business briefing series it paper

20 issues on IT as a strategic partner

Business briefing series

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Disclaimer:This discussion paper presents the opinions and comments of the author and not necessarily those of the Institute of Chartered Accountants in Australia (the Institute), Deloitte or their members. The contents are for general information only. They are not intended as professional advice – for that you should consult a Chartered Accountant or other suitably qualified professional. The Institute and Deloitte expressly disclaims all liability for any loss or damage arising from reliance upon any information contained in this paper.

All information is current as at June 2010

First published June 2010

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Business briefing series: 20 issues on new technologies First edition

ISBN: 978-1-921245-62-6

ABN 50 084 642 571 The Institute of Chartered Accountants in Australia Incorporated in Australia Members’ Liability Limited. 0510-28ABN 74 490 121 060 Deloitte Touche Tohmatsu.

Business briefing series: 20 issues on IT as a strategic partner3

Business briefing seriesThroughout the last decade there have been a host of newer, faster and friendlier information technology (IT) options developed to assist business leaders and their organisations remain competitively positioned. During this time the challenge for business leaders has been dedicating the time to analyse and cut-through the many options available in order to find those that have the potential to impact the organisation more successfully. It is in this regard that the Institute has engaged with Deloitte, to produce this leadership paper entitled, Business briefing: 20 issues on IT as a strategic partner.

The paper provides business leaders with an introduction to the 20 most important technology issues likely to be at the forefront in shaping the role and contribution of business IT over the next decade. The issues are divided into five core elements that contribute to the value IT makes to the operation of the organisation:

• Strategic alignment

• Information management

• IT effectiveness

• Agility and innovation

• Operation efficiency.

Business briefing: 20 issues on IT as a strategic partner has been written and presented in such a way as to maximise the reader’s understanding of the issues. Each of the five sections contain pull-out boxes – or ‘jargon busters’. The discipline of IT is notorious for specialised terminology, jargon, acronyms and abbreviations, the jargon busters pick out some of the more commonly used abbreviations and esoteric terminology, and provide a brief explanation. In addition, each section begins with a diagnostic questionnaire to ensure the reader is thinking about the right questions when reading the paper. The questions are also consolidated on the one page at the back of the paper for quick reference and to enhance practicality.

The coming years present considerable challenges for business leaders seeking to exploit IT and new technology innovations. Organisations looking to adopt new technology such as, social media, cloud computing and standard business reporting need to consider how these new technologies can help differentiate themselves from their competitors.

I trust that you will find this thought leadership paper interesting and worthwhile reading.

This leadership paper is an initiative of the Institute’s Business Leader Series. A series dedicated to providing guidance and resources to leaders working in organisations.

Michael Spinks

President Institute of Chartered Accountants in Australia

20 issues on IT as a strategic partner

4Business briefing series: 20 issues on IT as a strategic partner

4


Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Strategic alignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

1. Business-IT alignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

2. IT governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

3. IT investment and IT value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Information management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

4. Management reporting and analytics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

IT effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

5. Customer responsiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

6. Collaboration technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

7. Social media . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

8. Wireless and mobile computing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

9. Data security, confidentiality and privacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

10 Business reporting (XBRL). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Agility and innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

11. IT agility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

12 Cloud computing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

13. Software as a Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

14. Business rules management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

15. Service oriented architecture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Operational efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

16. Green IT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

17. IT sourcing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

18. Virtualisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

19. Systems security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

20. Disaster recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Issues checklist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Resources and further information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Contact details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Back cover

Contents


This paper provides business leaders with an introduction to the 20 most important technology issues likely to be at the forefront in shaping the role and contribution of business IT over the next few years. The paper helps business leaders consider questions such as:

• Are we getting value from our IT?

• What opportunities do new technologies provide in our business and are we taking advantage of them?

• Are we recognising and managing the associated risks?

• How should we decide where to invest our IT dollars?

These questions are not new challenges in the management of IT, but never has there been a more pressing time in the current business climate, considering the ever-expanding use of the internet and other e-innovations.

What has changed recently?The past two years have been eventful for organisations all over the world. The financial crisis has impacted the global economy in an unprecedented way and has forced some organisations into make tough decisions. In these turbulent times, the imperatives to free up cash, preserve revenue and minimise costs have driven the need for increased efficiency while at the same time enabling swift adaptation in a fiercely competitive environment. In this context, business leaders, perhaps more than ever, are looking to IT to deliver increasing value to their organisation at the lowest possible cost.

IT is becoming more and more integrated into the ‘fabric’ of organisations. IT and business processes have become so intertwined, arguably they are indistinguishable. The crisis has also served to highlight the major role of IT in tackling business challenges, enabling transformation of operations and customer service, and ultimately leading to a better competitive position.

Why are new technologies important?Meanwhile, technological innovation continues at a rapid pace. A number of technologies have emerged and are being adopted which have the potential to drive real change in many sectors, not just in efficiency but also in competitive positioning and the nature of the workplace. These include: podcasts being used to provide training material which employees can consume ‘on the go’; wireless networks and collaboration tools supporting home-workers and a mobile workforce; business applications available on laptops and smart-phones; hardware consolidation to enable green IT; and the use of social media for ‘crowd sourcing’ and other marketing initiatives.

