Ivi external briefing_pack_v.aim

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Managing IT for Business ValueIntroduction to the Innovation Value Institute

2IVI-External briefing pack.ppt Copyright © 2010 Innovation Value Institute

Introduction

Who are we?• The innovation Value Institute – a consortium of leading players interested in

improving the business value that IT delivers

What are we developing?• Developing an industry standard for managing IT for business value, the IT capability

Maturity Framework (IT-CMF)• The framework covers 33 critical processes to run an IT organisations, built on

foundational learning in IT transformation at Intel, refined by academic and industry input

• Includes maturity curves, assessment tools, practices, outcomes and metrics to increase maturity level, case studies and illustrations of best practices


IT value management is a key topic for CIOs

... with a tangible opportunity

Budget flexibility coupled with strategic IT alignment leads to 50% greater IT payoffs2

Improving management practices alongside IT investment drives 20% higher IT yields3

Growing evidence of an important gap in the IT industry

Important issue for CIOs ...

71

62

52

45

40

0 20 40 60 80 100

CEO/CFO demanding better waysto demonstrate value

Find it difficult to calculate ROI

Executives "skeptical" of ROI from IT

Metrics don't adequately capturebusiness value

Do not measure business valuefrom IT investments

Source: Industry surveys1. CIO Insight Survey 2. CRTO research 3. LSE, IVI Survey

% of respondents1


CIOs lack a framework for describing business contribution

Financial value delivered

Cash flow ROI

ROCE ROE NPV

EVA

Operational value of IT

Customer

Employee Partner

Supplier

Societal

Managerial

Business valueIT process frameworks

• How to deploy service oriented architecture?• How to implement best in class security?• How to manage a data center?• How to deploy virtualization?

• What is the average return from your IT investments?

• What is the cumulative return from your IT investments?

?


IVI is focused on realizing more business value from IT

"IVI's vision is to transform organizations to consistently realise IT value from IT investment and practices...

... through researching, developing and disseminating an empirically proven and industry validated IT best practice model.

IVI's mission is to develop a unifying approach for managing the delivery (or realisation) of Information Technology investments ...

... and to validate that these approaches have a broad applicability across different industriesand contexts."

-Innovation Value Institute

Provide new perspectives on value-based IT management

Develop an end-to-end view of IT processes and capabilities

Develop a roadmap to help CIOs select strategies andimprove capabilities

Collect best practice case studies across industries,

understand key value drivers

Consortium of leading industry, consulting, not-for-profit and academic organisations


IVI formed to create integrating framework – creating new approaches, leveraging existing standards and addressing "value" gap

Steering patrons

IVI has 55+ members from leading industry, consulting,not-for-profit and academic organisations.

www.ivi.ie

http://www.pmi-ireland.org/


Initial focus - developing Capability Maturity Framework

What• Develop an integrating framework that enables CIOs and business management

to deliver more value from IT investments and practices

Why• To assess current practices• To understand opportunity and value of increasing maturity• To bridge structural gaps in other assessment frameworks

How

• Working groups with input from consortium members, academics and company experience

• Reviewing material with Technical Committee for Consortium• Testing and validating findings over time

When and where

• V1.0 available and ready for assessments• Output initially for Consortium members for testing, then to wider audience


IT-CMF offers concise management roadmapto optimize business value from IT investment

IT Capability Maturity Framework (IT-CMF) is based on five maturity levels to assess and optimize value of IT

