Download - IT Strategy Best Practice - Hazelband
IT Strategy Development Best Practice
Agenda
• Introduction
• Stage Level Overview
• Phase Level and Work Products Overview
• Relationship between Competencies and Methodology
• Sockets Introduction
• Strategic Enterprise Architecture
Our approach to IT Strategy
. . . providing insight into IT capabilitiesand their impact on the business
. . . constructing implementable IT architectures
. . . managing the investments to
the agreed strategy and architecture in a dynamic environment
Our IT Strategy approach drives business change by . . .
The IT Strategy Method provides a framework for accessing our Knowledge-base
• This method, and all of the firm’s methods, will be supported by Ascendant — the firmwide repository of methods
• Our Work Breakdown Structure
– Stage
– Phase
– Task
– Step
• Stages and phases are specific to route maps
• Tasks are shared by different methods
• The term “deliverable” is not emphasized in the methods repository due to the contractual implications of the term
• Work Products are the packaged findings that many older methods referred to as “deliverables”
• Forms are the blank templates that assist practitioners in rapidly creating work products
• Analysis Techniques are implied between forms and work products, and are also supported by reference materials
The conceptual framework illustrates the relevant subject matterfor each of the three stages of the approach
• Electronic Commerce
• Network infrastructure
• Desktop infrastructure
• Groupware and workflow
• Internet/Intranet
• Data warehousing
• OLAP, Data Mining
• Client/server
• Platform management
• Supplier & customer EDI
• Strategic analysis and decision making
• Supply Chain Integration
• Lower process costs
• Improved process capabilities
• Competitive response
• Improved customer care
• Targeting
• Product innovation
• Quality Improvement
Technology OfferingsBusiness Issues & Strategies
The Insight stage addresses the dynamic between requirements “pull” and technology opportunity “push”
IT Strategists provide insight by representing the capabilitiesof technology at the corporate strategy roundtable
The Insight stage also identifies the IT value proposition and metrics
Markets
Products
IndustryValue Chain
FinancialStructure
Business Strategy Drivers of ITInvestment Decisions
Decisions and actions about
technology investments must
focus on:
• Alignment with businessstrategy
• Enabling strategyimplementation andvalue creation
• Key strategic areas forgrowth
Resultant ITInvestment Proposition
Hard DollarBusiness Benefits
Low Cost InfrastructureCreation
Established Non-FinancialMetrics and Indicators
Customer
RelationshipManagement
PaymentProcessing
(document management)
DepositProcessing
(transaction/investment/credit servicing)
LendingProcessing
(consumer/commercial.loans/loan collection)
WholesaleBanking
(international)
MortgageProcessing
(retail)
Management(accounting tools/
data access/analytical, decision support)
Branch automation
Customer Information System
Customer Service
Management
VoiceResponse
CertificationTracking
TaxReporting
Customer Reference
System(Card Mgmt.)
Customer Statement and
Relationship Pricing
Depository Services
In clearingServices
Statement Rendering and Mail
Processing
Micro-graphics
LockboxProcessing
Foreign & DomesticPayment Processing
Demand Deposit
Savings/Time
System
ItemReconciliation
AdvancedLoans
(consumer)
On-lineCollections
SystemsLimited
Real Estate- loan setup- payment processing
- delinquency mgmt- customer service- investor reporting& acctng.
- warehouse & commitment control
- escrow mgmt
AccountsPayable
InformationWarehouse
InformationManagement
Asset/Liability
Management
CommercialLoans
FinancialManagement
TreasuryServices
Asset/Liability
Management
InformationWarehouse
business rules
workflow routings
Customer Info. Products
Product Pricing CompetitorInfo.
