Defining Business-Driven IT Strategies - IBM€¦ · Defining Business-Driven IT Strategies ......

Robert Insley

Principal, IT Strategy & Transformation

Defining Business-DrivenIT StrategiesIBM CIO Club of Excellence

March 10, 2015

Agenda

Introduction

The Big Picture

Business Drivers

IT Drivers

Strategic Goals and Initiatives

Ensuring Traceability

Summary

2

Introduction

� In theory, a business-driven IT Strategy can be derived from a company's Business

Strategy using a straightforward top-down approach.

� In practice, various factors can lead to situations where insufficient input is available to

clearly define the business context needed to define a business-driven IT Strategy using a

classic top-down approach.

� Using real-world examples, this presentation will illustrate how to leverage various tools,

techniques and assets in a hybrid top-down / bottom-up approach to define realistic and

implementable business-driven IT Strategies that clearly illustrate how IT can help support

the achievement of the strategic business goals.

3

Agenda

Introduction

The Big Picture

Business Drivers

IT Drivers



Summary

4

Business Drivers

IT Drivers

IT Strategy is driven by business and IT considerations

Business StrategyBusiness opportunities

Vision

Projects and Operationalization

Strategic Goals

Strategic Initiatives

FinancialsRoadmap

IT Strengths & Weaknesses

Optimization Potential

Scope of IT Strategy

5

Ideally, IT and Business Strategy are fully integrated

Unaligned

Aligned

Integrated

BusinessStrategy

IT Strategy

IntegratedStrategy

IT Strategy

BusinessStrategy

6

Agenda

Introduction

The Big Picture

Business Drivers

IT Drivers



Summary

7

Business drivers

Business drivers are strategic business goals and key business principles that in some

way have an identifiable impact or relevance for the strategic positioning of an IT organization.

In aligning itself to the business drivers, an IT organization must ensure it provides the IT capabilities required by the business in order to enable the business to achieve its strategic goals.

Business Drivers are typically found in Business Strategy or Rolling Strategic Planning

Examples

� Agility – React quickly to changing market demands (Flexibility)

� Time to Market – Quickly introduce products and solutions

� Business Resiliency – Proactively identify areas of risk in order to ensure business

stability in face of adverse business conditions

� TCO – Reduce total cost of ownership

8

Dimensions of Business Drivers

Powerto Innovate

A. Efficiency

Business Drivers

C. Product Leadership

B. Customer Value

Corporate Division 1 Division 2

Be preparedfor externalGrowth

ImproveCompetitiveness

Push commoncompetencies

Powerto Innovate

Increase After Sales Business

Penetrate intonew Markets

Increase Sales Volumes

Develop tools & new Control System

Improve Processes

Improve Capabilities &Organization

Increase Robustiveness, Industrialization

Reduce CostsOrganic Growth

Increase Value GenerationCapability

ImproveCompetitiveness

9

IBM Best PracticeBusiness / IT Alignment is driven from the business architecture

10

ARB

TRB

DA

Change Programs

Business/ITArchitecturelinkages

Governance

On Demand – Technology Overview – Detail View

Capacity Management

Billing

License MgmtServices

Rating

Metering Services

Data Access Services

Common Services

Portal Services

Workflow

…Personalization

Reporting

…

…

Policy Based Orchestration

Collaboration

Services Integration Frameworks

Presentation

Mediation

Events

ETL

Acquired Services

…

…

nt

Policy Based Orchestration

Adaptors/Connectors

Application Connectivity Services

Web Services

Business Services

…

…

Business Connection

Financial

Management

Customer

Accounting

Customer

Service and Sales

Customer Portfolio

Management

AcquisitionsBusiness

Administration

Product

Management

Product

Operations

Planning&

Analysis

Checks&

Controls

Execution

Business Planning

Business Ar chitec ture

Business Unit

Administration

Manage Alli ance Relationships

Policy & Procedure Manuals

HR Management

Administer Al liance SLAs

Audit/ QA/ Legal

Facil ities

Develop and Operate Systems

Accounting and G/LProduct Di rectory

Produc t Development and Deployment

Marketing

Market Research

Acquisition Planning and Oversight

Managing Produc ts

Sector Mark eting Plans Customer P ortfo lio

and Analy sis

Credit and Risk Management

Appl ication Proces sing

Customer B ehavior Dec isioning

Tar get Lists (Prospecting) Cus tomer Profile

Contact/ Event History

Correspondence

Campaign Execution

Smart Routing

Servicing

(Dia logue Handler)

