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How to Map Business goals vs IT goals

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How to Map Business goals vs IT goals

  1. 1. Understanding How Business Goals Drive IT Goals Executive Briefing
  2. 2. Understanding How Business Goals Drive IT Goals IT Governance Institute® The IT Governance Institute (ITGITM ) (www.itgi.org) is a non-profit, independent research entity that provides guidance for the global business community on issues related to the governance of IT assets. ITGI was established by the non-profit membership association ISACA in 1998 to help ensure that IT delivers value and its risks are mitigated through alignment with enterprise objectives, IT resources are properly managed, and IT performance is measured. ITGI developed Control Objectives for Information and related Technology (COBIT® ) and Val ITTM , and offers original research and case studies to help enterprise leaders and boards of directors fulfil their IT governance responsibilities and IT professionals deliver value-adding services. Disclaimer ITGI has designed and created this publication, titled Understanding How Business Goals Drive IT Goals (the ‘Work’), primarily as an educational resource for control professionals. ITGI makes no claim that use of any of the Work will assure a successful outcome. The Work should not be considered inclusive of any proper information, procedures and tests or exclusive of other information, procedures and tests that are reasonably directed to obtaining the same results. In determining the propriety of any specific information, procedure or test, controls professionals should apply their own professional judgement to the specific control circumstances presented by the particular systems or information technology environment. Reservation of Rights © 2008 ITGI. All rights reserved. No part of this publication may be used, copied, reproduced, modified, distributed, displayed, stored in a retrieval system or transmitted in any form by any means (electronic, mechanical, photocopying, recording or otherwise) without the prior written authorisation of ITGI. Reproduction and use of all portions of this publication are permitted solely for academic, internal and non-commercial use and for consulting/advisory engagements, and must include full attribution of the material’s source. No other right or permission is granted with respect to this work. IT Governance Institute 3701 Algonquin Road, Suite 1010 Rolling Meadows, IL 60008 USA Phone: +1.847.660.5700 Fax: +1.847.253.1443 E-mail: info@itgi.org Web site: www.itgi.org Understanding How Business Goals Drive IT Goals Printed in the United States of America 2 © 2 0 0 8 I T G O V E R N A N C E I N S T I T U T E . A L L R I G H T S R E S E R V E D .
  3. 3. Acknowledgements Acknowledgements ITGI wishes to recognise: The Researchers Wim Van Grembergen, Ph.D., University of Antwerp Management School, and IT Alignment and Governance Research Institute, Belgium Steven De Haes, Ph.D., University of Antwerp Management School, and IT Alignment and Governance Research Institute, Belgium Hilde Van Brempt, University of Antwerp Management School, and IT Alignment and Governance Research Institute, Belgium ITGI Board of Trustees Lynn Lawton, CISA, FBCS, FCA, FIIA, KPMG LLP, UK, International President George Ataya, CISA, CISM, CGEIT, CISSP, ICT Control SA, Belgium, Vice President Yonosuke Harada, CISA, CISM, CAIS, InfoCom Research Inc., Japan, Vice President Howard Nicholson, CISA, CGEIT, City of Salisbury, Australia, Vice President Jose Angel Pena Ibarra, CGEIT, Consultoria en Comunicaciones e Info., SA & CV, Mexico, Vice President Robert E. Stroud, CA Inc., USA, Vice President Kenneth L. Vander Wal, CISA, CPA, Ernst & Young LLP (retired), USA, Vice President Frank Yam, CISA, FHKCS, FHKIoD, CIA, CCP, CFE, CFSA, FFA, Focus Strategic Group, Hong Kong, Vice President Marios Damianides, CISA, CISM, CA, CPA, Ernst & Young LLP, USA, Past International President Everett C. Johnson, CPA, Deloitte & Touche LLP (retired), USA, Past International President IT Governance Committee Tony Hayes, FCPA, Queensland Government, Australia, Chair Sushil Chatterji, Edutech Enterprises, Singapore Kyung,Tae Hwang, CISA, Dongguk University, Korea John W. Lainhart IV, CISA, CISM, CGEIT, IBM Business Consulting Services, USA Hugh Penri-Williams, CISA, CISM, CCSA, CIA, Adcatel, France Eddy Schuermans, CISA, PricewaterhouseCoopers, Belgium Gustavo Adolfo Solis Montes, CISA, CISM, Grupo Cynthus, Mexico Robert E. Stroud, CA Inc., USA John Thorp, CMC, I.S.P., The Thorp Network Inc., Canada Wim Van Grembergen, Ph.D., University of Antwerp Management School, and IT Alignment and Governance Research Institute, Belgium COBIT Steering Committee Robert E. Stroud, CA Inc., USA, Chair Gary S. Baker, CA, Deloitte & Touche, Canada Rafael Eduardo Fabius, CISA, Republica AFAP SA, Uruguay Erik Guldentops, CISA, CISM, University of Antwerp Management School, Belgium Jimmy Heschl, CISA, CISM, CGEIT, KPMG, Austria Debbie A. Lew, CISA, Ernst & Young LLP, USA Greta Volders, Voquals, Belgium 3© 2 0 0 8 I T G O V E R N A N C E I N S T I T U T E . A L L R I G H T S R E S E R V E D .
