6/5/10 SIM Advanced Practice Council

04/08/23 SIM Advanced Practice Council 1

The CIO’s Role in Enabling Organizational AgilityHighlights of SIM’s Advanced Practices

Council Research Findings

Madeline Weiss, APC Program DirectorNovember 13, 2006


Capturing Merger Benefits at CVS

"Instead of taking until mid-year 2005 to get all these stores converted and to start realizing benefits from our merchandising schemes and plans, we started doing it in mid-November. That's huge; that's what IS enables. It enables the business to step in. The next phase is introducing our merchandising mix, layout and strategy. It can be done because the infrastructure is complete."


Disruptive Innovation at Cemex

Customer

Customers have the flexibility to change orders

Cement trucks can deliver orders in a 20 minute window

Dynamic Synchronization of operations controls plant production, tracks vehicle movements, and automatically optimizes order fulfillment

Global Digital enables tracking of orders and payments

Transition from product selling (cement) to solution selling (ready-to-pour-concrete)


Researchers• Assessing Enterprise Architecture Outcomes (Jeanne Ross, Center for

Information Systems Research at MIT)

• Building Knowledge Assets from Light Knowledge with Wikis (Ann Majchrzak, University of Southern California, Christian Wagner, City University of Hong Kong)

• Deploying Far-Flung Teams: A Guidebook for Managers (Ann Majchrzak, University of Southern California, Arvind Malhotra, University of North Carolina)

• Driving Value from I/T: Investigating Senior Executives’ Perspectives (William Kettinger, University of South Carolina, Donald Marchand, IMD International)

• Strategic Agility (Anandhi Bharadwaj, Emory University, V. Sambamurthy, Michigan State University)


Thought Leaders• How Top Performing Firms Govern IT (Peter Weill, Center for

Information Systems Research at MIT)

• Riding the Waves: Emerging Technologies (John Henderson and N. Venkatraman, Boston University)


Strategic Agility


What is Agility?

• Anticipate or sense opportunities and threats

• Assemble needed assets and capabilities

• Judge risks and benefits of initiating action

• Initiate action rapidly

• Capture learning from experience and apply it to future actions


Strategic Agility Behaviors

Strategy Formulation

Action

Anticipate

Sense

LeadRespond

Entrepreneurial

AgilityA

dapt

ive

Agi

lity

Resiliency

Flexibility Opportunism

Disruption


Portfolio Approach to Agility

• Alignment

- Leverage current business model

- World class execution

• Adaptive agility

- Operational innovation

- Offensive and defensive competitive moves

• Entrepreneurial agility

- Strategic experiments

- Shaping business options


First, Get the Basics of Alignment Right

• World-class IT execution –a trusted service that functions well; delivering projects on time and within budget

• The right people – good problem solvers, listeners, learners, communicators, empathizers, leaders and managers; grounded in the business

• Excellent working relationships - with business partners across the enterprise

• Enterprise IT architecture and governance - that support the business model


Enhance Agility By

– Evolving enterprise IT architecture to a new stage

– Increasing use of collaboration tools and practices

– Enhancing culture of experimentation and learning


Enhance Agility By





Evolving Architecture


The organizing logic for a firm

’s core

business processes and IT capabilities

captured in a set of principles, policies and

technical choices to achieve the business

standardization and integration requirements

of the firm’s operating model.

Enterprise Architecture


Delta’s View of Enterprise Architecture

Source: Adapted from Delta Air Lines documents – used with permission

BusinessReflexes

Employee RelationshipManagement

Delta Nervous System

Electronic Events

Nine core databases

Location Maint.ScheduleFlight

Equip. Employee Aircraft Customer Ticket

Clean/ServiceAircraft

UnloadAircraft

Flight Arrival and

Closeout

MonitorFlight

Flight Departure

and Closeout

Load Aircraft

Prepare for Flight Departure

AllocateResources

BaggageInflightBoardingCrownRoom

TicketCounter

SkycapTravelAgent

ReservationsSkymilesSkylinks

Personalization Digital Relationships Loyalty Programs

Customer ExperienceCustomer Experience

Operational PipelineOperational Pipeline

Reservation

Systems

PDAs

ScannersLaptops

EVENTS

PROFILE

Desktops

Cell Phones

Video

Voice

Pagers Gate Readers Kiosks Hand

Helds


ING Direct’s View of Enterprise ArchitectureExternal ServicesExternal Services

ReportsLocal/HQ/Tax

ReportsLocal/HQ/Tax

ProspectFulfillment

ProspectFulfillment

StatementFulfillment

StatementFulfillment Payments

PaymentsChecks

Checks

ContactHistory

ContactHistory Product

Info

ProductInfo

CIFCIF CRM

Customer Relationship Services

Common Business ServicesCommon Business Services

ServicesServices

TransactionsTransactions

CustomersCustomers

ProductsProducts

BankingEngine

BankingEngine

CreditScore

MutualFunds Brokerage

Core Banking Services

Channel ServicesChannel Services

Gatewayserver

Gatewayserver

IVR/CTIserver

IVR/CTIserver

Imagingserver

Imagingserver

E-mailserver

E-mailserver

Webserver

Webserver

Source: Robertson, D. “ING Direct: The IT Challenge (B)”, 2003, IMD-3-1345. Used with permission

