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IT Strategy: Aligning IT and the Business
The document outlines the critical components and recommendations for aligning IT strategy with business objectives, highlighting that many organizations fail to effectively link their strategy to budgeting and employee incentives. It emphasizes the importance of understanding people, processes, and technology, and presents an assessment framework to identify gaps in current systems and develop a roadmap to support strategic goals. Key recommendations include fostering better communication, enhancing system integrations, and prioritizing IT projects based on their potential return on investment.
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IT Strategy: Aligning IT and the Business
- 1. ALIGNING IT ANDTHE BUSINESS
- 2. ALIGNING IT ANDTHE BUSINESS Welcome and Introduction Aligning IT with the Business Components of a Strong IT Strategy Developing the Plan Tips for Execution
- 3. STRATEGIC PITFALLS •60% oforganizations don’t link strategy to budgeting •75% of organizations don’t link employee incentives to strategy •86% of business owners and managers spend less than one hour per month discussing strategy •95% of a typical workforce doesn’t understand their organization’s strategy. Credit: Forbes.com
- 4. IT STRATEGY: CHANGETHE PERCEPTION
- 5. BECOME AN ITPARTNER NOT JUST A SUPPORT CENTER CHAOTIC - 0 •High operational cost • Low productivity •Can’t predict demand •Low employee morale •Unsatisfied customers •Can’t define success REACTIVE - 1 •Systems downtime • Inconsistent performance • Firefighting •Compromised service expectations • Inability to plan • Time consuming maintenance •Ineffective troubleshooting PROACTIVE - 2 •Limited financial insight • Undervalued services •Services not timely •No alignment of resources to demand SERVICE - 3 •IT as a Service •Activity Based Costs • SLAs •Integrated Processes • Capacity Mgmt. •Define Services, Classes & Pricing VALUE – 4 •IT as a Strategic Partner • IT & Business Metrics •IT/Business Collaboration •Business Planning 3
- 6. FUNDAMENTALS OF ALIGNINGIT WITH THE BUSINESS ManagementStaff 1. People – understanding the customer’s voice and assessment of current systems, processes and technology. 2. Process – an understanding of the integration and workflows between departments and system functions. 3. Technology – an understanding of the technology platforms and utilization of the information delivery capabilities.
- 7. CHARACTERISTICS OF ASTRONG IT STRATEGY • Executive sponsorship • Clarity, Communication, Education • Clear definition of success and KPIs to track progress • Flexibility to change direction as market and technology dictate
- 8. DEVELOPING THE PLAN •Assessing the “AS-IS” environment • Define Strategic Goals and Mission Statement • Identify gaps between “As Is” and strategic goals • Define and prioritize work needed to accomplish strategic goals
- 9. THE MISSION STATEMENT “BEGINWITH THE END IN MIND” The Mission of the “COMPANY” IT Strategic Business Strategy Assessment is to create an IT strategy and infrastructure to support the current and future information capital requirements to grow the business to $2B by 2020. The objective of the assessment will be to: 1. Provide recommendations and an IT Road Map to support the immediate, short & long term needs 2. Identify baseline “as is” and “to be” IT systems to meet the business requirements and driver measures 3. Prioritize the IT projects that will generate the greatest return on investment 4. Provide a recommended implementation approach to execute the IT Business Plan
- 10.
- 11. PEOPLE ASSESSMENTIT STRATEGYASSESSMENT WORKPAPERS Interview Questions Notes PEOPLE ASSESSMENT Executive Team CEO What is your vision for the company? What is your goals for the company? Revenue, Strategy, Profit, Stock Value, Competition Analysis COO What is your operational goals for the company? Gross Margin performance, sales growth, performance optimization CFO What is your financial goals for the company? Cashflow, profits, stock valuation, EBITDA CAO What is your administrative goals for the Company? Adminstrative efficiencies, administrative collaboration CIO What is your IT strategy for the company? IT Plan, Cloud strategy, Reporting strategy, Cost strategy CHRO What is your human capital strategy for the company? HR strategies, Comp & Benefits, Training, Recruiting, Onboarding Management Team Accounting How well is the ERP system working for you? Reporting, transactional efficiency? Transactional efficiencies, timeliness of information IT How well is the IT systems working? See below for more detail questions? Hardware, Software, Middleware assessments HR How is HR valued to business? How is HR strategic? What are your goals to be strategic? HR Compensation Plans, Recruiting, Career Pathways, Onboarding efficiencies Marketing How is marketing helping with market share? New customers? Growth in revenue? Growth, Sales, New Customers, Marketshare, Competitive Analysis Corporate Communications How is communications handled? Webinar, Video, Audio, Newsletters, intranets Unified messaging, sharepoint solutions, lync collaboration Legal How is legal using IT to help with document management? Sharepoint, document management, document versioning End Users Finance & Accounting Users Is the current systems you are using efficient? Manual processes, lack of integration, manual reporting HR & Payroll Users Is the current systems you are using efficient? Manual processes, lack of integration, manual reporting Marketing & Communications Users Is the current systems you are using efficient? Manual processes, lack of integration, manual reporting
