that support business needs, the lower the operational efficiency and lack of ability to meet those business needs. Based on market trends, customer and analyst feedback technology convergence is very real.
How long have we been talking about IT to Business Alignment?
So why has it always been IT to Business.
So why has it always been IT to Business.
In most organizations, IT is a departmentBusiness is a collection of departmentsIT / Technology is woven throughout the organization and each departmentIT has to understand each of the departments and how their goals impact the entire process.
IT has to understand the interactions with all the primary departments – 1st within itself, then with the business departments, and their sub-departments, each of whom believe they should be the top priority.
Has the Technology Industry made it too easy for the business leaders to think they understand technology?We have made things so simple with “plug & play” devicesA business leader probably thinks, “of course I understand technology, after all, I set up my home wireless network.”
How many more times are we going to fall for the silver bullet? Now, these are great books, and they all have great ideas in them, and they are also great stories. We love a good story. You know, the rags to riches kind of thing. That instant success. We “got everyone on the bus” and wham! We were successful. We want instant gratification.
RichardShonberger wrote “Japanese Manufacturing Techniques” in 1982. In it, he explains one of the quality principles of N=2. The concept is very simple. Measure the 1st part, measure the last part, if they are good, the batch is good. Sounds great! Some companies went out and did this. It was a TOTAL FAILURE. You see, the thing that was overlooked was the months and sometime years of process control work that went into refining the parameters of the process so you could implement N=2. It was not easy!
We must remember – THERE IS NO SILVER BULLET. There is only Hard Work. The work may not be difficult, in fact it may be simple; but it is not easy. It takes time, commitment and effort to be successful.
Until recently, there has not been an effective tool to measure where you are as an organization.The Capability Maturity Model Integration (CMMI) has been developed at Carnegie-MellonJerry Luftman has proposed the Strategic Alignment Maturity ModelMicrosoft has developed the Infrastructure Optimization Assessment ModelThere are many more out there, but each goes through a structured process of assessment and will help an organization discover their level in the selected model
The traditional approach to technology implementations has been to focus on the Technology, take a glance at the process, but not really a good look, and explain to the people they will just have to make the new technology work.We have traditionally failed.
In order to be successful, we must focus on the process while engaging the people. Getting the people involved in the process before the technology is deployed will allow for the people to take ownership of their processes and fully understand the implications of their work. Doing this will help us prepare for the Technology which will then solidify the new, improved process.
This is a continuous process.
To help an organization get started in this process, we have developed the IT2x Framework.
The IT2x Framework is a process centric approach involving IT and business that helps create a necessary dependence and partnership with each other for success. By helping create this dependence, improved alignment between IT and the business objectives is achieved.The framework also identifies IT projects that are supportive of the business goals and tie to the improvement of a business processA ROI analysis and prioritized roadmap is also provided to ensure alignment to the business goals.
In the IT2x Framework, we start with the business plan and IT strategies, and select a business or IT process to be reviewed.We then perform a Business Process Assessment, an Infrastructure Assessment, and a Business Technology Assessment.Analyzing and consolidating the results from these assessments, an Aligned IT roadmap is provided that ties back into the Business Plan and Strategies.
Looking in a little more detail at the bottom row, we spend about a week (3 – 5 days) performing a Business Process Assessment on a process that’s been selected to be reviewed or improved. In it we review the current state, develop a future state, and an action plan for the BPA. We’ll discuss this in further detail in a few minutes.After the BPA, we perform an Infrastructure Assessment, looking specifically at the areas of Security and Networking, Identity and Access Management, Desktop, device & server management, data protection and recovery, as well as IT & security processes. We also perform an energy efficiency review of your data center to help determine opportunities to reduce your energy usage and costs.Concurrent with the Infrastructure Assessment, we perform a Business Technology Assessment where we focus on the areas of Collaboration, Enterprise Content Management, Search, Unified Communications, and Business Intelligence.Taking the information from these assessments, we develop a road map to align IT infrastructure and technology projects to the Business process, as well as provide an ROI analysis to help with project justification.
Let’s spend some more time on the Business Process Assessment.A BPA is an analysis of a process in the organization required to bring a product or service to the customer.