Inv entory Management

Rewar ds Management

Produc t Proc essing

Financia l Capture Payments

Customer Account

Merchant Operations

Col lec tions and Rec overy

Financial Consolidation

Bi llingTreasury

AuthorizationsSales and Cross-Sel l

Service/ Sales Adm inistration

Reconci liations

Financia l Control

Operations Administration

Securi tization

Case Handling

Customer Accounting Pol icies

Produc t Operations Management

Risk ManagementCus tomer Servicing and Sales Planning

Financial

Management

Customer

Accounting

Customer

Service and Sales

Customer Portfolio

Management


Administration

Product

Management

Product

Operations

Planning&

Analysis

Checks&

Controls

Execution

Business Planning

Business Ar chitec ture

Business Unit

Administration

Manage Alli ance Relationships


HR Management

Administer Al liance SLAs

Audit/ QA/ Legal

Facil ities


Accounting and G/LProduct Di rectory


Marketing

Market Research


Managing Produc ts

Sector Mark eting Plans Customer P ortfo lio

and Analy sis


Appl ication Proces sing

Customer B ehavior Dec isioning

Tar get Lists (Prospecting) Cus tomer Profile


Correspondence

Campaign Execution

Smart Routing

Servicing

(Dia logue Handler)

Inv entory Management

Rewar ds Management

Produc t Proc essing

Financia l Capture Payments

Customer Account

Merchant Operations

Col lec tions and Rec overy


Bi llingTreasury

AuthorizationsSales and Cross-Sel l

Service/ Sales Adm inistration

Reconci liations

Financia l Control


Securi tization

Case Handling

Customer Accounting Pol icies

Produc t Operations Management

Risk ManagementCus tomer Servicing and Sales Planning

Architecture

Enterprise Architecture

Where are the core and non-core activities?

What shape is my organization in the future?

What are the current business priorities

Where are the key programs impacting?

Who do I partner with to deliver the end to end value?

What are the priorities for Technology?

Financial

Management

Customer

Accounting

Customer

Service and Sales

Customer Portfolio

Management


Administration

Product

Management

Product

Operations

Planning&

Analysis

Checks&

Controls

Execution

Business Planning

Business Architec ture

Business Unit Administration

Manage Alliance Relationships


HR Management

Administer Alliance SLAs

Audit / QA/ Legal

Facilities


Accounting and G/LProduc t Directory


Marketing

Market Research


Managing Produc ts

Sector Marketing Plans Customer Portfolio

and Analysis


Application Processing

Customer Behavior Decisioning

Target Lists (Prospecting) Customer Prof ile


Correspondence

Campaign Execution

Smart Routing

Servicing

(Dialogue Handler)

Inventory Management

Rewards Management

Product Processing

Financial Capture Payments

Customer Account

Merchant Operat ions

Collections and Recovery


BillingTreasury

AuthorizationsSales and Cross-Sell

Service/ Sales Administrat ion

Reconciliations

Financial Control


Securitization

Case Handling

Customer Accounting Policies

Product Operations Management

Risk ManagementCustomer Serv icing and Sales Planning

Financial

Management

Customer

Accounting

Customer

Service and Sales

Customer Portfolio

Management


Administration

Product

Management

Product

Operations

Planning&

Analysis

Checks&

Controls

Execution

Business Planning

Business Architec ture

Business Unit Administration

Manage Alliance Relationships


HR Management

Administer Alliance SLAs

Audit / QA/ Legal

Facilities


Accounting and G/LProduc t Directory


Marketing

Market Research


Managing Produc ts

Sector Marketing Plans Customer Portfolio

and Analysis


Application Processing

Customer Behavior Decisioning

Target Lists (Prospecting) Customer Prof ile


Correspondence

Campaign Execution

Smart Routing

Servicing

(Dialogue Handler)

