Ethier Associates Calgary CIO Forum June 509
- 1. Increasing Your Effectiveness By Analyzing Leadership’s Attitudes Toward Information Technology Calgary CIO Forum Larry R. DeBoever [email protected] Managing Director June 5, 2009 © EAdirections 2009. All Rights Reserved.
- 2. Corporate Snapshot George S. Paras Larry R. DeBoever Tim Westbrock • Founded by Larry R. DeBoever, George S. Paras, Tim Westbrock – 50+ years of combined leadership in Technology Strategy & Enterprise Architecture – Launched the Enterprise Architecture Strategies (EAS) service at the META Group in 1996 – Launched the first EAC with in 1997; continuously chaired – Editor-in-Chief of Architecture & Governance Magazine – Associate Editors of the Journal of Enterprise Architecture – Founding members of SIM Enterprise Architecture Working Group (SIMEAWG) – Named one of the 5 ‘Pioneers’ of EA by SIM • Our Mission - Improve the effectiveness of technology-enabled organizations by creating deep, mentoring relationships driven by independent research. Thought Leaders. Mentors. Deep Relationships. © EAdirections 2009. All Rights Reserved. 2
- 3. Our Approach to Building Effective Technology-Enabled Organizations Ongoing Mentoring – Make our clients more effective – IT Strategy, Business/IT Alignment, Business Transformation, Project Management, Application Portfolio, Enterprise Architecture, IT Governance, Cost Optimization, etc. – Individuals or Teams – Retainer based Assessing Activities & Review Deliverables – Provide honest feedback and prescriptive advice – Critique documents to improve effectiveness especially for C-level – Guide development of new artifacts – Ongoing review of emerging issues Building the Extended Team – Refine mission, strategy, roles and responsibilities – Establish communications strategy to enroll support – Build a culture of collaboration and effectiveness focused on ‘enterprise outcomes’ Mapping the Application Systems to the FH In the diagram below, the Application Systems are mapped to the FH. This can be very effective in understanding which applications support which functions as well as possible overlap. The Application Systems use the same color coding in this map as in the previous slide. Company ABC Providing ‘Jump Start’ Materials & Other Research – Provide ‘quick & dirty’ enterprise-wide templates for demonstrating High Level Functional Hierarchy 1.0 Marketing 2.0 Sales 3.0 Engineering 4.0 Operations 5.0 Finance & Administration 1.1 Public Relations & Communications 1.3 Marketing Ops & Lead Generation 1.2 Advertising & Brand Management 2.1 Prospecting & Lead Management 3.2 Product Development & Design 2.4 Sales Negotiations & Contracts 3.1 Research & Development 5.7 Information Systems (IT) 5.2 Accounts Recievable 3.3 Product Engineering 5.4 Financial Reporting 5.6 Human Resources 5.3 Accounts Payable 4.5 Customer Service 2.3 Sales Proposals 4.2 Manufacturing 5.5 Internal Audit 4.1 Procurement 2.2 Qualification 5.1 Purchasing 4.3 Inventory 4.4 Shipping 4.6 Returns 5.8 Legal Customer Relationship Management (CRM) Leads Contacts Accounts Campaigns Financial System General Ledger Cash Management Accounts Payable Business/IT Alignment , Enterprise Architecture, etc. Company ABC's Information Systems Accounts Receivable – Templates for demonstrating Business/IT alignment Fixed Assets Supply Chain Management Order Entry Purchasing Inventory Forecasting Manufacturing Bill of Materials Scheduling Cost Management Quality Control Capacity Planning Freight Management & Shipping Freight Management & Shippping Human Resources – Tools for ‘Business Fit’ vs. Technical Fit’, etc. Personnel Payroll Benefits Time & Attendance Content Managent Content Management etc. etc. etc. LEGEND System function © EAdirections 2008. All Rights Reserved. 13 – Perform on-going research © EAdirections 2009. All Rights Reserved. 3