The challenge for business leaders is to understand these developments in IT, identify the opportunities and risks that these developments bring to the organisation, and direct IT investment to ‘do the right things’ and ‘do things right’.

IntroductionFew decades, if any, can compare with the first one of the 21st century when it comes to the extraordinary

leaps and bounds the global society has achieved in the field of information technology (IT). Throughout the

decade there has been a host of newer, faster, friendlier technologies introduced that have been promising

revolutionary breakthroughs at any point in time. The difficulty for business leaders is that all forms of new

technologies have the potential to significantly impact the operations of the business, as well as placing

demands on existing IT hardware and processes. The technology is also presented to business leaders

heavily laced with industry jargon and sales messaging. It is no wonder most find it difficult to cut through

and pick out the technologies which have the potential to impact an organisation successfully. More often

this analysis and agreement on their relative importance can come too late.


Structure The paper is divided into five topic areas. Together these determine the contribution which IT makes to the value of the business:

Strategic alignmentAn organisation needs governance and planning processes which ensure that business leaders are aware of new technologies and trends, and are able to determine which IT investments are right for the organisation. Strategic alignment considers the processes and structures needed to ensure the business strategy is properly informed of technology possibilities, and that IT investment is appropriately targeted.

Information managementThe shift from transaction efficiency to exploiting the information available to the organisation to improve business performance is a common theme. Information management has emerged as a discipline in its own right, in recognition of its potential to add value to the organisation.

IT effectivenessBusiness leaders need to consider the potential of new technologies such as social media and collaboration tools and how organisations can take advantage of them. These new technologies have the ability to transform how organisations operate, but they also bring new risks in relation to data security and confidentiality.

Agility and innovationA number of new offerings in IT are gaining popularity due to their ability to support a more flexible and responsive business model, and indeed to enable innovation in the form of new business models.

Operational efficiencyThere are some important trends and developments which continue to contribute to efficiency. It is possible that these technologies, when approached in the right way, may also contribute as much to agility and innovation as they do to cost reduction.

Throughout the paper, the 20 issues are discussed in terms of both opportunity and risk, and their potential as enablers of efficiency, enablers of differentiation, or both.

How to use this guideTo enhance the practicality of the paper, each section begins with a short checklist. At the back of the paper these checklists are consolidated onto a single page for quick reference.

Strategic alignment

Business value of IT

Information management

Operational efficiency

IT effectiveness Agility and innovation

Jargon busterThe discipline of IT is notorious for specialised terminology, jargon, acronyms and abbreviations. Throughout the paper we have included ‘jargon buster’ boxes which pick out some of the more commonly used abbreviations and specialised terminology and provide a brief explanation. There is also a glossary on page 27.


Strategic alignmentStrategic alignment of IT is a well-established business requirement, but with new technologies emerging the role of

IT in the organisation is changing and new approaches are needed. Traditionally, the concept of IT alignment has

been that when IT is strategically aligned with the business strategy the IT capabilities of the organisation are

optimised to support the business operations which implement the strategy. However, IT is increasingly moving

into the ‘front office’, so that technology strategy and business strategy are inextricably linked. Different

processes and governance are needed so that both business strategy and IT strategy can be developed in

tandem, effective IT governance can be achieved, and IT investment and value can be systematically managed.

Ckecklist

Can we describe our organisation’s technology strategy simply and succinctly?

Has our board considered ongoing IT training for the directors?

Are IT supply and demand balanced for value?

What role does IT have in creating value in our organisation?

What is the nature/form of current IT capabilities?

How do current IT capabilities compare to business needs, competitor capabilities and the overall market?

Where is IT creating or not creating value in our organisation?

What are the risks and benefits associated with reducing IT spend?

1. Business-IT alignmentAlthough simple in theory, aligning IT strategy with business strategy remains a test for many organisations. However, as the role of IT expands and technology becomes more pervasive, the traditional idea of a sequential strategy process whereby IT strategy is developed to enable a previously developed business strategy is already superseded. Both need to be developed simultaneously, each informing the other of demands and possibilities.

In a world of online customer self-service, technology moves from supporting the delivery of customer service to being the primary delivery channel for customer service. Business strategy and technology strategy are therefore becoming so interwoven as to be inseparable.

Many of the technology innovations discussed in this paper have the potential to deliver cost efficiencies or to enable the organisation to differentiate and improve its competitive position. Without clarity of purpose in the combined business and IT strategies, the risk is that the true potential is missed and either the wrong outcome is delivered or none at all.

Alignment of IT with the business therefore requires a new perspective on the processes of strategic and

business planning, and executive involvement in determining investment priorities across increasingly blurred boundaries between the business and IT.

To grapple with IT’s inherently complex nature and rapid pace of change, both quantitatively and qualitatively, business leaders need access to meaningful information that allows them to effectively perform their duties. They need to determine whether IT strategy is aligned within the framework of the organisation’s long-term strategic plan, to assess its risks, to monitor its implementation, and to measure IT performance. It was not until the last decade that IT was generally considered a strategic issue. Today, IT supports areas that fall squarely in the domain of director diligence, monitoring company strategy development, risk, compliance and controls, operations, and globalisation. More directors are warming to the idea that IT is a board-level issue.

