dont try to align it and the business

of 38 /38
Trying to Align IT with ‘The Business’ is Futile December 30, 2008 Copyright: www.stankirkwood.com

Upload: stan-kirkwood

Post on 23-Jan-2015

4.565 views

Category:

Technology


1 download

DESCRIPTION

CIOs struggle with trying to align IT with the rest of the business. Problem is "the business" as a single entity does not really exist. Therefore there is not one thing to align to.

TRANSCRIPT

Page 1: Dont Try To Align It And The Business

Trying to Align IT with ‘The Business’

is Futile

December 30, 2008

Copyright: www.stankirkwood.com

Page 2: Dont Try To Align It And The Business

Copyright: www.stankirkwood.com 2004

Business & IT CIO Challenges

Every year Aligning IT to the Business ranks as one of the top three challenges for CIOs.

Here is a snapshot of the result of a study done over a two-year period. As you can see the alignment of IT was the number one issue in both years.

Page 3: Dont Try To Align It And The Business

CIO ChallengesBusiness & IT

The most critical challenges facing agency chief information officers*

Top ten challenges:

2005 Rank DESCRIPTION 2004 Rank

1 Aligning IT and organizational mission goals 1

2 Obtaining adequate funding for IT programs and projects 3

2 Building effective relationships in support of IT initiatives with agency senior executives (agency head, CFO, etc.)

11

4 Hiring and retaining skilled professionals 5

5 Formulating or implementing an enterprise architecture 4

6 Unifying "islands of automation" within lines of business (across agencies) 8

7 Using IT to improve service to customers/stakeholders/citizens 2

7 Consolidating/virtualizing the IT infrastructure --

9 Managing or replacing legacy systems 5

10 Developing agencywide IT accountability 7

* AFFIRM – Association for Federal Information Resource Management

Copyright: www.stankirkwood.com 2004

Page 4: Dont Try To Align It And The Business

What is ‘The Business’?Business & IT

The BusinessITAlign

Each part of this car must be in alignment with each other part.

Misaligned components will harm performance and could cause unexpected results.

Copyright: www.stankirkwood.com 2004

Page 5: Dont Try To Align It And The Business

What is ‘The Business’?

Network

Servers

Internet

Applications

Security

Management

Business & IT

The BusinessITAlign

IT is not just one thing.

IT performs many functions, each one requiring different knowledge and skill sets.

Copyright: www.stankirkwood.com 2004

Page 6: Dont Try To Align It And The Business

What is ‘The Business’?

Executive Management

Accounting

Finance

Legal

HR

Facilities Management

Sales

Marketing

Advertising

Merchandising

Product Development

Customer Service

Production

Operations

Purchasing

Material Mgmt

Logistics

Network

Servers

Internet

Applications

Security

Management

Business & IT

The BusinessITAlign

Aligning IT and The Business is a “Many-to-Many” relationship.

Which part of IT is to be aligned with which part of “The Business”?

Copyright: www.stankirkwood.com 2004

Page 7: Dont Try To Align It And The Business

What is ‘The Business’?

Network

Servers

Internet

Applications

Security

Business & IT

The BusinessITAlign

The Business is not one nice and neat entity. It has many inter department connections which look like this picture.

Payroll /Benefits

P

P

P

P

P Advertise

P

P

P

P

P

Accounting

P

P

P

P

P

Sales

P

P

P

P

P

Finance

P

P

P

P

P

CustomerService

P

P

P

P

P

Logistics

P

P

P

P

P

Manfact

P

P

P

P

P

Warehouse

P

P

P

P

P

Copyright: www.stankirkwood.com 2004

Page 8: Dont Try To Align It And The Business

What is IT going to align to?Business & IT

Business

Sales

Marketing

Advertising

Merchandising

Product Development

Customer Service

Operations Administrative

- Goals- Incentives- KPI’s- Budget- Projects

- Goals- Incentives- KPI’s- Budget- Projects

- Goals- Incentives- KPI’s- Budget- Projects

- Goals- Incentives- KPI’s- Budget- Projects

- Goals- Incentives- KPI’s- Budget- Projects

Manufacturing

Assembly

Purchasing

MaterialManagement

Logistics

- Goals- Incentives- KPI’s- Budget- Projects

- Goals- Incentives- KPI’s- Budget- Projects

- Goals- Incentives- KPI’s- Budget- Projects

- Goals- Incentives- KPI’s- Budget- Projects

- Goals- Incentives- KPI’s- Budget- Projects

Finance

Human Resources

Information Technology

Legal

Facilities Management

- Goals- Incentives- KPI’s- Budget- Projects

- Goals- Incentives- KPI’s- Budget- Projects

- Goals- Incentives- KPI’s- Budget- Projects

- Goals- Incentives- KPI’s- Budget- Projects

- Goals- Incentives- KPI’s- Budget- Projects

- Goals- Incentives- KPI’s- Budget- Projects

Copyright: www.stankirkwood.com 2004

Page 9: Dont Try To Align It And The Business

v

You must be able to see what you are aligning to

Business & IT Aligning to the Vision

Each person must have a common understanding of what the end state looks like or else they are not going in the same direction

Words are not good enough to have a common understanding.