- 4. Topics • Examples of Current Client Challenges • Typical Initial Questions from CEO • Basic Technology Positioning to Leadership • Analyzing Leadership: Overview • Exercise #1: Leadership’s Perception of IT Effectiveness • Exercise #2: Analyzing the Extent of ‘Holistic Optimization’ in the Organization • Exercise #3: Analyzing Leadership’s Attitudes Toward ‘Holistic Optimization’ ------- • High-Level Approach to Demonstrating Business/IT Alignment (Tactical) © EAdirections 2009. All Rights Reserved. 4
- 5. Topic Examples of Current Client Challenges © EAdirections 2009. All Rights Reserved. 16-B 5
- 6. Current Client Challenges – Examples • IT Cost Containment – Rationalizing systems & infrastructure – SaaS – Cloud Computing – Open Source – “Showback” (in lieu of Chargeback) – Etc. • Demonstrating/Communicating IT’s Value • Demonstrating/Communicating IT’s Alignment with Business Strategy • High Availability & ‘Zero Downtime’ (cost effective) • “How do I more effectively engage executive leadership?” © EAdirections 2009. All Rights Reserved. 6
- 7. Typical Initial Questions from CEO “Are We Doing the Right Things in IT?” Or “What Are Other People Doing?” © EAdirections 2009. All Rights Reserved. 16-B 7
- 8. Favorite “Stories” • Sabre – reduced OpEx $20M year – HP nonstop to HP/Intel/LAMP – Less than 200 millisecond delay – Horizontal scaling with 350 servers – 60% of all travel reservations in North America • Mayo Clinic – 6 TB of new data per week with only 22 minutes of downtime this year – ‘Zero downtime’ – A planned outage is just as bad as an unplanned outage if you offer customer self-service 24/7 • Russell Companies – 30% reduction in IT cost during a period of 35% growth – $220 billion in assets – Complete • H&R Block – 20% increase in revenue by integrating customer data • Wal-Mart embracing SaaS for employee scheduling – 2.1 million employees © EAdirections 2009. All Rights Reserved. 8
- 9. Consistent Themes Basic Technology Positioning to Leadership © EAdirections 2009. All Rights Reserved. 16-B 9
- 10. A Primary Business Challenge The rate of change in business is accelerating. 18 Months Significant Process Significant Process Significant Process Change Initiated Change Initiated Changes Initiated The timeframe that ‘change’ must occur is often shorter than IT’s planning cycles. IT must enable rapid change in the business rather than inhibit it. © EAdirections 2009. All Rights Reserved. 10
- 11. Understanding Technology Trends 1.10 1.00 Today’s Price/Performance Regardless of Technology .90 .80 “Tech-tonics: the study of the basic, inexorable forces which cause fundamental changes in Technology .70 the development, adoption and use of information technology on a global basis.” Price/Performance .60 .50 .40 … … T0 Tn Time © EAdirections 2009. All Rights Reserved. 11
- 12. Concept of ‘Tech-tonics’ Relentless improvements in price/performance in technology 1.10 1.00 .90 STAFFING .80 Technology ENTERPRISE .70 Price/Performance SOFTWARE .60 .50 PROCESSOR .40 NETWORK STORAGE … … T0 Tn Time © EAdirections 2009. All Rights Reserved. 12
- 13. Topic Analyzing Leadership: Overview © EAdirections 2009. All Rights Reserved. 16-B 13
- 14. Analyzing Executive Leadership: Overview Holistic Optimization • “To what extent is the organization holistically optimized?” • “What are the CEO & Leadership Team’s attitude toward holistic optimization?” IT Effectiveness • “How does the CEO & Leadership Team evaluate IT’s current effectiveness?” • “How effectives does the CEO & Leadership Team believe IT needs to be for the organization to achieve its strategic objectives?” FORMAT FOR 3 EXERCISES 1. Analysis Framework 2. Perform Exercise 3. Example (if no one volunteers…) © EAdirections 2009. All Rights Reserved. 14
- 15. Exercise #1 Leadership’s Perception of IT Effectiveness © EAdirections 2009. All Rights Reserved. 16-B 15