  4. 4. Understanding How Business Goals Drive IT Goals Acknowledgements cont. ITGI Affiliates and Sponsors ISACA chapters American Institute of Certified Public Accountants ASIS International The Center for Internet Security Commonwealth Association for Corporate Governance Inc. FIDA Inform Information Security Forum Information Systems Security Association Institut de la Gouvernance des Systemes d’Information Institute of Management Accountants Inc. ISACA ITGI Japan Norwich University Socitm Performance Management Group Solvay Business School University of Antwerp Management School Aldion Consulting Pte. Ltd. Analytix Holdings Pty. Ltd. BWise B.V. CA Inc. Consult2Comply Hewlett-Packard IBM ITpreneurs Nederlands B.V. LogLogic Inc. Phoenix Business and Systems Process Inc. Project Rx Inc. Symantec Corporation TruArx Inc. Wolcott Group LLC World Pass IT Solutions The researchers wish to recognise: This research project was commissioned by the IT Governance Institute and was performed by the IT Alignment and Governance Research Institute of the University of Antwerp Management School (UAMS) in Belgium. ITGI also provided the necessary contact information from the ISACA member database for building the expert team. We are grateful to the valuable support of the COBIT Steering Committee and would like to thank Erik Guldentops, who initiated this research and provided us with many ideas on IT governance. Thanks also go the expert team members for taking the time during several rounds to provide us valuable answers and feedback on the questionnaires. 4 © 2 0 0 8 I T G O V E R N A N C E I N S T I T U T E . A L L R I G H T S R E S E R V E D .
  5. 5. Table of Contents Table of Contents Introduction.......................................................................................................................................................................................................6 Research Background......................................................................................................................................................................................7 General Findings ..............................................................................................................................................................................................8 Sector-specific Findings.................................................................................................................................................................................12 Full Research Report Available ....................................................................................................................................................................17 List of Figures.................................................................................................................................................................................................18 5© 2 0 0 8 I T G O V E R N A N C E I N S T I T U T E . A L L R I G H T S R E S E R V E D .
  6. 6. Understanding How Business Goals Drive IT Goals Introduction In today’s complex and constantly changing business world, IT’s alignment to the business and IT governance are high on the agenda of executive management. Strategic planning based on the alignment of IT goals to business goals is a key component in business/ IT alignment. It is important that an enterprise start with a clear view of its mission and a thorough definition of its supporting strategy and business goals. This then needs to be translated into goals for the IT department, which are the basis for the IT strategy. Finally, the supporting IT processes must be carefully planned to translate the IT strategy into action. For these planning efforts, enterprises may be looking for guidance to identify the set of important business goals and IT goals, and how they interrelate. Research into this subject by the IT Governance Institute was discussed in previous Information Systems Control Journal articles1 and led to the publication of a set of generally applicable business goals for IT and associated IT goals in COBIT® .2 Extensive follow-up research was performed to gain more insight into this set of business and IT goals and their linkage. This white paper presents the main results of the follow-up research project in which a group of experts in different sectors were asked to validate, prioritise and link a set of business goals and IT goals. This research has also resulted in a significant improvement of the business goals for IT and associated IT goals in COBIT® 4.1. In addition to this white paper, a full research report that includes all of the detailed data is available at www.itgi.org. 6 © 2 0 0 8 I T G O V E R N A N C E I N S T I T U T E . A L L R I G H T S R E S E R V E D . 1 Van Grembergen, W.; S. De Haes; J. Moons; ‘IT Governance: Linking Business Goals to IT Goals and COBIT Processes’, Information Systems Control Journal, vol. 4, 2005 and Van Grembergen, W.; S. De Haes; H. Van Brempt; ‘How Does the Business Drive IT? Identifying, Prioritising and Linking Business and IT Goals’, Information Systems Control Journal, vol. 6, 2007 2 IT Governance Institute, Control Objectives for Information and related Technologies (COBIT), USA, 1996-2008, www.itgi.org
  7. 7. Research Background Research Background This research project follows up on the findings of a pilot study that resulted in a list of 20 generic business goals and a list of 28 generic IT goals, first published in COBIT 4.0. The objectives of the research presented in this white paper are to: • Validate these lists for completeness, consistency and clarity • Gain more insight into goals and priorities for different sectors • Examine the relationship between IT goals and business goals In practice, every enterprise has its own distinct sets of business and IT goals. Priorities within these sets will differ depending on a variety of internal and external factors such as company size, market position, degree of IT dependency, industry and geography. This project chose an industry approach and started with a pilot in the financial sector that was then replicated for four other sectors: • Manufacturing and pharmaceuticals • IT professional services, telecommunications