business alignment
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It’s all about your businessIt’s all about your business
www.bytesofknowledge.comwww.bytesofknowledge.com
with creative IT strategywith creative IT strategy
Alignment: Business & Technology
• Alignment vs. Double-vision– Make sure that the direction for business is clear. – There are multiple paths to implement technology.
Choose the one that leads to your business destination. Sometimes it isn’t clear.
• Common Patterns for Failure & Success– Communication, personal biases, planning, use of
resources, understanding of risk, and the destination.
• A Solution: Governance Process– Budget, Value/Benefits, Business Alignment,
Risk, and Priority.
Alignment: Business & Technology
Choosing poorly
1. Biases & errors in judgment2. Failure to establish an effective
framework3. Lack of metrics for determining
value4. Inability to assess and value risk5. Failure to identify projects that
should be killed
Such problems cause companies to get only 60% of the value of their IT projects.
How do should we choose?
• Tie technology decisions to business objectives
• Build a process– It will help you to make a decision before you have
to make one under pressure
• Ask questions:– What does it [insert technical stuff here] gain us?– How do we measure its impact?– Where is the implementation & adoption plan?
• Get expert help– Are we using the right investments in the right
places for maximum leverage of resources?– Is our technology a drag or an accelerator for
growth?
Common Language
• Governance process– A clear destination and good
communication avoids: divergent institutional aims & divided leadership
• Value propositions– Accepting flawed value propositions
without scrutiny or promises that can never be realized is dangerous
• Risk– What are we willing to tolerate in
order to gain the situation described “post implementation”?
Governance Process defined
• Governance: This is simply the way various aspects of a decision will be processed. Iterative evaluation of a decision is often part of this process.
Define the selection process before you need to choose, define the weight of importance before you have to score, and stick to your plan.
Periodically, evaluate your G.P. and adjust based on business conditions
Value/Benefits defined
• Value/Benefits: The difference of doing or not doing something. It is the measure why which this project enables your company to reach its objectives.
• The value/benefit of a project is its worth to the organization to obtain the payoff of the project.
• Sources: Reduced cost, increased revenue, increased customer satisfaction, and obtaining a new capability or knowledge.
Risk defined
– Cost – typically escalation of project costs due to poor estimating or scope creep
– Schedule – Activities take longer than expected. Slippages or schedule compression
– Performance – Project outcomes will fail to produce the results expected
• Risk: Webster defines it as “a possibility of loss.”
Risk isn’t always bad. It should be seen in relation to its value. “How
much risk you choose to carry and how aggressively you mitigate it are directly related to how much value is at stake.” (Smart Business, © Dave Chapman 2002)
Common Language (cont.)
• Business Alignment– Business decisions rely on accurate
and timely information. Its worth varies over time.
• Priority– Clearly deciding among “top priorities”
based on their effect on the business. – Ask Why? Five times – Like root
cause analysis. Validate the real reason for the priority order
Business Alignment defined
• Consideration of IT projects against a backdrop of business conditions is critical for allocating resources along the organization's strategic goals.
• What’s most important here is how to best allocate the available budget across the identified main corporate initiatives (or strategies). – For instance:
1. ABC will be known as an organization that develops innovative products
2. It is critical that ABC products and services deliver the data to achieve a positive behavioral change in the lives of our customers.
3. Achieve a 30% net profit growth over actual for FY ‘07
Priority defined
• Mandatory: Work that you "have to do" might be supporting a legal or auditing requirement. Generally speaking, do you don't have the ability to say you are not going to do it.
• Business Critical: Must be done to support (sustain) the business. One of the key aspects of this work is that you have some discretion over how much you spend on it.
• High: Work that you think "must get done." You might break this work into two areas based on the impact to the business: – Strategic - This work is usually larger and more expensive but helps you transform the
business. – Tactical - This work usually costs less and has a more short-term payoff. The value is
incremental, not transformational.
• Normal: You can break the "Normal" work down into medium priority or low priority, but usually neither category of work will get funded. Low-priority work should be the last to get funded.
Practical Approach
RISK SCORING
Very Low =
1, Low =
2, Med = 3,
High =
4, Very
High =5
Technology
Innova
tion
Complexity
Schedu
le
TOTAL RISK
BUSINESS A
LIGNMENT
BUSINESS A
LIGNMENT #1.