Services not implementedIn all countries

Customer Contact:Call Center, IVR, E-mail,

Direct mail

Self-Service:Internet, MinTel, ATM,

WAP, (WebTV)


Architecture Maturity Stages1-

Application Silo

2-

Standardized Technology

3-

Rationalized Data

4-

Modular

Strategic Objective

Local/ functional Optimization

IT efficiency Process optimization

Strategic choices

Platform and Technology

Multiple technologies and platforms

Technology standardization, fewer platforms

Data Transaction data in individual. applications

Data warehouses

Standardized data

Processes Local Local Standardized core processes

Customized or reusable modules


Evolving Management Practices

Business casesProject methodologyProgram managers Architects on

project teams IT Steering committee*Architecture exception process*Formal compliance process*Infrastructure renewalprocess*Centralized funding of enterprise applications*

Process owners*Enterprise architecture guiding principles*Business leadership of project teams*Senior executive oversight*

Enterprise architecture graphic*Post-implementation assessment*Technology research and adoption process*

Adapted from: Ross, J.W., “Creating a Strategic IT Architecture Competency: Learning in Stages,” MISQ Executive (2:1), March 2003, pp 31-43.

Asterisked items are statistically significantly related to architecture maturity—they are associated with greater value in later stages.

ApplicationSilo

StandardizedTechnology

RationalizedData

Modular

Architecture Maturity


Architecture Planning and Design•Senior business executive oversight•Enterprise architecture guiding principles•One-page high-level graphic•Enterprise level process owners•Enterprise architecture team

Architecture Planning and Design•Senior business executive oversight•Enterprise architecture guiding principles•One-page high-level graphic•Enterprise level process owners•Enterprise architecture team

Standard Technology Environment•Architects on project teams•Centralized standards team•Formal research and adoption process•Architecture exception process•Compliance process

Standard Technology Environment•Architects on project teams•Centralized standards team•Formal research and adoption process•Architecture exception process•Compliance process

IT Funding•Business cases for IT investment•Centralized funding of enterprise apps•Annual infrastructure renewal•IT steering Committee

IT Funding•Business cases for IT investment•Centralized funding of enterprise apps•Annual infrastructure renewal•IT steering Committee

Project Management•Standardized project methodology•Post-implementation assessment•IT program managers•Business leadership of project teams

Project Management•Standardized project methodology•Post-implementation assessment•IT program managers•Business leadership of project teams

Management practices within each practice set are statistically significantly correlated with each other.

Architecture Management Practices


ManagementPractices

Benefits ofArchitectureInitiatives

Architecture planning and

design practices

Implementation of standard technology

environment

IT funding practices

Project management

practices

Cut IT costs1 * *Reduce development time2 * *Reduce IT-related risks3 * *Increase business discipline4 * *Enhance strategic effectiveness5 * *

1Unit operating costs and application maintenance costs 4Data and process standardization2Development time and percentage of projects on-time, on-budget 5 Strategic effectiveness—measured as strategic outcomes3Business risk, security breaches, disaster tolerance and (operational excellence, customer intimacy, product innovation, and regulatory compliance strategic agility) weighted by their relative importance to each firm.

ALL management practices are significantly correlated with ALL benefits. Asterisks identify the management practices best predicting the benefit.

Management Practices Support Desired Outcomes


• Enterprise architecture enables and constrains business strategyEA defines the essence of a firm’s operating model by clarifying integration and standardization requirements. This creates a stable platform for responding to market changes.

• Maturity mattersDifferent stages support different operating models. Greater maturity is related to greater strategic value and profitability.

• It does not pay to skip stagesGenerating value from architecture investments is a learning process. Aggressive investment in IT architecture can be slow to generate a return.

• Learning is captured in management and governance practicesManagement requirements are more complex in later stages.

• There is no substitute for strong senior management leadershipFirms getting strategic business benefits from architecture have senior business leaders who are actively involved in architecture design, management, and implementation.

Key Findings on Enterprise Architecture


Enhance Agility by





Far-Flung Teams


Far-Flung Teams

• Teams spread across the globe, working collaboratively to innovate, with minimal or no face-to-face interaction

• Challenges– Communications– Culture– Time zones– Tasks


Far-Flung Teams Supporting Agility

• Testing new products in local markets and then formulating global marketing plan for products

• Designing thrust chamber for new rocket engine • Ensuring flawless email infrastructure on first

day of merged company operations• Integrating processes and procedures during

merger• Integrating information infrastructures during

merger


Deploying Far-Flung Teams Guidebook

• Creating Supportive Business Environment

• Supporting Knowledge Exchange

• Integrating Technology into the Way Work is Done



• Creating Supportive Business Environment– Deploy full-time team leaders– Appraise team members on contributions to the FFT– Reward team member contribution to enterprise’s

intellectual capital equal to task accomplishment– Discourage travel– Encourage use of collaborative technologies



