Integrasi Strategi Bisnis Dan Strategi Sistem Informasi Strategi SI-TI/SK-6 Linking IS... ·...

11/19/2008 Integrasi Bisnis & SI/TI - Maswig 1

Integrasi Strategi Bisnis Dan

Strategi Sistem Informasi

Dosen:

Ir. Mas Wigrantoro Roes Setiyadi, SE, MSi, MPP

Program Pasca Sarjana - Magister Ilmu Komputer - Universitas Budi Luhur

Kuliah Sessi – 6:

Align IS and Business Strategy:

A Governance Approach

2

Adopted from Jos Luhukay, PhD’s presentation (2007)

3

Topics

• Alignments are Not One-Way Paths

• Domain of Strategic Choices

• Possible scenarios

• Evolving the Governance Strategy

• Caveats


• Alignments are Not One-Way Paths


• Possible Scenarios

• Evolcing the Governance Strategy

• Caveats


Key Assumptions For

Alignment

• There exists a strategic business opportunity to which IT is integral

• At least one of the four business needs exist:– Ever increasing volumes of transaction which require speed, accuracy and service integration

– A Widening geographic spread

– An increasing keener competition, both market-and self-imposed

– Other external factors impacting strategy: regulatory issues, partnership or participatory requirements, industry standards, etc.


Alignment is Reciprocal

• Reciprocity is a must in achieving best levels of governance

• As part of a company’s Corporate Governance and its ramification must be:– Fair in its deployment and budget allocation

– Accountably implemented, with a proper cost allocation scheme

– Responsive in its two-way alignment

– Transparent in its implication and impact resolutions


• Alignments are Not One Way Paths




• Caveats


Relevant Keys in a Business

Strategy

• Scope: The Strategy proposes products or services that is either:– Information outright. Or

– Heavily information-intensive

• Existence of Distinctive Competencies: The company is seeking to add value to costumers in a way that:– Is unique

– Outperforms the competition

– Has information technology as integral elements


Domain of Strategic Choice

• Business Strategy

• Information Technology Strategy

• Organizational Infrastructure

• Information Technology Infrastructure






• Caveats


Scenario # 1

• Business structure and IT strategy are not aligned

• Key alignment is between organizational structure and IT infrastructure

Business

Strategy

Organizational

Infrastructure

Information

Technology

Infrastructure


Scenario # 2

• Business side is alignment

but IT is not integrate

• Key alignment is between

IT strategy and IT

infrastructure

Business

Strategy

Information

Technology

Strategy

Information

Technology

Infrastructure


Scenario # 3

• IT strategy is highly integrated with business strategy

• IT strategy is principal driver

• Focus is on fitting IT Structure to the IT strategy, so that business is enable

Information

Technology

Strategy

Organizational

Infrastructure

Information

Technology

Infrastructure


Scenario # 4

• IT becomes enabler of

strategic opportunities

• It may seem that IT is

driving business,

although it is actually the

enabler and integrator

Business

Strategy

Organizational

Infrastructure

Information

Technology

Strategy






• Caveats


Needs to Fit the Evolution

• The organizational and processes must fit the evolving strategies

• This will in turn change the perspectives periodically

• Nothing is “cash in concrete”, a company’s handling of IT strategy will most like “swing”between extremes every 5 to 15 years:– Between “centralized” and “de-centralize”

– Between “IT-driven” to “business driven”

– Between “Consolidation” and “expansion”


Some Lessons

• Keeping the alignment between business and

IT is not a one-time activity, but a process

that a company must commit to

• Issue that are “important” and urgent” today

will almost certainly change with time

• The alignment process requires focusing both

on specific domains and on relationship

between domains


# 1 Actively Designed Governance

• Governance by default will create “silos”– Introducing mechanism one at time to address a particular need

– Catching up problem as they arise is a defensive tactic that limits opportunities for strategic impact from IT

– Instead, management should actively design IT governance around the enterprise’s objectives and performance goals

• Senior executives should explicitly take the lead and allocate resource, attention, and support to process

• Overall governance requires active design and– Focus on having the fewest number of effective mechanism

possible, between six and ten well-functioning ones

– Goal of any governance redesign should be to assess, improve, and then consolidate the number of mechanisms


# 2 Know When to Redesign

• Individual must learn new roles and relationships– Governance redesign should be infrequent, coinciding with a

change in desirable behavior, for example when changing strategy

– These transformations involve many other issues besides IT and make many months to implement.

