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The "Deliver Business Value with IT" series provides a good overview and actionable material of the ways a CIO can provide valuable and effective support to your company strategy and leverages business model concepts to deliver business value from IT. Martin Palmgren propose an extremely solid piece of work that comes across as the A-Z reference of how to execute and implement IT strategy from a CEO and CIO level perspective."
Executive Summary:
The CIO and the IT Department need to position as premium provider of IT services and focus on value to cost.
In order to avoid the "do we really need a CIO and IT department to bother us with technology when we can use the cloud?" the CIO has to ensure that the business strategy and business objectives are supported by IT (from a Business and IT architecture perspective). Where the IT Strategy support Strategy execution, "Time to Market", Cost Effectiveness and stakeholder expectations from an Executive, Business Unit, IT Management and IT Risk Management perspective.
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Design, Build and Run an Effective IT (Service) Strategy to Business Needs
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Copyright 2013 COMMUNICATE!
Design, Build and Run an Effective IT
(Service) Strategy to business needs!
- To Deliver Business Value with IT!
!!
By
Martin Palmgren, IT Strategy and Transformation Executive @ .COMMUNICATE
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CEO, CFO, CIO, CTO, SVP, Architects, Strategy, Business Executives
and the IT function in general. !
Target Audience!
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The IT Bottom line is that up to 40 % of current IT spend occurs
outside the IT budget (CRM, Cloud). The IT department needs to
position itself as a facilitator to IT services and effectively address
emerging needs, market opportunities and demonstrate that the current
Business Model is supported effectively.!
The IT department should facilitate the access to IT services to support
new and current business initiatives.!
The IT Bottom line!
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In order to avoid the "do we really need a CIO and IT department to
bother us with technology when we can use the cloud?" the CIO
has to ensure that the business strategy and business objectives are
supported by IT (from a Business and IT Architecture perspective).!
Where the IT Strategy support Business Strategy execution, "Time to
Market", Cost Effectiveness and Stakeholder Expectations from an
Executive, Business Unit, IT Management and IT Risk Management
perspective.
Focus on added value!
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!
We execute the IT (service) strategy to business needs: Design - Spell
out IT Activities from a demand and supplier side, Build - Set IT
processes and key performance indicators, Run - Aligned to described
ITIL V3 activities and processes with full IT Financial
Management. Once services defined we can then decide where to run
the application that support the IT and or Business Services (servers /
internal / external cloud / outsourced provider).!
Design, Build and Run an effective IT (Service)
Strategy to Business Needs!
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Copyright 2013 COMMUNICATE!
Martin Palmgren, EVP .COMMUNICATE – Deliver Business Value with
IT / martin.palmgren@pscommunicate.com (mail)!
Deliver Business Value with IT (the book) https://www.smashwords.com/books/view/290604 (the
blog) http://deliverbusinessvaluewithit.wordpress.com /!
CONTACT!
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Differentiation
and Cost
(That is, how does IT provide a competitive advantage for the business),
(How does the IT Department deliver IT Services cost effectively) !
ACCENTURE Point of View 2012,
Reimagining Enterprise IT for an Uncertain Future!
We identified 2 key trends for the CIO to focus on:!
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8. Strategy Execution!
IT Infrastructure Portfolio Management!
Application Portfolio Management!
Service Portfolio Management!
Enterprise Portfolio Management:!
Process based IT Architecture!
Project Portfolio Management !
Performance Management:!
Process based Business Architecture !
Product / service life cycle management!
Business Strategic Intent!
Strategy Articulation!
Time to Market!
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Cost Effectiveness!
Cycle Time!
Time to Market (Governance: Performance & Conformity)!
Business (IT) Strategy Road Map (How)!
Time to Market, Cost Effectiveness , Cycle Time!
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We would like to increase sales by 25% how can the IT
Department support the Business in this effort and what will
be the impact on the budget of the IT Department?!
Business objectives!
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At the end of the day Business Executives take the decision to out /
cloud source when:!
•
•
•
•
•
IT is not perceived to understand stakeholder expectations,!
IT is not perceived to contribute to business objectives,!
IT is not perceived to deliver value to cost, !
IT is not perceived to deliver services to business needs,!
The IT department is unable to deliver services in a time to market
perspective,!
• IT propose an effective service portfolio that correspond to Demand and
Cost drivers !
Deliver IT services to business needs!
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• Is the initiative political or Business Case driven (TCO with Cost,
Consumption and Chargeback)?!
• How do we support IT (IT (service) Strategy, Delivery Capability (Governance),
Architecture and Security) and Business objectives and processes.!