• Supporting Knowledge Exchange– Pick the right people– Motivate members for intellectual growth– Foster understanding of differences to

leverage them– Establish collaboration norms and procedures – Hold regular audio conferences – Hold periodic face-to-face team tuning

meetings



• Integrating Technology into the Way Work is Done– Less than 30% of teams used any form of video

conferencing– Instead, FFTs used a combination of

• Instant messaging• Audio conferencing• Repository for content capture and display


Wikis An Emerging Collaborative Technology


Wikis and the Wiki Way

• Wiki– Technology to write and maintain web pages

collaboratively: fast, simple, immediate, where knowledge can be added or corrected by anyone

• Wiki Way– Norms for wiki design and collaborative wiki

content creation: open, organic, observable, convergent


Wikis Supporting Agility

• Two business groups from separate product lines combined to integrate the product lines

• Competition tracking (with RSS feeds)• Project management on fast-track project• Community of customers and staff• Collaboration with software vendor and another

user• Ethnic marketers collaborating across consumer

goods product lines


“The teleconference used to be 1 ½ hours, with much time wasted on bringing people up to speed on the week’s events. Now team members update themselves on the wiki, and that part of the teleconference takes 5 to 10 minutes. The rest of the teleconference is used for idea generation, being innovative, talking about problems and looking at solutions, which is what the meeting should be about…”

Diben JobanputraDresdner Kleinwort Wassersteing (wiki user since 1997)


Novell Internal Wiki


Windriver Intranet


IBM’s Customer Facing ETTK Wiki


“Wikis will become mainstream collaboration tools in at least 50% of companies by 2009.”

Gartner Group, June 2005


Creating Wiki Sustainability

1. Initiation – Steering People to the Wiki– Champion’s mantra: “It’s on the wiki”– Use viral marketing techniques

2. Promoting Active Participation– Drive content creation: “Please do this on the wiki”– Nudge participants for small contributions– Keep wiki simple (“wabi sabi” – the beauty of

imperfection)– Establish procedures for keeping content up-to-date– Provide good search tools


Creating Wiki Sustainability

3. Establishing Wiki Culture– Encourage people to change the work of others and

shape the wiki– Reward collaboration

4. Steady State– Champions with business knowledge, wiki

knowledge (technology and the wiki way), organizational influence are crucial

– Difference of opinion on amount of structure to impose


Checklist for Successful Wiki Initiation

• Does the wiki participation model fit with corporate culture (i.e., less hierarchical/ more collaborative, merit based)?

• Is there a wiki champion who understands wiki technology and the wiki way, and has the organizational knowledge and standing to engage others, and to shape the collective knowledge contributions?

• Does the organization (wiki team) have guidelines or a shared understanding to protect wiki based intellectual property?

• Has a wiki software been chosen that incorporates access rights management and task structuring?

• Does each wiki have someone who appears to be shaping the contributions?• Is the nature of the wiki supported task such that participants with personal, efficiency

driven interests can benefit from wiki participation?• Is the wiki team of sufficient size to ensure both reading and writing?• Do you have plans in place to phase in the wiki, steer participants to the wiki, create

active participation, create wiki culture, and maintain steady state?


Enhance Agility By





Enhancing Culture of Experimentation and Learning

“The ability to learn faster than your competitors may be the only sustainable competitive advantage.”

Arie de Geus (Royal

Dutch/Shell Group)


Enhance Your Culture of Experimentation and Learning

• Invite forecasters and futurists to speak at meetings• Set up strategic experiments and learn from them• Hold before and after action reviews• Encourage IT staff to take business positions and vice

versa• Give significant monetary awards for outstanding ideas

that are implemented; make the awards public• Use wikis to encourage knowledge capture and a culture

of commenting on others’ work


Enhance Your Culture of Experimentation and Learning

• Which of these elements of culture exist in your organization?– Staff encouraged to post wild, ambitious ideas on the

Intranet and solicit peer feedback.– Eight brainstorming sessions per year where the best

six ideas are presented. If an idea is vetted, the idea generator must attract a team to work on it.

– 70/20/10 rule. – Interior hallways in which staff can scribble random

thoughts on large whiteboards strung together.– Tech talks with well-known people invited to speak.– Executive message: “If you’re not failing enough,

you’re not trying hard enough.”


Enhance Agility By

– Evolving enterprise IT architecture – Increasing use of collaboration tools and

practices– Enhancing culture of experimentation and

learning – ???


SIM Advanced Practices Council

Pushing the Frontiers of IT Management

CIO Driven Research Relevant Thought Leadership Member Sharing Networking

Madeline Weiss, Program Director ([email protected])Blake Ives, Research Director ([email protected])


www.simnet.org

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Recent APC Research Projects• Unleashing the Power of Enterprise Value Nets• Network and Industry Transformation• Assessing IT Architecture Outcomes• How to Drive Value from IT – Senior Executives’ Perspectives• Identity Management for Business Value• Advanced Practices in IT Structure and Governance• Deploying Far-Flung Teams: A Guidebook for Managers• Transformation of the Enterprise through eBusiness• Future Architectures• Strategic Agility• Disruptive Technologies• Inter-organizational IT Change Management• Benefits and Risks of Open Source• Creating Knowledge Assets Using the “Wiki Way”