and media • Government, utilities (e.g., energy, oil and gas) and healthcare • Retail, distribution and transportation For the prioritisation and linking of the goals, a Delphi method was used. This method is based on a structured process for collecting and distilling knowledge from a group of experts by means of several feedback rounds. For this study, a team of experts was asked to prioritise a list of business and IT goals by using a ranking technique, and the averaged results were returned to them. Different interview rounds were performed to achieve consensus amongst the experts on the important goals and how the business goals are linked to the IT goals. The ISACA member database was used as a major source to identify subject experts. In total, 158 business and IT professionals, either managers or auditors, participated from enterprises with more than 150 employees. All five industry sectors were represented. One of the assumptions was that experts holding a management or auditing position have sufficient knowledge of both IT and business goals. Figure 1 presents the expert team’s composition by sector and geographic location. 7© 2 0 0 8 I T G O V E R N A N C E I N S T I T U T E . A L L R I G H T S R E S E R V E D . Retail, Distribution and Transportation: 16 Government, Utilities and Healthcare: 39 IT Professional Services, Telecommunications and Media: 40 Financial: 38 Manufacturing and Pharmaceuticals: 25 Europe: 37 Latin America: 3Australia: 7 Middle East: 18 Asia: 28 Africa: 14 North America: 51 Expert Team by Sector Total number of subject experts: 158 Expert Team by Geographic Location Figure 1—Expert Team Composition
  8. 8. Understanding How Business Goals Drive IT Goals General Findings The research reported in this white paper was executed in enterprises of different industries, sizes and geographic locations. This section discusses some general findings that are relevant to the whole data set. Identifying and Validating Business and IT Goals During the research, the original list of IT and business goals (as published in COBIT 4.0) was validated and reviewed multiple times, and evolved to a generic list of 17 (IT-related) business goals and 18 IT goals. Overlap, inconsistencies and ambiguities amongst the different goal definitions were reduced to a minimum. The goals turned out to be generically defined and applicable across all sectors. Figure 2 presents the final list of business and IT goals, categorised by their corresponding balanced scorecard (BSC) perspectives. The generically defined goals provide a guideline for companies to help them identify their set of important business and IT goals. In practice, enterprises will need to develop their own subset, but they can do that efficiently by: • Starting from these generic business and IT goals • Updating these goals for enterprise specifics (strategy, infrastructure, etc.) • Adding measures to track goal achievement Documenting the Top 10 Business and IT Goals The lists of business and IT goals have been prioritised over five different sectors. Figure 3 presents the top 10 most important business and IT goals, consolidated over all sectors. Apart from some minor exceptions, the separate lists of the different sectors include the same business and IT goals in their individual top 10. This proves that there is a very high degree of consensus that these business and IT goals are the most important ones. Filtering the results by company size and geographic location confirmed the stability of these lists of top 10 goals. 8 © 2 0 0 8 I T G O V E R N A N C E I N S T I T U T E . A L L R I G H T S R E S E R V E D . Figure 2—Validated Lists of Business and IT Goals Business Goals IT Goals Financial (Corporate) Perspective Corporate Contribution3 – Manage (IT-related) business risks. – Offer transparency and understanding of IT costs, benefits and risks. – Provide a good return on (IT-enabled) business investments. – Ensure IT compliance with laws and regulations. – Improve financial transparency. – Account for and protect all IT assets. – Ensure compliance with external laws and regulations. – Drive commitment and support of executive management. – Improve IT’s cost-efficiency. – Align the IT strategy to the business strategy. Customer Perspective User Orientation – Improve customer orientation and service. – Make sure that IT services are reliable and secure. – Establish service continuity and availability. – Provide service offerings and service levels in line with business requirements. – Offer competitive products and services. – Translate business functional and control requirements into effective and – Achieve cost optimisation of service delivery. efficient automated solutions. – Create agility in responding to changing business requirements. – Accomplish proper use of applications, information and technology solutions. – Obtain reliable and useful information for strategic decision making. Internal Perspective Operational Excellence – Improve and maintain business process functionality. – Maintain the security (confidentiality, integrity and availability) of information – Improve and maintain operational and staff productivity. and processing infrastructure. – Enable and manage business change. – Deliver projects on time and on budget, meeting quality standards. – Ensure compliance with internal policies. – Optimise the IT infrastructure, resources and capabilities. – Optimise business process costs. – Provide IT agility (in responding to changing business needs). – Seamlessly integrate applications and technology solutions into business processes. Learning and Growth Perspective Future Orientation – Acquire, develop and maintain skilled and motivated people. – Acquire, develop and maintain IT skills that respond to the IT strategy. – Identify, enable and manage product and business innovation. – Acquire knowledge and expertise in emerging technologies for business innovation and optimisation. – Ensure that IT demonstrates continuous improvement and readiness for future change. 3 Because IT may not have a direct impact on the perspectives listed under business goals, the associated IT goals are called corporate contribution, user orientation, operational excellence and future orientation.
