A look at how technology transformation services can be used effectively to increase IT-business alignment.

1. Pritam Dey [email_address] Using Technology Transformation Effectively to Improve Business-IT Alignment 2009

3. Case Study Consider a scenario: A national retail bank in India, with hundreds of subsidiaries and branches, decided to automate its operations and move its services online. Since most of its services are common across all its branches, the bank decided to implement a Service Oriented Architecture (SOA) to increase the interoperability. It was decided that the corporate IT group would be in charge of execution of the complete project, including the implementation of SOA and definition of its services. Needless to say, the project started with much optimism and excitement. However six months into the project, it ran into roadblocks. Cracks started to become visible. There were frequent disagreements among the various business units on who is responsible for defining and administering the SOA services. Who is responsible for the overall governance of the project? Some groups have also questioned corporate IT’s shortsightedness of not carefully considering the complexity of integrating existing applications built across diverse platforms and technologies. The need for a clear IT strategy and technology roadmap was clearly felt. A year later, the project was scrapped. It became impossible to execute the project without a well-defined IT Roadmap, Enterprise Architecture and IT Governance mechanisms. What went wrong?

5. What Can We Do Differently? “ Winners don’t do different things, they do things differently.” - Shiv Khera

6. What Can We Do Differently?

8. IT - Business Alignment: Best Practices Source: CIO: How to Close the IT-Business Alignment Gap A recent article in Harvard Business Review (“Radically Simple IT,” March 2008) advocates that Business and IT shouldn’t just be aligned, they should be “forged together.” One way to do this is by having the CIO report directly to the CEO or COO, not the CFO. All levels and all functions of the business must be accountable and work on their part of executing the corporate strategy. Start with Corporate Strategy and Objectives Take a Holistic View Highlight the Requirements Gap Have a long-term roadmap Accountability Design, build, and roll-out systems with a long-term IT roadmap. The roadmap should make some simple distinctions such as layers of information-value in the organization. It should also layer applications in the overall system architecture. Business/IT alignment happens when the gap between bottom-up and top-down is bridged. Big gap, low alignment. Take a holistic view when a business unit comes with a problem. Who else needs to see this information? How will this information be made “actionable” so we can watch trends over time, adjust for seasonality, compare with forecasts, and eventually fire unprofitable customers. Directly correlate all IT initiatives with overall Corporate Strategy. IT should be able to show multiple correlations from many systems to many strategic objectives. More correlations, high alignment.

9. What Can We Do Differently?

11. What Can We Do Differently?

15. Five Phases of IT Strategic Plan Development Devising and revising IT strategic plan should be a core management capability, and an annual activity. When you create one for the first time, you might find that it isn’t as complete or as streamlined as you might like. Use each pass through the strategic planning process to capture learnings and apply them to the next version - Forrester Research Phases of Strategic Plan Development And On-Going Review

16. What Can We Do Differently?

19. IT Roadmap: Maturity Levels of GRC While aligning IT with business, companies must understand their level of GRC maturity. Some of the basic maturity levels for GRC are: Source: CIO – Your IT Roadmap For Governance, Risk Management, and Compliance No awareness of interdependence of GRC and IT resources Limited understanding of GRC; no common platform for GRC Understanding of the need to integrate GRC with IT Businesses align and leverage GRC to realize GRC benefits, growth, profitability and asset utilization Highest level of GRC maturity. Businesses use a common language and set of metrics to continuously improve the platform YoY Level 5 Level 1 By themselves, GRC initiatives aren’t necessarily good or bad. But, depending on how organizations choose to interpret and implement them, they can be. Organizations should use the maturity model and GRC steps to help ensure more strategic alignment between their IT strategy and their GRC initiatives.

