1@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

Enterprise ICT (EICT) Strategy

How is it related with Business Strategy ?

2@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

Overall Effect of Digitalization

• Businesses rely more and more on ICT– Automation (efficiency)– Info management (quicker decision making)– Reduced complexity– Rapid innovation– ……

• Result: Businesses accumulate “Digital Assets”

• What are these digital assets?– How to manage these digital assets?

3@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

Digital Assets

• Digital tools & Data– Technology implemented & info gathered

• Almost common across businesses

• Digital biz processes– Enabled by easy access to tools & data

• Workflows may be different even within verticals

• Digital channels– To connect to stakeholders (employees, investors,

partners and customers)• Evolving constantly

4@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

Biz needs to manage this asset• Can we use ICT to manage it?

– Yes

• That brings us to an interesting ‘recursive’ situation– To manage digital asset we accumulate more digital asset

ICTICTICTICT ManagementManagementManagementManagement

5@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

Design for Management (DfM)

• So we should create digital assets from the very beginning in such a way as that their management becomes easy and handy with ICT tools– This is DfM

• It’s a TOP-DOWN approach

• DfM is the second crux of this course– We shall try to view every article from within this

framework• Once you understand it, the “trash e-mails” from top

management will make sense to you– Or why your brilliant idea was shelved by your team leader

6@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

Design for Management• Top down

– Not bottom up

• Design thinking– http://hbr.org/2008/06/design-thinking/

• Ideal: Design effort 90%– Management effort 10%

• Real life: Design effort 30%– Management effort 70%

• Little scope for improvement aka innovation !!!

7@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

Design Thinking• “A methodology that imbues the full spectrum

of innovation activities with a human-centered design ethos” (HBR).

• “By this I mean that innovation is powered by a thorough understanding, through direct observation, of what people want and need in their lives and what they like or dislike about the way particular products are made, packaged, marketed, sold, and supported.”

8@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

Design for Management (DfM)

• “A methodology that imbues the full spectrum of innovation activities with a manager (human)-centered design ethos” (HBR).

• “Innovation is powered by a thorough understanding, through direct observation, of what managers (people) want and need in their companies (lives) and what they like or dislike about the way particular products and/or services are made, packaged, marketed, sold, and supported.• But if ICT centre is always thinking about how to

manage technology, when can it think about managers?

9@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

Example

• You – as an ICT manager – have been asked to advise a BU head for the specification of the smart phones to be purchased for its sales force.

• How would you go about it?

10@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

Design for Management

Business Strategy

EICT Strategy

Enterprise ICT Architecture

ICT Infrastructure

Business Goals

TOPDOWN

11@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

REFER TO ARTICLE 5 IN THE HANDOUT

Business–IT strategic alignment maturity: predicting the impact on transformational strategy and business results, Elby M. Nash, IEEE IT Professional, 2009.

12@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

ICT Investment & Productivity

• Higher levels of ICT investment improve business productivity, provided these investments are complemented with changes in operational strategy, management practices or work structures (e.g., organization).

• Impact of these ‘complementary factors’ on business performance can be understood as harmonizationharmonization of a firm’s business and ICT goals and objectives, i.e., ‘strategic alignment’.

13@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

Biz.-ICT SA MM

14@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

Alignment does matter• Strategic alignment maturity model (SAMM)

posits that higher overall levels of strategic alignment maturity better enable business transformation.

• A firm having a higher level of strategic alignment maturity should demonstrate better overall economic performance than its industry peers.

• Refer to Fig 1 of the article– Did you feel it in your previous organization?

15@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

Model & Criteria

16@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

Symptoms of Poor Alignment• Poor understanding and rapport between ICT

management and business• Ongoing conflicts between business and ICT• Continual questions about the value of ICT• Lack of vision and strategy (business + ICT)• No seat at the business table for ICT• Projects not used, canceled or late• Declining business productivity

17@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

Findings to note• Firm-level sales and level of Strategic

Alignment maturity – shown to be positively correlated, – although additional research needs to be done to

clarify the direction of causality

• “Alignment gap” and firm-level “productivity and profitability” – shown to be positively correlated.

18@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

EICT Strategy: How and What

Implementation

19@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

EICT Strategy• High level decisions about the strategic role of

EICT in the business – How do the business principles translate to ICT

principles that guide ICT decision making?– What is the role of ICT in the business?– What are desirable ICT behaviours?– How will ICT be funded?

• EICT Strategies are to be decided by CIO along with other CXOs/BU leaders

Ref: Davenport, Hammer & Metsisto 1989, Broadbent & Weill 1997

20@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

Features• EICT vision and strategy must be in line with

the company’s business vision and strategy– Alignment

• So EICT strategy must be derived from business strategy by senior executives and top ICT management– Top-down

• The role of CIO and his team is most crucial to ensure the above alignment– ICT leadership

21@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

EICT Strategy Operationalization

• Three major domains:– EICT Architecture

• Enterprise-wide Architectural Control

– ICT Infrastructure• Technology to be Implemented

– ICT Investment• Project Prioritization and Funding

• Once architecture and infrastructure are planned, the budget must be approved by CEO

[Ref: MIT Sloan CISR Research]

22@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

Definitions• EICT architecture

– At the enterprise level, it is the organizing logic for applications, data, infrastructure technologies, as captured in a set of policies and technical choices, intended to enable the firm’s business strategy

• ICT infrastructure– It is the collection of technology platforms, off-

the-shelf or customized, deployed according to the architecture defined at the higher level to best suit the processes intended to run on them

23@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

Responsibility

CEO

CIO

CIO’s Office

Business Strategy

EICT Strategy

Enterprise ICT Architecture

ICT Infrastructure

24@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

This is not a one-time taskChange in Biz.

Strategy

New technologies

Business Strategy

EICT Strategy

Enterprise ICT Architecture

ICT Infrastructure

25@ 2015, D. Saha, Indian Institute of Management Calcutta (IIM-C), India

What decides EICT strategy?

EICT Strategy

Business Strategy

State-of-art ICT

Purview of this course