Digital Transformation: How to build success as you move through the digital journey!

digital-transformation

# Digital Transformation, # Business Models, # Digital Failure # Digital Success

Last weeks article https://www.linkedin.com/pulse/what-causes-digital-business-models-products-services-martin-palmgren?trk=prof-post where I shared Frank Hilderts observation / thought provoking point of view that you can find @ https://www.linkedin.com/pulse/ignorance-regard-digitalization-frank-hilderts?trk=prof-post met quite an audience and I want to add / provide a complementary perspective based on my experience.

The full post is available @ https://deliverbusinessvaluewithit.com

Keep in mind that you do not speak to a potential investor, disruption is the last word that your board wants to hear. A disrupted service is a service that is down.

L’Oreal has successfully built an online business that is today their 3 largest market in the world. They did not disrupt their business model they simply extended it for their products to be available so that their clients could purchase them when they wanted where they wanted at the same price point not to cannibalise on sales from their retail network.

Sephora is driving sales though the ability for clients to exchange on how they use their products.

GE aviation is using IoT / the industrial internet (Predix) to keep airplanes up and fuel consumption down and minimise downtime.

GE Oil and Gas are leveraging the industrial internet to keep oil installation up and running and safe and minimise downtime.

If you want the board and your business stakeholders to sign off your digital project focus on the business bottom line.

Is strategic

  • Ensure that Digital services (internal and external) can be prototyped and set up in weeks not years.

Bottom line: Focus should be on time to market

Acquire the right tool sets and focus on result culture is important but, delivery cycles should be calculated in days or a week or 2. To many companies focus on minimising software licenses only to find themselves with solutions that where initially scaled for small and mid sized companies and that requires significant effort to set up. Focus here should be on how fast can we set the service up to the needs of the business so that they can deliver customer value.

If the service does not work and does not provide value for the business it does not matter that you did not pay a software license you still invested time and resources that could have been used elsewhere.

  • Build small teams to explore external and internal business model improvement or new business models with a prototype, test, correct, put in production (agile, learn / fail fast) rather than a “do or die” mentality no one ever wanted their head to end up on a silver plate or put their career at stake.

Over investing time in tools that are not adapted to purpose only moves the cost from vendor lock in to “tools that are not adapted to purpose lock in”.

Sometimes we need to appreciate that we can not make a dead horse run any faster no matter what we do even though loading it on a truck might be tempting.

Take the sunk cost an move on! The earlier the better.

Microsoft, Google, Uber, AirBnB, Skype/WeChat, Alibaba, SocietyOne or Netflix did not propose a perfect product but a product that was good enough to be used yet 80% of IT development effort is focused on the 20% of functionality that few use anyhow.

Most of the time this is driven by business requirements where IT is unable to put a cost on the additional time it will take.

Bottom line: Allocate resources effectively and focus on the needs of the business and the needs of your customers.

A certain structure needs to be put in place such as as a transformation office, a business and IT team that leverage external providers as needed. Agile and Waterfall are popular development methods that could be leveraged but to much focus on the method might not bring the right focus. Many of the “Agile” references such as Spotify, Netflix etc work with small, smart teams that test services as they go often level times a week or day where Agile is used to formalise how they work as opposed to being implemented and rolled out. Where the business model can be more or less “disruptive” the execution of the IT backbone of the service is based on rapid improvement enabled by platforms such as AWS for micro services https://www.linkedin.com/pulse/why-microservices-should-default-architecture-pattern-brahma-acharya?trk=hp-feed-article-title-like

Sounds strategic and is capital

  • Ensure the digital customer experience for external and internal customers with dynamic BI and Digital application performance management.

Bottom line: Invest in the customer experience.

If your strategy is digital then make the necessary investment to ensure that services are up and running and the customer experience is optimised. Digital and Application Performance Management as well as Dynamic BI ensures the customer experience for your customers but also the business and your business stakeholders.

  • Build a coherent strategy where the CIO and the CDO work with best in class providers from Microsoft (Azure), IBM, AWS to rapidly deliver scale able cloud services as needed.

Bottom line: Do we build or buy the service? A public / private cloud can often be set up in a matter of days so that you can start to build services and test them on the fly to see if they gain traction. The successful service can then be brought in to a private cloud / data centre (internal cloud) as we seek to optimise cost and security.

If cloud services are not run effectively cost will run out of control and I have seen this on numerous occasions where the on off boarding of cloud services is not effectively managed.