- 16. FRAMEWORK Perception of IT Effectiveness HIGH Level of IT Effectiveness That Is Needed (to Achieve Strategic Goals) LOW LOW HIGH Current IT Effectiveness © EAdirections 2009. All Rights Reserved. 16
- 17. EXERCISE Perception of IT Effectiveness CEO CFO Cx3 Cx4 Cx5 Cx6 HIGH Level of IT Effectiveness That Is Needed (to Achieve Strategic Goals) LOW LOW HIGH Current IT Effectiveness © EAdirections 2009. All Rights Reserved. 17
- 18. EXAMPLE Perception of IT Effectiveness HIGH CEO Cx5 Cx3 Level of IT Effectiveness That Is Needed (to Achieve Strategic Goals) Cx6 CFO Cx4 LOW LOW HIGH Current IT Effectiveness © EAdirections 2009. All Rights Reserved. 18
- 19. Exercise #2 Analyzing the Extent of ‘Holistic Optimization’ in the Organization © EAdirections 2009. All Rights Reserved. 16-B 19
- 20. FRAMEWORK Analyzing Extent of Holistic Optimization HIGH Future Enterprise-Wide Optimization LOW LOW HIGH Current Enterprise-Wide Optimization © EAdirections 2009. All Rights Reserved. 20
- 21. EXERCISE Analyzing Extent of Holistic Optimization GLOBAL CORPORATE EXECUTIVE PROCESSES PLANNING CUSTOMER BONUSES HIGH Future Enterprise-Wide Optimization LOW LOW HIGH Current Enterprise-Wide Optimization © EAdirections 2009. All Rights Reserved. 21
- 22. EXAMPLE Analyzing Extent of Holistic Optimization HIGH CUSTOMER CORPORATE PLANNING GLOBAL PROCESSES Future Enterprise-Wide Optimization EXECUTIVE BONUSES LOW LOW HIGH Current Enterprise-Wide Optimization © EAdirections 2009. All Rights Reserved. 22
- 23. Exercise #3 Analyzing Leadership’s Attitudes Toward ‘Holistic Optimization’ © EAdirections 2009. All Rights Reserved. 16-B 23
- 24. FRAMEWORK Attitudes Toward Holistic Optimization HIGH Desired Amount of Enterprise-Wide Optimization LOW LOW HIGH Current Enterprise-Wide Optimization © EAdirections 2009. All Rights Reserved. 24
- 25. EXERCISE Attitudes Toward Holistic Optimization CEO CFO Cx3 Cx4 Cx5 Cx6 HIGH Desired Amount of Enterprise-Wide Optimization LOW LOW HIGH Current Enterprise-Wide Optimization © EAdirections 2009. All Rights Reserved. 25
- 26. EXAMPLE Attitudes Toward Holistic Optimization HIGH CEO Cx5 Desired Amount of Enterprise-Wide Cx6 Cx3 Optimization CFO Cx4 LOW LOW HIGH Current Enterprise-Wide Optimization © EAdirections 2009. All Rights Reserved. 26
- 27. Topic High-Level Approach to Demonstrating Business/IT Alignment (Tactical) © EAdirections 2009. All Rights Reserved. 27
- 28. Using A Matrix to Demonstrate ‘Tactical’ Alignment • Developed this approach over many years – very effective – Toyota’s HEAT map is a version of this • Successfully used by numerous clients where CIO wanted to demonstrate that IT projects supported immediate business objectives – Of greatest interest to Business Unit leadership and, typically, COO – Effective way to communicate to IT staff near-term priorities • First step is to place Business Objectives for 2008 on horizontal axis Best Stuff Inc. CORE BUSINESS OBJECTIVES - 2008 SALES CUSTOMER SERVICE PROCUREMENT Real-time Provide Increase Provide 7x24 Integrate all visibility into Supplier customer self- customer Customer data Supplier performance service by 30% access inventory reports on-line © EAdirections 2009. All Rights Reserved. 28
- 29. Using A Matrix to Demonstrate ‘Tactical’ Alignment Best Stuff Inc. CORE BUSINESS OBJECTIVES - 2008 SALES CUSTOMER SERVICE PROCUREMENT Real-time Provide Increase Provide 7x24 Integrate all visibility into Supplier customer self- customer Customer data Supplier performance service by 30% access inventory reports on-line © EAdirections 2009. All Rights Reserved. 29