Organization charts
Governance policies and procedures
Application ProgrammingLanguages/API
Applications/Solutions
Network/Communications
Database ManagementSystems
Presentation
Processor
Operating System
The Architecture stage establishes the fundamental design commitments that form the basis for the actual engineering of solutions across the enterprise
The Architectural Stages moves from concept to implementation level
• The Architecture stage represents the enterprise integration requirements, and translate those into engineering grade blueprints that accelerate implementation
• As the architecture phases progress, design commitments in each of the four quadrants are described in increasing levels of granularity and specificity
The Investment Stage makes the strategy happen
• The Investment Stage builds on the work completed in the previous stages and manages the strategy as it evolves:
– Project portfolio
– Investment case
– Risk management
– Benefits realisation
– Governance
– Change program
• It ensures IT initiatives are integrated with other business initiatives through the transformation agenda
ProgramOffice
ExecutiveManagement
Project 1
Project 2
Project 3
Project n
The Investment Stage is also where the Program Office is created
The Program Office acts as the “hub” for the individual projects and their
activities and provides coordination and support to the projects to ensure
the success of, not only the individual projects, but of the overall
program.
Each of the stages of the conceptual framework are also broken down on an activity basis into the phases of the method
Insight Stage
What is the business strategy?
How does IT support the current strategy?
How can current IT support process improvements?
INSIGHT:What IT investment opportunities will enable new processes and strategic opportunities?
STAGE PHASE QUESTIONS POSED
• IT enablement of Strategy hinges on Process — IT enables the Processes — Processes operationalize the Strategy
Architecture Stage
• The architecture development process begins with the conceptual business systems architecture, but results in client specific implementable architectures
What are the enterprise interoperability requirements?
How does interoperability weigh against functionality requirements?
How will interoperability requirements be met?
How will the organization feasibly migrate from the current state?
STAGE PHASE QUESTIONS POSED
Investment Stage
• “No plan survives first contact with the enemy” — We must manage our IT investments to the established strategy and architecture in a dynamic environment
How does the rest of the organization view the IT enabled changes?
How will the issues in one project impact other projects and the overall change program?
How should IT investment be managed in volatile business and technical environment?
Is the IT Strategy still valid at major checkpoints?
STAGE PHASE QUESTIONS POSED
Putting it all together
Parameters:
• No IT organization can support a business strategy without hearing it
• Minimum threshold for making business strategy explicit
• Objectives of the organization
• Means of achieving them
• Metrics of success
Deliverable:
• Actionable Strategy Statement
Our Tools and Inputs:
• Enterprise Organization Model
• Value Chain Analysis
• Porter’s “Five Forces” Model
• SWOT
• Cycle Time
• Era Analysis
• Core Processes
• KPIs
• CSFs
• Culture Assessment
• Seven “S”
• Systems Dynamics
• Balanced Scorecard
• VBM, Valuebuilder
Understand Strategy and Positioning
Parameters:
• Document current state
• Identify performance improvement opportunities
• Evaluate ability to support and enable change
Deliverable:
• Current IT Assessment
Suggested Tools and Inputs :
• IT spend by industry benchmarks
• Applications profiles and inventory
• Activity analysis
• IT PI maturity framework
• Strategic Alignment Model
Understand Current IT Environment
Parameters:
Deliverable
• Strategic Options
Suggested Tools and Inputs:
• Scenario Envisioning
• The Insight Diagnostic
• Process Benchmarks
• Best Practices
• Industry Specific Technology Applications
• Strategic Process Framework/Capability Matrix
• Product Architecture and Infrastructure Architecture Convergence Analysis
• Technology Horizon/Forecasts
• Business Rules
• Process Treatments
Develop Process Insight
Understandin
g of Business
Strategy
Understandin
g of Business
Strategy
Enablement
Knowledge
Base
Enablement
Knowledge
Base
+ = INSIGHT into Process
Opportunities
INSIGHT into Process
Opportunities
Parameters:
• Covers the full scope of the enterprise as defined for the engagement
• Maps application and automation boundaries to the client’s business systems
• Represents client specific processing needs
