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Aligning Organizational Performance to IT Development and Integration

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Agenda

1. Short business card

2. Practical Issues between software developers and clients

4. Public sector – Riga e-city project

3. Business – Performance systems

5. Opportunities for SW development and IT services sector

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Ernst & Young in figures• One of the “Big 4” in

professional services business• First/second in market position

in 7 of the top 10 world markets• 106,000 people in over 700

cities in 140 countries• FY 2002 revenues – 10,1

billion USD• FY 2003 revenues are

projected to be USD 13 billion - up 25%

• In Baltics offices in Vilnius, Riga and Tallinn

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Ernst & Young Baltics: 270 FT personnel• Audit services

• TAX consulting

• Legal services

• Corporate Advisory Services:– Strategic planning and improvement of

business processes– IT planning and implementation– IT security management– Corporate finance consulting– Business risk assessment – Human capital solutions– Customer relationships solutions

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Practical issues and trends observed

• Difficult to get investment approvals for larger IT development / integration projects

• Fast changing and inconsitent requirements

• Budget and time “Overruns” becoming a normal practice

• Legal disputes and litigation cases

• Increasing number of failed projects, frustration from business people

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Example from business side

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How tasks are assigned to this manager, how hes performance is being evaluated?

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Role of performance measuring

Technology Process

Strategy

People

Sales Marketing

ServiceBO sp

ecial

ists

PerformanceMeasurement

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POLICY, MISSION,

Performace indicators

ActionHow do we contribute progress to this aim daily?

CRITERIASGoalWhat should

we do?

Most popular methods – Balanced Scorecard (BSC)

STRATEGYStrategy

mapHow are we going to get there?

VISION VisionWhere are we going?

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Balance Scorecard (example) Business perception Creativity Planning and systems approach Promotion of level of efficiency

Profit

Orientation to clients needs Forming and maintaining of relationaships Orientation to changes Flexibility

Clients

Project management Professional/ technical competences Delegation of obligations Quality control

Operational excellency

Improvement of team work Promotion of group work results Development and motivation of emloyees Self-development

Human

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Insight for SW development• Most of middle level managers

have defined perfomance indicators, that should be achieved within current financial year and/or medium term

• Indicators contain both financial and non-financial measurments

• Most indicators are industry specific and will not be directly addressed through SW development and integration

• In case predefined performance is not met they feel it in theyr pockets !

Managers are not happy with projects that are putting

at risk their personal scorecards !

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Example from public sector

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Modernization of Riga city using IT and modern organizational practices

1. Improving quality and accessibility of municipal services

2. Enhancing the transparency and public participation

3. Increasing efficiency of municipality operations

Project mission:

Riga e-city project

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Project organizationCity council

IT council

Project council

Project board

City majorDeputy majorExecutive director

Project directorRC project managersSP representatives

Subproject/ work package

group

RD project managerSP/ Supplier project managerUser representativesSP/ Supplier

Project supervision

Project management

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Project approach

Business functions

BusinessCapability

(Architecture)

Strategy

Process

HR & Organization

Applications

IT infrastructure

Solutiondevelopment Operations

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Target functional model of customer services

Traditional organization

Product push

Hard selling

Superposition of channels (mainly outbound)

Basic segmentation

Limited and unstructured feedback

TouchpointsFront officeBack office

Structured FO-BO communicationEnhanced customer information

Integration of channelsOutbound and inboundSingle point of contact

Increased and structured feedback

One-to-one approach (products - service - relationships)

Channels dynamics

One stop shop Multi-product

Multi-platforms

Flexible organization

Customers & Partners

Touchpoints Contact Team Networked OrganizationCustomer Centric

Organization(focus on Information&

Interactivity)

Corporate Centric Organization

(focus on production and sales)

Transition

Tomorrow

Today

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Lessons and project issues

•E-city project from very beginning has to be positioned as an integrated organization modernization project

•Sponsorship and practical involvement of higher political management is crucial•IT department is not best candidate for e-city project manager role•Overlapping of legislative and executive power, fragmentation of municipal administration – serious obstacle to implement municipality-wide modernization initiatives

Sponsorship and practical involvement of higher political management is crucial

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How to get such sponsorship and involvement ?• Produce tangible, measurable

results from the project on regular basis– Outputs vs. Outcomes

• Be ready to adopt changing and sometimes conflicting business architecture and development scenarios

• Adopt your project development lifecycles to annual budgetary procedures

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Opportunities for SW development world

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Is current SW development approach aligned with reality ? • Traditional “waterfall” based development

methods– Strict definition phases wiyth emphasis on fixing

requirements– Insufficient interaction with customer during

development phases– Heavy change management procedures– Testing against “old” requirments

• ISO certification ?• Capability Maturity Model (CMM) certification ?

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What would help to work it out ?

• Industry specialisation– Better understanding, predicting

customer needs– Possibility to use prefabricated industry

specific objects– Less time spent on requiremements

• Training and investments in agile development methods making them (RAD, Reusable components)– industry acceptable– customer acceptable– procurement process acceptable