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IT Business Alignment Creating a Necessary Dependence Eliminating Waste Budgeting for Innovation Glenn Whitfield – Director Of Business Integration, New Age Technologies June 2009
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IT Business Alignment Creating a Necessary DependenceEliminating WasteBudgeting for Innovation
Glenn Whitfield – Director Of Business Integration, New Age Technologies
June 2009
Agenda
• 2009 Current State• IT Business Alignment
• History• Challenges / Difficulties• Necessary Condition
• IT2x Framework• Eliminating Waste• Allow more budget for innovation
• Questions
2009 IT Trends
Source: CIO Insight / Ziff Davis survey of 222 IT Executives Nov 2008
35% 31% 28%Top 2009 Technology Priorities
2009 IT Trends
Source: CIO Insight / Ziff Davis survey of 222 IT Executives Nov 2008
Improving Business Processes
Delivering Better Customer Service
Cutting Costs
42%41%
38%
Top 2009 Business Priorities
2009 IT Trends
Source: CIO Insight / Ziff Davis survey of 222 IT Executives Nov 2008
Improving Alignment with Business Objectives
Improving IT Planning Processes
Reducing ROI Costs
61%
37% 37%
Top 2009 Management Priorities
IT Budgets Falling
Source: CIO.com March/October 2008 /Jan 2009 survey of 243 IT Executives
March 2008 October 2008 January 2009
83%
60%
47%
IT Budget Increase
Source: IDC
80% of IT budget spent on maintenance
Innovation & Growth
Existing Systems / Maintenance
80%
20%
IT Budget Allocation
UnderAttack
The ResultMore Pressure and Opportunity for IT
Innovation -Meet Escalating Business Needs• Simplify Working Together• Find Information• Improve Business Insight• Secure and Manage Content
Operations – Improve Efficiency• Drive Value from IT
Investments• Manage Deployment,
Operations and Support Costs
• Maintain Security and Control
IT Business Alignment
Issue was 1st documented in 19771
Nothing New
1 Ephraim McLean & John Soden, Strategic Planning for MIS
32 Years Ago
Society of Information Management (SIM) annual survey of top issues facing CIOs:
1980 – 1994: Top 10 1994 – 2008: #1 or #2
2008?
#1
Still an Issue
IT Business Alignment
1) The alignment paradigm. The paradigm has focused only on how IT is aligned to Business, not Business to IT1
2) Silver Bullet Mentality3) Lack of Effective tool to gauge maturity of IT to
business alignment4) Traditional approach to implementing
technology solutions
1 Luftman & Kempaiah, “An Update on Business-IT Alignment,” MIS Quarterly Vol.6 No. 3, Sep 2007
Why is Business Alignment so Difficult?
The Alignment Paradigm
IT Business
Conceptually, this looks very simple:
I know where the IT department is…but where is the Business department?
The Alignment Paradigm
IT is usually a department
Business is a collection of departments
Technology is woven through
The Alignment Paradigm
Mar
ketin
g
Fina
nce
Ope
ratio
ns
Sale
s
IT
IT
The Alignment Paradigm
From concept to reality
IT
InsideSales
Finance
Operations
Sales
Marketing
OutsideSales
Materials
Shipping
AssemblyQuality
Accts Payable
Treasury
Accts Receivable
Budgeting
Financial Reporting
Public Relations
Design
HRBenefits
Emp.Relations
Desktop
Servers
PMO
Help Desk
Telecom
Perhaps we have made Technology too easy?
The Alignment Paradigm
So, what about Business to IT?
It is a Two – Way street
IT Leaders must seek to understand the business
Business Leaders must seek to understand technology
The Alignment Paradigm
“All you have to do is this and your
problem will be solved”
Silver Bullet Mentality
How many times are we going to fall for this?
Silver Bullet Mentality
N=2First Part GoodLast Part Good
ThenBatch is Good
Silver Bullet Mentality
1982
Oh – forgot to mention, this is only after you have your
process under control after months of
detailed analysis
There is no Silver Bullet.