Adequate information regarding IT and IT strategy will be increasingly needed at senior levels to support the organisation’s overall strategy. It will also enable organisations to exploit opportunities to improve product value, increase market share, mitigate risk, and vastly improve the efficiency of operations – all primary shareholder concerns.


2. IT governanceThe question of business-IT alignment and the role of strategic planning process, discussed in Issue 1, should form part of an overall IT governance framework. The essence of IT governance is bringing the right people to the table to have the right conversation about the right places to spend IT dollars. IT governance involves balancing IT’s potential contribution against other opportunities and available resources. In practice this means involvement of business leaders in decision-making and management of various facets of IT, not just strategic planning.

Management, however, does not always see the added value of IT governance to the overall success

of the organisation. Managing IT means addressing conflicting goals:

• Balancing lower costs and increased quality of service

• Balancing increased agility and lower risk.

Faced with these challenges, several questions can be raised which point to the effectiveness of IT governance:

• Is IT established as a driving force for business projects?

• How are the responsibilities shared between IT and the business?

• How formalised are the relationships between IT and the business?

• How is IT managing the demands of the business?

• How is the business involved in IT investments?

• How are the IT financials shared with the business?

Properly enacted, IT governance will not only reduce the risk that IT investment is sub-optimal for an organisation, also provide the basis for managing performance in the delivery of IT projects and services. Whether the strategic intent is primarily to use technology to improve efficiency or to differentiate product or customer service, the IT governance framework is the cornerstone of effective IT investment and IT service delivery.

IT governanceThe IT governance Institute defines IT governance as ‘an integral part of enterprise governance’ that ‘consists of the leadership, the organisational structures and the processes that ensure that the organisation’s IT sustains and extends the organisation’s strategies and objectives‘.

Decisive external factors influencing IT decision-makingAmericas

(excl. USA) Asia-Pacific EMEA Grand total

Cost reduction initiatives 89% 10% 15% 13%

New technologies 99% 17% 13% 13%

Internal restructuring or business process re-engineering 7% 11% 12% 11%

Request for more automation 69% 6% 13% 11%

Regulatory obligations 99% 10% 9% 9%

Mergers and acquisitions 11% 2% 8% 8%

New management 11% 7% 7% 8%

Changes in own portfolio 12% 5% 7% 7%

New risks 69% 11% 6% 7%

Technology price fluctuations 13% 7% 3% 6%

Changing competition 4% 6% 4% 4%

ISO certification 2% 8% 2% 3%

Other 4% 1% 1% 1%

Grand total 100% 100% 100% 100%

Source: 2009 Survey on IT-Business Balance (Deloitte).


Strategic alignment (continued)

3. IT investment and IT valueThe efficiency dimension of IT (automation, faster execution at a lower cost) is still an important element of the value of IT. However, the operational efficiency made possible by integrated systems is beginning to be taken for granted. The enabling technology which drives process efficiency, primarily enterprise resource planning (ERP), is now mature and well established in all sectors, ranging from large enterprises to the upper ends of the small-to-medium market.

With the possibilities of new technologies, the emphasis is increasingly on IT to deliver on dimensions which are more directly related to business value and competitive edge, through:

• Better products and services

• Higher customer satisfaction

• Go-to-market advantage

• Growth and profitability.

As IT becomes embedded in revenue-generating customer service operations, traditional models of IT funding, value attribution, and lines of accountability and responsibility are being superseded. For example, IT systems which support back-office transaction

processing can reasonably be treated as a corporate investment, yet IT systems which are used for internal functions and to support business unit revenue-generating operations create a more complex management challenge. Adoption of new technologies in support of revenue growth and customer service necessarily moves IT into the ‘front office’ of more and more organisations. IT mangement discipline which are well established in technology-intensive industries, such as banking, are therefore becoming increasingly relevant across all sectors.

Traditionally the cause-and-effect relationship between IT spending and business results has not been well understood. The discipline of IT value management enables business leaders to clarify IT expenditure and assets contribution to tangible business output.

In the absence of effective practices for directing IT investment and tracking value, organisations run the risk of eroding competitive advantage by failing to exploit opportunities or respond to risks. Equally, it is nearly impossible to measure the value contribution of IT or to gauge whether an IT strategy is successful and what impact it has had on business results.

Source: 2009 Survey on IT-Business Balance (Deloitte)

Kevin Daly CEO, Maxxess Systems director, Danka Business Systems, PLC and iteris

‘The value of IT Ito the extent it is realised) it is impact on business performance metrics. Unless and until IT impacts true business parameters. It is providing no strategic value. While IT investments cannot be isolated from other changes going on in the business environment. It is usually a valid assumption that major IT initiatives will (if they are successful) have meaningful impacts on at least some traditional business efficiency, effectiveness, control or compliance metrics.’

William A. Etherington Chair, Canadian Imperial Bank of Commerce, Director, Celestica and MDS

‘We do regular reviews of capital projects that are mostly IT investments. Whenever, we have had project misses (schedule and/or budget), we have revisited the process to review IT strategy and operations. Our current plan calls for annual IT strategy updates, regular project reviews with ‘watch-list projects’ highlighted and connections to IT strategy included in regular strategy and operations reviews by the business unit leaders.’