Typically a BPA takes 3 – 5 days, with the team members meeting whenever possible for 6 – 8 hours per day. This can be reduced depending on each organization, but breaking it up does sub-optimize the process.Key Leaders, subject matter experts and others that perform or are impacted by the process are invited to attend. Recognizing that some may not be able to attend the complete session, these personnel are asked to be available should the team have any questions requiring their input.The first step is to document the current state. One thing that is preferred to do is to actually go out and walk the process whenever possible. This helps the team understand what people are really doing. Remember, there are 3 stages to a process – what you think it is, what it actually is, and what it should be. By going to look and see the process, the team can understand the differences between what they think the process is and what it really is.Also, by walking the process, the team can more accurately identify waste and non-value added activities. Let’s talk a little more about what I mean by these.There are basically 3 types of activities – Value Added, non-value added (sometimes referred to as business value added), and waste.A Value Added activity is an activity that the customer is willing to pay for. One the changes the form, fit, or function of a product or service.A non-value added (or business value-added) activity is one that does not add value to the customer, but does add value to the business. For example, in a hospital, the completion of Medicare documentation. Now, the customer does not care if the Medicare documentation is competed properly, but the hospital sure does – if it wants to be reimbursed for its services.Those activities that add no value to the customer or the business are pure waste. Keeping the healthcare scenario, if a nurse enters a patient room and writes information on her clipboard, then returns to the nursing station to enter the data into the system, the action of writing the information on the clipboard is double work – pure waste.Once the activities are properly categorized, the team spends some time brainstorming on improvements to the process to eliminate the waste, minimize the non-value added activity and maximize the value added actions.The ideas from the brainstorming session are used to develop a future state map for how the team would like the process to be performed. The actions required to implement the future state are then placed into an Implementation and Action plan that the team can use to track progress toward achieving the future state.
To evaluate the Infrastructure and Business Technology Assessments, We have developed the RAMP Model.The RAMP model is a maturity model with four phases -Reactive, Adaptive, Managed, and Proactive. It is used to gauge an IT organizations overall maturity, as well as the maturity in each of the sub-categories of the Infrastructure and Business Technology Assessments.Although the goal of the IT organization overall will be to move from Reactive, where the IT functions as a cost center, to Proactive, where it functions as a strategic asset to the organization, it is not necessarily required for an organization to move to the Proactive stage in each of the sub-categories. For example, if the organization does not have a large mobile workforce, it may not make business sense for them to be in the Proactive stage in Unified Communications. We believe very strongly that an organization should only move forward in the model if it meets their business needs. To do so otherwise would be wasting the organizations, time, money, and resources.
The Infrastructure Assessment is completed through the use of an on-line tool and through interviews with key personnel within the organization.The results of the Infrastructure Assessment will help an organization drive for a more secure, well-managed, and proactive infrastructure that will enable a reduction in overall IT costs through better utilized resources.The IA provides IT the information needed to help it move toward becoming a strategic asses for the business.
Concurrent with the Infrastructure Assessment, the Business Technology Assessment is an assessment of the technology behind the business processes.Completed through interviews with key personnel and New Age’s on-line tool, the BTA identifies a set of technologies to help streamline the management and control of content, data and processes.It helps simplify how people work together while improving the quality of business insight.
The deliverables of the IT2x Framework include a project / action summary aligning IT projects to the organizations business processes as identified by the Business Process AssessmentWe make sure the technology solution proposed will actually add value to the process.
For each of the action items, we perform an ROI analysis as appropriate to help you understand the investment and the potential return on your investment. We take a very hard look at not just the benefits, but the implementation costs, including labor and other resources, to implement the project.
We provide the organizations status on the RAMP model, from Reactive to Proactive, in each of the sub categories of the Infrastructure Assessment and the Business Technology Assessment.
A map of the current and future states is also provided. The example here shows a swim lane format, but it could be a traditional flow chart, or a Value Stream Map. The type of map utilized depends on the scope of the process reviewed.
A Gantt chart of IT projects is provided to help show the timing and dependence of the projects to the organization. For example, if providing your employees mobile devices to enter data remotely was identified as a business need, the corresponding infrastructure work would need to be completed before the devices can be deployed.
In Summary, the IT2x Framework provides an organization with an actionable roadmap to help IT’s maturity increase in line with the business needs, thus enabling the alignment of it’s business processes to IT.There are reduced IT and operations costs as a result of improved efficiencies from the elimination of wasteful activities. This allows an organization with the ability to provide more funds toward innovation and growth initiatives leading to a more agile business better capable of responding to the needs of an ever changing market.
What can you do next?Take a look at your processes. Look at the sequence in which things happen and the interactions between people, process, and technology.What steps in your process add value? What steps are waste? How do you eliminate the waste?Look at your technology and how it interfaces with the process. Was the technology designed to support the process or the process to support the technology? Does your technology support your business objectives?It is very important that you understand that.