Sounds capital and is strategic

  • Onboard the board to ensure that they understand the value of IT as a driving force and provide enough leeway to explore new digital external and internal business models.

Bottom line: Do not expect your stakeholders to “speak IT” focus on the business logics, market share, down time that is speak business.

  • Provide the ability to rapidly detect bottlenecks in the delivery of external and internal IT services.

Bottom line: The ability to deliver effective internal IT services conditions your credibility. With the right tool sets this can be done in real time.

Sounds and Is capital

  • Trust is capital in a customer relationship most executives first contact with it is with the internal IT service organisation ensure to be able to detect and address bottleneck before they become a trust issue

Bottom line: Trust is built on a step by step basis. If you can gain the trust of your board / finance department they will allocate the necessary resources.

Most of the time IT needs to answer 2 questions: 1) does it work, 2) is our spend aligned with the competition.

  • Run it as a business enabler as opposed to a cost center. That is understand how services are delivered and how cost is distributed this would include for outsourced providers.

Bottom line: Where creative accounting might sometimes be required to get the ROI right for a necessary infrastructure investment most of the time we need to understand how services are delivered and who consumes them to understand how cost is distributed.

If you have a good service request management service catalogue front end it can used to understand who consumes what and how services are billed for and notably by outsourced providers.

If you can effectively allocate cost you can run IT as a profit centre were charge back can be based on real consumption.

Martin PALMGREN is a seasoned Senior Business and IT Strategy Transformation Executive with 15 years of experience that works with some of the top CIO’s and IT organization’s on the European market on how to deliver business value with IT.

He is recognized to have delivered some of the more innovative enterprise architecture and IT strategy innovation and has been approached by both ISACA and TOGAF to publish where his perspective pulls both models together and his IT Business Model Blue print has been used for several “greenfield” very large initiatives to reposition how IT is leveraged to deliver value for the business. Please find his work @ https://flevy.com/seller/mpalmgre/road-maps-15

Within this frame he address strategy formulation and rollout for fortune 500 businesses with a focus on how to ensure that the business strategy and objectives are supported by IT with an effective IT Strategy. A cross sector expert he works with both Business and IT Executives to reach this objective. Martin demonstrates strong analytical skills, the ability to clearly structure complex situations and develop and deliver solutions under pressure.

He has managed top talent in virtual and physical teams across the globe. A lecturer and thesis adviser he works with top talent from a student to a senior executive level with confirmed results and moves with ease from the executive suite to a startup and classroom environment.

Delivery capabilities would include but not be limited to:

• End-to-end IT delivery with the consolidation of the IT Operating Model and a focus on IT services,

• The IT blue print and delivery of the spin off of large business entities,

• “Innovative CIO” or IT Value Management (Business IT alignment) where the focus is on business needs and we delivered innovative IT solutions and a review of the IT Value proposition with a focus on digital and cloud,

Author Note: The upper part of the clients that I speak to feel that there is a lack of actionable articles and publications that help to bridge the gap between the execution of the business strategy, business objectives and how IT can be used to support the latter to deliver business value. This is also the reason why I decided to put forward an execution centric material that has for objective to if not entirely bridge the gap between IT and the business provide Business and IT Decision makers the necessary common language to move forward in the same direction (pointing fingers is rarely productive).

The Deliver Business Value with IT series is a reply to: How do we put the IT Strategy in place and how do we communicate effectively with our stakeholders.

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 hence 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.

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?

A recognized thought leader please find his contribution @  www.deliverbusinessvaluewithit.com affiliated with the book by the same name that you can find @ https://flevy.com/browse/business-document/deliver-business-value-with-it-design-build-and-run-effective-it-strategy-execution-to-business-needs-294  together with specific roadmaps to hit “the road running” with a best in class blue print leveraged in a number of spin offs and strategic road maps based on work that I have performed for clients that would include well know fortune 50 to 500 @ https://flevy.com/browse/business-document/design-build-and-run-an-effective-it-service-strategy-to-business-needs-279

 

 

 

 

Advertisements
Image

Value, Profit, People – What is your unique competitive advantage?

Value, Profit, People – What is your unique competitive advantage?

To leverage IT to execute on the set business strategy we need to effectively focus on:

Value, Profit and people aligned to create a unique competitive advantage.

The tandem is an excellent metaphor for the Business IT relationship. Where Information Technology can accellerate “Go to market”, “Cycle time” and “Cost effectiveness” it is for the Business to set direction and for the IT Department to support the business model.