Susan Wand Director, Altera Corp, Avanex Corp, and Nektar Therapeutics

‘A company that puts all of its resources into its core business and uses IT as a kind of a necessary part of business, but does not want to spend an extra penny if it can help it. In some respects its penny-wise and pound-foolish, because it will end up with a lot of cobbled-up systems and processes that wind up costing more.’


Information managementEffective business management requires accurate, reliable and current information insights into

operations, supply and sales. There are high expectations for any organisation to make effective use

of insights which can be gleaned from the mass of data generated by transaction systems. The focus

for IT continues to evolve from improving transaction efficiency to improving decision support.

Ckecklist

Are we lacking high-quality financial and management information?

Do we struggle to obtain meaningful information across business domains?

Do we have problems with availability, consistency and accuracy of management information?

Are sales operations held back because of lack of insight into customers?

Do we have accurate and current information about supplier performance?

Do we know how much we spend on what and with whom?

Do we know what we need to know about our customers?

4. Management reporting and analyticsMost organisations today recognise the importance of improved information management, some simply need to demonstrate they can deliver financial reports that are timely and accurate, while others need to bring consistency to a jumble of IT systems garnered through acquisitions. Management reporting and data analytics are emerging as two strategically important aspects of new approaches to information management.

Management reporting provides support for strategic and operational decision-making and is increasingly recognised as an often-untapped source of competitive advantage. Management reporting of this kind, which collates information to inform decision-making rather than verify past performance, produces actionable information. This type of reporting and analysis is typically described as business intelligence (BI). An effective BI strategy clarifies the link between information and business performance, focusing business leaders on the key data required to run the organisation.

Through a successful BI initiative, an organisation can:

• Extract integrated decision-support data from business transactions

• Identify profitable customers, reduce costs, and identify profitable products, services and trends

• Provide an environment which helps in refining or building business processes

• Provide users with a platform to run customised reports on the fly (ad hoc analysis)

• Eliminate reporting inertia

• Integrate multiple data sources to provide a single version of truth

• Track internal and operational performance within the organisation.

Business Intelligence (BI)The world of business intelligence comes with its own set of technology concepts and language. Commonly used BI terminology includes:

• Data warehouse

• Datamart

• Data repository

• Cubes

• Online analytical processing (OLAP).


Information management (continued)

Before any organisation can realise the benefits of a BI solution, business leaders first need to define the business questions they are trying to answer. BI solutions will then enable users to quickly adapt to new business requirements and evolving sources of information.

Although BI solutions will reduce the effort required to produce actionable reports, the primary potential is to contribute to competitive positioning. The BI strategy should include a broad set of processes, technologies, and stakeholders for collecting, integrating, accessing, and analysing information for the purpose of helping organisations make better business decisions.

Analytics are a key tool in managing any organisation, and by providing granular insights into the business they can play a powerful role in both cost reduction and differentiation. For example, market positioning can be fine-tuned through greater understanding of the customer population, supply-side cost reduction can be driven through more strategic sourcing and procurement, and customer experience can be improved through improved order fulfilment and customer service.

Specifically, the type of information management systems required by organisations to satisfy their demands and strategic goals are:

• Executive dashboards that deliver integrated information

• Enhanced tools for data quality, data management and integration.

Enterprise Information Management (EIM)

• Information governance

• Enterprise data management

• Enterprise content management

• Data warehousing

• Business performance management

• Data quality management

These are the various IT disciplines involved in producing the high-quality information needed for an effective executive dashboard.

Business Intelligence

Decisions and actions

Vision and

strategy

Technology

Business drivers

Governance

Data architecture

Business planning

Business process

Organisation


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Average uptime 0% 100%

Example of a dashboard

Potential problems by product and city

Goa

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Large orders0 6 10

Small orders0 6 10

Ship time by city

Proportion of volume by country

USA 63%

Europe 6%

India 9%Japan, Korea 3%

China 19%

Product volume of top five cities

Beijing 54%

Glasgow 9%

Mumbai 4%

Tokyo 18%

Long Beach 15%


IT effectivenessIs IT enabling the organisation to take advantage of the potential of new technologies? Is the business aware

of the potential of new technologies and planning how to exploit them? The use of multi-media, mobile

computing, social media and collaboration platforms is poised for explosive growth with the deployment

of the National Broadband Network. ‘Doing the right things’ in the world of IT is no longer solely about

efficient processing of transactions. The new technologies have the potential to be truly disruptive and

transformative to all spheres of business, the public sector and not-for-profits. Business leaders need to

understand the opportunities and threats that these technologies may present.

Ckecklist

Are we ‘doing the right thing’ and ‘doing things right’ with our IT?

Do we have a strategy for how we manage social media?

Do we have a strategy to use social media and collaboration tools for competitive advantage?

Do we have a strategy for mobile workforce?

Is there clarity about how we decide where to target our IT investment?

5. Customer responsivenessAs consumer lifestyles and tastes continue to diversify in society, organisations are facing greater challenges to acquire, grow and retain the right customers. For the organisation, ‘customer experience management’ aims to deliver a consistent experience, specific to individual needs, across all touch points and through all phases of the customer lifecycle.