  9. 9. General Findings Financial and Customer-oriented Goals Score High in Importance Although priorities may differ from sector to sector, in general, business goals categorised in the customer and financial perspective of the BSC score high in the ranked list, while the internal and learning and growth perspective goals receive lower scores overall. As an example, the customer-oriented business goals ‘Improve customer orientation and service’ and ‘Establish service continuity and availability’ and the financial-oriented business goals ‘Ensure compliance with external laws and regulations’ and ‘Manage IT-related business risks’ make up the top four in the generic list and are also systematically ranked high to very high in the individual lists by sector, geographic location and company size. This trend is confirmed in the IT goals list; the IT goals for the related IT BSC corporate and user perspectives are higher in the list than those for the internal and the learning and growth perspectives. For example, the corporate contribution-related goals ‘Align the IT strategy to the business strategy’ and ‘Ensure IT compliance with laws and regulations’ and the user-oriented goals ‘Make sure that IT services are reliable and secure’ and ‘Provide service offerings and service levels in line with business requirements’ are systematically ranked high for the different sectors, geographic locations and company sizes. It is remarkable that the future-oriented business goal for acquiring and maintaining the necessary skills only just makes it in the list of top 10 business goals (number 8). Its IT counterpart goal, ‘Acquire, develop and maintain IT skills that respond to the IT strategy’, fails to break into the list of top 10 most important IT goals. The Role of Sector-specific Characteristics in Prioritising Business and IT Goals In general, a relatively high degree of consensus was found regarding the most important (top 10) business and IT goals. However, a number of sector-specific characteristics were identified. As an example, the IT professional services sector’s high dependency on IT skills is confirmed with a higher ranking for the goal ‘Acquire, develop and maintain IT skills…’. Another important asset (differentiator) for the enterprises operating in this sector is (knowledge of) advanced technology, which explains the higher importance of ‘Identify, enable and manage product and business innovation’. A more detailed discussion on sector-specific differences is presented in the next section, addressing the following sectors: manufacturing and pharmaceuticals; IT professional services, telecommunications and media; government, utilities and healthcare; and retail, distribution and transportation. 9© 2 0 0 8 I T G O V E R N A N C E I N S T I T U T E . A L L R I G H T S R E S E R V E D . Figure 3—Prioritised Lists of Top 10 Business and IT Goals Top 10 Business Goals Top 10 IT Goals 1. Improve customer orientation and service. 1. Align the IT strategy to the business strategy. 2. Ensure compliance with external laws and regulations. 2. Maintain the security (confidentiality, integrity and availability) of information 3. Establish service continuity and availability. and processing infrastructure. 4. Manage (IT-related) business risks. 3. Make sure that IT services are reliable and secure. 5. Offer competitive products and services. 4. Provide service offerings and service levels in line with business 6. Improve and maintain business process functionality. requirements. 7. Provide a good return on (IT-enabled) business investments. 5. Ensure IT compliance with laws and regulations. 8. Acquire, develop and maintain skilled and motivated people. 6. Translate business functional and control requirements into effective and 9. Create agility in responding to changing business requirements. efficient automated solutions. 10. Obtain reliable and useful information for strategic decision making. 7. Deliver projects on time and on budget, meeting quality standards. 8. Drive commitment and support of executive management. 9. Improve IT’s cost-efficiency. 10. Account for and protect all IT assets.
  10. 10. Understanding How Business Goals Drive IT Goals The Impact of Size and Geographic Location Comparing differences amongst regions in the world or contrasting enterprises of different sizes revealed fewer variations, which may indicate that sector-related characteristics have a higher impact on setting priorities. Still, there are some minor but interesting differences. For example, larger enterprises tend to pay more attention than smaller enterprises to business goals such as ‘Ensure compliance with external laws and regulations’ and ‘Manage (IT-related) business risks’. In Europe, the Middle East and Africa, the IT goal ‘Acquire, develop and maintain IT skills that respond to the IT strategy’ appears to be less important compared to other regions in the world. IT Goals: More Generic Than Business Goals Another finding is that, in general, the level of agreement amongst the experts for the list of prioritised business goals is lower than the level of agreement for prioritised IT goals. A possible explanation is that business goals may differ more depending on some external or internal factors—such as sector-specific characteristics, enterprise size and geographic location—while prioritisation of IT goals may follow a more generic pattern and may be less influenced by these aspects. Different Levels of Linking Relationships This research also contains detailed findings on how IT goals can support business goals (figure 4). From this matrix, it becomes clear that some goals are defined on a higher level than others. For example, the IT goal ‘Align the IT strategy to the business strategy’ supports all business goals in a primary (P) or a secondary (S) manner, indicating that its scope is broadly defined and covers multiple areas of IT responsibilities. On the other hand, business goal 15, ‘Improve financial transparency’, and IT goal 13, ‘Offer transparency and understanding of IT costs, benefits and risks’, show only a primary relationship to each other, confirming their similar and narrowly defined scope. 