• Are investments demand and / or cost driven and how do we support
new business initiatives!
• If we start with mail and infrastructure how do we make the services
available (Business / IT Service Catalogue) and how do we follow up
on delivery (tickets) and cost to consumed services (TCO with Cost,
Consumption and Chargeback)?!
• How do we cloud (source) services (internal, external (near, far) cloud,
hosted provider)?!
• How do we leverage (external) cloud capabilities to rapidly support
new services / business initiatives where applications can be
operational within days (demand driven)? These can then continue to
run on an an external cloud be brought inside the firewall to run on an
internal cloud / server. !
Leveraged by a Cloud Business Model
!
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We have identified the following critical risk factors:!
• As we break services out, how do we manage data integration!
• Re integration of data if we decide to in source or change cloud / out
sourcing partner (switching cost)!
• How do we recuperate data if the cloud / outsourcing partner is attacked /
goes out of business (cloud, hosted provider).!
• Total cost of ownership!
& Long term risk is established!
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•
•
•
•
•
What are my IT assets and what do they cost?!
What are my IT resources and what do they cost ?!
What services do I provide to the customer ?!
– What do these services cost ?!
– What was their intended value proposition ?!
– What is the quality of the service delivery ?!
Who consumes the IT services ?!
– What is the consumption on a per unit, per seat, basis ?!
– How are customers currently paying for these services ?!
– What is the backlog of new unfulfilled IT demands ?!
What processes does IT perform ?!
– How do these processes compare to best practices ?!
– What are the cost drivers on an activity basis ?!
IT Cost is spelled out
!
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IT is effectively managed:!
!
!
Establish Baseline !
!
Cost, Consumption, Chargeback !
!
!
Build a service based business model of IT!
!
Based on IT Service Management!
!
!
Perform Business Case & Best Practise Bench Mark!
!
GAP (As Is, To Be, ROI) !
!
Track Realisation of ROI Outcomes!
IT Decisions are ROI Based
!
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• Spell out IT Activities from a demand and supplier side (Design) !
• Set IT processes and key performance indicators (Build)!
• Manage the Business of Information Technology!
• Develop and Manage IT Customer Relationships!
• Manage Business Resiliency and Risk!
• Manage Enterprise Information!
• Develop and Manage Information Technology Solutions!
• Deploy Information Technology Solutions!
• Deliver and Support Information Technology Services!
• Manage IT Knowledge!
• Aligned to described ITIL activities and processes with full IT Financial
Management and defined services (Run) !
We Design, Build and Run the IT (Service) Strategy!
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Business Drivers & Processes!
!
!
!
!
Cost Effectiveness!
Cycle Time!
Manage information technology
Manage the Business of Information Technology!
! !
Develop the enterprise IT strategy
Build
strategic
intelligence
Iden0fy
long-‐term
IT
needs
of
the
enterprise
in
collabora0on
with
stakeholders
Define
strategic
standards,
guidelines,
and
principles
Define
and
establish
IT
architecture
and
development
standards
Define
strategic
vendors
for
IT
components
Establish
IT
governance
organiza0on
and
processes
Build
strategic
plan
to
support
business
objec0ves
! !
!
!
ITIL: SERVICE CATALOGUE MANAGEMENT
COBIT: PO1 Define a Strategic IT Plan
Develop and Manage IT Customer Relationships
Manage Business Resiliency and Risk
Manage Enterprise Information
Develop and Manage Information Technology Solutions
Deploy Information Technology Solutions
Deliver and Support Information Technology Services
Manage IT Knowledge
!
Articulated!
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!
!
!
Key Performance Indicators!
!
- Time in weeks to complete projects that address an identified business exposure or opportunity (More than 80% of
total annual revenue)!
- Time in weeks to close an identified IT skill or capability gap!
- Average time in weeks to fulfill a simple information need!
- Average time in weeks to fulfill a medium information need!
- Average time in weeks to fulfill a complex information need!
- Average time in weeks to create the enterprise information management strategic plan!
- Time in weeks to report on compliance status of the information architecture!
- Average time in weeks to set up a simple technical interface for a user of a defined data content source!
!
!
!
!
!
!
!
Cycle Time!
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!
!
!
Key Performance Indicators!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
- Personnel cost of the process "perform enterprise data and content management" per $1,000 revenue!
- Systems cost of the process "perform enterprise data and content management" per $100,000 revenue!
- Personnel cost of the process "develop and maintain information technology solutions" per $1,000 revenue!
- Systems cost of the process "develop and maintain information technology solutions" per $100,000 revenue!