This business need, moves the emphasis of IT from process and transaction efficiency within siloed business operations to technology support for cross-functional customer management processes. In practice, this means being able to deliver to business users current, accurate and relevant information at the right time and place. For example, sales data is demanded at an ever more granular level of analysis, overlaid by an increasing number of perspectives to support concepts such as customer touch point management and closed-loop marketing management.

Successful online businesses such as Google, Amazon and Apple’s iTunes store provide examples of leading practice in these disciplines. All these online businesses track customer behaviour and use this information to enhance the customer experience and maximise the value from the customer. Examples include Amazon’s ‘customers who bought this product also bought ...’ and iTunes’ ‘just for you’ suggestions.

The innovations of the successful online retail organisations are now being adopted in other sectors. This requires investment in IT solutions comprising varying combinations of:

• Online (web) applications

• Data warehouses

• Business intelligence solutions

• Mobile applications

• Systems integration.

Closed-loop marketingMeasures the results of online marketing and communication initiatives by tracking the response of targeted groups. The results of responses such as

• Completed surveys

• Promotion code redemptions

• Purchase/browsing behaviour

• Email response rates

• External blogs

• Comments posted on corporate blogs

• Social media (Twitter, Facebook, tagging, ratings)

are added to a database for tracking and evaluation to improve future marketing decisions.


6. Collaboration technologiesThe various collaboration tools available in the market allow organisations to share key business data and ideas with employees, partners and customers. This results in improved efficiency, effectiveness and innovation. The scope for exploiting these technologies continues to grow and with the advent of Software as a Service (SaaS) solutions (see Issue 13) comes the ability to deploy them rapidly.

Collaboration technologies can therefore enable groups within the enterprise and across organisations to rapidly come together, work collaboratively on a project or shared interest, and then disband. Examples include:

• Project workspaces where different organisations can work together, for example, architects, planners, financiers, lawyers and engineers involved in a construction project

• Innovation and knowledge management zones

• Workspaces for dispersed groups who share a common interest (‘communities of interest’) to exchange ideas, information and knowledge

• Cross-organisation and cross-border collaboration, for example, virtual R&D teams.

Collaboration technologies can therefore be exploited both as enablers of efficiency (streamlining group processes) and as enablers of competitive advantage (supporting teamwork, innovation and customer service delivery across organisational boundaries).

7. Social mediaSocial media is pervasive in mainstream society and has already started to infiltrate the workplace. Although a large number of organisations have already implemented some form of social media, most have not realised the full benefits that can be potentially delivered. These include increasing employee productivity, operational efficiencies, fostering creativity and innovation, and enhancing customer and prospective relationships.

The technologies classed as social media are often seen as being just that. However, organisations are finding that innovative use can be made of these technologies to change the way in which traditional business activities are done. Examples range from using podcasts for internal communications and training to using messaging technologies such as Twitter to build communities of interest, capture ideas and support innovation.

At the same time, these technologies need to be deployed with due regard for the inherent risks to privacy, confidentiality and brand damage, which can arise from the inadvertent or malicious disclosure of inappropriate company information and opinions. Whereas in the past an individual’s views – good or bad – would be unlikely to reach beyond their immediate acquaintances, they can now reach hundreds of thousands in a short period, in the form of blogs, tweets and videos. Organisations therefore need to review security and privacy policies and update them to address the new range of risks which come with these new technologies (see Issue 9).

8. Wireless and mobile computingWith recent enhancements in hardware devices and network capacity, mobile computing is becoming an important strategic businesses enabler that delivers productivity and innovative customer experience. It allows the workforce to be connected to business operations regardless of locality, resulting in increased productivity.

The combination of hardware devices, broadband networks and new applications is also changing the way customers interact with business at different phases of the customer experience cycle. Branchless banking is an example of a new business’s model. This has been made possible through increased network bandwidth and reliability, a critical mass being reached in public adoption of online and mobile computing, and confidence in the security of online transactions. Retail banking may be at the forefront of technology-mediated customer service, but the same technologies are enabling the advent of customer self-service in sectors as diverse as retail, health and policing.

From a more defensive standpoint, organisations should also consider the possibility that, if innovation in the use of mobile technologies is not driven by the organisation itself, third parties may seize the opportunity. For example, the iPhone application store contains many applications which have been developed and launched by independent entrepreneurs, representing varying degrees of risk and lost opportunity to the relevant organisations.


IT effectiveness (continued)

9. Data security, confidentiality and privacyThe data security landscape today is very different from that of 20 or even 10 years ago, and it continues to evolve rapidly. Today, more people than ever have access to sensitive data and use it in their daily work. At the same time, the role of the physical boundaries of the workplace in safeguarding security and confidentiality are diminishing as workforces become increasingly mobile. The boundary between personal IT and work IT is also blurring as mobile devices are used for both professional and personal activities.

A comprehensive approach which reduces exposure to critical risks and potential damage to brand should consider:

• Privacy and data protection strategy

• Building an organisation-wide inventory and classification map of personal data

• Policies and procedures

• Training and awareness

• Data retention

• Compliance with law enforcement requests

• Building privacy controls into IT projects

• Varied international compliance requirements and cross-border data transfers

• Audit and monitoring programs for ongoing data protection compliance.