10 © 2 0 0 8 I T G O V E R N A N C E I N S T I T U T E . A L L R I G H T S R E S E R V E D . IT Goals BusinessGoals Improvecustomerorientationandservice. Ensurecompliancewithexternallaws andregulations. Establishservicecontinuityandavailability. Optimisebusinessprocesscosts. Enableandmanagebusinesschange. Improveandmaintainoperationaland staffproductivity. Improvefinancialtransparency. Ensurecompliancewithinternalpolicies. Identify,enableandmanageproduct andbusinessinnovation. Manage(IT-related)businessrisks. Offercompetitiveproductsandservices. Improveandmaintainbusinessprocess functionality. Provideagoodreturnon(IT-enabled) businessinvestments. Acquire,developandmaintainskilledand motivatedpeople. Createagilityinrespondingtochanging businessrequirements. Obtainreliableandusefulinformationfor strategicdecisionmaking. Achievecostoptimisationofservice delivery. Align the IT strategy to the business strategy. P S S P P P S S P P S S P S S S P Maintain the security (confidentiality, integrity and availability) of information P P P P S S P and processing infrastructure. Make sure that IT services are reliable and secure. P P P P S S S S S S S S Provide service offerings and service levels in line with business requirements. P P S P P S S S S S S S S S Ensure IT compliance with laws and regulations. S P P S S S P Translate business functional and control requirements into effective and S S S S P S S S S S S S S S efficient automated solutions. Deliver projects on time and on budget, meeting quality standards. S S S S S S S S S S Drive commitment and support of executive management. S S S S S S S S S S Improve IT’s cost-efficiency. S P P P S Account for and protect all IT assets. S S S S S S Acquire, develop and maintain IT skills that respond to the IT strategy. S S P S S S S S Provide IT agility (in responding to changing business needs). S S S S P P S Offer transparency and understanding of IT costs, benefits and risks. S S S S P Optimise the IT infrastructure, resources and capabilities. S S P S P S S Accomplish proper use of applications, information and technology solutions. S S S S S S S S S S S S S Seamlessly integrate applications and technology solutions into business processes. S S P S S S S S S S S Ensure that IT demonstrates continuous improvement and readiness for S S S P S P future change. Acquire knowledge and expertise in emerging technologies for business S S P S S S S P innovation and optimisation. P = primary, S = secondary Figure 4—Linking IT Goals to Business Goals
  11. 11. General Findings Applying the Results Preliminary results of this research have already been taken into consideration for the continuous COBIT development/update process and contain valuable new opportunities for further updates and follow-up research. The results of this research provide practical guidance for professionals as they build business and IT goals for their specific organisation. Enterprises can do that efficiently by starting from these generic business and IT goals, selecting what applies to them, and updating them for enterprise-specific situations. This will be a good starting point towards implementing IT governance. 11© 2 0 0 8 I T G O V E R N A N C E I N S T I T U T E . A L L R I G H T S R E S E R V E D .
  12. 12. Understanding How Business Goals Drive IT Goals Sector-specific Findings Although, as indicated previously, a relatively high degree of consensus was found regarding the most important (top 10) business and IT goals, a number of sector-specific characteristics were identified. In this section, some sector-specific findings are discussed in more detail regarding the importance of specific business and IT goals. Manufacturing and Pharmaceuticals Sector The prioritised lists of business and IT goals for this sector are presented in figures 5 and 6. Both lists of business goals and IT goals were generally in line with the overall cross-sector findings (figure 3). As this is often a highly regulated sector, ‘Ensure compliance with external laws and regulations’ was rated somewhat higher in the importance lists for business goals (moved from ranking 2 to 1) and IT goals (moved from ranking 5 to 3). Compared to the other sectors, the learning and growth objective ‘Acquire, develop and maintain skilled and motivated people’ was seen as less important in this sector (six places lower in the list). Also, the IT goal ‘Drive commitment and support of executive management’ ranked lower in the list and was seen as less important, which may suggest that IT in these sectors is still seen as less strategic. Between the different sub-sectors of manufacturing and pharmaceuticals, no major differences were noticed. IT Professional Services, Telecommunications and Media Sector Figures 7 and 8 present the ranked lists of business and IT goals for the IT professional services, telecommunications and media sector. The importance ranking in this sector is, for the most part, in line with the overall results. Customer- and financial-oriented goals scored high, in line with the generic lists (figure 3). The learning and growth business goal ‘Acquire, develop and maintain skilled and motivated people’ is found higher in this list as compared to other sectors. This seems logical since this sector represents many IT services and consultancy enterprises, where knowledge and skills are their most important resources. Another important asset (differentiator) for the enterprises operating in this sector is (knowledge of) advanced technology, which explains the higher importance of ‘Identify, enable and manage product and business innovation’. The business goals ‘Establish service continuity and availability’ and ‘Improve and maintain business process functionality’ scored lower compared to most other sectors. This may be explained due to lower focus (and lower budgets) on their own internal processes while most efforts go to customer services. 