Creating A Necessary Dependence - IT Business Alignment

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

glenn.whitfield@newat.com Or

Tony Fink – Vice Presidenttony.fink@newat.com

502.412.6681

Want more information?

Thank You