This is also true for the non brick and mortar references that have emerged from silicon valley. Amazon sells books and online store space. Google the opportunity to find things + run applications on a cloud (mutualised storage space outside the firewall) + hosted services such as email (the opportunity to communicate in writing and keep a trace). Ebay enables the exchange of goods. Twitter provides a tool for self promotion and advertisement. Facebook fills the void of distance and keep the contact with your friends and the opportunity to make new acquantainces. Linkedin the opportunity to keep up to date with your professional network + some promotional features. The business model sets the direction enabled by best in class technology.

Chapter 1. To deliver Business Value with IT we need to Design, Build and Run an Effective IT (Service) Strategy to business needs.

This is a breakout from Deliver Business Value with IT (the Book) that you can find as well as (Actionable Story Boards) @ https://flevy.com/seller/mpalmgre/ref=mpalmgre that is flick out the slide set on your ipad and start to share with your CIO, Executives and Board.

Image

How do we Create a demand of IT services?

How do we Create a demand of IT services?

In a recent conversation that I had with David Giambruno, CIO Revlon, he mentioned his ability to get the business hooked on new services and products as he actively propose new solutions to the business to leverage competitive advantage and keep the run in perfect shape. But the role as “gatekeeper of technology” to create business value can only be valid as the infrastructure runs smoothly. David has over they years shifted the focus of to use 80 % of the budget for workarounds and fire fighting the keep the lights on and 20 % to propose new solutions to the business to an opposite 80 / 20 where 80 % of the budget is used to enhance the capability of the business.

He also clearly indicated that where the logics spelled out in ITIL are excellent they are are a minimum requirement to build an effective IT Strategy to the needs of the business where the perspective has to be completed with a Design (Demand and Supply) and Build (supported by IT processed with clear KPI’s) phase to tie the strategic value piece with the operational elements of IT service delivery.

This is a breakout from Deliver Business Value with IT (the Book) that you can find as well as (Actionable Story Boards) @ https://flevy.com/seller/mpalmgre/ref=mpalmgre that is flick out the slide set on your ipad and start to share with your CIO, Executives and Board.

Image

How do we Reconstruct the Boundries of the IT landscape

How do we Reconstruct the Boundries of the IT landscape

Would you sign up to run a retail business operation where you do not know what clients consume which product / service at a specified quantity and subsequently be billed for their consumption (nor how you will finance the future run and build)? This is however the reality for most CIO’s! The focus of a servicebased model is to demonstrate how IT Delivers Value to the business, that is delivers services to business needs (cost effectively, or at least at a specified cost rate that permit to take qualified decisions) over time with an effective IT Business Model and Value Proposition.

We see Total Cost of Ownership (TCO) as the corner stone to move further from “IT generates to much cost” where we can demonstrate who consumes what services (and should subsequently pay for what they consume) to obtain the means (investments) and ends (budgets).

To run a cost effective IT Operation that delivers to business expectations and leverages the execution of the set strategy (1) you would need to build a clear IT Service Strategy (what services do we deliver to the business) with Total Cost of Ownership per user with: cost (how much does each service cost), consumption (how much does the individual user consume) and chargeback (consumed services are allocated “charged back” on an effective cost basis to the business units) (2) in order to be able to provide the means (necessary investments) and ends ( budget). With the right support (best in class technology) this can be done in weeks with a top down (General Ledger), Bottom Up (effective cost) (3) analysis and tied to the roll out of an IT Service Strategy (that drives an end to end roll out of ITIL V 2/3 logics).

Most CFO’s understand a well conceived business plan (IT Service Strategy), with a clear Value Proposition (What services do we deliver) and Business Model (how do we deliver the depicted services to our potential clients) and know that to generate productivity improvement you need to invest. Our experience is that where some clients underconsume services due to a non effective cost allocation model other heavy users tend to overconsume services and do so the more willingly as they do no not pay for their consumption (are not charged back). An allocation model based on delivered services will hence accord the CFO to deliver a coherent financial model based on effective consumption and reflect user behaviour. Most IT Financial Management solutions tend to “massage” the general ledger and do not provide an effective integration to the IT Service Strategy over time. As a result they do not provide cost transparency on an ongoing basis, nor do they deliver to the above set objectives.

This is a breakout from Deliver Business Value with IT (the Book) that you can find as well as (Actionable Story Boards) @ https://flevy.com/seller/mpalmgre/ref=mpalmgre that is flick out the slide set on your ipad and start to share with your CIO, Executives and Board.

Image

How do we build and demonstrate IT success?

How do we build and demonstrate IT success?

