| Date post: | 22-Nov-2014 |
| Category: |
Documents |
| Upload: | the-thorp-network-inc |
| View: | 1,225 times |
| Download: | 5 times |
Unlocking ValueUnlocking ValueDelivering on the Promise of ITDelivering on the Promise of IT
John Thorp, CMC, I.S.P., ITCPJohn Thorp, CMC, I.S.P., ITCPJohn_thorp @thorpnet.comJohn_thorp @thorpnet.com
Consulting Conference 2010
May 29th, 2010Richmond, BC
Val IT and slides copyright © 2006 IT Governance Institute. Used with permission.
© 2010 The Thorp Network Inc.
The Information ParadoxThe Information Paradox
The value of IT is being The value of IT is being increasingly questioned...increasingly questioned...
?? ?
……yetyet organizations continue to organizations continue to spend more and more on ITspend more and more on IT
“The failed promises of the Information Age add up to the longest-running disappointment in business history. On the other hand, information technology has produced an enormous transition, something that companies should be grappling with and studying every day.”Jack WelchWorld Economic Forum, Davos, 1997
Gartner – more than 600 billion $ thrown away annually on ill conceived or ill executed IT projects
Standish Group – 24% of projects fail outright, 44% are challenged and only 32% are successful
Other reviews and studies continue to confirm concerns
The RealityThe Reality
2000
2002
2004
Successful Failed Challenged
2006
2009
0% 20% 40% 60% 80% 100%
1998
• 74% of IT projects from 1994 – 2002 failed to
deliver expected value
MIT Sloan Management Review, 2007, D Shpilberg et al
• In a 2007 survey of 1,125 professional
worldwide 57% had positive outcomes in less
than half their organizations IT initiatives
HP and Economist Intelligence Unit
Investments are increasing and... ... complexity is increasing!
Evolution of Use of ITEvolution of Use of IT
Management of Information
IT
Business
Transformation of Business
Business
IT
ITBusiness
Automation of Work
Efficiency - Run the business
Effectiveness - Change the business
Innovation -Change the rules
Source: The Information Paradox
A New PerspectiveA New Perspective
IT Investments
Investments inIT-enabled Change
“You can’t separate IT form the business”
Faisal HoqueFounder & Chair, BTM Institute
TheThe FundamentalFundamental QuestionQuestion
Are we maximizing the value of our Are we maximizing the value of our investments in IT-enabled change investments in IT-enabled change such that:such that:
we are getting we are getting optimal benefitsoptimal benefits;;
at an at an affordable costaffordable cost; and; and
with an with an acceptable level of riskacceptable level of risk??
Over the full economic life-cycle of the investment
“… “… ICT needs to be driven from the ICT needs to be driven from the boardroom, not the backroom. Unless boardroom, not the backroom. Unless there is recognition at the highest levels there is recognition at the highest levels that technology is critical to an that technology is critical to an organisation's ongoing success - and organisation's ongoing success - and there is the drive and patience to pursue there is the drive and patience to pursue technology strategies from senior technology strategies from senior management - then the chances of a management - then the chances of a successful implementation of ICT are successful implementation of ICT are significantly lessened.”significantly lessened.”
Senator Helen Coonan, Australian Minister for Communications, Information Technology and the Senator Helen Coonan, Australian Minister for Communications, Information Technology and the ArtsArts
Are wedoing
the rightthings?
Are wedoing
the rightthings?
Are wedoing them
the rightway?
Are wedoing them
the rightway?
Are wegetting
them donewell?
Are wegetting
them donewell?
Are wegetting
thebenefits?
Are wegetting
thebenefits?
Are wegetting
thebenefits?
Are wedoing
the rightthings?
Are wedoing
the rightthings?
Are wedoing
the rightthings?
Are wedoing
the rightthings?
Are wedoing them
the rightway?
Are wedoing them
the rightway?
Are wedoing them
the rightway?
Are wedoing them
the rightway?
Are wegetting
them donewell?
Are wegetting
them donewell?
Are wegetting
them donewell?
Are wegetting
them donewell?
Are wegetting
thebenefits?
