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Delivering Maximum Business Valuefrom

Information Systems

Part 1

David P Jacobs

Copyright Profit From Information Limited 2001. All rights reserved.

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“Each Succeeding Generation of Computers Seems to

Teach Businesses to Operate Slower Faster.”

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Information Systems

“Only 15% of IT departments were able to meet strategic business goals.”

“There is no link between IT spend and corporate profitability.”

“We need a fundamentally new approach.”

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Context

of the problem and the start of a solution

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The Business Log and Phys Design Code

10% 90%effort effort

Users Analysis Software

90% 10% !?

Use of Processing Information of Information

The Ten-Ninety Diagram

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Business

Sector

Operation

Strategy

Mission

Process

Creativity

FunctionalInformation

System

LogicalDesign

Physical Information

System

Physical Design

Application

Data

Software Foundation

Infrastructure

Operating Systems

Networks

Market

Customers

Sales

Profit

Image

Loyalty

Suppliers

Traditional domain of ‘IT’

The Profit Business Value ApproachPeople, Culture, Creativity, Objectivity, Information

The Information Systems Activity/Role Spectrum

Market Research

Advertising, Marketing

ConceptualInformation

System

InformationUsage & Type

MarketingOperational

Financial

OperationalStrategicExternalInternal

V

A

L

U

E

£

£

£

B

I

N

A

R

Y

V

O

L

T

A

G

E

s

Requirements

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The Exponential Iceberg of Resource

A given business requirement

An exponential, multi-dimensional, unpredictable

and volatile resource requirement

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‘Information Technology’Expectations and Reality

Software

Usage and Business Value

Start of Computing Time 2001

Maximum Obtainable

Levelof

Expectation

Hardware

The 1934 Model

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Benefit Profiles

0

1

+

2

-1

‘Generation’ upgrades

Technical ‘upgrades’

Year 2000 Millennium Bug

Growth, business creativity

Information Systems Business Value (ISBV)

Worth doing, some benefit

Running to stand still, negligible positive benefit

What we’re aiming at

Users ‘satisfied’

IT Effectiveness

Cost ‘containment’

Traditional Automation

Conceptual Units of Benefit

Euro !

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Business Information

Value

£’s

Information

X Y

ZPeople, Activity

Business and Information

‘IT’

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The Core of a Solution

The Layers

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Pro-active Support

£s Value £s

Deployment

Physical Design

Semi-physical design sub layers

Functional / Logical Design

Business Goals and Objectives

Information support for Business Goals

Conceptual Information System

Horizontal Layers of Focus (Major)

VALUE

Requirements and Options

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Vertical Correspondence

To ensure that business value cascades through the process

Requirements

ValueIdentification

Functional Design

Increase detail

Verify Propagate

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Profit Principlesand IT Effectiveness Guidelines

• Functional ConceptsCreativity, Objectivity, Intent

• Principles of AutomationCrunch, In-touch, Value Targeted SubsetsData and Information

• Business Practice and ContingencyHuman and Machine

• Physical PracticalitiesPragmatic Design and Diagnostics

• Documentation Issues‘What you need', Parallelism

• Multi-skilled Role Development

• Culture Change Guidelines

• Strategy and Decision Making

• Etcetera …

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The Profit Business Value Approach

Is based on extensive, multifaceted business/IT ‘hybridism’ and gap bridging.

It is therefore

• a Skill

• a (Unified) Set of Roles

• an Attitude & Ethos

• an Approach

Why and how does this kind of Approach differ from more traditional IT approaches…?

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The Business

The Profit Business Value ApproachProfit Principles and IT Effectiveness Guidelines

Functional Concepts

Identify and Monitor Business ValueApply Principles of ‘Automation’

Data and Information IssuesBusiness Practice and Contingency

Etcetera …

I.T.

PRINCE LBMS/Platinum SSADM, YOURDON, IE DSDM, RAD/JAD, LSDM OO, UML …

Project Manager Business Analyst Systems Analyst Developer

Quality measured on business benefit

Reconciliation of Business & IT views

Use of multifaceted skills

Holistic and business focused

Understand how information increases Business Value

Manage culture transformation

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Working with a BISS or an ISBVS

Project ManagementI.S./I.T.

Provides IS/IT resources, schedules, monitors physical quality, technical analysis, software design, delivery and support

Project ManagementBusiness

Defines business goals, functional requirements, provides business resources, business ‘process’ definition and deployment

Stakeholders/Steering Group, IS/IT Director/CIO

Project TeamBusiness and IS/IT Personnel

ISBVS (BISS)

Translates, mediates,identifies business value, monitors layers of focus,

assesses benefits, reviews use of information

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Enhancing Existing Methods

What can the Profit B. V. Approach add?

For example, to DSDM

• MoSCoW

• Extensions

• Value Tagging/Projection

• Timeboxing

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‘Information Technology’A set of steps for mankind

Software

Usage and Business Value

Start of Computing Time 2001

Maximum Obtainable

Levelof

Expectation

Hardware

The Step Diagram

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Future Value Strategy

For Improved Business Value and Benefits we could do well to …

aim at generating business value rather than ‘getting the software in’

calculate step heights and lengths based on practicality and maximum Business Gain

try to target value at a lower level of detail

improve understanding of the use of information

promote generic, business-IT ‘hybrid’ and gap bridging skills, play as one team - and make better use the skills we have got!