• Value-centric IT management• State-of-the-art practices and

outcomes

• Benefits from IT investments quantified and communicated

• Practices and outcomes well above industry average

• IT/business interaction forma-lized for all critical processes

• Transparent investment decisions

• Delivering basic IT services• Some IT/business interactions

formalized

• No formal processes• Ad-hoc management of IT

Ma

turity

Low

High

Initial

Basic

Intermediate

Advanced

Optimising


IT-CMF is based on previous groundworkby Intel

Managing IT like a business

Managing the IT capability

Managingthe

IT budget

Managing IT for

business value

IT-CMF Macro Processes

The IT-CMF built on proven foundation

• Based on a framework by Intel

– Initially developed as part of the Intel’s IT transformation

– Reviewed and tested with 200+ IT Executives

• ... structured into 4 macro-processes for value-oriented IT management

– Subdivided into 32 core processes

– Providing broad coverage for all aspects of managing IT


Design Pattern – Generically Reusable Solution

High-level impact of maturity is detailed by each of the 32 individual critical processes

Value Centre5

Investment Centre4

Sustainable Economic Model

Corporate Core Competency

Optimised Value

Expanded Funding Options

Strategic Business Partner

Options and Portfolio

Management

3 Service CentreSystemic Cost

ReductionTechnology

ExpertROI & Business

Case

2 Cost CentrePredictable

PerformanceTechnology

SupplierTCO

1

Managing IT like a business

Managing theIT budget

Managing IT for business value

Managing theIT capability

BeginningInitial

Basic

Intermediate

Advanced

Optimising


IT-CMF details 4 Macro Processes to manage IT organizations for business value

CP Body of Knowledge

Criti

cal P

roce

ssDefinition

Maturity

CBBs

Levels

CP Performance Metrics

POMs

‘how to’ fundamentals

Assessment Questions

Case Studies

Illustrative examples

Training

Proxy for CP effectiveness & value – as maturity improves

Policy directives

A collection of policies, templates, standards, tools, and proven artefacts for maturity advancement


Standardised materials provided for value-centric assessments of each critical process

Standard set of materials provided for each of the 32 critical processes

Value of maturity$

Evidence and anecdotes of value delivered to companies who increased maturity

Business value

perspective

Best practices and case studies of how companies improved maturity

Practices

Level-by-level assessment questions to determine a company’s strengths and weaknesses

AssessmentTool

Five-level maturity curve framework and supporting evidence

Maturity Curve1

2

3

4

5

Collection of whitepapers, academic journals, books, and consortium-submitted content

ReferenceMaterials

Proposed industry standard definition for a set of capabilities

Process Definition“ ”

Assessments can be run efficiently and with low overhead through use of standardized tools and documents


Content developed using robust process Broad Input, validation, and QA

Initial background

research

WorkingGroup

Adjust content,

develop key insights

Final approval

Validate & Test

Develop prose

1 2 3

4

5 6

Technical review / QA


Objective maturity assessment of IT management practices, identifying both gaps and potential over investments

Managing IT like a businessManaging theIT capability

Managing IT for business

value

Managing theIT budget

1

2

3

4

5

ITG BPM BP SP DSM CFP RM AA ODP SRC IM SAI FF BGM PPP BOP EAM UTMPAM ICM RAM RDE SD SRPTIM UED PPM SUM CAM TCO BAR PM

Risk of competitive disadvantage due to below below-average maturity?

Can be applied across all IT functions or in a selected set of areas

Risk of competitive disadvantage due to over-investment?

Industry Average

The company’scurrent maturity level


Very positive reactions to the work so farFrom contributing organisations

IVI is working on topics of great importance to our business, where innovation in IT is a way of life, and managing value is critical to our success. ... I see materials here that I can bring back to my organisation immediately, today.

The industry is looking to the IVI industry consortium to lead the way in researching the challenges facing IT today. I have great faith in the value of this approach to the field of IS management.

This consortium is a great way to see how other industries have solved the problems we’re tackling. I think there is tremendous value in participating, and contributing to IVI.

I have no doubt of the value of IVI... when I look at the output we have produced. The return has been incredible compared to the investment I have made.