Are wegetting
thebenefits?
Are wegetting
thebenefits?
Are wegetting
thebenefits?
Are wegetting
thebenefits?
Are wegetting
thebenefits?
Source: The Information Paradox
Key Governance QuestionsKey Governance Questions
IT Governance of IT
Business Governance of IT
Enterprise Governance of IT
Continually asking…
Enterprise Value Management
A Definition…A Definition…
KubernánKubernán (gr): to steer a (gr): to steer a ship – the process of ship – the process of continually orienting and continually orienting and adjustingadjusting
“Managing an uncertain journey to an uncertain destination”
“any organisation is multifaceted, and the range of organisational variables is mind-boggling”
John RobertsThe Modern Firm
The Good News The Good News
Enterprises that actively design their top-level IT governance Enterprises that actively design their top-level IT governance arrangements make and implement better IT-related decisionsarrangements make and implement better IT-related decisionsGartnerGartner
Firms with focused strategies and above average IT Firms with focused strategies and above average IT Governance had more than 20% higher profits than other firms Governance had more than 20% higher profits than other firms following the same strategiesfollowing the same strategiesPeter Weill and Jeannie W. Ross, Peter Weill and Jeannie W. Ross, IT GovernanceIT Governance
Enterprises focused on converging their business and Enterprises focused on converging their business and technology disciplines exhibited superior revenue growth and technology disciplines exhibited superior revenue growth and net margins relative to their industry groups and exhibited net margins relative to their industry groups and exhibited consistently greater rates of return than those of their consistently greater rates of return than those of their competitorscompetitorsBTMBTM InstituteInstitute
IT GovernanceIT Governance
• Not a panacea – necessary but not sufficientNot a panacea – necessary but not sufficient• ““The term “IT governance” as used by the IT industry is a legacy The term “IT governance” as used by the IT industry is a legacy
of the separateness between business and IT”of the separateness between business and IT” Cliff Berg, Cliff Berg, Value-Driven ITValue-Driven IT
• ““The focus of IT governance continues to be on the more The focus of IT governance continues to be on the more operational IT issues with little appetite for tackling the business operational IT issues with little appetite for tackling the business aspects of planning and managing how the business uses IT to aspects of planning and managing how the business uses IT to create and sustain value”create and sustain value”ITGI sponsored UAMS Research, ITGI sponsored UAMS Research, Exploring the relationship between enterprise benefits and IT governance practices Exploring the relationship between enterprise benefits and IT governance practices COBIT 4.1 and Val IT 2.0COBIT 4.1 and Val IT 2.0., 2008 ., 2008
• The way forward requires “The introduction of an IT management The way forward requires “The introduction of an IT management and governance framework that explicitly stimulates and facilitates and governance framework that explicitly stimulates and facilitates collaboration and knowledge exchange across the business/IT collaboration and knowledge exchange across the business/IT divide from the Board downwards.”divide from the Board downwards.”Geoff Codd, Geoff Codd, The Drowning DirectorThe Drowning Director
•Filtered information*•Selective hearing•Wishful thinking•Fear•Emotional overinvestment•Unrealistic stakeholder expectations
*Source: Larry Bossidy, Ram Charan – Confronting Reality
Strategy Management
Project Management
Operations Management
©2010 The Thorp Network Inc.
The Big DisconnectThe Big Disconnect
Performance Management
Strategy Management
Project Management
Operations Management
Portfolio Management
Programme Management
Project Management
Management of
Change
©2010 The Thorp Network Inc.
Connecting the DotsConnecting the Dots
Performance Management
Strategy Management
Project Management
Operations Management
Portfolio Management
Programme Management
Project Management
Management of
Change M
gmt
Asset
Architecture
Management
©2010 The Thorp Network Inc.
Completing the PictureCompleting the Picture
Performance Management
Portfolio Management
Strategy Management
Programme Management
Project Management
Operations Management
Asset
Mgmt
Architecture
Management
Strategic Enterprise Governance
Management of
Change
©2010 The Thorp Network Inc.