There is only Hard Work
Silver Bullet Mentality
How do you know where you are?
Lack of Effective Tool
Lack of Effective Tool
Staged
= Groups of process areas chosen for process improvement to achieve maturity level 3
Selected Maturity Level
Maturity Level 5
Maturity Level 4
Maturity Level 2
Maturity Level 3
REQM
PP
PMCSAM
MA
PPQA
CM
Strategic Alignment Maturity Model (Luftman)
Capability Maturity Model Integration (Carnegie Mellon)
Infrastructure Optimization Assessment (Microsoft)
Focus on the Technology
Approach to Technology
Traditional Approach
Glance at the Process
Blind to the People
Focus on the Process
Approach to Technology
A New Approach
Involve & Engage the
People
Prepare for Technology
The vision is an organization where:• People are empowered with access to
information when they need it• Processes are automated and aligned with
business goals• IT technology/services can easily be adapted
to changing business needs
Business Alignment Vision
Alignment Vision
Process
Technology
People
Alignment
Up to now, we have dealt with:• A vision of what IT Business Alignment looks
like in an organization • Barriers to achieving Alignment• Approaches and Tools to break down those
barriers
Taking a Step Back
Taking a Step Back
IT Business Alignment
Tools & Techniques
?
What is driving these Approaches?
What necessary condition should be in place to drive the achievement of IT Business Alignment?
Taking a Step Back
IT Business Alignment requires that Business leaders and IT leaders are:
• Dependent on each other to meet the organization’s goals and objectives
and• Dependence is mutually recognized and
acted upon
The Necessary Condition
• IF IT and Business leaders are dependent upon each other for success, THEN shared goals, objectives and metrics will be in place
• IF shared goals, objectives and metrics are in place, THEN approaches and solutions can be developed jointly
• IF approaches and solutions are developed and executed jointly, THEN the outcomes of IT Business Alignment will be met
• IF the outcomes of IT Business Alignment are met, THEN we are aligned.
The Necessary ConditionLogical Evaluation
Yes – It is inherently simpleYes – Everyone thinks they are doing itYes – It is Common Sense
It is not Common Practice
The Fundamental Principle and Necessary Condition
IT2x FrameworkSM
A Starting Point
IT2x FrameworkSM
• Process centric approach involving IT and Business helping create a necessary dependence and partnership with each other for success.
• Alignment between IT initiatives and the business objectives.
• Identifies IT projects that are supportive of the business goals
• Provides ROI and a roadmap prioritization that maps to the business goals.
Business / IT Process Assessment
InfrastructureAssessment
IT2x FrameworkSM
AlignedIT Roadmap
Business Plan or IT StrategiesBusiness or IT
Processes
IT to BusinessIT to Efficiency
Business TechnologyAssessment
IT2x FrameworkSM
©2009 New Age Technologies, Inc.
IT / Business Strategy Analysis
Current State Analysis
Future State Analysis
Business Case Assessment
Implementation Plan - Just Do Its - Projects
Infrastructure Review using RAMP ModelSM:
Infrastructure Business TechnologyAnalysis and Report
Out
Review of Technology behind Business
Processes using RAMP ModelSM:
Analyze Results from BPA, Infrastructure and
Business Technology Assessment
Framework ROI analysis for overall assessment and each action item
Security & Networking
Identity & Access Management
Desktop, Device & Server Management
Data Protection & Recovery
IT & Security Process
Collaboration
Enterprise Content Management
Enterprise Search
Unified Communication
Business Intelligence
Roadmap to align IT infrastructure and
technology projects to Business Process
Organization’s IT status as an asset to the
organization
Discuss & Agree on Next Steps
1 Week 4 Weeks 2 Weeks
performed concurrently
Business or IT Process Assessment
Energy Efficiency
per process
IT to BusinessIT to Efficiency
Technology Infrastructure Assessment
IT2x FrameworkSM
©2009 New Age Technologies, Inc.