Deliverable:
• Conceptual Architectural
Suggested Tools and Inputs:
• Industry Standard Process Models
• Various Process modeling techniques
• Business Systems Architecture
• Affinity Analysis
• Product Specific functional mappings
• Business Priorities
• Current or Product Coverage
Construct Conceptual Architecture
Parameters:
• Examples of “Cornerstone” design commitments
• ERP vs. Best of Breed
• Middleware Architecture
• Legacy Renewal
• Component Architecture
Deliverable:
• Policies and Principles
• Design Commitments
Suggested Tools and Inputs:
• Scenario Envisioning
• Implementation Cost Estimation Techniques
• Enterprise Application Selection
• Skills/Availability Assessment
• Current IT Assessment
• Sourcing
Commit to Strategic Solutions
Parameters:
• Maps physical, product specific designs to the client specific enterprise interoperability requirements
–Data
–Application
–Technology
–Organization
Deliverable:
• Implementation Architecture
• Transition Strategy
Suggested Tools and Inputs:
• Implementation Planning
• Product specific architectures
• Sourcing
Construct Implementation Architectures
Parameters:
• Deliverable documents the strategy
• Provides basis for gaining and maintaining commitment to investment
• Includes:
–Project Portfolio
– Investment case
–Responsibilities
Deliverable:
• Systems Investment Prospectus
Suggested Tools and Inputs:
• Transition Strategy
• Portfolio planning
• Transformation agenda
• Project charter
• Strategic grid
• ROI, DCF, NPV
• Real options
• Value analysis
• Risk management
• Benefits realisation
• Performance measures
• Balanced scorecard
Publish Systems Investment Prospectus
Parameters:
• Puts in place the change management program that launches the strategy
• Addresses the change issues inherent in any major IT investment
• Managing the people changes ensures the technical benefits and increasing wider people benefits
Deliverable
• Change Management Program
Suggested Tools and Inputs:
• Change Vision
• Culture Change
• Communications Planning
• Performance Measures
• Cascading Levels of Commitment
• Organisational design
• Leadership
• Coaching and training
Establish a Change Management Program
Parameters:
• Program performance must be measured to ensure goals are achieved
• The program office is a clearinghouse for project interdependence issues
• No plan is perfect; a change program must be managed in order to keep it aligned with the established goals, strategy, and architecture
• The program recognises that the strategy evoives over time and requires active management
Deliverable:
• Program Management Office
Suggested Tools and Inputs :
• Consistent project management methodology
• Goal directed project management
• Cross-functional staffing and participation
• Risk management
• Issues resolution and escalation process
• Benefits realisation
• Balanced scorecard
Establish and Operate Program Office
The Competencies in the Context of Methodology
COMPETENCIES
METHODOLOGY
How the IT Strategy methodology and competencies are interrelated
• In conducting an IT Strategy, according to the methodology, the work plan likely calls for the project to start in the stage called “Insight”.
• Within the “Insight” stage, the first phase is “Understand Strategy and Positioning”.
• The “Understand Strategy and Positioning” phase, requires a practitioner to demonstrate several competencies
How the IT Strategy methodology and competencies are interrelated
Parameters:
• No IT organization can support a business strategy without hearing it
• Minimum threshold for making business strategy explicit
• Objectives of the organization
• Means of achieving them
• Metrics of success
Suggested Tools and Inputs:
• Enterprise Organization Model
• Porter’s “Five Forces” Model
• SWOT
• Cycle Time
• Era Analysis
• Core Processes
• KPIs
• CSFs
• Culture Assessment
• Seven “S”
• Systems Dynamics
• Balanced Scorecard
• VBM
During the phase “Understand Strategy and Positioning” core competencies would be employed
• A practitioner would use Scenario Planning competencies, such as Porter’s Five Forces during the phase to understand business strategy options
• A practitioner would use Value Analysis competencies, such as the Value Chain during this phase to understand how value is created
How the IT Strategy methodology and competencies are interrelated
The competencies of Scenario Planning and Value Analysis are shown as related
to the “Insight” component of the Methodology
ITS must ensure integration with other ITS core competencies andconsistency with broader SC & IT competencies
CEO
CxO
CIO
Design
Build
Operate
Ind
us
try
O&CS
ITS
SCC&OS
TS
ITM (PI)
What other competencies are needed?