VALUEVALUE RISKRISK
Total Total Benefits Benefits – – Total Total CostsCosts
Performance Management
Portfolio Management
Strategy Management
Programme Management
Project Management
Operations Management
Asset
Mgmt
Architecture
Management
Strategic Enterprise Governance
Management of
Change
©2010 The Thorp Network Inc.
Direction & Steering
Selection, monitoring and on-going adjustment to optimise enterprise
business value
Structuring the delivery of
change around business outcomes
Reliable delivery of capability to
achieve business outcomes
Quality, repeatable execution of the delivery of
services, IT service and support
Enterprise perspective on organisational assets and their
relationships
Managing organisational
assets to maximise the selection, use,
reuse and lifecycle of each
Managing organizational and
cultural change
Performance Management
Portfolio Management
Strategy Management
Programme Management
Project Management
Operations Management
Asset
Mgmt
Architecture
Management
Strategic Enterprise Governance
Management of
Change
©2010 The Thorp Network Inc.
• Executive• Strategy Office
• Executive• IT Exec Committee• Investment Decision Board• Value Mgt Office
• Business Sponsor• Program Manager• Program Mgt Office
• Project Mgr• Project Mgt Office
• CIO• IT Leaders• IT Business Leaders
Architecture Office
• Asset Owners• Process Owners
• Process Council
• Change/Transformation Office
• Change Working Group(s)
PortfolioPortfolioManagementManagement
ProgrammeProgrammeManagementManagement
Project Project ManagementManagement
Programme – a structured grouping of projects designed to produce clearly identified business value
Project – a structured set of activities concerned with delivering a defined capability based on an agreed schedule and budget
Portfolio – a suite of business programmes managed to optimise overall enterprise value
PP33MM - Projects, Programmes, and - Projects, Programmes, and PortfoliosPortfolios
Source: The Information Paradox
“We believe [strategic program management] is the management construct best suited to enable better business engagement, value delivery and risk”
Gartner Research, March 17, 2008
“Business cases are generally viewed only as documents for gaining funding. Once approved they are put away…few track the business benefits the projects actually achieve”Gartner, Building Brilliant Business Cases”
“Business Cases contain untested assumptions masquerading as facts”Bob Morton, Government of Canada
“…47% of respondents openly admitted to overstating benefits in order to get approval”Cranfield School of Management, survey of 60 European companies
Largely works of fiction based on “delusional optimism” and “strategic misrepresentation”!
The Business CaseThe Business Case
• The foundation that sows the seeds for success or failure – NOT a bureaucratic hurdle
• Business cases should:• operate at the programme level containing all required
initiatives to realize outcomes – not just the technology• contain clear and relevant benefits metrics – both lead and
lag• be a living, operational management tool – updated
through the full life cycle of an investment decision• be regularly reviewed by an independent body such as a
Value Management Office (VMO)• Development and management of business cases
should be supported by a benefits mapping process
The Business CaseThe Business Case
INITIATIVE
Source: The Results Chain™, Fujitsu
Results- focused
programmes
CONTRIBUTIONCONTRIBUTIONCONTRIBUTION ASSUMPTIONASSUMPTIONASSUMPTION OUTCOMEOUTCOMEOUTCOMEINITIATIVEINITIATIVEINITIATIVEINITIATIVEINITIATIVEINITIATIVE
Clear accountabilities
Full scope of effort— All necessary IT and business initiatives, including change management
Clear understandingof outcomes
Relevantmetrics
Benefits MappingBenefits Mapping - Complete and - Complete and Comparable Business CasesComparable Business Cases
Portfolio ManagementPortfolio Management
CategoriseCategorise
VENTURE
GROWTH
NONDISCRETIONARY
CORE
Dis
cret
iona
ryN
on-D
iscr
etio
nary
Transform the Business
DISCRETIONARYENHANCEMENTS
Grow the Business
Run the Business
VENTURE
GROWTH
NONDISCRETIONARY
CORE
Dis
cret
iona
ryN
on-D
iscr
etio
nary
Transform the Business
DISCRETIONARYENHANCEMENTS
Grow the Business
Run the Business
TransformationalTransformationalInformationalInformationalTransactionalTransactionalInfrastructureInfrastructure
MandatoryMandatorySustainingSustainingDiscretionaryDiscretionary
EvaluateEvaluate
Are wedoing
the rightthings?