In the context of social media and collaboration technologies, the securing of ‘data’ must be seen to include not just traditional ‘hard data’ such as financial records but also multimedia content, comment in emails and online forums, and shared content created in online collaboration workspaces.

In some cases, breach of sensitive data can cost an organisation millions of dollars for not only the immediate indemnity of data loss, but also the potential lost revenue due to their deteriorated reputation and trust undermining the value of the brand.

Physical security of data, particularly on mobile devices such as laptops and smartphones, is a particular challenge, with a number of high-profile incidents of data loss having received international coverage. However, safeguarding sensitive data is more than just disabling USB devices or monitoring outgoing emails. Organisations need to take a holistic approach to identifying the potential risks and threats and putting appropriate mitigating controls in place.

10. Business reporting (XBRL)Extensible Business Reporting Language (XBRL) is a language for the electronic communication of business and financial data that is increasingly being used around the world. It provides key benefits in the preparation, analysis and communication of business information in the form of cost savings, greater efficiency, improved accuracy and increased comparability in the delivery of information to all parties in the financial reporting supply chain.

XBRL is an extension of the web-based XML (Extensible Markup Language) and can ‘tag’ financial data, allowing comparison by analysts across industries and reporting periods. XBRL is an open-standards-based reporting system being built to accommodate the electronic preparation and exchange of business reports around the world.

Regulators in many capital markets, such as Singapore and the United States, have introduced mandatory XBRL-formatted financial reporting, with the UK and Canada currently allowing voluntary filing. A key challenge for regulators is to prescribe a ‘taxonomy’ or a uniform listing of account captions that is neither too narrow to allow meaningful reporting nor too broad to reduce comparability.

The Standard Business Reporting (SBR) program is a federal government initiative aimed at reducing the reporting burden for business by removing duplications across multiple agencies and jurisdictions. To achieve its outcomes, SBR is utilising a reporting taxonomy standard based on XBRL.

SBR is expected to achieve substantial reductions in time and effort spent preparing, lodging and correcting in-scope financial reporting forms. SBR aims to simplify financial reporting requirements by:

• Removing unnecessary and duplicated information and increasing consistency and wording among forms

• Enabling automatic pre-filling of government forms through accounting/record-keeping software

• Introducing a single system that will enable automatic sending of reporting information electronically to participating agencies with a single sign on.


Agility and innovationMany of the new technologies enable organisations to get instant access to ‘off-the-shelf’ packages and

online services, improving their ability to respond to change. However, organisations generally pay a

premium for these services and there are risks involved which need to be managed and considered for

each of these opportunities.

Ckecklist

Does the pace of change in our IT inhibit our ability to change the business?

Do IT projects take too long?

Does IT volunteer solutions which take the organisation forward?

Do we have a large, disparate collection of legacy applications?

11. IT agilityCompetitive advantage relies in part upon an organisation’s ability to react quickly to various changes in customer preferences, market trends, consumer demands, etc. While businesses are typically able to keep up with the pace of change, traditional IT departments often fail to respond to changes at the same pace.

A disciplined IT function fills this gap between business and technology by building the capacity to react to change in a timely, accurate and consistent manner. A number of new technologies and approaches to delivering IT services hold out the possibility of overcoming some of the traditional obstacles to providing more flexible and adaptable IT services.

In practice, translating this potential into business advantage requires the IT function to adopt a combination of technology standards and approaches, and a suite of leading practice processes. The strategic intent behind the adoption of these technologies needs to be clearly articulated so the IT function can be organised accordingly.

Technology solutions such as those highlighted below are insufficient in isolation. To realise the full potential of these solutions, the IT function needs to embed a service culture, and pragmatically apply leading process frameworks (such as the IT Infrastructure Library, ITIL). In doing so, it must be recognised that the ‘internal’ IT processes of service delivery are actually intermediate steps in broader end-to-end business processes.

12. Cloud computingCloud computing refers to a collection of IT capabilities that are provided over the internet and which customers buy as a service. For example, instead of buying a storage server and installing it in a private data centre, customers buy access to storage hosted by the supplier in a remote location.

In contrast to the traditional ‘buy-to-own, implement on-premise’ IT, which requires major capital investment, long implementation time and significant maintenance costs, cloud computing holds out the promise of lower capital investment, potentially higher return on investment, and greater flexibility in IT operations. The greater flexibility arises from the ability to rapidly ‘switch on’ and ‘switch off’ additional IT capacity and services almost instantly. For the organisation, this can translate into reduced time to market and greater operational agility. So while there may be a tendency to

‘The Cloud’Cloud computing is a collection of IT facilities accessed via the internet, including software, application development platforms and servers and storages. Because the physical location of the IT systems is not relevant, they are said to be in ‘the cloud’. The cloud is basically another name for the internet. Well-known examples include Google Gmail, Microsoft’s Azure platform for application development, and Amazon’s data storage and server services.


Agility and innovation (continued)

see cloud computing in terms of cost management, and rebalancing capex vs opex, the real potential of cloud computing lies in the competitive advantage of a more agile IT capability.