• In transformations, IT governance can be use as one of the levers to encourage change– E.g. State Street Corp introduced enterprise-wide IT budgeting,

encouraging a shift in perspective from the business unit to thecorporation.

– JP Morgan Chase's buy-hold-sell process accomplished the same objective at a technology level

– These governance processes communicate and enforce new desirable behaviors to facilitate organizational transformations


# 3 Involve Senior Managers

• Banks with more effective IT governance usually had more senior management involvement– CIOs must be effectively involved in IT governance for success

– Other senior managers must participate in committees the approval processes, and performance reviews

– The IT Steering Committee can be use for this

• Senior management is rarely concern with the exception process:– If an exception has strategic implications, it may reach the

executive level IT Steering Committee

– If the exception request escalates to the CEO, then it’s no longer a technology issue. AT that point it’s a strategic choice.

• Many senior managers are willing to be involved but are not sure where to best contribute– The CIO should communicate IT governance on one page which

help help clarify senior managers’ role and any concerns they have


# 4 Make Choice

• Good IT governance can and should highlight conflicting goals for debate:– Banks should handle goal conflicts with a few clear business

principles from which IT principles should be derived

– E.g. Old Mutual South Africa’s applies six IT principles called “non-negotiables,” the first states: “The interest and needs of the Group/OMSA come first when exploiting technology or when contracting with suppliers.”

– Appropriate Stakeholders must be involved in the approval process prior to contracts being signed

• When directives come from many agencies (incl. majority owners), the result will be confusion, complexity, and mixed messages– The unmanageable number of goals typically arose from not

making strategic business choice and had nothing to do with IT, confuse managers


# 5 Clarity Expectations-Handling

• Exceptions are how banks learn:– Exceptions challenge the status quo, particularly the IT architecture &

infrastructure. Most come from a true desire to meet business needs.

– If the exception proposed by a business unit has value, a change to the IT architecture could benefit

• Three common elements to good exceptions procedures:– Clear & well understood procedures with clear criteria and fast escalations

encourage only business units with a strong case to pursue an exception.

– Reduce stages that quickly move the issue up to senior management. This minimize the chance that architecture standards will delay project implementation.

– Successful exceptions are adopted into the enterprise architecture, completing the organizational learning process.

• Exceptions serve as a release valve, relieving the bank of built-up pressure– Managers become frustrated if they are told they can’t do something they sure is

good for business. A good exceptions process provides a transparent vehicle to release the frustration without threatening the governance process


# 6 Provide the Right Incentives

• Misalignment of incentive and reward systems with behaviors the IT governance arrangements were designed to encourage– IT governance is less effective when incentive and reward

systems are not aligned with organizational goals

• A major alignment issue is business unit synergy:– If IT governance is designed to encourage business unit

synergy, autonomy, or some combination, the incentives of the executives must also be align

• Avoid financial disincentive to desirable behavior:– DBS Bank Singapore does not charge for architectural

assistance to encourage project teams to consult with architects.

– Banks can arrange charges to encourage desirable behavior, and chargeback pricing must be reasonable and clearly understood.


#7 Assign Ownership & Accountability

• IT governance must have an owner and accountabilities:– First, IT governance must have an organisation-wide that goes beyond IT,

as well as credibility with all business leaders.

– Second, the person or group cannot implement IT governance alone. Directs or CEO must make it clear that all managers are expected to contribute to IT governance

– Third, IT assets are increasingly important to bank performance. A reliable cost-effective, regulation-compliant, secure, and strategic IT portfolio is more critical today than ever before. The person or group owning IT governance must understand what the technology is and is not capable of. It is not the technical details that are critical but a feel for the two-way connection between strategy and IT.

• Usually, the CIO, COO or even the CEO owns IT governance, but itcould also be the ITSC:– ITSC have the problem of meeting only periodically and dispersing the

responsibility and accountability.






• Caveats


Caveats

• The alignment between business and IT strategies should be driven at the top corporate level as part of a company’s overall governance

• It must be written-up as part of the corporate policy document, the mother-of-all-manuals which specifies the corporate governance intent

• Review of the alignment should be performed at least once every 3 years

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