THE VERY REASON WHY MOST IT STRATEGIES FAIL AND MISERABLY: The IT department needs to perform 3 things well: 1) understand the needs of the business, 2) how to build and run applications that meets the needs of the business and 3) to run an effective infrastructure.
That is IT supports new emerging business initiatives that will eventually form the business strategy as they succeed or fail and the RUN.
Yet most IT Departments: 1) has a poor understanding of the needs of the business, 2) are not very successful @ to build and run applications that meets the needs of the business and 3) do not run an effective infrastructure. We all know that infrastructure is unsexy.
It is due to his effort to build a solid infrastructure that David Giambruno @ Revlon has successfully turned a “we spend 80 percent of our resources to fire fight and hopefully keep the lights on” to one where 20 percent of the resources are spent on the run and 80 percent on how to deliver effective solutions to the business.
Instead most IT departments are IT centric and focus on project management or to roll out frameworks (that have a specific function) to build business strategy. Once the “happy few” certified have managed to talk the IT Executive management in to how important it is to impose an excellent project management tool brought forward to develop software, or manage the IT architecture or how to ensure that IT and Business Processes are managed and controlled to build the IT Strategy we then feel obliged to adapt how the business side is run to fit to this world view and deliver to the needs of the business..
Agile is only the latest methology to suffer “the one methodology fits all dilemma”. I have over the last years encountered a number of CIO’s that tried to apply Agile to build the IT Strategy and run the IT department. Agile is an excellent tool to ensure capability delivery and effective project management and product delivery within the frame of software development.
Where I do agree with the principles of a more “adaptive” approach to IT Strategy development spelled out in http://deloitte.wsj.com/cio/2012/05/24/an-agile-approach-to-it-strategy/ I believe it is important to keep the methodologies apart and focus on business objectives not to confuse your business stakeholders.
TO AVOID THE “MARSHMALLOW” MOMENTUM, FOCUS ON THE BUSINESS MODEL: I regularly perform an innovation cursus where we use the Marshmallow challenge http://www.marshmallowchallenge.com/TED_Talk.html as an exercise to demonstrate the make or break factor of a project (strategy, innovation production, sales, marketing, R & D) and the importance of to produce a customer journey map and prototype. Each time I perfom the exercise it hits me how often the “Tadaa” moment turns in to the “Uuh” (translated in to that they did not get it) moment during the delivery of an IT project / IT strategy delivery. But rest assured this would also be valid for strategy, marketing, production, R & D, Sales and Delivery.
Within the exercise we demonstrate how IDEO with a simple customer jurney map (day in the life of) formalised, modelised (prototyped if needed) and validated by the client permit significant improvement in effectivenes (that is productive and efficient) and the customer perception of the experince (in this case Amtrac and the General Portland Hospital).
The objective is to address the actual health care service, the patient and staff experience of the service and then define the ways it could be improved. The developpment of what became IDEO Project Journey was key in this success.
Step 1 – Observe: Try to define and map the different health care segment (surgery department, waiting room…) of the hospital/health care service. Collect feed-back from different patients/staff members of each segment (then make a statistical survey, with both quantitative and qualitative information about the service and give a mark to each segment). Rank the grades and select the segments that obtained the worst grade. Experiment the journey of a patient in those specific segments (use shadowing, interviews…).
Step 2 – Synthesize: Confront the patient and the staff point of views of each segment in the health care service (use a unique support like a board to give a synthetic view). Carry out a « typical patient journey » for each segment selected.
Step 3 – Generate Ideas: Allow patient and staff members to post ideas of improvement or suggestions in a box available in the hospital. Brainstorm with the staff.
Step 4 – Refine: Realize a quick prototype for each main idea. Test the prototypes with staff members and patient to analyze what could be quickly improved. Give a provisional budget for each main idea.
Step 5 – Implement: Implement the ideas that suit to the budget constraints. Implement the ideas collaborating closely with the staff. Inform staff and patients of the undergoing change. Be receptive to direct feedback.
If I now describe what can happen in an IT project (all examples are fictional, for educational purpose and any similarity to a real IT project would be coincidental).
Phase 1. – To support business processes and enhance the customer experience we: (this is where we tie back to the IDEO project journey):
Step 1 – Observe: (Context A) A vendor of a process modelisation tool manages to convince the business or IT executive team that to provide a modelised version of business and IT processes was business critical and would demonstrate that the IT Strategy is business centric and that the IT department understands the Business, Business objectives and the Business strategy. (Context B) A business or IT internal client wants to industrialise a process or a bundle of services with IT. We decided to use the same consultants as for the six sigma initiative (below) to capture business processes. The problem is that the business people are to busy to do their job (and might not be able to formalise their processes). And if their work is automatised we might chuck their work out on the cloud or an outsourced provider as well (the last time they spoke to a consultant their colleague was fired (sorry made redundant, sorry given the opportunity to seek new challenges))? Obviously they do not get it.