- Personnel cost of the process "deploy IT solutions" per $1,000 revenue!
- Systems cost of the process "deploy IT solutions" per $100,000 revenue!
- Personnel cost of the process "deliver and support IT services" per $1,000 revenue!
- Systems cost of the process "deliver and support IT services" per $100,000 revenue!
- Total cost of the process "manage the business of IT" per $1,000 revenue!
- Total cost of the process "develop and manage IT customer relationships" per $1,000 revenue!
- Total cost of the process "manage business resiliency and risk" per $1,000 revenue!
- Total cost of the process "manage IT knowledge" per $1,000 revenue!
- Total cost of the process "develop information and content management strategies" per $1,000 revenue!
- Total cost of the process "define enterprise information architecture" per $1,000 revenue!
- Total cost of the process "manage information and IT knowledge resources" per $1,000 revenue!
!
!
Cost Effectiveness!
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!
!
Key Performance Indicators!
!
!
!
!
!
- Control of IT expenses percentage, over or under IT budget, allocation to different budget items !
- IT budget as a percentage of turnover !
- IT expenses per staff member !
- Business value of the IT function percentage of the development capacity engaged in strategic
projects relationship between new developments/infrastructure investments/replacement investments !
- Business value of new IT projects financial evaluation based on ROI, NPV, IRR, PB business
evaluation based on information economics !
Corporate Contribution!
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!
!
Key Performance Indicators!
!
!
!
!
!
!
!
!
!
!
!
!
- Efficient software development !
- Average days late in delivering software !
- Average unexpected budget increase !
- Percentage of projects performed within SLA !
- Percentage of maintenance activities !
- Efficient computer operations !
- Percentage unavailability of network !
- Response times per category of users !
- Percentage of jobs done within time !
- Efficient help desk function !
- Average answer time of help desk !
- Percentage of questions answered within time !
Operational Excellence!
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• Set Business processes and key performance indicators (Build)!
• Develop vision and strategy!
• Develop and manage products and services!
• Market and sell products and services!
• Deliver products and services!
• Manage customer services!
• Develop and manage Human Capital!
• Manage information technology!
• Manage financial resources!
• Acquire, construct and manage property!
• Manage environmental health and safety !
• Manage external relationships!
• Manage knowledge, improvement and change!
To support the business Strategy!
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As the IT department delivers effective IT Services and innovative
technology solutions to improve competitiveness, demonstrated
and articulated in:!
• An IT Business Model “This is how we deliver IT services to the business”!
• and a Business IT Value proposition “This is how we support business
objectives with services in a time to market perspective” !
! !
Provide competitive leverage!
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With an (IT) Business Model “This is how we deliver IT services to the business”
where IT processes (bundled IT services) are supported by applications and
execute the IT Service strategy to business needs (where ITIL Spell out IT
Activities from a demand and supplier side (Design), Set IT processes and key
performance indicators (Build), Aligned to described ITIL activities and processes
with full IT Financial Management (Run)), Delivery capability (IT – CMF, CobIT 5,
ValIT, CobIT 4.1, RiskIT, where we ensure that managed processes and objectives
meet stakeholder expectations, ISO 38 500 we ensure that IT has the necessary
means to effectively support the business strategy), Architecture (TOGAF where
business objectives are supported by business processes, a business architecture
leveraged by an IT architecture and applications that sit on an IT infrastructure as
needed (inside the firewall on a server or mutualised servers (internal / private
cloud) or outside the firewall on a mutualised server (external / public cloud),
Security (ISO 9001, ISO 27 001, COSO where business continuity is ensured by
risk and control objectives). !
“This is how we deliver IT services to the business” !
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Executive Management!
Business Unit Management! IT Management! IT Risk Management!
Stakeholder Expectations!
Drives!
Business (IT) Objectives!
Delivers!
Business (IT) Road Map!
Executes!
Employees & Organisation!
Strategy Execution!
Time to Market (Governance: Performance & Conformity)!
Business (IT) Strategy Road Map (How)!
The Roadmap reflects stakeholder expectations!
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Priorities from an Executive Management Perspective:!
!
- IT supports the achievement of strategic business objectives!
!
- IT Delivers value to expenditure!
!
- IT cost is managed effectively!
!
- IT risk is identified and managed!
!
- Targeted inter company IT synergies deliver to schedule!
!
- We have a clear vision towards which we expect the IT department to deliver!
IT provides competitive leverage!
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Priorities from an IT Management Perspective:!
!
- We understand stakeholder expectations and propose a service portfolio that
correspond to both Demand and Cost drivers with a focus on perfect order business
transactions !