Cloud computing is still an evolving paradigm. Its definitions, underlying technologies, issues, risks and benefits continue to be refined in spirited debate. The cloud computing industry represents a large ecosystem of many models, vendors and market niches.

While there are potential benefits to cloud computing, the move to this approach requires consideration of serious issues such as:

• Where will our data be physically stored? Does it matter if it is offshore?

• How secure will our IT systems and data be? If offshore, are there geopolitical risks to consider?

• What degree of disaster recovery and business continuity assurance will we have?

• Will the service provider prove to be as flexible and responsive as we need?

13. Software as a Service Software as a Service (SaaS), where an organisation pays fees for the use of hosted business software, is an increasingly popular approach to delivering IT functionality, applications and end-to-end business processes.

Cloud computing (see Issue 12) is in many ways an example of SaaS hosted on the internet, with similar potential benefits. These include a much-reduced implementation time (the application is already there waiting to be used), reduced or zero capital outlay, and avoidance of the need for in-house IT support and applications expertise.

As with all new technologies, there are potential pitfalls to avoid and issues to manage. When assessing the SaaS approach, business leaders need to consider how adaptable the service is to specific business requirements, and the upgrade path of the service provider, who is juggling the competing demands of many customers. Services hosted offshore may complicate what are perceived to be ‘common’ business rules in jurisdictional areas such as tax and payroll. Additionally, there may be different local regulations regarding access to data kept on shore, for example the US government has higher access to data than does the Australian government.

SaaS offerings which are not truly multi-tenant may also prove to not actually be a more economical option than a traditional in-house implementation. Finally, the change management challenge of transitioning people to a new application and new ways of working is undiminished, whether SaaS or in-house. Indeed, for the IT department SaaS raises new challenges as the emphasis on skills shifts from deeply technical to supplier management.

A thorough assessment of these issues and a sound business case therefore need to be established prior to undertaking the SaaS option.

14. Business rules management In an environment where market demand changes rapidly, Business Rules Management (BRM) need to be updated in a timely manner. Traditionally, changing business requirements has required the re-engineering of IT applications to support evolving business operations. The slow process of software redevelopment can put a brake on the responsiveness of the organisation. This is a particular issue for organisations whose operations are subject to intricate rules and requirements, such as governmental regulations, configurable products and differential pricing.

Multi-tenantThe basic idea of SaaS is that many customers share the same implementation of the application, and the economies of scale achieved by the SaaS provider flow through to benefit the customers. This model of many organisations sharing the same application is known as ‘multi-tenant’.

Rules engineA rules engine is a specialised piece of software which ‘plugs into’ other applications and allows complex business logic rules to be modelled without the need for traditional coding of the rules into the software. Changing the way an application works is then a matter of resetting the rules instead of laborious recoding of the software.


BRM is an approach to building IT applications which significantly reduces the time needed to modify IT solutions. The approach requires the use of a BRM software application, typically an ‘off-the-shelf’ package called a rules engine. Given the sophistication of these packages they can attract significant licensing fees, but equally can deliver significant long-term value and return on investment.

15. Service oriented architecture Service oriented architecture (SOA) pronounced ‘so-ah’, is a concept which is essentially simple but rapidly devolves into highly technical terminology and arcane disciplines. The majority of ‘off-the-shelf’ software packages are moving or have moved to a SOA structure, therefore the normal cycle of upgrade and replacement of applications means that many IT shops (and hence organisations) are incrementally moving to SOA almost by default.

From an IT perspective, SOA reduces the effort required to develop and enhance applications and therefore reduces the cost of these activities. The main promise of SOA, however, is not in reducing IT costs but in improving the ability of IT to respond rapidly to changing business requirements. Greater responsiveness from the IT department should in turn enable greater flexibility for the business, such as the ability to bring new products to market more rapidly, particularly in cases where product or service delivery is mediated by technology.

However, achieving these business results in practice requires more than simply implementing new technologies or rebuilding existing applications. Business process change is also needed to take advantage of a more flexible and responsive IT function. Therefore, the organisation needs to be able to define what it would do with the increased flexibility of its IT systems.

Service oriented architecture ‘SOA’SOA is the name given to the practice of building applications from re-usable building blocks. These chunks, or services, can in theory be rapidly re-arranged to create new applications much more rapidly than with traditional ‘monolithic’ systems. Indeed some of these building blocks do not even have to run on IT platforms within the organisation, they can be accessed as services over the internet.


Operational efficiencyMany organisations have significant IT infrastructure, and it is therefore important that these assets

are used efficiently and effectively. Additionally, organisations need to ensure they protect these assets

and have procedures for managing if the IT system is lost.

Ckecklist

Is our IT spend appropriate to our IT strategy?

Does our IT strategy contribute to ‘greening’ our operations?

What is our strategy for sourcing IT services?

Do we have multiple pockets of IT capabilities that could be consolidated?

16. Green ITAs the amount of electricity consumed by computer and network devices is significant, IT can play a key role in reducing energy consumption. Despite the strong arguments around climate change, little has been done in a practical sense due to organisation’s failure to make the link between green IT and the bottom-line. Organisations need to consider green IT initiatives from an economic standpoint.