- 12. PROCESS ASSESSMENT IT STRATEGYASSESSMENT WORKPAPERS Interview Questions Notes INFORMATION ASSESSMENT Information Reporting KPI Metrics (Lead &Lag) What KPI metrics are in place and being delivered on time? List KPI reporting, dashboards, lead and lag measures, do they have cadence? Financials Statements What financials reports are in place and automated? List financial reports, manual reports, excel reports Operational Statements What operational reports are in place and automated? List operational reports, manual reports, excel reports PPPs - Policies, Procedures, Processes Policies Are your policies aligned with your system processes? List policies Procedures Are your procedures up to date and aligned with your system processes? List procedures Processes Are your processes up to date and aligned with your policies and procedures? List processes
- 13. TECHNOLOGY ASSESSMENT IT STRATEGYASSESSMENT WORKPAPERS Interview Questions Notes TECHNOLOGY ASSESSMENT Hardware Servers What are the current server technology used? On premise, off premise, cloud, VM ware Storage What are the current storage technology used? On premise, off premise, cloud, VM ware Desktops What desktops are being used today? Lease vs purchases? What are desktops are being used? Laptops How are mobile computers being used? What are mobile computers being used for? Wireless Devices How are wireless devices being used? What are wireless devices being used for? CITRIX How is citrix being used? Latency platforms? Why is Citrix being used? CISCO What routers and switches are being used for network computing? When is the cisco gear nearing upgrades? Software Business Applications What business applications are being used ? Inventory business applications and how they are integrated or not? Enterprise Applications What enterprise applications are being used? Inventory enterprise applications and how they are integrated or not? Intranet What are you using for intranet platform? Do they have department intranets? Email What email system is being used? Exchange, 0365, other? ERP What ERP is being used? List ERP applications and modules CRM What CRM is being used? List CRM applications and modules Middle Ware Custom Applications What custom applications are being developed? List of applications and how they are integrated or not? Integration Platforms What interface or integration platforms are in place? List of applications and how they are integrated or not? Business Intelligence Platforms What BI tools are in place? List of BI toolsets and how integrated with enterprise applications Web Applications What is being used for web applications? Web applications? Inventory of web applications?
- 14. IT ASSESSMENT &BUSINESS PLAN ROADMAP Sample Deliverable Pillar 1 - People The following assessment covered the current transactional and information delivery users of the systems: 1. The “transactional users” are overall generally satisfied with the efficiency of the data entry features of the system 2. The “operational and financial information users” are dissatisfied with the ease of use and with the amount of effort to retrieve meaningful information to manage the business – the business has outgrown the legacy paper reporting method that has been used in the past to quickly manage the business in a timely manner 3. Lack of clearly defined driver measure reports used in the cadence of operations being delivered to management (lack of scheduling, utilization management, and capacity planning information) 4. More training is needed for both transactional and operational/financial users to understand what the current system can do for them 5. There is material amount of duplication of data entry in access databases, excel and other systems creating manpower inefficiencies and potential lack of integrity of information 6. Strong IT programming skills and adequate PC Network staff skills but missing project management and business applications skillsets The following recommendations should be considered to address the People findings: 1. Setup Focus Groups of users to share best practices to raise all users level experience to highest level possible 2. Design, develop, and deliver reports to management timely and in best format for usability 3. Define Driver Metrics to deliver reports to management to incorporate into weekly operational cadence system 4. Train users on the information reports designed and developed in #2 and #3 above 5. Identify and replace duplicate systems where possible 6. Upgrade IT project management, business applications and analytics skills
- 15. IT ASSESSMENT &BUSINESS PLAN ROADMAP Sample Deliverable Pillar 2 - Process The following assessment covered the system & process integration & workflow between departments: 1. The core financial systems (GL, PO, AP, OE, Billing, AR, JC/WO, PR, e-Time) are fairly well integrated even given the divergent platforms and the high degree of customization that were purchased (M&D, Harris, Custom Applications, etc…) 2. The HR system (Silkroad) is an integrated suite of products replacing manual processes today; however, it is needs to be integrated with Harris HR/Payroll and e-Time to prevent duplication of efforts 3. The RVI imaging system has been implemented at a few sites and is having some good success but not company wide; however, there is an opportunity to improve the workflow to include AP and AR for customer backup and billing support and create further improvements in workflow and integration before implementing company wide. There is