Here is an experiment to prove that point.

Copyright: www.stankirkwood.com 2004

Page 10: Dont Try To Align It And The Business

Four people were given a verbal description of a vision.

Those four people represented four Vice Presidents of a company.

Their job was to implement my vision by drawing their quadrant which represented ¼ of the company.

There were two constraints placed upon them:

• Could not show each other their work until they were finished drawing

• They could not talk with each other.

Four different strategies were executed - as you will see by going through the next slides.

Business & IT Setting up the Experiment

Copyright: www.stankirkwood.com 2004

Page 11: Dont Try To Align It And The Business

“A house in a field with a tree on either side of it, mountains in the background, clouds in the sky and a brook.”

VisionBusiness & IT

Copyright: www.stankirkwood.com 2004

Page 12: Dont Try To Align It And The Business

Just Do It! – Strategy 1

Result: Nothing aligned. Mountains in every quadrant

Business & IT

Page 13: Dont Try To Align It And The Business

Reorganization – Strategy 2

Here we had each person select the quadrant they could draw best. We were getting “the right people in the right seats” (Reorganizing). Alignment better than before but only barely.

Business & IT

Page 14: Dont Try To Align It And The Business

To replicate new IT systems I allowed them to talk with each other – exchange information more easily. This simulated having improved IT communications. Still distinct alignment issues.

New IT Systems – Strategy 3Business & IT

Page 15: Dont Try To Align It And The Business

What would happen if I showed them what my vision looked like? Here is what I had in mind. And here is what my four VPs did after seeing my vision.

Show Blueprints – Strategy 4Business & IT

Page 16: Dont Try To Align It And The Business

While not perfect this comes very close and I can manage the differences. It took much less time and communication to complete the “implementation” when they could see what I wanted.

Blueprint-Based AlignmentBusiness & IT

Page 17: Dont Try To Align It And The Business

How to create alignment

Executives developing goals and strategiesImplementation team

Business & IT

What happens to common understanding when you only have words to rely on? How confident are you that the implementation team will build what you

are thinking? Copyright: www.stankirkwood.com 2004

Page 18: Dont Try To Align It And The Business

Blueprints provide a common understanding and context.Effective empowerment comes only thru common understanding.

How to create alignment

Executives developing goals and strategiesImplementation team

Business & IT

Copyright: www.stankirkwood.com 2004

Page 19: Dont Try To Align It And The Business

People can not see what you have in mind so how can you expect your employees to implement that? The design of the business is the responsibility of the CEO / President. 80% of the time performance issues are design-related.

What you have in mindOur understandings constantly change. We read, we think - and our idea of what the business is and can be changes.

Business & IT

Copyright: www.stankirkwood.com 2004

Page 20: Dont Try To Align It And The Business

Common Fundamentals

Every business is unique and every business is the same.

Business & IT

Same is true of people. Each of us likes to think of ourselves as being unique and yet we are much more similar than different.

The next two slides will illustrate my point.

The first slide will show distinctly different people. You can easily tell them apart.

As soon as you hit enter the people will be replaced by business logos representing their corporations. You can easily tell them apart as well.

Copyright: www.stankirkwood.com 2004

Page 21: Dont Try To Align It And The Business

Common Fundamentals

How Unique are they?

Business Blueprints™

Copyright: www.stankirkwood.com 2004

Page 22: Dont Try To Align It And The Business

Common Fundamentals

How Unique are they?

Business Blueprints™

Copyright: www.stankirkwood.com 2004

Page 23: Dont Try To Align It And The Business

Common Fundamentals

That was easy.

Business & IT

Now we get to the interesting slide which will show how businesses are essentially the same.

Structure: As humans we have the same structure. That is we have a head, two eyes, ears, torso, legs, arms, fingers, …. Though we may be apportioned differently the basics are essentially the same.

Structure: Our businesses have the same structure. You will see the five basic components of every business regardless of size or industry.

Copyright: www.stankirkwood.com 2004

Page 25: Dont Try To Align It And The Business

Common Fundamentals

Metrics:

Framework:

Building Block:

Business Blueprints™

Structure: Capstone

Organizational Model

Process

Model

Market Model

SystemsModel

Copyright: www.stankirkwood.com 2004

Page 26: Dont Try To Align It And The Business

Common Fundamentals

That was easy.

Business & IT

We continue to develop this slide to show how businesses are essentially the same.

Building Block: As humans we share a common DNA structure. True it is not completely the same or we would all look the same but human DNA is different than any other animal.

Building Block: Our businesses have the same DNA. Look closely and see the very essence of business since day 1.