!
- We develop the professional competencies needed for successful service delivery!
!
- We capture organisational knowledge to continuously improve performance!
!
- The IT and Stakeholder departments have clear objectives, processes and
indicators with clear accountability and responsibility to deliver to set objectives!
The IT Strategy support Business objectives!
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Business (IT) Value Proposition!
(IT) Business Model!
“This is how we support business objectives
with services in a time to market perspective” !
“This is how we deliver IT services to the business” !
Business Strategy:!
Business Architecture :!
IT Strategy:!
IT Architecture:!
-
-
-
-
-
-
-
-
Vision!
Articulate!
Deliver!
Strategy Execution!
IT Vision!
Baseline!
Roadmap!
Design!
Build !
Time to Market (Governance: Performance & Conformity)!
The business strategy is executed by IT!
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Build an effective IT Delivery Model to
meet Business Needs!
- To deliver to set business strategy and objectives !
!!
Break Out or How do we do this!
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How fast can we get our products and services to
market “Time to Market” & how can the IT department
support the business from a Cycle Time and Cost
Effectiveness perspective. !
Business Bottom Line!
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Build a clear problem statement: what problem do we solve and how!!
As Is!
(where we are today)
!
! !
!
!
To Be!
(where we would like to be
in 6, 12, 18 months)!
• How to go there!
!
!
• Critical Success Factors!
• Milestones, Timelines!
!
• Advantages (Strength, Opportunity) !
• Constraints (Weakness, Threat)!
!
• Business Model (eliminate-reduce-raise-create)!
• Go to market!
• Next steps !
We articulate the Value Proposition with a StoryBoard!
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We would like to increase sales by 25% how can the IT
Department support the Business in this effort and what will
be the impact on the budget of the IT Department?!
Business objectives!
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Leverage business strategy execution!
• Deliver IT Services to Business needs ()!
!
!
!!
!!
! ! - IT contributes to business objectives ()!
!
- and provides competitive leverage ()! !
!
- Deliver effective business strategy execution ()!
! ! - Build an IT Service Strategy ()!
! ! - Delivered to business needs ()!
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The IT service proposition is aligned to the business strategy as:!
•
!
•
•
•
•
Stakeholder expectations are understood and IT propose a !
service portfolio that correspond to Demand and Cost drivers !
Business Contribution, Cost, Consumption & Chargeback is identified!
Focus is on perfect order business transactions!
Services are effective (demand and cost drivers identified)!
Services are competitive (Benchmark Industry Market Forces)!
• New technological solutions that could change how current business
is performed are explored, proposed and implemented.!
! !
IT contributes to business objectives!
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!
!
!
Key Performance Indicators!
!
!
!
!
!
!
!
!
!
!
- Time in months to break even for new or enhanced IT services (Investment < $100,000)!
- Time in months to break even for new or enhanced IT services (Investment b/w $100,000 and $250,000)!
- Time in months to break even for new or enhanced IT services (Investment b/w $250,000 and $500,000)!
- Time in months to break even for new or enhanced IT services (Investment b/w $500,000 and $1,000,000)!
- Time in months to market for new or enhanced IT services (Investment < $100,000)!
- Time in months to market for new or enhanced IT services (Investment b/w $100,000 and $250,000)!
- Time in months to market for new or enhanced IT services (Investment b/w $250,000 and $500,000)!
- Time in months to market for new or enhanced IT services (Investment b/w $500,000 and $1,000,000)!
- Time in months to respond to major business shifts!
- Time in weeks to complete projects that address an identified business exposure or opportunity (< 20% of total
annual revenue)!
- Time in weeks to complete projects that address an identified business exposure or opportunity (20-40% of total
annual revenue)!
- Time in weeks to complete projects that address an identified business exposure or opportunity (40-60% of total
annual revenue)!
- Time in weeks to complete projects that address an identified business exposure or opportunity (60-80% of total
annual revenue)!
!
!
!
Cycle Time!
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!
!
!
Key Performance Indicators!
!
!
!
!
!
!
!
!
!
- Total IT budget as a percentage of revenue!
- Total IT budget per FTE!
- IT expense per FTE!
- Personnel cost of the process "manage the business of IT" per $1,000 revenue!
- Systems cost of the process "manage the business of IT" per $100,000 revenue!
- Personnel cost of the process "develop and manage IT customer relationships" per $1,000 revenue!
- Systems cost of the process "develop and manage IT customer relationships" per $100,000 revenue!
- Personnel cost of the process "manage business resiliency and risk" per $1,000 revenue!