also an opportunity to centralize how workflow can improve overhead and create automation and synergies across RFOC 4. There is a need for an automated Requisition system to be interfaced with Procurement system and a Sales Tax system is needed to accurately record sales tax. 5. The operational systems (Estimating, Engineering, Procurement, Scheduling) are working in vertical silos for the most part and there are some opportunities to integrate engineering-bill of materials-procurement systems. The following recommendations should be consideration to address the Process findings: 1. Setup ITEC and review ERP solutions to gain new ideas to improve current platform or determine cost/benefit of solutions 2. Continue to integrate SILKROAD with current Harris HR/Payroll & e-Time systems 3. Review current RVI workflow design and determine best path forward for company wide rollout and improved workflow 4. Evaluate the cost/benefit of a Requisition and Sales Tax module to be built vs long term software package alternatives 5. Review current Operational system workflow opportunities and design an integrated Configuration Management System
- 16. IT ASSESSMENT &BUSINESS PLAN ROADMAP Sample Deliverable Pillar 3 - Technology The following assessment covered the technology applications and infrastructure: 15 1. The hardware, server, and Microsoft platforms are solid infrastructure solutions 2. Standard laptops should be established with remote VPN capabilities to make it easier to use remote computing 3. Leverage Microsoft BI to deliver better information from the ERP and explore BI tools as needed 4. Sharepoint for Intranet solutions should be leveraged better for improved communications and office productivity 5. Review the engineering toolsets to ensure the right solutions for the business The following recommendations should be considered to address the Technology findings: 1. Setup ITEC and review ERP solutions to gain new ideas to improve current platform or determine cost/benefit of solutions 2. Document current network and provide recommendations on switches and routers 3. Document upgrade path for servers and infrastructure to keep up with business needs 4. Establish a company standard laptops, desktop and remote connectivity solution that is reliable 5. Training for ERP programmers on toolsets to improve productivity and delivery of information 6. Provide an assessment of Sharepoint utilization and make recommended improvement proposal 7. Move forward with Lync as the Video/Web/Communication unified conferencing messaging solution for company 8. Review and evaluate engineering and configurator toolsets to automate workflow and automation 9. Move forward with Microsoft Cloud Office 365 and Lync to reduce IT support and infrastructure costs
- 17. Sample Deliverable IT OrganizationalAssessment & Recommendations Sparkhound has evaluated current IT operations and costs, compared to the envisioned state, then provided recommendations to organizational design and associated budget. The result is an optimized IT human resource model and a more efficient cost structure. IT ASSESSMENT & BUSINESS PLAN ROADMAP Total IT Expenses Current Org Chart CIO 111 Infrastructure 25 Development 25 PMO 25 ERP 36 IT Expenses $25,500,000 IT Salaries 10,000,000 Total IT $35,500,000 *Cloud Infrastructure & Managed Services main reason for reduction Future Org Chart CIO 90 Infrastructure 16 Development 20 PMO 20 ERP 20 Total IT Expenses* IT Expenses $20,000,000 IT Salaries 8,000,000 Total IT $28,000,000
- 18. IT ASSESSMENT &BUSINESS PLAN ROADMAP High $$$ Medium $$ Low $ TransformationalStrategicEfficiency 2 A-E HR SilkRoad 15 SharePoint Intranet 4 Salesforce.Com Microsoft Cloud Office 365 Messaging, Communications & Collaboration WBT & CBT 12 13 PC Network WAN Infrastructure 5 ABC Company Estimating System 6 Configuration Management System Project Scheduling System 1 16 AP-AR Imaging Workflow 3 Sales Tax Inventor – CNC 11 18 Web Site Upgrade eRequisition System 27 7 ABC Company Operations Reports 14 ERP Evaluation 22 Client EDI 17 Client Cloud Portals 23 Fax Server Electronic Rental Invoices 10 8 Manpower Utilization Management Reports 25 Single Sign-On 9 Business Intelligence, Dashboards, Budgeting & Forecasting 4-in-1 Project 20 Sales OPS IT HR Finance 21 Document Mgt System 24 26 Tool Management 19 Cell Phones Sample Deliverable IT Project Portfolio ABC Company’s IT Project Portfolio was assessed to determine the cost of each initiative as well as its value to the organization. These were grouped by business unit and categorized by impact. IT Project Portfolio Segmentation 20
- 19. IT ASSESSMENT &BUSINESS PLAN ROADMAP Sample Deliverable Short, Mid & Long Term Projects Upon evaluation, it is recommended that each project be scheduled based on its cost, duration and value characteristics. IT Project Portfolio Prioritization* *See Appendix A – Project Profiles for detail. 21
- 20. EXECUTING THE PLAN “MARCHING TOGETHER AND SPEAKING THE SAME LANGUAGE”
- 21. Tenants for Implementingan IT Strategy 21 • Assign ownership of projects and tasks: The most common reason a plan fails is lack of ownership. If people don’t have a stake and responsibility in the plan, it’ll be business as usual for all but a frustrated few. • Communicate frequently and consistently: Meet regularly with staff and managers. Discuss KPIs important for success. • Track progress and report out to all levels within the organization: Help to maintain employee buy-in and executive support when everyone is in the know. Keeps everyone speaking the same language with regards to wins, challenges, and progress.