Are wedoing them
the rightway?
Are wegetting
them donewell?
Are wegetting
thebenefits?
Risk
AlignmentBusiness worth
Are wedoing
the rightthings?
Are wedoing them
the rightway?
Are wegetting
them donewell?
Are wegetting
thebenefits?
Risk
AlignmentBusiness worth
AlignmentAlignmentBusiness WorthBusiness Worth•FinancialFinancial•Non-FinancialNon-FinancialRiskRisk
Select & Select & MonitorMonitor
10
9
8
7
6
5
4
3
2
1
010 9 8 7 6 5 4 3 2 1 0
Overall RiskOverall Risk
Fin
an
cia
l Wo
rth
Fin
an
cia
l Wo
rth
10
9
8
7
6
5
4
3
2
1
010 9 8 7 6 5 4 3 2 1 0
Overall RiskOverall Risk
Fin
an
cia
l Wo
rth
Fin
an
cia
l Wo
rth
10
9
8
7
6
5
4
3
2
1
010 9 8 7 6 5 4 3 2 1 0
10
9
8
7
6
5
4
3
2
1
010 9 8 7 6 5 4 3 2 1 0
Overall RiskOverall Risk
Fin
an
cia
l Wo
rth
Fin
an
cia
l Wo
rth
Design ProgrammeDefine Programme
ConceptCommissionProgramme
ExecuteProgramme
Transfer toOperations
MgmtApproved
MgmtApproved
MgmtApproved
MgmtApproved
MgmtApproved
TRANSPARENCY
TRANSPARENCY
Getting ahead of the Curve!Getting ahead of the Curve!
Requires an Effective Full Cycle Governance Requires an Effective Full Cycle Governance Process that…Process that…
Prevent / Plan Contain / React Recover / Throw away or start again
$’s
Develops complete& comprehensive
Value-driven plans
Senses & respondsto deviations early,
quickly anddecisively
Eliminates the riskof getting to the
crisis stage“How does a project get to be a year behind schedule? One day at a time.”
Fred Brooks
““After all’s said and done there’s more said then done”After all’s said and done there’s more said then done”AnonAnon
Why isn’t everyone doing this?Why isn’t everyone doing this?
We do this already Confirmation bias Delusion and deception Playing “games”
“Figures don’t lie, but liars can figure” Knowing-doing gap
We’re no worse than anyone elseYou’re making it much too complexIt’s an IT problem
Lack of business engagement / accountability
We do this already Confirmation bias Delusion and deception Playing “games”
“Figures don’t lie, but liars can figure” Knowing-doing gap
We’re no worse than anyone elseYou’re making it much too complexIt’s an IT problem
Lack of business engagement / accountability
“Information technology isn’t an optional extra, it is a condition of entry to most markets. It is the enabler of business sustainability. The CEOs who don’t get that are either in the wrong job or have done some calculations in respect of their retirement date and this reality dawning on the shareholders.”Ade McCormack, The IT Value Stack
Checking the egoChecking the ego Knowing what you don’t know vs. “I got here because I know Knowing what you don’t know vs. “I got here because I know
what to do”what to do” Recognizing/accepting complexity vs. “you’re making it much Recognizing/accepting complexity vs. “you’re making it much
too complex”too complex” Listening vs. confirmation biasListening vs. confirmation bias
Taking the Enterprise viewTaking the Enterprise view We thinking vs. I thinkingWe thinking vs. I thinking Collaboration vs. competitionCollaboration vs. competition Program scope crosses “traditional” organizational management Program scope crosses “traditional” organizational management
boundariesboundaries
Embracing shared visibilityEmbracing shared visibility Openness vs.. “hidden agendas”Openness vs.. “hidden agendas” No “game playing” (with it’s optimistic delusion & “strategic No “game playing” (with it’s optimistic delusion & “strategic
misrepresentation”)misrepresentation”)©2010 The Thorp Network Inc.