- Systems cost of the process "manage business resiliency and risk" per $100,000 revenue!
!
!
!
!
!
!
!
!
- Personnel cost of the process "manage IT knowledge" per $1,000 revenue!
- Systems cost of the process "manage IT knowledge" per $100,000 revenue!
- Personnel cost of the process "develop information and content management strategies" per $1,000 revenue!
- Systems cost of the process "develop information and content management strategies" per $100,000 revenue!
- Personnel cost of the process "define enterprise information architecture" per $1,000 revenue!
- Systems cost of the process "define enterprise information architecture" per $100,000 revenue!
- Personnel cost of the process "manage information and IT knowledge resources" per $1,000 revenue!
- Systems cost of the process "manage information and IT knowledge resources" per $100,000 revenue!
Cost Effectiveness!
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!
!
!
Key Performance Indicators!
!
- Total cost of the process "perform enterprise data and content management" per $1,000 revenue!
- Total cost of the process group "manage enterprise information" per 1,000 revenue!
- Total cost of the process "develop and maintain information technology solutions" per $1,000 revenue!
- Total cost of the process "deploy IT solutions" per $1,000 revenue!
- Total cost of the process "deliver and support IT services" per $1,000 revenue!
!
- Total IT cost per $1,000 revenue!
!
!
!
!
!
Cost Effectiveness!
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!
!
Key Performance Indicators!
!
!
!
!
!
!
!
!
!
- Preferred IT supplier !
- Percentage of applications managed by IT !
- Percentage of applications delivered by IT!
- Partnership with users !
- Index of user involvement in strategic applications!
- Applications index of user involvement in developing new applications !
- User satisfaction !
- Index of user friendliness of applications !
- Index of user satisfaction Process Management!
User Orientation!
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!
!
Key Performance Indicators!
!
!
!
!
!
!
!
!
- Training and education of staff!
- Number of educational days per person !
- Education budget as a % of total IT budget !
- Expertise of the IT staff !
- Number of years of IT experience per staff member !
- Age pyramid of the IT staff !
- Research into emerging technologies !
- % of budget spent on IT research General Business Management!
Future Orientation!
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How do we:
- Deliver services to the needs of the business on target in a “Time to Market”
perspective (Business (IT) Value Proposition) and demonstrate contribution,
- Conduct a constructive budget dialogue with the business: Total Cost of
Ownership (TCO) with Cost Consumption and Chargeback / Showback,
- Build and run an effective IT Business Model to Best Practice Frameworks.
To Address Critical Success Factors!
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49. Service strategy !
Delivery capability!
Architecture!
Security!
Strategy Execution!
“This is how we support business objectives
with services in a time to market perspective” !
“This is how we deliver IT
services to the business” !
Business (IT) Value Proposition!
.
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(IT) Business Model!
!
Develop vision and strategy
!
Develop and manage products and services
!
Market and sell products and services
!
Deliver products and services
!
Manage customer services
!
Develop and manage Human Capital
!
Manage information technology
!
Manage financial resources
!
Acquire, construct and manage property
!
!
Manage environmental health and safety !
!
Manage external relationships
!
Manage knowledge, improvement and change
!
Time to Market (Governance: Performance & Conformity)!
Business (IT) Strategy Road Map (How)!
Deliver effective business strategy execution!
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50. .
Copyright 2013 COMMUNICATE!
With an (IT) Business Model “This is how we deliver IT services to the business”
where IT processes (bundled IT services) are supported by applications and
execute the IT Service strategy to business needs (where ITIL Spell out IT
Activities from a demand and supplier side (Design), Set IT processes and key
performance indicators (Build), Aligned to described ITIL activities and processes
with full IT Financial Management (Run)), Delivery capability (IT – CMF, CobIT 5,
ValIT, CobIT 4.1, RiskIT, where we ensure that managed processes and objectives
meet stakeholder expectations, ISO 38 500 we ensure that IT has the necessary
means to effectively support the business strategy), Architecture (TOGAF where
business objectives are supported by business processes, a business architecture
leveraged by an IT architecture and applications that sit on an IT infrastructure as
needed (inside the firewall on a server or mutualised servers (internal / private
cloud) or outside the firewall on a mutualised server (external / public cloud),
Security (ISO 9001, ISO 27 001, COSO where business continuity is ensured by
risk and control objectives). !
“This is how we deliver IT services to the business” !
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!
Develop vision and strategy
Business Service Catalogue!
!
Develop and manage products and services
!
Market and sell products and services
!
Deliver products and services
!
Manage customer services
!
Develop and manage Human Capital
!
