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An approach for IT strategy execution and measurement
Technology evolution… leading to evolution of IT organization
Strategic business enabling function Distributed process automation function Traditional EDP backend function
Tactical 1980s 1990s 2000s
Strengthen project management to de-risk IT implementation and improve schedule.Key themes for excellence in IT management 1. Assess key business processes proactively and identify areas to leverage IT for business excellence . productivity and quality 3. Align IT initiatives with business strategy and measure the business value generated by IT programs 2. Integrate key IT operational and sustenance processes to improve service levels across the organization 4.
Integrated Approach To Management Excellence IT Balanced Scorecard Aligning IT strategy for execution BSC Software Process Improvement Strengthening engineering processes CMM IT Management Excellence Operations Process Improvement Integrating operational processes Six Sigma Business Process Assessment Anticipating areas for improvement BNQA People Practices .
Execution of strategies continues to be a challenge… Only 5% of the team understands strategy Only 25% managers have incentives linked to strategy Less than 10% Of strategies effectively formulated are effectively executed 85% of executive teams spend < 1 hr / month discussing strategy 60% organizations don’t link resource allocation to strategy Source: Fortune Magazine Survey .
… and it helps to have an approach to… Communicate IT Objectives Align Metrics And Targets IT Objectives Metrics And Targets IT Initiatives Review Metrics / Progress Focus Budgets & Initiatives .
A hands-on approach… Step 1 Assimilate Business Objectives Step 3 Identify IT Strategic Objectives Step 4 Select IT Metrics / Targets Step 5 Align Day-to-day Operations Step 2 Analyze Emerging Role Of IT Team .
Step-1 Analyze and assimilate business strategy… Value Selection Target Customers Customer Benefits Customer Costs Competitive Value Value Management Forecast Plan Design Deliver Manage Value Enhancement Brand / Image Customer Contact Customer Relationship How To… Review Strategy Collect Information Structured Interviews Business Strategy Map Step 1 Business Step 2 Role Of IT Step 3 IT Objectives Step 4 IT Metrics Step 5 Institutionalize .
providing foundation for intra./ inter-company workings. balancing demand for services and supply of resources Architecture Development Business Enhancement Developing blueprint for IT technical design. fusing business and IT strategy. setting standards / policies Supporting business change initiatives by analyzing/designing business processes. developing and evaluating applications largely for supporting business-change initiatives Gartner Research 2002 Role Analysis Structured Interviews Facilitated Workshop Emerging IT Roles Step 1 Business Step 2 Role Of IT Step 3 IT Objectives Step 4 IT Metrics Step 5 Institutionalize . managing projects / relationships with users Technology Exploitation Vendor Management How To… Designing.Step-2 Consolidate emerging roles of the IT organization… Strategy Leadership Creating the IT vision. developing and evaluating applications largely for supporting business-change initiatives Designing.
Step-3 Identify key IT strategic objectives… Business Objective 1 Business Objective 2 Business Objective 3 Business Objective 4 Business Objective n Strategy Leadership Architecture Development Business Enhancement Technology Exploitation Vendor Management How To… Straw Man Design IT Process Analysis Facilitated Workshop IT Strategy Map Step 1 Business Step 2 Role Of IT Step 3 IT Objectives Step 4 IT Metrics Step 5 Institutionalize .
Review capabilities to achieve the key objectives… Strategic IT Plan Technology Plan Investment Plan Plan Architecture Plan Internal Relationship Partnership Plan Identify Solution Build Infrastructure Audit Systems Build Develop Solution Internal Procedures Change Management Implementation Plan Manage Partners System Security Implement Implement Solution Advise / Train Users System Audits Define Service Levels Manage Configuration Manage Facilities Sustain Manage Performance Manage Data Manage Complaints Step 1 Business Step 2 Role Of IT Step 3 IT Objectives Step 4 IT Metrics Step 5 Institutionalize .
Step-4 Select IT strategic measures and targets… IT Strategic Objectives Outcome Measures Common Measures Across The Industry Lagging Measures To Gauge Outcomes Of Strategy Change Drivers Strategy Dependent Unique Measures Leading Measures To Understand processes And Activities How To… Draft Scorecard Facilitated Workshop Feasibility Analysis IT Scorecard Step 1 Business Step 2 Role Of IT Step 3 IT Objectives Step 4 IT Metrics Step 5 Institutionalize .
