1 partnership for performance how to hear this lecture click on the icon: to hear the narration for...
TRANSCRIPT
1Partnership for Performance
How to hear this lecture
Click on the icon: to hear the narration for each slide.
2Partnership for Performance
fisher.osu.edu
Fisher logoIT Strategy and Alignment
Dr. Rajiv RamnathDirector
Collaborative for Enterprise Transformation and Innovation (CETI)Department of Computer Science and Engineering, College of EngineeringDepartment of Computer Science and Engineering, College of Engineering
The Ohio State UniversityThe Ohio State University
[email protected]@osu.edu
http://www.ceti.cse.ohio-state.eduhttp://www.ceti.cse.ohio-state.edu
Partnership for PerformancePartnership for Performance
3Partnership for Performance
The Business Context – Brief Recap
• The 5 forces that act on firms determine the competitive position
• Organizations try to compete in scope and cost or focus.
• The value chain determines HOW the company does its work
• There are linkages in the value chain• Competitive strategy determines how the value chain
should be constructed and linked.• Engineering the value chain (using frameworks like
the Balanced Scorecard) brings competitive advantage
Ref: How Information Gives You Competitive Advantage, Porter and Millar
5Partnership for Performance
How Information Technology Provides Competitive Advantage
• Depends on “information intensity” of products and industry structure
• Each step has a physical and an information component• IT optimizes the performance of the step
– Capture knowledge of how to do it right– Automate the step– Do the step better by exploiting information– Build reconfigurable systems
• IT helps exploit linkages better• Coordination among the linkages needs information coordination• Documentation costs are reduced
• A company’s information is also its product. Example: Lexis-Nexis, credit reporting agencies, product service and support
• Changes industry structure• IT has changed cost structure of firms• Internet has increased reach of firms
• Helps spawn new businesses around information processing• B2B integration
Ref: How Information Gives You Competitive Advantage, Porter and Millar
6Partnership for Performance
Where IT is Needed Now - Services
Environmental Trends …• Globalization
– The removal of “friction”– Uniform quality of most “products” manufactured anywhere– Outsourcing of almost anything– Global movement up Maslow’s Hierarchy of Needs
Have Created the Need for Service Innovation:• Beyond operational excellence• Not product innovation but service innovation
Characterizing Services:• Physical and informational component• High variation among transactions• Continued negotiation during service delivery• Little cost amortization• Oscillation around satisfaction• High touch requirement• Decisions made on secondary factors – opinion, trust and relationships• Must be delivered at the point of the need• Local presence is an advantage
7Partnership for Performance
How IT Can Help - Examples
• The removal of “friction” in service delivery• Of the informational part of the service
• High variation among transactions• Understand variation through knowledge capture and delivery• Through clustering techniques help create tailored services
• Continued negotiation during service delivery• Coordinate the negotiation• Provide information for the negotiation (what-if tools)
• Little amortization of costs (small proportion of fixed costs relative to variable costs)
• Codifying expert knowledge electronically converts variable costs to fixed costs• Oscillation around satisfaction
• Electronic standardization of processes increase satisfaction• Electronic capture of satisfaction
• High touch requirement• Provide increased sense of touch through customer analysis and delivery of customer
information to service provider• Decisions made on secondary factors – opinion, trust and relationships
• Replace intuition with captured information• Must be delivered at the point of the need
• Provide location identification and location based delivery• Local presence is an advantage
• Remove distance; enhance local presence with local add-ons.
Ref: Services Science-A New Field for Today's Economy, Paulson
8Partnership for Performance
How Can IT Help – Computing Aspects of “Services Science”
• Modeling• E.g. object-oriented modeling of businesses in the CBM
• Analysis• E.g. data mining
• Process enablement and improvement• Workflow enablement• Business process re-engineering
• Systems monitoring and management• Autonomic computing for self-healing, optimization etc.• Better capacity planning• Automated system provisioning
• Enhancing insights from other fields:• Computational models on how people and groups work and
interact (based on social sciences research)• Operations research algorithms
9Partnership for Performance
Counterpoint: IT is Just a Utility
• IT cannot provide sustainable competitive advantage
• Too easy to copy once implemented• E.g. UPS tracking service
• Hence no incentive for innovation by single companies
• Does create ECONOMIC value across businesses
• Hence must be created by the government and managed like a utility
Discussion: Is this true?Ref: IT Doesn’t Matter, Carr
11Partnership for Performance
Business-IT Alignment Is Many Things
Goal: IT that delivers a sustainable competitive advantage in a manner compatible with the Business
This notion will affect everything that we study in this course• Intellectual dimension:
• Linking between the business plan and the IT plan. • Congruence between the business strategy and the IT strategy. • The fit between business needs and information system priorities
• Cultural dimension:• Communication and behavioral styles
• Structural dimension (formal and relationship-based):• External alignment – with technology changes, suppliers• Matching business organization – e.g. decentralized vs. centralized IT
deployment, management, personnel• Alignment of project management style to business needs
– E.g. Agile vs. Structured processes• This is a continuous process
Ref: IT Alignment What Have We Learned, Chan, Reich
College of EngineeringThe Ohio State University
Enterprise Architecture – A Framework for IT Alignment
13Partnership for Performance
What is Enterprise Architecture?• In a complex system of which IT is an integral
part, EA is a decision support process i.e. a means of:• Informing the business decision making process• Understanding organization structure and function and
technology dependencies• Identifying an IT portfolio
• Supported by a EA roles• Documented using a framework• Represented by a meta-model• Stored in a repository
Ref: A Simple Guide to Enterprise Architecture, Bailey
15Partnership for Performance
EA Artifact Example – IT Portfolio – City of Columbus
Ref: IT-Enabled Sense and Respond Strategies in Complex Public Organizations, Ramnath, Landsbergen