Manage information technology
!
Manage financial resources
!
Acquire, construct and manage property
!
!
Manage environmental health and safety !
!
Manage external relationships
!
Manage knowledge, improvement and change
Business (IT) Value Proposition!
“This is how we support business objectives
with services in a time to market perspective” !
!
Strategy Execution!
Time to Market (Governance: Performance & Conformity)!
Business (IT) Strategy Road Map (How)!
Delivered to business needs!
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Leverage business strategy execution!
!
!
!
!
!!
!!
!!
!!
• Focus on strategy articulation ()!
!
- IT support Business Objectives ()!
!
- Processes ()!
!
- and activities ()!
!
- to deliver competitive services to strategic focus ()!
! ! - Aligned ()!
! ! - With a focus on Investment ()!
! ! - and Process Management ()!
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IT Service Catalogue!
Enterprise Portfolio Management:!
Process based IT Architecture!
Performance Management:!
Process based Business Architecture !
Business Service Catalogue!
Strategy Execution!
Time to Market (Governance: Performance & Conformity)!
Business (IT) Strategy Road Map (How)!
IT support Business Objectives !
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54. Deliver products and services
!
!
!
!
!
Acquire, construct and manage property
!
Create and manage organizational performance strategy
Benchmark performance
Develop enterprise-wide knowledge management (KM) capability
Manage change!
Manage knowledge, improvement and change
Build investor relationships
Manage government and industry relationships
Manage relations with board of directors
Manage legal and ethical issues
Manage public relations program
Manage external relationships
Determine environmental health and safety impacts
Develop and execute environmental health and safety program
Train and educate employees
Monitor and manage environmental health and safety management program
Ensure compliance with regulations
Manage remediation efforts
Manage environmental health and safety !
Design and construct/acquire nonproductive assets
Maintain nonproductive assets
Obtain, install, and plan maintenance for productive assets
Dispose of productive and nonproductive assets
Manage physical risk
Perform planning and management accounting
Perform revenue accounting
Perform general accounting and reporting
Manage fixed-asset project accounting
Process payroll
Process accounts payable and expense reimbursements Manage treasury
operations
Manage internal controls Manage taxes
Manage international funds/consolidation
Manage financial resources
Manage the Business of Information Technology
Develop and Manage IT Customer Relationships
Manage Business Resiliency and Risk
Manage Enterprise Information
Develop and Manage Information Technology Solutions
Deploy Information Technology Solutions
Deliver and Support Information Technology Services
Manage IT Knowledge
Manage information technology
Develop and manage human resources (HR) planning policies, and strategies
Recruit, source, and select employees
Develop and counsel employees
Reward and retain employees
Redeploy and retire employees
Manage employee information
!
!
Develop and manage Human Capital
!
Develop customer care/customer service strategy
Plan and manage customer service operations
Measure and evaluate customer service operations
Manage customer services
!
Plan for and acquire necessary resources (Supply Chain Planning)
Procure materials and services
Produce/Manufacture/Deliver product
Deliver service to customer
Manage logistics and warehousing
Understand markets, customers, and capabilities
Develop marketing strategy
Develop sales strategy
Develop and manage marketing plans
Develop and manage sales plans
Market and sell products and services
Manage product and service portfolio
Develop products and services
Develop and manage products and services
Develop vision and strategy
Define the business concept and long-term vision
Develop business strategy
Manage strategic initiatives
!
!
Time to Market!
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Cost Effectiveness!
Cycle Time!
and activities!
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55. Copyright 2013 COMMUNICATE!
Business Objectives
Business Processes
.
Defined in the Business Service Catalog
Requirements
Information
Defined in the IT Service Catalog
IT Objectives
IT Processes
Broken down in to
ITILv2&3 workflows
Controlled by
Measured by
Audited with
Key Activities
Control Derived from Control
Outcome
Objectives
tests
Performed to
For performance
For Maturity
For Outcome
Responsibility and
Accountability
Charts (RACI)
Performance
indicators
Outcome
Measures
Audited with
Maturity
Models
Embedded Business Activity
Monitoring (BAM)
Audit Workflows & Reports
Implemented with
Control Based on Control
Practices
Design
Test
Embedded in Service Catalog per Service
CMMI, ITIL continuous
process improvement
Aligned!
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We align and lever operating, management and support processes through the
effective implementation of IT.!
- Do we perform them in the right manner? - The architecture question!
- The investment:!
!
!
!
!
- Is in line with our architecture,!
- Is consistent with our architectural principles,!
- Contributes to the population of our architecture.!
- Do we perform them well? - The delivery question!