Valuable content

Industrythought

leadership

Learning &development

Return on investment


Benefits of IVI membership

Content

• Framework for assessing IT maturity• Leading practices, industry trends, "hot topics"• Assessment tools, "health check"• Better understanding of value/return from increasing maturity

Relationships• Extended network of leading organisations, with broad and deep experience in IT• Network of key opinion leaders, academics

Marketing • Be seen as contributing to leading industry thought

Staff development

• Platform to develop expertise, networks, lead content development• Approaches/tools for collaborative development


Using IT CMF and IVI

Oil and Gas comparisons

• Top 6 assessed. Dropped COBIT in favour of IT CMF• Chose 6 CP’s.• Critical message for some in results

Hospitals benchmarking

• Comparing IT effectiveness and impact at different levels of capability

CIO dept. skills management

• Accurate distribution of CIO -1 responsibilities. Supported with training and assessments

Specific assessment

focus

• Sanofi Aventis – Innovation management• P&G Enterprise architecture management


Key current focus - objectives

Content• Continue to build content for our members• Add case studies and use cases.• Add industry benchmarking and general applications

Build a ‘Knowledge Exchange’

• Support self service by members talouring content to need

Marketing • Build the awareness needed to increase membership and IT CMF adoption

Adoption Journey

• Support our member’s as they understand how to gradually use and embed IT CMF

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IVI Confidential

ICT Professional Services from IVI

Organisational serviceFrom IVI

IVI

IVI supporting the organisation and the Individual

The objective is to provide training and education to ICT professionals, utilizing the IVI knowledge-base, and provide a University recognised accreditation

IVI provide a range of services to support IT CMF successful adoption

IVI provide a range of support services and certification for ICT management professionals

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IVI Confidential

IVI Knowledge base

The accumulation of knowledge on IT for business value:-• IT CMF• Multiple assessment

database• Industry specific• BVD’s• Case studies• Other frameworks

connected in.

Education

Innovation Value Institute

The core objective is the continued accumulation of this knowledge base

Assessment and analysis

Business Collaboration

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IVI Confidential

The IVI Demand Services

Possibilities:-

• Assessing ICT overall Capability and planning for improvement• Leveraging the ‘Cloud transition’ effectively• Optimizing Enterprise Architecture for Business value• Maximizing Innovation Management within ICT and it’s contribution to the overall

business• Leveraging mobility and Social media technology• Optimum digitalization of the organisation’s processes for consistency and

productivity• Managing the effective use of ITIL across the ICT organisation• Structuring and measuring ICT for maximum business alignment and business value• Managing the effective use of CMMI across the ICT organisation• Assessing for, and planning optimum Service Management• Assessing for, and planning optimum Shared Services Center management• Collaborating with, and learning from your industry vertical• Data Centre optimization

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Working draft – For discussion

For each IVI service:-

IVI develop and track the following:-

• Develop a framework for each and track progression – responsibility –• Content maturity – ‘hard core’, POM’s POM’s+, etc. (this is building the CP’s up

effectively• Marketing material (this is where the ‘collection and inventory’ of existing material is

important). Build from the web site video through case studies, and conferences, etc• Build education through the 5 levels and build lo touch delivery• Detailed and validating case studies, and use cases• Conferences and out reach effort• COP’s as appropriate coordinated through IVI• Documentation available, (digital mostly, but chargeable)• Delivery capability – lo touch through hi touch, exploiting partners and direct.• All releases through TC (the appropriate version)


Backup slides


Glossary of acronyms

ABR = Accelerated Background Research

CIO = Chief Information Officer

CMM = (SEI) Capability Maturity Model

EVA = Economic Value added

IT-CMF = Information Technology-Capability Maturity Framework

IVI = Innovation Value Institute

IVIC = Innovation Value Institute Consortium

NPV = Net Present Value

NUI = National University of Ireland

ROCE = Return on Capital Employed

ROE = Return on Equity

ROI = Return On Investment

SEI = Software Engineering Institute of Carnegie Mellon University

TCO = Total Cost of Ownership

WG = Working Group

Documents

Ivi external briefing_pack_v.aim