The CIO and the IT Department need to position as premium provider of IT services and focus on value to cost.

In order to avoid the “do we really need a CIO and IT department to bother us with technology when we can use the cloud?” the CIO has to ensure that the business strategy and business objectives are supported by IT (from a Business and IT architecture perspective). Where the IT Strategy support Strategy execution, “Time to Market”, Cost Effectiveness and stakeholder expectations from an Executive, Business Unit, IT Management and IT Risk Management perspective.

To deliver business value with IT we need to Focus on the Business Bottom Line: How fast can we get our products and services to market “Time to Market” & how can the IT department support the business from a Cycle Time and Cost Effectiveness perspective.

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)?

We have identified 2 key trends for the CIO to focus on: – Differentiation (That is, how does IT provide a competitive advantage for the business), and – Cost (How does the IT Department deliver IT Services cost effectively). To do so we need to Build an effective IT Delivery Model to meet business needs and expectations as we leverage business strategy execution and business processes supported by an IT Service strategy (ITIL, IT – CMF, CobIT 5 (ValIT, CobIT 4.1, RiskIT), ISO 38 500, TOGAF and ISO 9001, ISO 27 001, COSO) delivered in a Business IT roadmap; that is how do we support business objectives and processes leveraged by IT and an effective IT Services strategy. Within this scope we would by definition address how we execute the IT service strategy (ITIL) Design – Spell out IT Activities from a demand and supplier side, Build – Set IT processes and key performance indicators, Run – Aligned to described ITIL activities and processes and full IT Financial Management (supported by delivery capability IT CMF, COBIT 5). Once services defined we can then decide where to run the application that support the IT and or Business Services (server / internal / external cloud / outsourced provider).

Within the frame of an acquisition up to 80% of the value realisation is (can be) on the IT side. The failure to address IT and the IT strategy can be an additional (1 out of 3) reason to M & A failure.

If we assume that to deliver business value with IT we need to support business objectives, the integration of a new entity is an optimisation of the current IT strategy (how we support business objectives and processes). We would obviously need to understand (and hopefully have the opportunity) how the current IT run before the purchase (IT due diligence) with full IT Financial Management to figure out the actual cost of delivered IT services (cost, consumption, chargeback). Once services defined we can then decide where to run the applications that support the IT and or Business Service (server / internal / external cloud / outsourced provider). We also need to define the purpose of the purchase (invest / divest) in the overall corporate strategy where it is of little use and a significant cost to integrate all systems in to a common backbone if the company is to be divested only a few years later. We could use a an IT Scorecard to ensure that stakeholder expectations are met from an executive, business line, IT and IT risk perspective.

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.

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. Apply the bits a pieces that apply to your business.

Business focused technology can be a make or break factor as we innovate or re-invent a brand and business model

Business focused technology can be a make or break factor as we innovate or re-invent a brand and business model. Angela Ahrendts for Harvard Business Review:

“When I became the CEO of Burberry, in July 2006, luxury was one of the fastest-growing sectors in the world. With its rich history, centered on trench coats that were recognized around the world, the Burberry brand should have had many advantages. But as I watched my top managers arrive for our first strategic planning meeting, something struck me right away. They had flown in from around the world to classic British weather, gray and damp, but not one of these more than 60 people was wearing a Burberry trench coat. I doubt that many of them even owned one. If our top people weren’t buying our products, despite the great discount they could get, how could we expect customers to pay full price for them?” Read the full article @ http://hbr.org/2013/01/burberrys-ceo-on-turning-an-aging-british-icon-into-a-global-luxury-brand/ar/1

Burburry have taken the a lead in the how to leverage business innovation with IT, notably with social as a key enabler through a “Facebook” driven platform that drives innovation bottom up where employess connect to share best practise on how to set up stores and sell products and even compete internally on a daily basis who sold more in “discussion groups” set up by the teams not by management. I would invite you to discover an interview @ http://blogs.hbr.org/video/2012/12/how-burberry-manages-talent.html?cm_mmc=email-_-newsletter-_-cant_miss_update-_-hbrcm020813&referral=01087&utm_source=newsletter_cant_miss_update&utm_medium=email&utm_campaign=hbrcm020813

To support business strategy execution

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 hence 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.

This is a breakout from Deliver Business Value with IT (the Book) that you can find as well as (Actionable Story Boards) @ https://flevy.com/seller/mpalmgre/ref=mpalmgre that is flick out the slide set on your ipad and start to share with your CIO, Executives and Board.

Image