Inventory Management

Rewards Management

Product Processing

Financial Capture Payments

Customer Account

Merchant Operat ions

Collections and Recovery


BillingTreasury

AuthorizationsSales and Cross-Sell

Service/ Sales Administrat ion

Reconciliations

Financial Control


Securitization

Case Handling

Customer Accounting Policies

Product Operations Management

Risk ManagementCustomer Serv icing and Sales Planning

IBM Component Business ModelExample: Consumer Products

11

Agenda

Introduction

The Big Picture

Business Drivers

IT Drivers



Summary

12

IT Drivers

IT Drivers represent strengths and weaknesses of the current IT Organization, as well as

the future optimization potential

Examples

� TCO

– Minimize complexity & costs for development and operation of integration products

– Buy before make - Commercial solutions are available for many integration scenarios

� Organization/Skills

– Align IT skills to complexity of integration products

� Governance/Compliance

– Governance / management capabilities ensure consistent use of integration products and

technologies

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1. IT-Strategic PlanningGuidelines defined and communicatedIT-Role & Contribution, Acceptance & TrustIT in line with Business Strategy and Goals

2. ApplicationsIntegratability (Heterogenity, Interfaces) “Best-in-class” Applications (Planned / In Use)Management Information and DashboardsAbility to support multiple business linesEase of access User friendly

3. ArchitectureNetwork (Cabling, Bandwidth, Capacity, Availability) Server (Homogenity, State of the art) Clients (Homogenity, State of the art)Standards (OS, DB, HW, SW, Communications, Systems ManagementBusiness Resiliency Support for Cloud

4. Organization Structure, Process ImplementationIT Business CooperationUser Support (Reaction times, Customer Orientation, SPoC)Controlling & Planning (Feasibility, SLA)

5. ProjectsProject Controlling, Project Portfolio, PrioritizationITPM Method (capability, usage)Resource Planning (capability, usage)

IT Drivers derived from Strengths & Weaknesses Analysis of IT Organization

Value- - - o + ++

Criteria

14

Agenda

Introduction

The Big Picture

Business Drivers

IT Drivers



Summary

15

Strategic Goals

Impact of Business & IT drivers is reflected in the strategic goals

Examples

� Integration Scenarios and Guidelines

– Support limited number of clearly defined integration scenarios with appropriate

integration solutions

– Reduce costs (software, human resources, skills, IT Infrastructure) by harmonizing,

consolidating, optimizing and simplifying current set of integration products

– Extend the Architectural Blueprint to provide architecture principles, binding integration

guidelines and policies for developers and implementation partners

– Improve efficiency and quality of data integration by using a standard data exchange

format whenever possible

– Ensure that all data has a single point of truth

� Governance

� Introduce integration governance as part of overall IT architecture governance

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Strategic Goals

Remaining SOA services can be migrated from WebSphere to future integration solution.

Support limited number of clearly defined integration scenarios with appropriate integration solutions

It is possible to simplify integration portfolio while still supporting all potential integration scenarios

Product B is in use and can be used to replace WebSphere.Too few use cases to justify using a dedicated ESB product

The application blueprint is evolving away from previous SOA-centric STP paradigm. Multiple levels of integration are used currently

Str

ate

gic

Go

als

Co

nc

lus

ion

s /

Ob

se

rva

tio

ns

Agility – React quickly to changing market demands

(smart) – Position company to take advantage of future “smarter” energy initiatives

Business Resiliency – Identify areas of risk to ensure business stability in face of adverse business conditions

Bu

sin

es

s

Dri

ve

rsIT

D

rive

rs

Replacement for highly available Web Sphere needed

Business requirements emphasize need for reliable & stable IT infrastructure

Minimize number of strategic platforms for business applications

TCO – Reduce total cost of owner ship

Differing levels of integration requirements exist

Buy before make –Commercial solutions for many scenarios

Minimize number of integration products in use

Ensure long term availability of integration solutions

Commercial integration solutions are leveraging open standards

Product A offers flexible integration framework (Java & .NET). Product B is based on an open standards stack

Enable SaaS environments integration

Improve performance & speed for integration of business requirements

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� The initiatives enable achieving the strategic goals within the next 3 years

� The three initiatives address governance, integration guidelines and integration scenarios

and build upon each other. The substantial potential benefits and cost savings offered by

consolidating the existing portfolio of integration products can only be realized by

implementing all three initiatives.