- We have: !
!
!
!
!
- Effective and disciplined management, delivery and change management processes,!
!
- Competent and available technical and business resources to deliver:!
!
- The required capabilities,!
!
- Organisational change required to lever capabilities.!
Process Management!
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Executive Management!
Business Unit Management! IT Management! IT Risk Management!
Stakeholder Expectations!
Drives!
Business (IT) Objectives!
Delivers!
Business (IT) Road Map!
Executes!
Employees & Organisation!
Strategy Execution!
Time to Market (Governance: Performance & Conformity)!
Business (IT) Strategy Road Map (How)!
The Roadmap reflects stakeholder expectations!
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Priorities from an Executive Management Perspective:!
!
- IT supports the achievement of strategic business objectives!
!
- IT Delivers value to expenditure!
!
- IT cost is managed effectively!
!
- IT risk is identified and managed!
!
- Targeted inter company IT synergies deliver to schedule!
!
- We have a clear vision towards which we expect the IT department to deliver!
IT provides competitive leverage!
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59. .
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Priorities from an IT Management Perspective:!
!
- We understand stakeholder expectations and propose a service portfolio that
correspond to both Demand and Cost drivers with a focus on perfect order business
transactions !
!
- We develop the professional competencies needed for successful service delivery!
!
- We capture organisational knowledge to continuously improve performance!
!
- IT and Stakeholder departments have clear objectives, processes and indicators
with clear accountability and responsibility to deliver to set objectives!
Business objectives are reflected in the IT Strategy!
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60. .
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Leverage business strategy execution!
• Deliver effective (IT) Performance Management ()!
!
!
!
!
!!
!!
!!
!!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
- Confirm Business Vision ()!
- Articulate the Business Value Proposition ()!
- Deliver the Business Architecture ()!
- Translate the Business Vision to an IT Vision ()!
- Set the IT Value Proposition Baseline ()!
- Construct the IT Business Model ()!
- Design the IT Value Proposition ()!
- Build the IT Value Proposition ()!
- To Perform Effective IT Governance ()!
- Deliver IT services to business needs ()!
! ! - IT contributes to business objectives ()!
! ! - Provide competitive leverage ()!
! ! - Deliver effective business strategy execution ()!
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Vision!
Articulate!
Deliver!
IT Vision!
Baseline!
Roadmap!
Design!
Build!
Transform the Business Model!
Vision!
Vision:!
-
-
-
Articulate strategic intent!
Business objectives!
Business drivers!
Confirm Business Vision!
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Vision!
Articulate!
Deliver!
IT Vision!
Baseline!
Roadmap!
Design!
Build!
Transform the Business Model!
Deliver!
Deliver:!
-
-
-
Deliver the Business Architecture!
Translate Business Architecture Vision to Business Architecture!
Vision of Business Architecture “to be”: state “where we need to go”,
“where we are now” & “how we need to proceed”!
Deliver the Business Architecture!
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Vision!
Articulate!
Deliver!
IT Vision!
Baseline!
Roadmap!
Design!
Build!
Transform the Business Model!
Baseline!
Baseline:!
-
-
-
-
-
-
-
-
Set the IT Value Proposition Baseline!
Set fundamentals of a service business!
Process view!
Establish Total Cost of Ownership and IT baseline with cost/value/risk!
Activity based financial view!
Service portfolio view!
Value contribution view!
Customer consumption view!
Set the IT Value Proposition Baseline!
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Vision!
Articulate!
Deliver!
IT Vision!
Baseline!
Roadmap!
Design!
Build!
Transform the Business Model!
Design!
Design:!
-
-
-
-
-
-
-
-
Design the IT Value Proposition!
Design the service strategy!
Articulate governance principles!
Define project teams!
Engage customer ʻbuy inʼ !
Design KPIʼs !
Define & validate service pricing!
Design the performance measurement system!
Design the IT Value Proposition!
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65. .
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Vision!
Articulate!
Deliver!
IT Vision!
Baseline!
Roadmap!
Design!
Build!
Transform the Business Model!
Transform!
Transform:!
-
-
-
-
-
-
-
-
Transform the IT Business Model!
Measure KPI trends and targets!
Meet business objectives!
Control costs!
Measure Delivery performance!
Manage change!
Continuous service & process improvement!
Process roll out (articulation & integration)!
-
Execute strategic intent!
To Perform Effective IT Governance!
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66. .
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The IT service proposition is aligned to the business strategy as:!
•
!
•
•
•
•
Stakeholder expectations are understood and IT propose a !
service portfolio that correspond to Demand and Cost drivers !
