managing it as a business capstone 4596 april 2011

30
Managing IT as a Business Capstone 4596 April 2011

Upload: gervase-park

Post on 01-Jan-2016

220 views

Category:

Documents


1 download

TRANSCRIPT

Page 1: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

Capstone 4596

April 2011

Page 2: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

Managing Organizations in the 21st Century Organizations must become more agile,

transparent, and innovative. There is great pressure to increase

efficiencies and productivity to reduce cost while improving customer value.

Organizational visibility and governance is more important than ever.

Business as usual won’t cut it! The dramatic economic and global pressures have placed extreme pressure on organizations to accelerate these changes.

Page 3: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business Managing Organizations in the 21st Century

Common Organizational Challenges Do More with Less – Productivity, Cost Reduction Need for Innovation Revenue and Expense Pressures Transparency Be Smarter Increase Service Value Collaboration – Internally & Externally Variable Cost Structure

Page 4: Managing IT as a Business Capstone 4596 April 2011

Managing IT as Business Managing Organizations in the 21st Century

Common Organizational Requirements Visibility into the Organization Control – Metrics & Process to Manage Optimization – Continuous Improvement Transformational Change Leverage the Power of IT to Enable the Change

Page 5: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

The Importance of IT / Business Alignment Business execs have high expectations of

technology — but lower confidence that IT can deliver to these expectations. This is the new business technology alignment gap — a gap between expectations for technology and confidence in the IT organization. Members of the Forrester Leadership Boards CIO Group discussed this gap during recent meetings and shared their practices for closing it. Their strategy: Make sure IT is integrated with business planning — and make sure barriers between business and IT are minimized. Forrester, Dec 2008

Page 6: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

The Importance of IT / Business Alignment A recent article in Harvard Business Review

(“Radically Simple IT,” March 2008 Issue) advocates that Business and IT shouldn’t just be aligned, they should be “forged together.”

It is important that IT and Business work together in a team based collaborative process and develop a common set of metrics to measure performance.

Page 7: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

Key Questions that Strategic Plans Should Address - Gartner

Does the IT Strategy Substantiate Mutually Owned Expectations Developed by All Stakeholders?

Are Critical Drivers Influencing the Direction of the IT Strategy Accounted For?

Is the IT Investment Direction and Alignment With Business/Mission Needs and Priorities Made Explicitly Clear?

Does the IT Plan Contain Performance Measures That Can Gauge Progress and Success

Does the Plan Outline the Governance Process to Execute the Strategic Planning Process and Approved IT Investment Decision?

Page 8: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

The Importance of IT / Business Alignment Why is it so difficult?

Most IT plans do not indicate the business value and what strategic or tactical organizational benefit that the organization is trying to achieve.

The CIO must report the IT value and guide other executives on achieving and reporting the contribution of the investment on the other executives goals.

The CIO must have the ability to relate IT investments into business value. Art Jahnke

Page 9: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

The Importance of IT / Business Alignment Software Project Disasters

The 1995 Chaos Report was a landmark survey made by the Standish Group. This report is the study of IT project failure and is widely cited when IT project failures are being discussed

The respondents to the Standish Group survey were IT executive managers.

The total sample size was 365 respondents representing 8,380 applications.

Page 10: Managing IT as a Business Capstone 4596 April 2011

Managing IT as Business

The Importance of IT / Business Alignment Findings - The Standish Group research showed a

staggering 31.1% of projects would be cancelled before they ever get completed. Further results indicated that 52.7% of projects will cost over 189% of their original estimates. Based on this research, The Standish Group estimated that in 1995 American companies and government agencies would spend $81 billion for cancelled software projects and paid an additional $59 billion for software projects that would be completed, but exceeded their original time estimates and projects completed by the largest American companies had only approximately 42% of the originally-proposed features and functions.

Page 11: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

2009 Chaos Report --“This year's results … highest failure rate in over a decade”

33%44%

24%

Projects

Succeeded Challenged Failed

CHAOS Summary 2009 - Standish Group

Page 12: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

A Review of the IT Environment The Challenge : How to Leverage New

Technology to be more Innovative? Financial Pressures to cut spending Legacy Computer Systems 78% of IT Dollars spent to “Run the Trains” Human Capital Challenges Non Alignment between IT & Stakeholder

Requirements

Page 13: Managing IT as a Business Capstone 4596 April 2011

ITStrategy

Corporate Directionand Strategy

Core

KK

K K = Knowledge Workers

“Plan” “Build”

“Do the right thing”Strategic Vision -

Effectiveness

“Do it right”Assets of the Company -

Efficiency

Business

Enable Change

Information Technology

“Run”

K

IT ConsultingServices

Construction ManagementServices

Application ServicesTracer

Desktop Services

Managing IT as a Business

Increase levels of productivity – Run/Build

Migrate the IT investment $and/or resources to the high pay-off areas to the business.