- 30. Put IT Projects On Vertical Axis • Use sub-bullets to provide more detail as required • A Best Practice is to also show CapEx and OpEx requirements BUDGET 2008 Total Capital Operating Expenditure Expenditure TECHNOLOGY INITATIVES - 2008 ($000s) ($000s) Achieve 7x24 Continuous Operations $ 4,460 $ 835 • Open 2nd data center in Cinn; share workload Major Network Upgrade $ 2,900 $ 675 • Significant increase both domestic & international capacity Implement Real-Time Customer Data Integration (CDI) $ 1,745 $ 854 • Replace existing LOB solutions Implement Transaction Data Management Solution $ 690 $ 250 • Enables both CDI and ContinuousOps initiatives Upgrade Customer Portal (Release 3.0) $ 875 $ 430 • Improve scalability, cross-selling & personalization Implement Supplier Performance Portal (Release 1.0) $ 1,250 $ 640 • Initial release to top 9 suppliers (45% of revenues) $ 11,920 $ 3,684 © EAdirections 2009. All Rights Reserved. 30
- 31. Put IT Projects On Vertical Axis TECHNOLOGY INITATIVES - 2008 Achieve 7x24 Continuous Operations • Open 2nd data center in Cinn; share workload Major Network Upgrade • Significant increase both domestic & international capacity Implement Real-Time Customer Data Integration (CDI) • Replace existing LOB solutions Implement Transaction Data Management Solution • Enables both CDI and ContinuousOps initiatives Upgrade Customer Portal (Release 3.0) • Improve scalability, cross-selling & personalization Implement Supplier Performance Portal (Release 1.0) • Initial release to top 9 suppliers (45% of revenues) © EAdirections 2009. All Rights Reserved. 31
- 32. Simple Business/IT Alignment (Tactical) Matrix • Very effective with most Leadership • Recent client experience illustrates effectiveness • In the example below, bullets are used to identify strength of applicability Best Stuff Inc. CORE BUSINESS OBJECTIVES - 2008 SALES CUSTOMER SERVICE PROCUREMENT BUDGET Real-time Provide 2008 Increase Provide 7x24 Total Capital Integrate all visibility into Supplier Operating customer self- customer Expenditure Customer data Supplier performance Expenditure TECHNOLOGY INITATIVES - 2008 service by 30% access ($000s) inventory reports on-line ($000s) Achieve 7x24 Continuous Operations $ 4,460 $ 835 • Open 2nd data center in Cinn; share workload Major Network Upgrade $ 2,900 $ 675 • Significant increase both domestic & international capacity Implement Real-Time Customer Data Integration (CDI) $ 1,745 $ 854 • Replace existing LOB solutions Implement Transaction Data Management Solution $ 690 $ 250 • Enables both CDI and ContinuousOps initiatives Upgrade Customer Portal (Release 3.0) $ 875 $ 430 • Improve scalability, cross-selling & personalization Implement Supplier Performance Portal (Release 1.0) $ 1,250 $ 640 • Initial release to top 9 suppliers (45% of revenues) $ 11,920 $ 3,684 ALSO NOTE: • Different ‘size’ bullets can be used to show size of spend • Different ‘color’ bullets can be used to show urgency © EAdirections 2009. All Rights Reserved. 32
- 33. Simple Business/IT Alignment (Tactical) Matrix Best Stuff Inc. CORE BUSINESS OBJECTIVES - 2008 SALES CUSTOMER SERVICE PROCUREMENT Real-time Provide Increase Provide 7x24 Integrate all visibility into Supplier customer self- customer Customer data Supplier performance TECHNOLOGY INITATIVES - 2008 service by 30% access inventory reports on-line Achieve 7x24 Continuous Operations • Open 2nd data center in Cinn; share workload Major Network Upgrade • Significant increase both domestic & international capacity Implement Real-Time Customer Data Integration (CDI) • Replace existing LOB solutions Implement Transaction Data Management Solution • Enables both CDI and ContinuousOps initiatives Upgrade Customer Portal (Release 3.0) • Improve scalability, cross-selling & personalization Implement Supplier Performance Portal (Release 1.0) • Initial release to top 9 suppliers (45% of revenues) © EAdirections 2009. All Rights Reserved. 33
- 34. Topic Summary © EAdirections 2009. All Rights Reserved. 16-B 34
- 35. Increasing Your Effectiveness By Analyzing Leadership’s Attitudes Toward Information Technology Calgary CIO Forum Larry R. DeBoever Managing Director June 5, 2009 © EAdirections 2009. All Rights Reserved.