Method
Example IT Themes
Electronic Commerce
Customer Relationship Management
Supply Chain Management
Internet/intranet
ERP IT Achitectureh
Industry Specific IT Strategy
Generic Service Offerings
Insight Architecture Investment
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. . .
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• To support this distinction, the method has been designed to leverage “packets” of market-proposition-specific content and knowledge bases
Hot Issues
• We know what the “HOT” issues are, and they all are addressed with IT Strategy approaches and techniques:
– Electronic Commerce/ E-Business
– Customer Relationship Management
– Supply Chain Management
– Industry Specific IT Strategy
– Mergers and Acquisitions: Integrating Legacy Technology Asset Bases
• Insight
– How can issue X advance my current business strategy?
– How can issue X technology allow me to expand my strategic options?
– Can my current IT resources pull off implementing issue X technology?
• Architecture
– How does issue X drive or utilize enterprise-wide information sharing?
– What impact will issue X have on my enterprise IT architecture?
– How should I implement issue X technologies?
• Investment
– How do I mobilize support for an issue X initiative?
– How do I learn from my mistakes and keep the issue X initiative on track?
Sockets Approach
• Without the sockets approach, we will end up with an unmanageable portfolio of methods and a limited ability to leverage our knowledge base
• The Alternative
– The Electronic Commerce/ E-Business Method
– The Customer Relationship Management IT Planning Method
– The Supply Chain Management IT Planning Method
– Industry Specific IT Strategy
• Consumer Industrial Products Method
• Telecommunications Method
– The method for Integrating Legacy Technology Asset Bases in mergers and Acquisitions
Sockets Approach
• The threshold of forms and work products necessary to construct a viable market-proposition-specific knowledge base — a socket — is relatively low
• Insight
– Marketing Grade presentation of the issues
– Assessment checklist
– Identified list of issues and opportunities
• Architecture
– Standard Process Models
– Standard BSA
– Architectural Scenario Options, i.e. Market Intelligent Framework for CRM
– Solution Architectures Prototypes
• Investment
– Typical value proposition
– Implementation issues
SEA is the blueprint for building an EWS that optimizes businessperformance
SEA performs four critical functions:
• Helps senior executives truly understand the implications of an EWS
• Fosters communication channels between the executive office and the EWS team
• Highlights and prioritizes where integration and commonality of business processes and information are most valuable
• Creates an ongoing framework for decision-making through the EWS project
Organisational
capabilities
Strategy
Technology
Processes
A three-phased approach to SEA ensures understanding of the strategic context and translates it to operational implications
Plan SEA
Project
Understand Strategic Context
and Direction
Scope the project and plan for success
Gain an understanding of the company’s strategy, current capabilities and objectives for the EWS program to highlight risks and potential areas of incongruence
Translate Strategic Direction into Operational
Implications
Develop a blueprint for how the organization and information technology will best support the business strategy and minimize cost and risk
Plan SEAProject
Understand Strategic Context Translate Strategic Directioninto Its Operational Implications
Develop and refine high-level business case
Optimize the strategic enterprise architecture
FORMALAPPROVAL
CHECKPOINT
Demonstrate EWS capabilities and impacts to executives
Understand strategy
and operational
opportunities
Understand businesscase for EWS
Understand the capabilitiesof the enterprise
Plan SEA
project
Identify and resolvecongruency issues
Financial services
Ordermanagement
Productionplanning
Customer
Ordermanagement
Productionplanning
Productionplanning
U.S.
DistribuEurope
SalesAsia
Marketing
Regions
Pro
ces
se
s
Product
s
Develop Organisational
Blueprint
Develop Preliminary
Application Architecture
Develop Enterprise
Process Model
Develop
Commonality Blueprint
FORMALAPPROVAL
CHECKPOINT
FORMALAPPROVAL
CHECKPOINT
and Direction
The SEA Approach
Strategic Enterprise Architecture is Advantech’s
approach to defining, aligning and optimising the power of EWS to achieve
strategic advantage