Page 14: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

Transforming IT to Achieve Dramatic Business Improvement

Unpredictable

Missed Delivery Dates

Over Budget

Ineffective Productivity Measurements

Rationed Staff

High Cost

Unpredictable

Missed Delivery Dates

Over Budget

Ineffective Productivity Measurements

Rationed Staff

High Cost

Reliable Reliable

On TimeOn Time

Within Budget Within Budget

High ProductivityHigh Productivity

Variable CapacityVariable Capacity

Lower Fixed CostLower Fixed Cost

Reliable Reliable

On TimeOn Time

Within Budget Within Budget

High ProductivityHigh Productivity

Variable CapacityVariable Capacity

Lower Fixed CostLower Fixed Cost

TransformationProcess

TransformationProcessCurrent StateCurrent StateCurrent StateCurrent State Future StateFuture StateFuture StateFuture State

CONTROLCONTROLCONTROLCONTROL

OPTIMIZATIONOPTIMIZATIONOPTIMIZATIONOPTIMIZATION

VISIBILITYVISIBILITYVISIBILITYVISIBILITY

Three-Phase Implementation

Page 15: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

A Review of the IT Environment Legacy Systems

Run on Mainframe Technologies Senior Programmers Close to Retirement Work not Generally Documented Operating Systems Expensive Not Agile or Client Centric Difficult to Integrate with Newer Technology

Page 16: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

A Review of the IT Environment Legacy Systems

Recent research reports indicate that integration is increasingly becoming the focus for many businesses. Organizations face the challenge of integrating various and distinct business applications together with their existing legacy systems, in order to create an effective business and enhance productivity.

Top IT experts conclude that 78 percent of an IT budget is spent just managing existing system and software infrastructures

Page 17: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

A Review of the IT Environment Legacy Systems

This is bad news for any organization looking to reduce IT costs. The fact that 78 percent of your IT budget is spent maintaining existing systems means less money for IT innovation and for alignment with business processes. It means that psychologically, IT managers have more of a stake in keeping current systems running, rather than looking for better ways to manage technology.

Page 18: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

Standard Processes Managing with Metrics Automation

Page 19: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

Defined Standard/Repeatable Processes Process/Performance/Product Metrics Quality Focus Standard Cost Model End to End Process Management Rock Solid Metrics Based Management Continuous Improvement

Productivity Quality

Page 20: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

Dramatically Lower Unit Costs Continuous Cost Reductions Higher Quality Improved Visibility Increased Controls Asset Optimization Increased IT Business Value

Page 21: Managing IT as a Business Capstone 4596 April 2011

Imp

rove

d C

apa

bilit

y L

eve

l

4-7 months

VISIBILITYClassify and Capture

Work, Metrics, Resources and Time

Implement Workflow Processes

Streamline & Craft Work Processes

Managing IT as a Business

CONTROL

OPTIMIZATION

Cumulative Timeline

Page 22: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a BusinessSoftware Process –

a set of activities, methods, practices and transformations

that people employ to Develop and Maintain Software and associated products.

- Mark Paulk, et al., The Capability Maturity Model, SEI

Page 23: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

Standard Process Enables … Realization of Methodology Benefits

Repeatable (Consistent, Reliable, Predictable) Execution

Common Language to Communicate Activity, Status, Issues

Page 24: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

Standard Process Enables … Realization of Methodology Benefits Quality Plans and Improvement Strategies

Discrete Units of Work for Performance Specification and Impact Assessment

Defined Quality Control Activities Implement Quality Assurance Strategy

Meaningful Process Metrics

Page 25: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

Standard Process Enables … Realization of Methodology

Benefits Quality Plans and Improvement

Strategies Tool Usage Benefit Maximization

Deployment of Tool Across Organization Feedback/Tuning Experience

Page 26: Managing IT as a Business Capstone 4596 April 2011

Managing With Metrics

Managing IT as a Business

Page 27: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business Why Metrics are Important

Business Goals - Define and Track Progress

View Support Costs by Application/Program

Enables Capacity Planning Conduct Periodic Customer Reviews

Based on FactsStamp out Anecdotal Management

Page 28: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

There is general agreement among practitioners that Standard Process and Managing with Metrics need to occur, but they haven’t.

Why? Hard to Get Started Hard to Achieve Consistency Hard to Avoid Entropy Hard to Institutionalize

We need help to ease the effort – The Answer - Automation

Page 29: Managing IT as a Business Capstone 4596 April 2011

Managing IT as a Business

Software maintenance productivity can improve at rates of 10% to 40% PER YEAR

- Capers Jones, Calculating the Value of PI

Page 30: Managing IT as a Business Capstone 4596 April 2011

ITStrategy

Corporate Directionand Strategy

Core

KK

K K = Knowledge Workers

“Plan” “Build”

“Do the right thing”Strategic Vision -

Effectiveness

“Do it right”Assets of the Company -

Efficiency

Business

Enable Change

Information Technology

“Run”

K

IT ConsultingServices

Construction ManagementServices

Application ServicesTracer

Desktop Services

Managing IT as a Business

Increase levels of productivity – Run/Build

Migrate the IT investment $and/or resources to the high pay-off areas to the business.