Behavioural ChangeBehavioural Change
Taking ownershipTaking ownership Activist accountability - outcome vs. activityActivist accountability - outcome vs. activity Not abdicating to the IT functionNot abdicating to the IT function
Learning to say and accept “no”Learning to say and accept “no” Management system worked vs. who to blameManagement system worked vs. who to blame
Willingness to change courseWillingness to change course Accepting ambiguity & uncertainty - managing “an uncertain journey Accepting ambiguity & uncertainty - managing “an uncertain journey
to an uncertain destination” vs. “we don’t want to hear bad news”to an uncertain destination” vs. “we don’t want to hear bad news”
Pragmatism vs. perfectionPragmatism vs. perfection ““Best is the enemy of good”Best is the enemy of good”
©2010 The Thorp Network Inc.
Behavioural Change (Cont.)Behavioural Change (Cont.)
• Current top down, hierarchical, siloed organizational models work against realizing value from IT-enabled change
• Web 2.0, social networking, crowd sourcing currently seen as a threat
• Enterprise 2.0 certainly presents governance challenges
• Enterprise 2.0 also presents governance opportunities• Broader and better decision making• Leveraging our human knowledge capital
Governance 2.0Governance 2.0
““If you don’t like change, you’re going to If you don’t like change, you’re going to like irrelevance even less”like irrelevance even less”
General Erik Shinseki, Chief of Staff, US ArmyGeneral Erik Shinseki, Chief of Staff, US Army
What does this mean to you?What does this mean to you?
Value is a business issueValue is a business issue Business must own use of ITBusiness must own use of IT Strategic (NOT IT) Governance is keyStrategic (NOT IT) Governance is key Business Case sets stage for success OR Business Case sets stage for success OR
failurefailure Proven processes, practices and techniques Proven processes, practices and techniques
are availableare available BUT…managing behavioural change is keyBUT…managing behavioural change is key
Think about Governance 2.0 – a challenge Think about Governance 2.0 – a challenge and an opportunityand an opportunity
We can and must do better! You can make a difference!
Resource Materials…
• ISACA ( ISACA ( www.isaca.org ) )• Val IT™ Framework 2.0Val IT™ Framework 2.0• Building the Business Case for COBIT® and Val IT™ – Executive BriefingBuilding the Business Case for COBIT® and Val IT™ – Executive Briefing• Implementing and Continually Improving IT GovernanceImplementing and Continually Improving IT Governance• ISACA Journal: IT Value Special CompilationISACA Journal: IT Value Special Compilation• Value Management Guidance for Assurance Professionals: Using Val IT™ 2.0Value Management Guidance for Assurance Professionals: Using Val IT™ 2.0
• ISO (ISO (www.iso.org ) )• ISO/SEC 38500 Corporate Governance of ITISO/SEC 38500 Corporate Governance of IT
• OGC ( OGC ( www.ogc.gov.uk ) )• Managing the PortfolioManaging the Portfolio• Managing Successful Programmes (MSP)Managing Successful Programmes (MSP)• Gateway Review for Programmes & ProjectsGateway Review for Programmes & Projects• Portfolio, Programme and Project Offices (P3O)Portfolio, Programme and Project Offices (P3O)
• PMI (PMI (www.pmi.org ) )• The Standard for Portfolio ManagementThe Standard for Portfolio Management• The Standard for Program ManagementThe Standard for Program Management
• The Information ParadoxThe Information Paradox– Downloadable from Fujitsu website (link from my website www.thorpnet.com)Downloadable from Fujitsu website (link from my website www.thorpnet.com)
Unlocking ValueUnlocking ValueDelivering on the Promise of ITDelivering on the Promise of IT
John Thorp, CMC, I.S.P., ITCPJohn Thorp, CMC, I.S.P., ITCPJohn_thorp @thorpnet.comJohn_thorp @thorpnet.com
Consulting Conference 2010
May 29th, 2010Richmond, BC
Val IT and slides copyright © 2006 IT Governance Institute. Used with permission.
© 2010 The Thorp Network Inc.