20. What Can We Do Differently?

21. Enterprise Architecture The Enterprise Architecture guides an organization’s project portfolio and the development of solutions. It becomes an intrinsic part of the overall design and governance continuum for a business, with the top down process of realizing business strategy and goals through the architecture supplemented with learning from the experience of implementation. Aligning project architectures to an overall Enterprise Architecture bridges the gap between business/IT strategy and solution development. Source: Capgemini – Architecture and the Integrated Architecture Framework Expand IT Reach You can collaborate more effectively than your competition with your customers, suppliers and partners through your IT Increase Business Agility You can continuously adapt your business (by changing your IT) more quickly and with lower risk than your competition Increase Project Success You can significantly improve your success with your investment in IT enabled business projects Reduce IT Cost You can deliver new IT solutions and manage your existing IT services at lower cost than your competition Reduce Cost The Value of Architecture

23. What Can We Do Differently?

25. What Can We Do Differently?

29. SOA Tidbits Source: Sun Microsystems SOA’s core vision is a global computing model that eliminates interoperability roadblocks. Only through loosely coupled collaboration do you get the true value of SOA. No one company has fully defined the set of infrastructure services that are needed to fully complete an SOA platform, because the whole platform concept is still in its infancy. Developers should not wait until standards get sorted out before adopting SOA. SOA is the next big thing. It’s good for another 5 to 10 years. Just as the web changed the world, so will SOA. Make SOA loosely couple and coarse grained, and have a top-down approach.

30. What Can We Do Differently?

31. IT Governance IT Governance refers to putting together structures around how organizations align IT strategy with business strategy to ensure that they stay on track to achieve their organization objectives, in addition to implementing ways by which IT performance can be measured and optimized. IT Governance is a subset discipline of corporate governance that ensures that all stakeholders interests are taken into account and that processes provide measurable results. An IT Governance solution helps businesses align IT spending with business strategy by combining the value of portfolio optimization with the power of improved execution. Source: HCL Technologies: IT Governance Drivers Key Areas Benefits • Misalignment between business and IT • Regulatory compliance • Reduced productivity • Absence of well defined processes • Confrontation with reduced budgets and increased expectation • No visibility for management to track key performance and quality parameters • Portfolio Management • Program Management • Performance Measures • Resource Management • Financial Management • Time Management • Deployment Management • Business-based decision making • Closer IT-business alignment • Predictable project outcomes • “Moment of Truth” for IT • Record for what IT is doing • Top-down / Bottom-up values alignment • Better IT governance compliant with regulatory specification • Cost reductions & productivity increase

32. IT Governance – Ten Principles IT Governance refers to putting together structures around how organizations align IT strategy with business strategy to ensure that they stay on track to achieve their organization objectives, in addition to implementing ways by which IT performance can be measured and optimized. IT Governance is a subset discipline of corporate governance that ensures that all stakeholders interests are taken into account and that processes provide measurable results. Source: IT Governance : HBS Press (Peter Weill and Jeanne W. Ross) Actively Design Governance Management should actively design IT governance around the enterprise’s objectives and performance goals. Focus on having the fewest number of effective mechanisms possible. Know When to Redesign Governance redesign should be infrequent. A change in governance is required with a change in desirable behavior. Involve Senior Managers CIOs and senior managers must be effectively involved in IT governance for success. Communicate IT governance on one page. Make Choices Good governance requires choices. Governance can and should highlight conflicting goals for debate. Clarify Exception-Handling Process Exceptions are how enterprises learn. Formally approved exceptions benefit organizations by formalizing organizational learning about technology and architecture. Provide Right Incentives IT governance is more effective when incentive and reward systems are aligned with organizational goals. Assign Ownership and Accountability for IT Governance IT governance must have an owner and accountabilities. The board or CEO must hold the CIO or a committee accountable for IT governance performance with some clear measures of success. Design Governance at Multiple Organizational Levels Consider IT governance at several levels. The starting point is enterprise-wide IT governance driven by a small number of enterprise-wide strategies and goals. Provide Transparency and Education The more education on IT governance, the more transparency. The more transparency of the governance processes, the more confidence in the governance. Implement Common Mechanisms Enterprises using the same mechanisms to govern more than one of the six key assets have better governance.

33. Putting It All Together

36. THANK YOU For questions and feedback, email [email_address]

37. APPENDIX

38. Business Process Re-Engineering Source: HCL Technologies