The Era Of BT Changes How IT Assures Business AlignmentBobby CameronVice President And Principal AnalystForrester Research

September 9, 2008

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Agenda

• What is BT - and why doesn't IT's current approach work?

• How does BT change the business' expectations of IT?

• How are IT shops changing their organizations, technologies, and alignment processes to enable BT success?

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Agenda

• What is BT - and why doesn't IT's current approach work?

• How does BT change the business' expectations of IT?

• How are IT shops changing their organizations, technologies, and alignment processes to enable BT success?

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Business alignment is about matching resources

► Adjusting IT resources to match business demand for both existing and new technology services.

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Today’s best IT executives manage IT-business alignment through a practice of “matching” . . .

• IT organizational structure -to- business units

• IT initiatives -to- business strategy

• IT budgets -with- business units

• IT initiatives -with- business processes

• The CIO -with- business peers

• . . .

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But alignment presents constant challenges as CIOs strive to balance across three dimensions

Demand

• What business requests• Funds for new investments• Individual business units’ needs• Business plant, equipment, people

< to >

• What IT needs to improve• Legacy maintenance• Enterprise-wide processes• Technology investments

Focus

• Delivering new value• Outsource• Delivering business process change• Current business plans• Deliver new value the old way

< to >

• Re-architecting for future development• In-house staff• Reducing ongoing ops costs• External market forces• Upgrade staff skills

Change

• Emerging technologies• Agility• Business-value sourcing• New business models

< to >

• Existing IT architecture• Stability• Internal sourcing• Traditional business models

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And business organizations are frustrated with IT

• Businesses are impatient with IT’s speed

• IT’s efforts to govern technology populism fail

• Technology is allowing users on their own to out-pace IT’s projects

Alignment becomes tough as IT’s design-build-maintain

approach isn’t working!

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New technologies enable business users — without IT

• Tech populism — blogs, wikis, IM, handheld devices

• Assembling, composing, and configuring — business process management (BPM), information workplace (IW)

• Contracting — Software as a service (SaaS), business process outsourcing (BPO)

• All based on increasingly robust IT infrastructure and operations

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We call this a shift to Business Technology (BT)

► Pervasive technology use that drives business results — increasingly under the control of business organizations

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BT will bring a fundamental

change . . .

. . . not just another swing of the IT

pendulum

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Non-IT staff drive the use of technology through roles previously found only in IT

Base: 186 global business executives

28%

34%

26%

28%

21%

30%

3%

3%

4%

3%

3%

2%

31% 25%

25% 15%

27% 19%

36% 24%

38% 24%

32% 21%

3%

3%

3%

10%

7% 16%

6% 19%

5%

12%

10%5%

Defining or designing the solution

Directly selecting vendor-offered solutions

Directly negotiating with and/or directly managing solutions

vendorsDirectly configuring solutions to

deliver what you need

Directly managing the technology solutions once in production

Directly managing projects with substantial technology involved

Completely other business areas’ (not IT’s) responsibility

More other business areas’ responsibility

Equal mix of other business areas and IT

More IT’s responsibility

Completely IT organization’s responsibility

Don’t know

Source: July 2007 US The Business View Of IT Online Survey

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CIOs have to balance two competing aspects of increased business control of technology

Risky business control . . .

• Information integrity and consistency

• Assuring compliance, security, policy, and privacy

• Quality assurance

• Execution performance

. . . vs. business-control- driven opportunity

• User-driven speed

• Business agility

• Networked business models

• Founded on IT excellence

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Agenda

• What is BT - and why doesn't IT's current approach work?

• How does BT change the business' expectations of IT?

• How are IT shops changing their organizations, technologies, and alignment processes to enable BT success?

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Traditionally, IT handled the entire technology stack

Stable foundation and commodity technologies

Transaction systems, data warehouses — RDBMS, BI

platform — storage, servers — data center ops,

desktop maintenance

Dynamic and differentiated technologies X Internet,

multichannel, mobile, SOA

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But with BT, business people deliver solutions

Historically, it’s all been IT. . .. . . but with BT, business people deliver dynamic, differentiated solutions

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BT alignment requires that CIOs recognize fundamental changes in users’ needs

Traditional IT provides: BT users also need from IT:

• Solution analysis, design, delivery, and operations

• Solid business app platforms• SOA services for data,

transactions, policy, security, etc. • Deep technical skills on call• Support for BT tools • Operational support for BT

solutions

• Project management • Project support services• Help with skills development

• IT-centric technology • Open minds, support, & culture

• New technology R&D • Joint business innovation

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Agenda

• What is BT - and why doesn't IT's current approach work?

• How does BT change the business' expectations of IT?

• How are IT shops changing their organizations, technologies, and alignment processes to enable BT success?

19Entire contents © 2008  Forrester Research, Inc. All rights reserved.

IT leaders face a fork in the road — Take it!

Focus mostly on traditional IT

• Letting business areas run ahead without you

• Getting stuck in the technology engine room

Focus heavily on enabling BT

• Empowering business success with managed risk

• Becoming a partner player

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CIOs enable BT by enabling flexibility

From: To:

• IT/business alignment • BT synchronization

• Business results from large IT-led projects

• Business results mostly from small BT efforts

• Investments that cover much of the technology stack

• User investments in thin layers at the top tech stack

• Data and transaction investments deep in the stack

• Crisp lines between IT and business roles

• Fluid lines of responsibility between IT and the business

• IT-does-it-all • Business-user-enabling• IT has open minds and culture

• IT assures risk and policy • IT enables users to manage risk and policy

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Today’s IT organization manages all technology . . .

IT Architecture

IT Strategy & Planning

CIO

Development IT OperationsIT Demand

Management

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Technology Exec

Today’s IT organization manages all technology . . .

IT Architecture

IT Strategy & Planning

CIO

Development IT Operations

IT Demand Management

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Technology Exec

. . . but CIOs must become chief BT officers, restructuring IT . . .

BT Architecture

BT Strategy & Planning

CIO

BT Synchronization

Business OrganizationsBusiness

OrganizationsBusiness Organizations

. . . as business orgs take on roles previously in IT

•Business analysis

•Project management

•Application configuration

•Information management

•Analytics delivery

•Security, compliance, risk, and policy assuranceDevelopment IT Operations

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And IT-business alignment becomes BT synchronization

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All top executives must help steer

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The CIO will change to support BT enablement

Source: December 2008 “Next Up: The 21st Century CIO”

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CIOs will focus more on partnerships — internal businesses, suppliers, customers, & competitors

Source: December 2008 “Next Up: The 21st Century CIO”

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Checklist for successful 21-st century CIO

Source: December 6, 2007 “Next Up: The 21st Century CIO:

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Bobby Cameron

+1 617.613.5708

bcameron@forrester.com

www.forrester.com

Thank you

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Related Forrester research reports

• February 22, 2008 “New IT-Business Partnership Enables BT Success — Centralized IT Control Fails As BT Moves Beyond IT’s Direct Control” by Bobby Cameron — http://www.forrester.com/Research/Document/0,7211,44019,00.html

• December 6, 2007 “Next Up: The 21st Century CIO” by Bobby Cameron — http://www.forrester.com/Research/Document/0,7211,43784,00.html

• June 18, 2007 “Debunking Alignment Nirvana” by Laurie M. Orlov — http://www.forrester.com/Research/Document/0,7211,42167,00.html

• May 7, 2007 “Business Technology Defined — Technology Management Is Changing To Deliver Business Results” by Laurie M. Orlov and Bobby Cameron — http://www.forrester.com/Research/Document/0,7211,42338,00.html