12 © 2 0 0 8 I T G O V E R N A N C E I N S T I T U T E . A L L R I G H T S R E S E R V E D . Figure 5—Prioritised List of Business Goals for the Manufacturing and Pharmaceuticals Sector Rank Business Goals BSC 1 Ensure compliance with external laws and regulations. Financial 2 Improve customer orientation and service. Customer 3 Establish service continuity and availability. Customer 4 Improve and maintain business process functionality. Internal 5 Offer competitive products and services. Customer 6 Create agility in responding to changing business requirements. Customer 7 Provide a good return on (IT-enabled) business investments. Financial 8 Manage (IT-related) business risks. Financial 9 Obtain reliable and useful information for strategic decision making. Customer 10 Achieve cost optimisation of service delivery. Customer 11 Enable and manage business change. Internal 12 Improve and maintain operational and staff productivity. Internal 13 Optimise business process costs. Internal 14 Acquire, develop and maintain skilled and motivated people. Learning and Growth 15 Improve financial transparency. Financial 16 Ensure compliance with internal policies. Internal 17 Identify, enable and manage product and business innovation. Learning and Growth
  13. 13. Sector-specific Findings 13© 2 0 0 8 I T G O V E R N A N C E I N S T I T U T E . A L L R I G H T S R E S E R V E D . Figure 6—Prioritised List of IT Goals for the Manufacturing and Pharmaceuticals Sector Rank IT Goals BSC 1 Align the IT strategy to the business strategy. Corporate 2 Make sure that IT services are reliable and secure. User 3 Ensure IT compliance with laws and regulations. Corporate 4 Maintain the security (confidentiality, integrity and availability) of information and processing infrastructure. Operational 5 Provide service offerings and service levels in line with business requirements. User 6 Translate business functional and control requirements into effective and efficient automated solutions. User 7 Deliver projects on time and on budget, meeting quality standards. Operational 8 Improve IT’s cost-efficiency. Corporate 9 Offer transparency and understanding of IT costs, benefits and risks. Corporate 10 Provide IT agility (in responding to changing business needs). Operational 11 Acquire, develop and maintain IT skills that respond to the IT strategy. Future 12 Optimise the IT infrastructure, resources and capabilities. Operational 13 Account for and protect all IT assets. Corporate 14 Drive commitment and support of executive management. Corporate 15 Ensure that IT demonstrates continuous improvement and readiness for future change. Future 16 Seamlessly integrate applications and technology solutions into business processes. Operational 17 Accomplish proper use of applications, information and technology solutions. User 18 Acquire knowledge and expertise in emerging technologies for business innovation and optimisation. Future Figure 7—Prioritised List of Business Goals for the IT Professional Services, Telecommunications and Media Sector Rank Business Goals BSC 1 Improve customer orientation and service. Customer 2 Ensure compliance with external laws and regulations. Financial 3 Manage (IT-related) business risks. Financial 4 Acquire, develop and maintain skilled and motivated people. Learning and Growth 5 Offer competitive products and services. Customer 6 Provide a good return on (IT-enabled) business investments. Financial 7 Establish service continuity and availability. Customer 8 Create agility in responding to changing business requirements. Customer 9 Obtain reliable and useful information for strategic decision making. Customer 10 Achieve cost optimisation of service delivery. Customer 11 Improve and maintain business process functionality. Internal 12 Identify, enable and manage product and business innovation. Learning and Growth 13 Enable and manage business change. Internal 14 Improve and maintain operational and staff productivity. Internal 15 Optimise business process costs. Internal 16 Ensure compliance with internal policies. Internal 17 Improve financial transparency. Financial
  14. 14. Understanding How Business Goals Drive IT Goals Government, Utilities and Healthcare Sector Figures 9 and 10 present prioritised lists of business and IT goals for the government, utilities and healthcare sector. While most customer-oriented business goals scored high in the generic list, this sector placed three out of six customer-oriented goals at the bottom of the importance list. This may be explained by some typical characteristics of the sector such as strong focus on budget control, complex decision structures and political influence. However, governmental institutions are also increasing their focus on providing adequate customer (citizen) services, which is confirmed by the high priority for the customer-oriented goals ‘Improve customer orientation and goals’ and ‘Establish service continuity and availability’. This is in line with the other sectors. 14 © 2 0 0 8 I T G O V E R N A N C E I N S T I T U T E . A L L R I G H T S R E S E R V E D . Figure 8—Prioritised List of IT Goals for the IT Professional Services, Telecommunications and Media Sector Rank IT Goals BSC 1 Align the IT strategy to the business strategy. Corporate 2 Maintain the security (confidentiality, integrity and availability) of information and processing infrastructure. Operational 3 Provide service offerings and service levels in line with business requirements. User 4 Make sure that IT services are reliable and secure. User 5 Ensure IT compliance with laws and regulations. Corporate 6 Deliver projects on time and on budget, meeting quality standards. Operational 7 Translate business functional and control requirements into effective and efficient automated solutions. User 8 Improve IT’s cost-efficiency. Corporate 9 Acquire, develop and maintain IT skills that respond to the IT strategy. Future 10 Drive commitment and support of executive management. Corporate 11 Accomplish proper use of applications, information and technology solutions. User 12 Account for and protect all IT assets. Corporate 13 Seamlessly integrate applications and technology solutions into business processes. Operational 14 Offer transparency and understanding of IT costs, benefits and risks. Corporate 15 