“It’s the broader skills that bring the value out from the narrower ones.”

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We Should Remember That

• User Community requirements may change every day - often justifiably!

• Information System Business Value cannot be manifested before implementation day and therefore requires Pro-active ‘Support’ thereafter.

• We are all ‘stupid’ together in this. Let’s work together - which makes us all clever!

• Producing high value information systems is like competing in a series of grand prix’s, it’s highly marginal, you have to keep tuning and the car only performs as well as its driver drives!

• Gain takes Pain and Strain, like going to the gym!

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21st Century Information Systems

We could also do well to …

Consider the aim to be ‘to create a new way of working that may use information systems at strategic points to engender business value’

Avoid playing politics with business ‘IS/IT’ projects – it kills value (and usually the project!)

Scope realistically, smaller steps rather than slippery leaps!

Profit’s objective is ‘to refine its Business Value Approach so that more businesses can be helped to help their customers and create value along the chain’

“Don’t try to beat this recession, plan to avoid the next!”

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For further details please refer to Profit product literature

Email : business@profinfo.co.uk

Wishing you Success!

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Appendix 1

Additional Slides Part 1

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Aims of The Approach

To maximise GainTo minimise Pain

By improving the effectiveness of an organisation or business unit’s BICEPS

That is the combined strength of its Business Information Creativity, Effort,

People .. and Software

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Style and Derivation of

the Approach

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Style of the Approach

• Business value and benefits focused

• Pragmatic, what you can do ‘on Monday’

• Holistic, takes account of the bigger picture

• A multifaceted view of business, IS and IT

• Shifts the focus to the Why/What from the What/How

• Sees information as the link between business and IT

• Combines evolution with revolution

• Out of the box coupled with inside!

• Enhances existing methods, does not replace

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Inputs to the Approach

• Empirical Synthesis

• Practice

• Observation

• Research

• Hypothesis and Trial

• Comparison

• Socratic Reasoning

• Discussion

• Prototyping

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The Business Value Approach’s Availability

This presentation

Published material

Informally documented material and development of The B. V. Approach

Professional Services and associated Documentation

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Appendix 2Selections from Part 2

Part 2 includes …

Definitions of Information Systems Business Value and IT Effectiveness

Maximising the Business Gain Equation

Assessment, Analysis, Planning and Monitoring with The IT Effectiveness Improvement Programme and The IT Effectiveness Spectrum

Value Projection at a Lower Level of Granularity

The Business Value Approach in Action

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Definitions

Information Systems Business Value (ISBV)

The degree to which the Information System potentially helps the business to achieve its objectives, i.e the business principle that yields the value (the quality of the ‘BICEP’)

IT Effectiveness

The degree to which the physical IT system supports the ISBV (the quality of the ‘S’)

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The aim is to Maximise Gain and Minimise Pain

That is Business Gain = ISBV * IT Effectiveness

• ISBV ranges from approx –1 through 0 to +N

• IT Effectiveness cannot exceed +1 (or 100%)

• ISBV can be more than +1 !

IT Effectiveness cannot increase ISBV, it can only detract from ISBV or fulfil it at best

Therefore ISBV has to be as large as possible in order to maximise BG and survive the Value Reduction Process (referred to in the Activity/Role Spectrum)

Information Systems Business Gain

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A systematic approach to the improvement of Information Systems

Business Value

The IT Effectiveness Improvement Programme

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1Assessment using the IT

Effectiveness Spectrum

E.g. ISBV = 37/100

2Analysis

of ISBV by Criterion

i.e. decompose score into constituents

3Assess Propensity

to improve by criterion

e.g. BAP ‘reconstructivity’ to be increased from 25/100 to

43/100

4Plan Improvements

on selected criteria

i.e. how to achieve required ISBV by criterion

0Select

Business Scope

e.g. Sales and Marketing

5Implement Improvements

and optionally go to re-assessment of new ISBV or

choose new scope

The IT Effectiveness Improvement Programme

Typical assessment and improvement cycle

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The IT Effectiveness Spectrum

First devised by Profit in 1996 as an Information Systems Business Value assessment and improvement ‘mechanism’

Helps to assess the quality of the process as well as the value and quality of the output

Consists of a range of indicative criteria measured and weighted

Designed specifically for the purpose of improving Information Systems Business Value and Gain

Is being continually improved

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IT Effectiveness Spectrum

Example Criteria

• Business Objectives, degree of address

• The degree of business ‘Reconstructivity’

• Adherence to the Layers of Focus

• The Business / IT relationship and its quality

• Degree of User Community involvement

• Information Usage ability of the business

• Etcetera

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‘Automating’ with the Crossword Diagram

+ +

0 0 0 -

0

0

0

BusinessActivity Pattern

Computer Assisted Business Activity

Benefit ‘Score’

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The Approach in Action

Some recent achievements as the approach becomes The Approach

1997 No bugs? – unheard of!

1999 Functional objectivity triumphs

2000/1 MoSCoW extensions in test

Some early wins with the approach

1981 birth of ‘hybridism’

1986/7 proof of the pudding

1987/8 a great idea but ouch!