Initiative C: Establish integration governance

Initiative B: Define integration guidelines

Initiative A: Implement integration scenarios

Scenario 1: Business process integration

Scenario 3: Data integration

Scenario 2: Business logic integration

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Agenda

Introduction

The Big Picture

Business Drivers

IT Drivers



Summary

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A1. ERP II Retail Suite

A2. Navision core upgrade and stabilization

A3. POS Standardization

A4. Web-based Team Collaboration (Corporate Communications)

A5. Group Treasury and Cash Planning

A6. HFM upgrade and integration

A7. Datawarehouse/DCIS/Scorecard, SKU and GPO

A8. EIS

A9. HR

A10. ERP Non-Core Business

T1. Sourcing

T2. Global Data Center

Implementation

T3. Business Continuity Services

for non-centralized IT Systems

T4. Global WAN and Network

Communications

T5. Shopfloor Technologies

T6. Suppliers Website (Extranet)

T7. Refine Intranet

O1. Set up IT Organization (incl.

CCCs and resources

allocation)

O2. IT Strategy Implementation

Program and Change

Management

O3. IT Services Management

(incl. processes and SLA)

O4. IT Guidebook

Initiatives support achieving the Business Drivers …

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1. IT Planning� IT Strategy Process� Architecture Planning (Applications, Data, Integration,

Infrastructure)� Program Management (Portfolio Business & IT projects)

2. IT Architecture� Applications, Operating Environment� Integration (People, Applications, Information)� Standardization

3. Enterprise Services (incl. Operations, Help Desk)� Content-/ Knowledge Management� Central Helpdesk (Bus. Applications)� Datacenter Operations, Business Continuity

4. Organization, Skills & Capabilities and Governance� Program & Project Management� Resource Management� Skills & Motivation

5. Key Performance Indicators (KPIs)� SLA� Availability � IT Customer’s Satisfaction

Dimensions and Criteria Ranking

-- - o + ++

Legend:-- = significantly weaker than avg. ¦ - = weaker than avg. ¦ 0 = about industry average ¦ + = better than avg. ¦ ++ = significantly better than avg.

Work Packages

O1, O4

T2

O2

A1-A10, T1, T2

A4, T2

A1, A2, A3, T2

A4, T8

O3

T2, T4

O2

O2, O3

O1, O3

O3

T2, O3

T4, O3

… and eliminate the IT Weaknesses identified

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IBM Best PracticeVisualize dependencies between business strategy, IT capabilities and resources

Strategic Capabilities Network (SCN)

V

Value Proposition: What a company needs to be in

order to offer a differentiated value to the market.

Example: IKEA’s low cost, customer

convenience, modular designVV

C

C

C

CC

C

CC

Capability: What a company needs to do in order to

achieve its strategic positions. Capabilities perform,

improve, and create the activities of the firm.

Example: Ability to design for customer

assembly, Ability to merchandise in-store and

online.

RR

R

R

R

R

R

R

R

R

Resource (Capability Enabler): What a company

needs to have in order to perform its capabilities.

Resources represent the process, knowledge,

organization and technology assets of the firm.

Example: In-house engineers and designers,

store locations, store layout expertise, web

developer/programmer, server…

R

R

R

R

RR

R

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Agenda

Introduction

The Big Picture

Business Drivers

IT Drivers



Summary

23

Business Drivers

IT Drivers

IT Strategy is driven by business and IT considerations

Business StrategyBusiness opportunities

Vision

Projects and Operationalization

Strategic Goals


FinancialsRoadmap

IT Strengths & Weaknesses

Optimization Potential

Scope of IT Strategy

24

Defining Business-Driven IT Strategies - IBM€¦ · Defining Business-Driven IT Strategies ......

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Transcript of Defining Business-Driven IT Strategies - IBM€¦ · Defining Business-Driven IT Strategies ......