CLIENT will
be
known for o
ur crea
tion of in
novative p
roducts
Strongly D
isagree =
1, D
isagre
e = 2,
Neit
her = 3,
Agree =
4, Stro
ngly Agree
= 5
This projec
t driv
es inno
vation of
existi
ng prod
ucts
This projec
t open
s a ne
w mark
et for C
LIENT pr
oducts
or servic
es
This projec
t will a
llow CLIENT to
impro
ve its
market
standin
g aga
inst c
ompetit
ion
This projec
t sup
ports
a "grow
ing" lin
e of b
usiness
This projec
t autom
ates curr
ent m
anual p
rocesse
s
This projec
t will i
mprove
integratio
n betwee
n busi
ness
develop
ment a
nd IT
Ope
rations
This projec
t will r
esult in
a sol
ution th
at can
be re
sold
This projec
t will f
acilita
te new
capa
bilities
that
may
lead to
product i
nnovat
ion
This projec
t will p
romote
the pu
blic aware
ness of
CLIENT prod
uct inn
ovation
TOTAL
BUSINESS ALIG
NMENT #2. C
LIENT produc
ts
must ach
ieve po
sitive
behav
ioral chan
ge in
custo
mers
This projec
t has s
pecific
objectiv
es to
contrib
ute to
the
improvement
of da
ta ava
ilable
This projec
t incre
ases th
e integrat
ion of m
ultiple
CLIENT syste
ms and D
atasets
This projec
t redu
ces the t
ime involve
d in da
ta
collec
tion p
atient/cu
stomer s
ide
This projec
t redu
ces the t
ime involve
d in da
ta
processi
ng pa
tient/cus
tomer sid
e
This projec
t improv
es the m
anage
ment o
f data
lifecyc
le
This projec
t redu
ces the d
istance be
tween d
ata
provider
and co
nsumer
This projec
t will c
learly m
ake a dif
feren
ce in
behavi
oral ch
ange
adop
tion rate
This projec
t will i
mprove
the pr
esentation
of da
ta for
easier d
elivery/
reten
tion
This projec
t prov
ides acc
ess to cli
nical kn
owledge
for
servic
es pro
vider
This projec
t's infr
astruct
ure re
quire
ments w
ill be
leverage
d by o
ther p
rojects
This projec
t enab
les a new
servic
e capa
bil ity t
hat w
ill
affect p
ositive
behavi
oral chan
ge
TOTAL
VALUE / BENEFIT ALIG
NMENT
Cost redu
ction
This projec
t will r
educe
costs
signifi
cantly
(2:1 ra
tio of
saving
s to co
st)
This projec
t will c
ontribute
to re
ducing t
he use
of
contra
ctors/
consultan
ts
This projec
t will e
nable
syste
ms for im
proved
accoun
tability
of pr
oductiv
e time
This projec
t will r
educe
the nu
mber o
f FTEs c
urrently
neede
d
This projec
t will i
ncrease
syste
ms auto
mation
This projec
t enab
les bett
er remote pr
oductiv
ity to
reduce
trave
l costs
TOTAL
Increas
e in re
venue
This projec
t acce
lerate
s the
time t
o marke
t for n
ew
product
s/serv
ices
This projec
t prov
ides acc
ess to bett
er mark
et
compe
titive inf
ormation
This projec
t prov
ides fas
ter acce
ss to
data
neces
sary
to win ne
w busine
ss
This projec
t enab
les CLIENT to
reach
a new m
arket
or custo
mer seg
ment
This projec
t satis
fies a
critic
al requ
irement
for
winning/deliv
ering
business
TOTAL
Increas
e in cu
stomer
satis
faction
This projec
t brin
gs new
problem so
lving c
apabili
ty to
frontli
ne staf
f
This projec
t prov
ides vis
ibility to
timely
infor
mation
regarding
CLIENT perf
ormance
This projec
t bench
marks C
LIENT agains
t com
petition
This projec
t corr
ects a
custo
mer sa
tisfactio
n problem
This projec
t incre
ases th
e loyalty o
f CLIENT cli
ents
throu
gh cle
ar va
lue adde
d
TOTAL
New learni
ng or c
apab
ility
This projec
t open
s the d
oor to new
servic
es
previousl
y una
vailab
le
This projec
t incre
ases CLIE
NT' capa
bility t
o compete
This projec
t incre
ases th
e front-
line sta
ff cap
abiliti
es to
servic
e the
custo
mer
This projec
t enab
les th
e delive
ry of n
ew
trainin
g/acce
ss to kn
owledge
This projec
t prov
ides a b
etter
infrastr
ucture fo
r
advanced
techn
ologies
This projec
t exte
nds the
produ
ctivity
of exis
ting
sytem
s or re
places o
utdated o
nes
TOTAL
4 4 4 3 3.75 4 4 4 4
3 4 3 2 3 3 3 2 2
3 3 4 5 3.75 4 4 3 3
2 1 3 3 2.25 2 2 1 2
Steps to Alignment
1. Create a Governance Process & Revise it periodically
2. Write a clear description of your destination – Business Objectives
3. Define the metrics to recognize your having attained them
4. Place this vision in its proper context of short + long-term goals for next layer in the team & so on
5. Create a safe environment to escalate new information back to you. Communication is key!
6. Check IT project’s reasonableness among other business goals (Budget, Value/Benefit, Business, Alignment, Risk & Priority)
7. If your organization is large, appoint a Portfolio Manager
8. As in sea voyages of old, check your bearings often
9. Stay the course, but kill a project swiftly if needed
10. Ask for assistance at any point. No one-of-us is as smart as all of us.
The Language of Business Leaders(spoken here)
www.bytesofkonwledge.comwww.bytesofkonwledge.com
Michael GaloPresident & IT Strategistmichael.galo@bytesofknowledge.com(615) 850-0279
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