Step 2 – Synthesize: (Context A) The captured processes are modelised in a process modelisation tool and will sit in a cuppord. (Context B) The captured processes (in the case of the industrialisation effort) delivered by the somewhat reluctant users are translated by a business analyst in to user requirements. These are then transferred to managment for verification. The 300 pages document sit on a disk somewhere for 3 weeks to 3 months before it is shipped of for programming.
Step 3 – Generate Ideas: The user requirements are programmed.
Step 4 – Refine: The end user team is brought in 18 months after to validate the application. Hmm they might not have gotten it either. At least we avoided a fist fight…
Step 5 – Implement: The project sponsor refuses to sign off the project budget because the coulour of beige of the application is not right. We and they know that this is due to the fact that the modelisation did not correspond to the needs of the client in the first place and certainly not 18 or 36 months down the road (not to mention thousands of man hours).
Phase 2. – Solve the problem: We realise that the customer experience and the services delivered by IT does not work / might not be perceived to be effective and the green light red light charts that we produce to demonstrate that we are able to keep the lights on during critical periods of the run performs the effect that we thought it would.
Best case scenario: We convince the executive team to leverage social media and post the business strategy via facebook and twitter for the IT personnel to appreciate it in a crisp 140 characters format
Next best case scenario: Walk your dead dog. This scenario would typically implicate a subject matter expert that would come in for an hour or 2 compare the Information system to a car, a boat or an engine where the new technology is a paradigm shift. The IT team that have participated gets all worked up because the analogy used that relates back to the early 19th century is so descriptive for our current cloud deployment. We build this really great presentation on how to leverage the cloud much as henry ford revolutionaised the personal transport industry with his you can have any coulour you like as long as it is black concept to optimise cost.
Not half that bad case scenario: We bring in a Top 3 or Big 5 to perform a change excercise (preferable a very long slide deck of .ppt that if not produces nausea or panic puts the subject (participant) out (commonly called death by powerpoint) from exhaustion.
The presentation should idealy be based on example of a project put in place for the production in a tooth paste / car factory (not our domain). If possible with a reorganisation so that a task that previously took 3 days now take 5 or 10. We cross our fingers an hope that the green light red light chart now will produce the desired effect.
Worst case scenario: We bring in a Top 3 or Big 5 to help management understand how important it is for IT not to be a support function. Executive management is brought in (down from their ivory tower) and walk the floor and participate in a IT strategy workshop. This is often resumed to a quick walk past a few desk and then in to a war room where an entusiastic team of IT leaders, personel (convoqued by the stategy consultants engaged) are to demonstrate how important it is for the company to have IT. A good intention turns in to a strategy exercise (that the Executive Team has no desire to perform let be told how to do strategy by the IT team) on a brown paper. In a Worst worst case scenario: the consultants bring out finger paint and the Businees executive finds himself with green paint on his tie or suit and now sees red.
Really bad case scenario: The consultants have organised an excercise for the IT team to solve the problem that end users do not get it when solutions are delivered and tend to interupt the reflections of the IT team. The obvious solution would be to exclude end users from any contact with the IT team and set up an answering machine with no possibility to leave a message as they have problems. Since the business consulting lead did not fel convinced, he managed to convice the IT Director to present the conclusions in front of the board. After all this was the conclusions of his team, and an all in IT initiative would have so much more credibility.
Phase 3. – The Big Change: As the business excecutives are a bit stingy and as the green light red light chart still does not do the charm we once more decide to bring in a Top 3 or Big five (preferably the same as earlier). We decide turn the situation around an in order to do so we will not do thing half way and go for a Big Change.
Best case scenario: We engage a top 1 team of consultants, that will manage a top 2 team of consultants, that will in turn manage a top 3 team of consultants to deliver change and new revolutionarry projects to be presented to the board. A transversal Big Change programme is announced and consultants from the top 1, 2 and 3 consulting companies an invited and provided with the possibility to bring in new ideas. The business, IT and endusers are not consulted and business is delivered as usual. After a year or so the conclusions of the programme is delivered, the cover looked smashing but we did not have the time so we put it (burried it) in a drawer for a moment where we would have more time on our hands.
