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Business Alignment


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This presentation was created to provide some practical advise in aligning IT projects to business objectives for a firm.

Published in: Business, Education, Technology
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Business Alignment

  1. 1. It’s all about your business with creative IT strategy Alignment : Business & Technology
  2. 2. <ul><li>Alignment vs. Double-vision </li></ul><ul><ul><li>Make sure that the direction for business is clear. </li></ul></ul><ul><ul><li>There are multiple paths to implement technology. Choose the one that leads to your business destination. Sometimes it isn’t clear. </li></ul></ul><ul><li>Common Patterns for Failure & Success </li></ul><ul><ul><li>Communication, personal biases, planning, use of resources, understanding of risk, and the destination. </li></ul></ul><ul><li>A Solution : Governance Process </li></ul><ul><ul><li>Budget, Value/Benefits, Business Alignment, Risk, and Priority. </li></ul></ul>Alignment: Business & Technology
  3. 3. Choosing poorly <ul><li>Biases & errors in judgment </li></ul><ul><li>Failure to establish an effective framework </li></ul><ul><li>Lack of metrics for determining value </li></ul><ul><li>Inability to assess and value risk </li></ul><ul><li>Failure to identify projects that should be killed </li></ul><ul><li>Such problems cause companies to get only 60% of the value of their IT projects. </li></ul>
  4. 4. How do should we choose? <ul><li>Tie technology decisions to business objectives </li></ul><ul><li>Build a process </li></ul><ul><ul><li>It will help you to make a decision before you have to make one under pressure </li></ul></ul><ul><li>Ask questions: </li></ul><ul><ul><li>What does it [insert technical stuff here] gain us? </li></ul></ul><ul><ul><li>How do we measure its impact? </li></ul></ul><ul><ul><li>Where is the implementation & adoption plan? </li></ul></ul><ul><li>Get expert help </li></ul><ul><ul><li>Are we using the right investments in the right places for maximum leverage of resources? </li></ul></ul><ul><ul><li>Is our technology a drag or an accelerator for growth? </li></ul></ul>
  5. 5. Common Language <ul><li>Governance process </li></ul><ul><ul><li>A clear destination and good communication avoids: divergent institutional aims & divided leadership </li></ul></ul><ul><li>Value propositions </li></ul><ul><ul><li>Accepting flawed value propositions without scrutiny or promises that can never be realized is dangerous </li></ul></ul><ul><li>Risk </li></ul><ul><ul><li>What are we willing to tolerate in order to gain the situation described “post implementation”? </li></ul></ul>
  6. 6. Governance Process defined <ul><li>Governance: This is simply the way various aspects of a decision will be processed. Iterative evaluation of a decision is often part of this process. </li></ul>Define the selection process before you need to choose, define the weight of importance before you have to score, and stick to your plan. Periodically, evaluate your G.P. and adjust based on business conditions
  7. 7. Value/Benefits defined <ul><li>Value/Benefits: The difference of doing or not doing something. It is the measure why which this project enables your company to reach its objectives. </li></ul><ul><li>The value/benefit of a project is its worth to the organization to obtain the payoff of the project. </li></ul><ul><li>Sources: Reduced cost, increased revenue, increased customer satisfaction, and obtaining a new capability or knowledge. </li></ul>
  8. 8. Risk defined <ul><ul><li>Cost – typically escalation of project costs due to poor estimating or scope creep </li></ul></ul><ul><ul><li>Schedule – Activities take longer than expected. Slippages or schedule compression </li></ul></ul><ul><ul><li>Performance – Project outcomes will fail to produce the results expected </li></ul></ul><ul><li>Risk: Webster defines it as “a possibility of loss.” </li></ul>Risk isn’t always bad. It should be seen in relation to its value. “How much risk you choose to carry and how aggressively you mitigate it are directly related to how much value is at stake.” ( Smart Business , © Dave Chapman 2002)
  9. 9. Common Language (cont.) <ul><li>Business Alignment </li></ul><ul><ul><li>Business decisions rely on accurate and timely information. Its worth varies over time. </li></ul></ul><ul><li>Priority </li></ul><ul><ul><li>Clearly deciding among “top priorities” based on their effect on the business. </li></ul></ul><ul><ul><li>Ask Why? Five times – Like root cause analysis. Validate the real reason for the priority order </li></ul></ul>
  10. 10. Business Alignment defined <ul><li>Consideration of IT projects against a backdrop of business conditions is critical for allocating resources along the organization's strategic goals. </li></ul><ul><li>What’s most important here is how to best allocate the available budget across the identified main corporate initiatives (or strategies). </li></ul><ul><ul><li>For instance:  </li></ul></ul><ul><ul><ul><li>ABC will be known as an organization that develops innovative products </li></ul></ul></ul><ul><ul><ul><li>It is critical that ABC products and services deliver the data to achieve a positive behavioral change in the lives of our customers . </li></ul></ul></ul><ul><ul><ul><li>Achieve a 30% net profit growth over actual for FY ‘07 </li></ul></ul></ul>
  11. 11. Priority defined <ul><li>Mandatory: Work that you &quot;have to do&quot; might be supporting a legal or auditing requirement. Generally speaking, do you don't have the ability to say you are not going to do it. </li></ul><ul><li>Business Critical: Must be done to support (sustain) the business. One of the key aspects of this work is that you have some discretion over how much you spend on it. </li></ul><ul><li>High: Work that you think &quot; must get done.&quot; You might break this work into two areas based on the impact to the business: </li></ul><ul><ul><li>Strategic - This work is usually larger and more expensive but helps you transform the business. </li></ul></ul><ul><ul><li>Tactical - This work usually costs less and has a more short-term payoff. The value is incremental, not transformational. </li></ul></ul><ul><li>Normal: You can break the &quot;Normal&quot; work down into medium priority or low priority, but usually neither category of work will get funded. Low-priority work should be the last to get funded. </li></ul>
  12. 12. Practical Approach
  13. 13. Steps to Alignment <ul><li>Create a Governance Process & Revise it periodically </li></ul><ul><li>Write a clear description of your destination – Business Objectives </li></ul><ul><li>Define the metrics to recognize your having attained them </li></ul><ul><li>Place this vision in its proper context of short + long-term goals for next layer in the team & so on </li></ul><ul><li>Create a safe environment to escalate new information back to you. Communication is key! </li></ul><ul><li>Check IT project’s reasonableness among other business goals (Budget, Value/Benefit, Business, Alignment, Risk & Priority) </li></ul><ul><li>If your organization is large, appoint a Portfolio Manager </li></ul><ul><li>As in sea voyages of old, check your bearings often </li></ul><ul><li>Stay the course, but kill a project swiftly if needed </li></ul><ul><li>Ask for assistance at any point. No one-of-us is as smart as all of us. </li></ul>
  14. 14. The Language of Business Leaders (spoken here) Michael Galo President & IT Strategist [email_address] (615) 850-0279