Copyright: www.stankirkwood.com 2004

Page 28: Dont Try To Align It And The Business

Common Fundamentals

Metrics:

Framework:

Building Block:

Business Blueprints™

Structure:

- ROI -

CustomersStakeholders

- VP -Process

Product

- VP -

Product

Competitor

Capstone

Organizational Model

Process

Model

Market Model

SystemsModel

Copyright: www.stankirkwood.com 2004

Page 29: Dont Try To Align It And The Business

Business & IT

Another perspective about how we are essentially the same.

Framework: Not only do we share the same common components we also have the same basic systems. Our bodies act in a similar fashion. Look at our respiratory, circulatory and reproductive systems. They are the same.

Framework: Our businesses have the same overarching processes. Every business, regardless of size or industry, must perform the same four processes.

Copyright: www.stankirkwood.com 2004

Common Fundamentals

Page 31: Dont Try To Align It And The Business

Common Fundamentals

Metrics:

Framework:

Building Block:

Business Blueprints™

Structure:

- ROI -

CustomersStakeholders

- VP -Process

Product

- VP -

Product

Competitor

Capstone

Organizational Model

Process

Model

Market Model

SystemsModel

Manage the Entity

Support the Entity

Create Demand

Fulfill Demand

BusinessEntity

Copyright: www.stankirkwood.com 2004

Page 32: Dont Try To Align It And The Business

Business & IT

Another perspective about how we are essentially the same.

Metrics: Visit a doctor in any country for your annual physical to see how well your body is performing and she/he will look at the same metrics.

Metrics: The performance of businesses can be determined by looking at the same eight metrics. Four are outward facing (towards the customer) and four are inward facing (towards the stakeholder).

Copyright: www.stankirkwood.com 2004

Common Fundamentals

Page 33: Dont Try To Align It And The Business

Common Fundamentals

-Temperature 98.6°- Blood pressure 120/80- Cholesterol <200- Red blood count

-Females 4.2 to 5.4 m/uL -Males 4.7 to 6.1 m/uL

- White blood count 4,300 to 10,800 cmm

Metrics:

Framework: Respiratory System

Circulatory System

Building Block:

Business Blueprints™

Structure:

Copyright: www.stankirkwood.com 2004

Page 34: Dont Try To Align It And The Business

Common Fundamentals

Metrics:

Framework:

Building Block:

Business Blueprints™

Structure:

- ROI -

CustomersStakeholders

- VP -Process

Product

- VP -

Product

Competitor

Capstone

Organizational Model

Process

Model

Market Model

SystemsModel

Manage the Entity

Support the Entity

Create Demand

Fulfill Demand

BusinessEntity

Copyright: www.stankirkwood.com 2004

- (VP) Value Proposition - Measure market satisfaction o Desirability o Cost o Quality o Lead time

- (ROI) Return on Investment - Measure stakeholder satisfaction o Customer satisfaction o Financial Success o Operational Effectiveness o Management Effectiveness

Page 35: Dont Try To Align It And The Business

2 Fundamental Questions

How satisfied is the market with your products and services?

• Alignment between customer expectation and business performance

Business & IT

BusinessLeaders

CustomersStakeholders

Value of products and services

Return on Investment

How satisfied is your stakeholder with the return on investment?

• Alignment between stakeholder expectation and business performance

Copyright: www.stankirkwood.com 2004

Page 36: Dont Try To Align It And The Business

Business AlignmentBusiness Blueprints™

Capstone

Market Performance Requirements

Process Performance Requirements

Organizational Performance Requirements

InformationTechnology

Expectations of market for services

Competitor offerings of services

How products/services designed to meet customer expectations

How processes designed to deliver products/services

How organization designed to execute processes

How IT is designed to support The Business

Copyright: www.stankirkwood.com 2004

Each component of the business (fundamental structure) must be designed based upon performance requirements of the preceding component.

Business Alignment can only be achieved by design.

Page 37: Dont Try To Align It And The Business

IT AlignmentBusiness Blueprints™

Capstone

Market Performance Requirements

Process Performance Requirements

Organizational Performance Requirements

InformationTechnology

Expectations of market for services

Competitor offerings of services

How services designed to meet customer expectations

How processes designed to deliver services

How organization designed to execute processes

How IT is designed to support The Business

Copyright: www.stankirkwood.com 2004

IT alignment is based upon two things:

• The business design

• The design of the IT department

Page 38: Dont Try To Align It And The Business

Business and IT AlignmentGood News:• IT and The Business can be aligned• An aligned area will give you:

– Confidence that the IT management team has a common understanding of the department’s direction and strategies and their roles in it’s success– Confidence in the value of IT’s products and services and the processes that produce them– Confidence that the areas of IT are working together and aligned.

• A set of strategies and a master project plan are not

sufficient.

Business & IT

Copyright: www.stankirkwood.com 2004