Business Contribution, Cost, Consumption & Chargeback is identified!
Focus is on perfect order business transactions!
Services are effective (demand and cost drivers identified)!
Services are competitive (Benchmark Industry Market Forces)!
• New technological solutions that could change how current business
is performed are explored, proposed and implemented.!
IT contributes to business objectives!
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67. Service strategy !
Delivery capability!
Architecture!
Security!
Strategy Execution!
“This is how we support business objectives
with services in a time to market perspective” !
“This is how we deliver IT
services to the business” !
Business (IT) Value Proposition!
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Copyright 2013 COMMUNICATE!
(IT) Business Model!
!
Develop vision and strategy
!
Develop and manage products and services
!
Market and sell products and services
!
Deliver products and services
!
Manage customer services
!
Develop and manage Human Capital
!
Manage information technology
!
Manage financial resources
!
Acquire, construct and manage property
!
!
Manage environmental health and safety !
!
Manage external relationships
!
Manage knowledge, improvement and change
!
Time to Market (Governance: Performance & Conformity)!
Business (IT) Strategy Road Map (How)!
Deliver effective business strategy execution!
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Provides clear, meaningful Business (IT) Vision / Mission:!
• Is realistic and achievable,!
• Is articulated,!
• Is communicated!
! !
!
!
The business (IT) strategy is effective!
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There is a understanding of:!
• Competitive Positioning,!
• Strengths and weaknesses,!
• Strategies and relative positioning!
! !
!
!
Competitive Advantage!
137
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There is a understanding of:!
• The Customer value proposition,!
• Customer needs,!
• Customer segmentation !
! !
!
!
Customer value proposition!
139
71. .
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There is a understanding of the:!
• Clarity of the IT Strategy roll out,!
• Extent to which the IT Strategy responds to industry and competitive
environment,!
• Extent to which the IT Strategy responds to internal capabilities,!
• Extent to which Critical Success Factors are clearly identified,!
• Clarity of implementation plan !
! !
Execution!
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72. .
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Appropriateness of detail:!
•
•
•
•
Clarity with which assumptions have been stated,!
Extent to which profit / return criteria has been evaluated,!
Evidence of appropriate scenario and sensitivity analysis,!
Evidence of appropriate key performance indicators!
! !
!
!
Financial plans!
143
73. .
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There is a understanding of the:!
• Suitability of the IT strategy,!
• Feasibility of the IT strategy,!
• Acceptability of the IT strategy!
! !
!
!
Meet stakeholder expectations!
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74. .
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Link Strategy and Operations!
1.
2.
3.
4.
Develop the Strategy!
Translate the Strategy!
Plan Operations!
Monitor and Learn!
5. Test and Adapt the Strategy!
Execute Procedures and Initiatives!
!
!
!!
!!
!
!
!
!
Business (IT) Strategy, link to operations!
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76. .
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!
!
The Stakeholder Strategy Map: Formalises stakeholder outcomes to deliver value for all parties.!
!
!
!
The strategy canvas allow the teams to articulate and formulate objectives on a project /
program basis for improved execution with an extended GAP, risk and added value analysis
captured in a DARCI (Decision taker, Accountable, Responsible, Consulted & Informed).!
& Canvas, articulated in a!
151
77. .
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Leverage business strategy execution!
• Conceived in to a solid story ()!
!
!
!
!
!
!
!
!
!
!
- Deliver IT Services to Business Needs () !
- IT contributes to business objectives ()!
- and provides competitive leverage ()!
- Deliver effective business strategy execution ()!
!
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78. .
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At the end of the day Business Executives take the decision to out /
cloud source when:!
•
•
•
•
•
IT is not perceived to understand stakeholder expectations,!
IT is not perceived to contribute to business objectives,!
IT is not perceived to deliver value to cost, !
IT is not perceived to deliver services to business needs,!
The IT department is unable to deliver services in a time to market
perspective,!
• IT propose an effective service portfolio that correspond to Demand and
Cost drivers !
Deliver IT services to business needs!
155
79. .
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As the IT department delivers effective IT Services and innovative
technology solutions to improve competitiveness, demonstrated
and articulated in:!
• An IT Business Model “This is how we deliver IT services to the business”!
• and a Business IT Value proposition “This is how we support business
objectives with services in a time to market perspective” !
! !
and provides competitive leverage!
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80. .
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We work with a number of large French and International groups on the
Business IT roadmap; that is how do we (as CIO, IT Department)
support business objectives and processes leveraged by IT and an
effective IT Services strategy.!
.COMMUNICATE!
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