Provide IT agility (in responding to changing business needs). Operational 16 Acquire knowledge and expertise in emerging technologies for business innovation and optimisation. Future 17 Optimise the IT infrastructure, resources and capabilities. Operational 18 Ensure that IT demonstrates continuous improvement and readiness for future change. Future Figure 9—Prioritised List of Business Goals for the Government, Utilities and Healthcare Sector Rank Business Goals BSC 1 Ensure compliance with external laws and regulations. Financial 2 Establish service continuity and availability. Customer 3 Improve customer orientation and service. Customer 4 Manage (IT-related) business risks. Financial 5 Improve and maintain business process functionality. Internal 6 Improve financial transparency. Financial 7 Obtain reliable and useful information for strategic decision making. Customer 8 Acquire, develop and maintain skilled and motivated people. Learning and Growth 9 Ensure compliance with internal policies. Internal 10 Provide a good return on (IT-enabled) business investments. Financial 11 Improve and maintain operational and staff productivity. Internal 12 Optimise business process costs. Internal 13 Enable and manage business change. Internal 14 Achieve cost optimisation of service delivery. Customer 15 Offer competitive products and services. Customer 16 Create agility in responding to changing business requirements. Customer 17 Identify, enable and manage product and business innovation. Learning and Growth
  15. 15. Figure 10—Prioritised List of IT Goals for the Government, Utilities and Healthcare Sector Rank IT Goals BSC 1 Maintain the security (confidentiality, integrity and availability) of information and processing infrastructure. Operational 2 Align the IT strategy to the business strategy. Corporate 3 Make sure that IT services are reliable and secure. User 4 Ensure IT compliance with laws and regulations. Corporate 5 Translate business functional and control requirements into effective and efficient automated solutions. User 6 Provide service offerings and service levels in line with business requirements. User 7 Drive commitment and support of executive management. Corporate 8 Account for and protect all IT assets. Corporate 9 Provide IT agility (in responding to changing business needs). Operational 10 Offer transparency and understanding of IT costs, benefits and risks. Corporate 11 Improve IT’s cost-efficiency. Corporate 12 Seamlessly integrate applications and technology solutions into business processes. Operational 13 Acquire, develop and maintain IT skills that respond to the IT strategy. Future 14 Ensure that IT demonstrates continuous improvement and readiness for future change. Future 15 Accomplish proper use of applications, information and technology solutions. User 16 Optimise the IT infrastructure, resources and capabilities. Operational 17 Deliver projects on time and on budget, meeting quality standards. Operational 18 Acquire knowledge and expertise in emerging technologies for business innovation and optimisation. Future Sector-specific Findings Due to the nature of the sector, competition-related goals and goals with respect to change are seen as less important. This is revealed by the lower scores for the business goals ‘Offer competitive products and services’ and ‘Create agility in responding to changing business requirements’. This is not directly translated to the list of IT goals; on the contrary, the IT goal ‘Provide IT agility’ is ranked within the top 10 (number 9), which is three places higher compared to the total list of goals. Thus, while the business seemed to feel less (important) need to be agile in response to changing (external) business requirements (or maybe business requirements are not changing that much), the IT services departments felt they should react more directly to the changing (internal) business requirements. Compared to other sectors, cost optimisation-related goals such as ‘Provide a good return on investment…’ and ‘Achieve cost optimisation of service delivery’ scored lower in the importance list. An exception was the utilities sub-sector, which had a higher importance rank for ‘Provide a good return on (IT-enabled) business investments’ (number 7). It is typical for the government, utilities and healthcare sector that internal (and external) policies are to be strictly followed, which was confirmed by the highly ranked business goals ‘Improve financial transparency’ (number 6) and ‘Ensure compliance with internal policies’ (number 9), respectively nine and seven places higher than in the generic list. This is reinforced even in the utilities sector, which may be a consequence of the specific market situation (monopoly/oligopoly) requiring a controlled environment. Within the list of IT goals, there was one goal with a remarkable difference compared to other sectors: the goal ‘Deliver projects on time and on budget, meeting quality standards’ ends up at the bottom of the list, 10 places lower than other sectors. In the healthcare sector specifically, the IT goal ‘Drive commitment and support of executive management’ is ranked very high (number 3). Retail, Distribution and Transportation Sector This sector represents retail, distribution and transportation enterprises. Figures 11 and 12 present the results based on the feedback from 16 respondents in the first round and 10 in the second round. This sector also shows some significant differences compared to the overall cross-sector list. For example, this was the only sector where the business goal ‘Ensure compliance with external laws and regulations’ (number 10) was not in the top three, indicating that compliance is not a major priority in the retail, distribution and transportation sector. From the sector-specific characteristics, it seems that customer loyalty is rather weak in this sector and initiatives are undertaken to deal with this situation. This is also confirmed by the top four most important business goals, which were all customer-oriented. 15© 2 0 0 8 I T G O V E R N A N C E I N S T I T U T E . A L L R I G H T S R E S E R V E D .