Worst case scenario: We read this really good article by the guy who used to be the top hen for IT for the US government that decided to chuck IT out to the cloud not to have to run an IT department and IT resources (By the way I wonder why he stayed for such a short time before he went on to evangelise the cloud for salesforce). I wonder if we can chuck the IT department out to the cloud. Then the cloud provider could deal with users that are not happy. I wonder if the cost cutting genious that we brought in last year is available. On his recommendation we consitently cut the cost of IT for the (mobile) sales force. At the end of the day as they did not have an office or a fix computer why should they need a lap top? Not to forget that we made substantial economies on software licenses and storage space.
Phase 4. – Set direction: We have the impression that we might not be on top of things and should add a bit of governance. The Internal audit department confirmed this impression as they confirmed that we clearly lacked focus due to the absence of an IT Dashboard.
Best case scenario: As we where quite happy with the Big Change report , the first page does after all look smashing, and the weight of the paper makes my table more stable. We decide to once more bring in our favourite consultants. At the end of the day if the six sigma task force initiative had a few bumps it was not due to the fact that the principles that where implemented where directly applied from the Toyota production chain (they are after all very good at car construction) but certainly due to the fact that the users did not get it. Even though the delivery cycle now takes 180 days compared to 30 before at least it is measured and we can bench cost to competition.
Now to the point, as the audit team requires an IT dash board we asked our consultants to deliver one that looks smashing and the audit team is satisfied. The best part is that we now feel that we have effective governance in place and that they did not have to bother neither the IT executive team nor the business or the IT team.
Worst case scenario: We had a meeting with the business consultant that convinced us that for IT to demonstrate that we support the business we should modelise all 15 00 business processes (I wonder why executive management put an end to this effort ?) This time we will demonstrate how we execute the IT strategy to the business strategy as we will implement a full audit framework!
The execution of the defined business strategy is often a mystery (missing link) both on the Business and the IT side. The truth is that regardless of how well the executive team draws out the strategy in the boardroom the bottom line is that the business initiatives that were supported by clients succeeds, those not supported by clients (that do not get it) fail and disappear.
The CIO and IT department needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed.
The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated.
The IT Bottom line is that up to 40 % of current IT spend occurs outside the IT budget (CRM, Cloud). The IT department needs to position itself as a facilitator to IT services and effectively address emerging needs, market opportunities and demonstrate that the current Business Model is supported effectively. The IT department should facilitate the access to IT services to support new and current business initiatives. The business strategy emerge out of a number of initiatives that are successful or not. The IT department need to support the “Run” of day-to-day operations as well as new projects. The Cloud might particularly be of interest within this frame.
We believe that in order for the CIO and the IT Department to position as premium provider of IT services and focus on value to cost we need to understand the Business (IT) Strategy and how the IT department can deliver effectively to business objectives, that is to deliver business value with IT: - What is the Business’s strategy and plans? , – What is the current business model that IT has to support? ,- Where could IT make a significant impact on the business? ,- Are there any further opportunities to use IT? , – How do we provide IT Services as we meet demand and cost drivers where the decision is to make (internal) or to buy (external service provider)?
COBIT 5 (ValIT, CobIT 4.1, RiskIT), ITIL, CMMI, IT-CMF are excellent frameworks to ensure that business and IT processes focus on to deliver business value, to implement a framework is as absurd as to try to roll out a dictionnary. Pick and choose the bits and pieces that apply to your business.
IN SHORT: In order for the CIO and the IT Department to position as premium provider of IT services and focus on value to cost we need to understand the Business (IT) Strategy and how the IT department can deliver effectively to business objectives, that is to deliver business value with IT.
– What is the Business’s strategy and plans?
– What is the current business model that IT has to support?
– Where could IT make a significant impact on the business?
– Are there any further opportunities to use IT?
– How can we leverage IT in a “Time to Market”, “Cost Effectiveness”, “Cycle Time” perspective?
WHAT THE REVIEWERS SAID: “ The “Deliver Business Value with IT” series is an extremely solid piece of work that comes across as the A-Z reference of how to execute and implement IT strategy from a CIO level perspective. The reader will learn robust approaches to deliver services designed to support IT and Business drivers. The perspective that Martin spells out permits an overview of how to leverage existing frameworks but also to effectively support the execution of an IT Strategy aligned with the Business Strategy.”
(Jean-Louis Leignel, Ex CIO of the Schneider Electric Group ; past vice-chairman of ISACA (Information System Audit and Control Association), of ISACA’s IT Governance Committee and of the AFAI association (ISACA’s french chapter)).