Business Process Assessment (BPA)
Definition:
An analysis of a process in the organization required to bring a product or service to the customer.
Business Process Assessment (BPA)
• Key Leaders / Subject Matter Experts• Document and analyze the current state • Identify waste / Non-value added activities• Brainstorm improvements• Develop the future state • Develop Implementation/Action Plan
Technology Infrastructure Assessment
Infrastructure Assessment• Drives for more secure, well-managed and
proactive infrastructure• Enables reduction in overall IT costs• Better utilized IT resources• Helps make IT a strategic asset for the
business
Technology Infrastructure Assessment
Business Technology Assessment• Assessment of the Technology behind the
business processes• Set of technologies to streamline the
management and control of content, data, and processes
• Simplifies how people work together, improving the quality of business insight
Technology Infrastructure Assessment
• A summary aligning IT projects to the technology behind the organization’s business process based on the business need identified by the BPA.
New Age Deliverables
Implement the Use of Electronic Forms IT Projects: SharePoint electronic forms (BTA)
Server Consolidation (IA)
Processes Impacted: Deed Process (reviewed as part of BPA)
IT Server Backup and Maintenance (not reviewed, but typically impacted by server consolidation projects)
Benefits: Eliminates walking deeds from courthouse to PVA office and the manual transfer of deeds within the office. Also allows for identification of status of deeds within the process, and reduces time to process a deed by 30%.
Investment: $110,000
ROI: 118% with a productivity factor adjusted average annual benefit of $138,000.
Suggested Metrics: Decrease time to process deeds (residential and commercial)
Delivery Agent: New Age Technologies
• ROI based on benefits for each business need identified by the BPA.
New Age Deliverables
• Organization’s current status in each of the sub-categories to assess IT’s capability as an asset to the organization.
New Age Deliverables
• Visual depiction of the Current State and Future States.
New Age Deliverables
XYZ Corporation Widget Process
Sale
sPu
rcha
sing
/ M
ater
ials
Ope
ratio
nsFi
nanc
eCu
stom
er
Meet with Customer
Customer Places Order
Sales faxes order to sales order
entry
Order entry enters order into system
Receive order from Sales
Determine material requirements
Fax material requirements to
suppliers
Materials Management evaluates and
schedules production
Send notification to Operations
Receive materials from supplier
Review schedule for expedited items
and modify as needed
Set up Machine for production run
Produce widgets to order
specification
Transport widgets to warehouseEnter production
data
Ship to customer and enter data
Receive Widgets Receive invoice Pay XYZ Corp
Receive production & shipping data
Process data in system
Send invoice to cutomer
Receive paymentA
A
• Gantt chart of IT projects illustrating the priority as they meet the alignment to the business needs.
New Age Deliverables
• Actionable roadmap is provided to help an organization move from reactive to proactive, enabling the alignment of it’s business processes to IT.
• Reduced IT costs and improved efficiencies through the elimination of wasteful activities
• Ability to provide more funds toward innovation and growth initiatives
• A more agile business better capable of responding to the needs of an ever changing market.
IT2x FrameworkSM Results
Linking it Together
Improve Operations &
Alignment with
Business
Innovation & Growth Budget
Eliminate Waste / Improve
Efficiencies
Proce
ss
Focu
s
Reduce
Costs
Increase
Funds
• Take a look at your processes. Look at the sequence in which things happen and the interactions between people, process, and technology.
• What steps in your process add value? What steps are waste? How do you eliminate the waste?
• Look at your technology and how it interfaces with the process. Was the technology designed to support the process or the process to support the technology? Does your technology support your business objectives?
What Next?
Questions?
Glenn Whitfield – Director of Business Integration
Tony Fink – Vice [email protected]
502.412.6681
Want more information?
Thank You