Performance Measure Unit Of Responsibility Measure Current Level 2001-2002 Target 2002-2003 2002-2003 Actual Performance Qtr 1 Qtr 2 Qtr 3 Qtr 4 Visual Indicator A Contribute To Productivity 1 IT Cost as % Of Revenue 2 # of key processes integrated through systems 3 Weighted adherence to productivity objectives B Contribute To Growth 1 % Leads generated through IT initiatives 2 Adequacy of data to support client relationship 3 % Projects with achieving cycle time reduction C Strengthen IT Capability 1 % footprint on obsolete technology 2 Delivered defect density 3 New / existing system adoption rate 4 % Compliance to implementation plan 5 % Applications adhering to performance standards 6 Weighted SLA adherence D Develop Competence 1 % Employees with training plan serviced 2 # of domain experts developed 3 # of employees PMI certified 4 % Employees with defined career paths 5 % Projects with knowledge assets created % # # % % Greg Timothy Greg Timothy Frank % D/fp Ratio % % % Frank Venessa Frank Venessa Baron Pfister % Ratio % Baron Judith Ramon % # % Pfister Ramon Pfister Step 1 Business Step 2 Role Of IT Step 3 IT Objectives Step 4 IT Metrics Step 5 Institutionalize .… to form the IT Balanced Scorecard Sr.
Step-5 Put the scorecard to day-to-day use… Traditional Review Meeting Strategy Review Meeting Strategic Issues (10%) Provide input to strategic issues currently under discussion Dialogue about performance Explain anomalies Suggest Solutions Identify Issues Identify strategic issues Review performance data Implications (30%) Performance (10%) Strategic Issues (60%) Implications (40%) Performance (50%) How To… Setup Reviews Rationalize Initiatives Activate IT Metrics Ongoing Reviews Step 1 Business Step 2 Role Of IT Step 3 IT Objectives Step 4 IT Metrics Step 5 Institutionalize .
details and employee cliams New Project Conventional New Project Conventional New Project Conventional HR HR HR Integrated Training System Assist people in identifying / nominating training needs.Phase 2 Employee temporary relocation system Automation of monthly grants. Group HR Project Desc Business Benefit Project Type IC1 IC2 IC3 IC4 IB1 IB2 IB3 IB4 Automation of confirmation Remove manual internvention in New Project process confirmation proces. hence reduce Conventional errors and time lags. overseas salaries & perdiem F&A F&A Employee cost allocations F&A Loans system Work-flow enabled system for requesting / processing of loans Step 1 Business Step 2 Role Of IT Step 3 IT Objectives Step 4 IT Metrics Step 5 Institutionalize . ESOP Management System . Linkage between the Single system for allocation of domestic. events. reports automation of relocation . Enhanced admin functionality Automation of separation process HR Control on seperation / clearance New Project & info collection at source Conventional New Project Conventional New Project Conventional New Project Conventional New Project Conventional HR Technology Aided Learning Online Remote Learning for all employees Attendance system Phase out the Paradox based system which is not geared up to handle the ever increasing emp strength.… rationalize the portfolio of initiatives Func.
…and setup an integrated reporting system Set Alerts on key metrics to monitor even when not logged in to Dashboard Standard and Query on Personalized Metrics data Reports for custom views Dashboard views that address all concerns Metrics display along with legend and navigation BU or its component level summary views that are selected for specific attention and displayed in the Watch list Indication appears when Alerts set by you are triggered Drill down from current view to its component Indicates presence of Alert on this Metric Step 1 Business Step 2 Role Of IT Step 3 IT Objectives Step 4 IT Metrics Step 5 Institutionalize .
Key benefits of using this approach • Facilitates shared understanding of business and IT strategy • Aligns goals and objectives of those involved in IT management • Introduces a metrics based culture within the IT organization • Facilitates better understanding of deviations and the reasons • Helps identify initiatives to improve capability and competence .
they use this approach to better manage the change • • • • • 1st step in Balanced Scorecard is to choose metrics and develop an application / setup a tool • 1st step is alignment of strategy and metrics. use them as working basis and iterate their strategies CIOs use this approach to guide and manage the performance of the IT team CIOs know strategies change.Common Perception Vs Our Experience Common Perception • This approach is of no use if the corporate does not first articulate its strategy We should not take this up if there is no corporate-wide BSC initiative Such efforts become obsolete when strategies change – so why bother • Our Experience CIOs make key assumptions. automation is taken up subsequently for deployment .
Balanced Scorecard Approach Assess Accelerate Assure • Readiness to initiate a Balanced Scorecard • Effectiveness of current Balanced Scorecards • Development of new Balanced Scorecard • Re-alignment based on major shift in strategy • Reviews / audits to support implementation • Planning / managing IT enabling of Scorecards Experience In Implementing And Using Balanced Scorecard .
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