“The focus that Martin takes in the “Deliver Business Value with IT” series will help in tackling the seven main non-technical challenges any CIO or other senior IT business leaders will face:
1. How and what should I communicate to whom in what way?
2. What to think of when it comes to competences needed to provide my IT services?
3. How to provide the best value at the best cost?
4. What to think of when ensuring efficient and effective delivery of projects?
5. How to establish a sourcing strategy and determining how to manage your vendors?
6. What are the best practices for managing my operations, and what to think of?
7. How can I best scan for and analyse emerging technologies?
The approach taken utilizing basic business management principles and applying them to how to run an IT department are explained clearly, and takes this publication above and beyond the standard publication proclaiming to ‘run IT as a business’. The 2 key trends identified in the publication for the CIO to focus on of “Differentiation” and “Cost” are a perfect example of this.
Further to this the focus and examples of non-technical KPIs used, provides a good framework for the CIO to communicate the state of how services are provided and how the company is maximizing its value of their IT assets.”
(Alex van der Kruit, is a senior IT executive with extensive experience in building and leading service organisations, and directing change management initiatives for leading global corporations. He has held positions such as Service Delivery Director at CSC, General Manager IT at Swedish Match, and is currently Business Systems Manager at Toyota Material Handling Europe)
Mats Hultin, CIO Saab Defence and head of one of the most business centric IT organisations that I have seen consider “Deliver Business Value with IT” as a toolbox that all CIO’s or IT Executives would like to have at hand and consult on a regular basis as they start to Design, Build and Run Effective IT Strategy execution to business needs.
Within the frame of the “Deliver Business Value with IT” series we propose a number of workshops with the purpose to ensure that IT supports Business Objectives:
We ensure that IT supports the run and emerging business initiatives:
We Articulate the Value propositionwith a storyboard:
We ensure to meet Time to Market, Cost Effectiveness, CycleTime both on the business and the IT side:
We Connect information:
IT support Business Objectives:
We Deliver effective business strategy execution:
The roadmap reflects stakeholderexpectations:
The ServiceStrategy support Business Drivers:
End to end industrialisation of business processes:
We ensure that The Business Strategy is executed by IT:
We Confirm business vision:
We Articulate the Business Value Proposition:
Deliver the Business Architecture:
Translate the Business Vision to an IT Vision:
Set the IT Value PropositionBaseline:
We Draw the Roadmap:
We Design the IT Value Proposition:
We Build the IT Value Proposition:
We Perform Effective IT Governance:
KEYNOTE + WORKSHOPS
Design, Build and Run an Effective IT (Service) Strategy to Business Needs
A one day Introductory workshop (Keynote) based on the material that can be found @: Design, Build and Run an Effective IT (Service) Strategy to Business Needs
Get Your Cloud Strategy Right
A 3 days workshop based on the material that can be found @: Get Your Cloud Strategy Right
Please find an example of the result delivered within the frame of a 3 days workshop with student with little knowledge in IT based on the same material:
How to leverage the IT Strategy with the Cloud
Build a roadmap for demand or cost driven implementation
How to cloudsource effectively
How to leverage the cloud
Leverage Business Strategy Execution with IT
A 3 days workshop based on the material that can be found @: Leverage Business Strategy Execution with IT
Logics for IT Sourcing (Internal, Shared service center, Out, Cloud)
A 3 days workshop based on the material that can be found @: Logics for IT Sourcing (Internal, Shared service center, Out, Cloud)
Build an IT Service Strategy Leveraged by ITIL V2 & 3 Design – Spell out IT Activities from a Demand and Supplier Side
A 3 days workshop based on the material that can be found @: Build an IT Service Strategy Leveraged by ITIL V2 & 3 Design – Spell out IT Activities from a Demand and Supplier Side
Build an IT Service Strategy Leveraged by ITIL V2 & 3 Build – Set IT Processes and Key Performance Indicators
A 3 days workshop based on the material that can be found @: Build an IT Service Strategy Leveraged by ITIL V2 & 3 Build – Set IT Processes and Key Performance Indicators
Build an IT Service Strategy Leveraged by ITIL V2 & 3 Run – Aligned to Described ITIL Activities and Processes
A 3 days workshop based on the material that can be found @: Build an IT Service Strategy Leveraged by ITIL V2 & 3 Run – Aligned to Described ITIL Activities and Processes
Other workshops available:
How to Build a CIO Office (3 days)
CANVASSED in a Business (IT) Strategy Canvas: Business Vision, Architecture (3 days)
CANVASSED in a Business (IT) Strategy Canvas: IT Vision (3 days)
CANVASSED in a Business (IT) Strategy Canvas: Baseline, RoadMap (3 days)
CANVASSED in a Business (IT) Strategy Canvas: Design, Build, Transform (3 days)