  16. 16. Figure 12—Prioritised List of IT Goals for the Retail, Distribution and Transportation Sector Rank IT Goals BSC 1 Align the IT strategy to the business strategy. Corporate 2 Provide service offerings and service levels in line with business requirements. User 3 Make sure that IT services are reliable and secure. User 4 Maintain the security (confidentiality, integrity and availability) of information and processing infrastructure. Operational 5 Ensure IT compliance with laws and regulations. Corporate 6 Translate business functional and control requirements into effective and efficient automated solutions. User 7 Optimise the IT infrastructure, resources and capabilities. Operational 8 Provide IT agility (in responding to changing business needs). Operational 9 Drive commitment and support of executive management. Corporate 10 Account for and protect all IT assets. Corporate 11 Deliver projects on time and on budget, meeting quality standards. Operational 12 Acquire, develop and maintain IT skills that respond to the IT strategy. Future 13 Ensure that IT demonstrates continuous improvement and readiness for future change. Future 14 Improve IT’s cost-efficiency. Corporate 15 Accomplish proper use of applications, information and technology solutions. User 16 Acquire knowledge and expertise in emerging technologies for business innovation and optimisation. Future 17 Offer transparency and understanding of IT costs, benefits and risks. Corporate 18 Seamlessly integrate applications and technology solutions into business processes. Operational Understanding How Business Goals Drive IT Goals Another remarkable difference compared to other sectors concerns the learning and growth business goals. For example, the goal ‘Acquire, develop and maintain skilled and motivated people’ scored very low (number 14) compared to the overall list (number 8); on the other hand, this is the only sector in which the learning and growth business goal ‘Identify, enable and manage product and business innovation’ had a place in the top 10 (number 7). Together with the high ranking for ‘Offer competitive products and services’, this may be explained by the increased competition in the market. Also, the business goals ‘Create agility in responding to changing business requirements’ (number 4) and ‘Optimise business process costs’ (number 7) received a higher priority compared to the overall business goals list. Because of the retail, distribution and transportation sector-specific characteristic of low profit margins, it seems logical that the attention for keeping costs under control is higher in this sector. As for the IT goals list, no major differences in the top six goals compared to overall sectors were noted. The goals ‘Optimise the IT infrastructure, resources and capabilities’, ‘Provide IT agility’ and ‘Ensure that IT demonstrates continuous improvement and readiness for future change’ are seen as more important compared to other sectors. This again may confirm the high priority for offering competitive products and services in a timely matter. Surprisingly, the goal related to cost optimisation seemed less important than other goals: ‘Improve IT’s cost-efficiency’ (number 14) fell lower down the list than in other sectors. 16 © 2 0 0 8 I T G O V E R N A N C E I N S T I T U T E . A L L R I G H T S R E S E R V E D . Figure 11—Prioritised List of Business Goals for the Retail, Distribution and Transportation Sector Rank Business Goals BSC 1 Improve customer orientation and service. Customer 2 Offer competitive products and services. Customer 3 Establish service continuity and availability. Customer 4 Create agility in responding to changing business requirements. Customer 5 Provide a good return on (IT-enabled) business investments. Financial 6 Manage (IT-related) business risks. Financial 7 Optimise business process costs. Internal 8 Identify, enable and manage product and business innovation. Learning and Growth 9 Achieve cost optimisation of service delivery. Customer 10 Ensure compliance with external laws and regulations. Financial 11 Obtain reliable and useful information for strategic decision making. Customer 12 Enable and manage business change. Internal 13 Improve and maintain business process functionality. Internal 14 Acquire, develop and maintain skilled and motivated people. Learning and Growth 15 Improve and maintain operational and staff productivity. Internal 16 Improve financial transparency. Financial 17 Ensure compliance with internal policies. Internal
  17. 17. Full Research Research Available 17© 2 0 0 8 I T G O V E R N A N C E I N S T I T U T E . A L L R I G H T S R E S E R V E D . Full Research Report Available This white paper presents a solid and strong list of 17 generic business goals and 18 generic IT goals, validated and prioritised over different sectors. Together with the linking information between both, it provides a good basis upon which to build a generic cascade from business goals to IT goals. A strong list of top 10 most important business and IT goals was identified over the different sectors and further analysis by sector and geographic location identified interesting deviations, which increases the practical relevance for companies operating in a specific sector that want to use these lists to help them identify a good set of business/IT goals. More detailed information regarding the full research methodology and resulting data by specific industry, size or geographic location is available in the complete research report at www.itgi.org.
  18. 18. Understanding How Business Goals Drive IT Goals List of Figures Figure 1—Expert Team Composition...............................................................................................................................................................7 Figure 2—Validated Lists of Business and IT Goals.......................................................................................................................................8 Figure 3—Prioritised Lists of Top 10 Business and IT Goals.........................................................................................................................9 Figure 4—Linking IT Goals to Business Goals.............................................................................................................................................10 Figure 5—Prioritised List of Business Goals for the Manufacturing and Pharmaceuticals Sector.............................................................12 Figure 6—Prioritised List of IT Goals for the Manufacturing and Pharmaceuticals Sector........................................................................13 Figure 7—Prioritised List of Business Goals for the IT Professional Services, Telecommunications and Media Sector..........................13 Figure 8—Prioritised List of IT Goals for the IT Professional Services, Telecommunications and Media Sector.....................................14 Figure 9—Prioritised List of Business Goals for the Government, Utilities and Healthcare Sector...........................................................14 Figure 10—Prioritised List of IT Goals for the Government, Utilities and Healthcare Sector....................................................................15 Figure 11—Prioritised List of Business Goals for the Retail, Distribution and Transportation Sector.......................................................16 Figure 12—Prioritised List of IT Goals for the Retail, Distribution and Transportation Sector .................................................................16 18 © 2 0 0 8 I T G O V E R N A N C E I N S T I T U T E . A L L R I G H T S R E S E R V E D .
  19. 19. 3701 Algonquin Road, Suite 1010 Rolling Meadows, IL 60008 USA Phone: +1.847.660.5700 Fax: +1.847.253.1443 E-mail: info@itgi.org Web site: www.itgi.org

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