Equipment manufacturers are placing significant emphasis on energy consumption in the new generations of PCs, servers and other equipment. Additionally, a variety of strategies can be deployed to improve the energy efficiency of IT operations, including:

• Datacentre consolidation

• Datacentre modernisation

• Server virtualisation (see Issue 18)

• Cloud computing and SaaS (see Issues 12 and 13)

• Infrastructure modernisation.

17. IT sourcingTraditionally, large outsourcing contracts, representing a substantial proportion of IT spend, are usually renewed every five to seven years. More recently, however, many organisations are looking to renegotiate agreements before contracts are due to expire. Many are moving from large outsourcing contracts with a single vendor to a ‘multi-source’ strategy, sourcing IT services from a number of vendors.

Clear objectives and strategies are essential in order to establish a win-win situation with the vendors. Organisations should have a clear understanding of the business value and intent of an outsourcing or multi-sourcing strategy. A key part of this strategic view is a clear definition of the skills and capabilities which need to be retained in-house, and the functions, structure and governance of the ‘retained organisation’.

As an alternative to outsourced service provision, and as a means of focusing on core competencies, organisations with large critical mass are looking to consolidate low-value/non-strategic activities into a shared service capability. The evolution of new IT capabilities, such as virtualisation, greater standardisation of core technologies and the ever-expanding functionality of enterprise resource planning (ERP) packages, can enable a single IT function to support a broader range of business functions and operations.

By re-engineering the business process and modernising systems, organisations are continuing to adopt the shared service model for IT functions.

As with outsourcing or multi-sourcing, one of the key success factors in adopting a shared services model is to define the functions and structure of the retained organisation, and the processes and governance which control how these functions interact with the shared services body.


18. VirtualisationResearch has shown that as little as 20% of an average server’s capacity is actually used, representing real waste in terms of capital investment and energy efficiency.

Server virtualisation is the practice of dividing up a single physical server into a number of logical servers, to optimise the usage of the machine’s available capacity. This enables an IT function to consolidate multiple physical servers onto a single physical device.

Cost saving benefits are realised in the areas of hardware purchases, server maintenance efforts, electricity/cooling requirements and the gain in server administration productivity. IT becomes more responsive to changing business requirements because fulfilling the need for a new server becomes a case of ‘switching on’ a new virtual machine rather than procuring and installing a new box.

Typically these issues have a longer time to benefit than other types of IT investments which directly impact business initiatives. For virtualisation initiatives to be successful, business leaders need to focus on developing clear objectives, strategy and business cases with comprehensive benefit realisation plans.

19. Systems securityCyberspace, which began as an electronic add-on to other domains such as land and sea commerce, is today a domain unto itself. Cyber-culture is growing more rapidly than cyber-security due to the accelerated growth of internet-enabled devices and machinery, and thus everything that depends on cyberspace is at risk. Private data, intellectual property, cyber-infrastructure, and even military and national security can all be compromised by deliberate attacks, inadvertent security lapses, and the vulnerabilities of a relatively immature, unregulated global internet. So although the discipline of systems security is not a new one, the challenges continue to evolve and the associated risks become more extensive as new technologies become widely used.

Security strategies and operations should include, for example:

• Monitoring processes covering areas such as anti-malware, intrusion detection, security information and event management (SIEM) and threat management

• Response activities covering areas such as incident management, disaster recovery (see Issue 20), crisis management, e-discovery and IT forensics

• Prevention activities including processes around secure email, firewalls, network segregation, data leakage prevention and cryptography.

20. Disaster recoveryDisaster recovery, or operational resiliency, is a critical component of successful business management. Experience shows that typically more than 50% of businesses without an effective disaster recovery plan will ultimately fail following a major disruption. While this is not a new issue, the need to ensure continuity of service has never been greater, due to more organisations operating 24/7 and an increasing dependence on technology to conduct business. Increasing stakeholder and regulatory expectations demand an approach that ensures equal consideration is given to managing the immediate and longer-term outcomes of incidents affecting people, processes, systems or events external to the organisation.

Disaster recovery consists of three elements:

• IT disaster recovery

• Business continuity management

• Crisis management.

Virtual machineThe logical server is created by sub-dividing a single physical server into multiple operating units. Special software is run on the physical server which partitions it in a way transparent to the user. For each user, their own virtual machine (or ‘vm’) appears to be a completely stand-alone, separate server. Virtualisation underpins the ability of service providers to provide cloud computing services to multiple consumers.


Operational efficiency (continued)

Organisations should have a clearly defined strategy and action plans encompassing all three.

Disasters are normally divided into three categories:

1. Natural (electrical storms, earthquakes, landslides, fire, flood, pandemic)

2. Human – accidental and intentional (terrorism, cyber attacks, rioting, protests, tampering, information disclosure, fire, theft)

3. Accidental/technical (structural damage to building, system failures, loss of utilities, fuel shortage).

Some disasters (eg. fire) may fall under more than one category. Organisations should consider how these types of disasters can affect key IT infrastructure and services, for example, datacenters, backup tapes, internet access, telephone services including mobile phones, and access to PCs and office space in the event of disaster which affects an entire office. This assessment is typically undertaken as a business impact analysis, followed by development of a recovery strategy for each critical service/application identified in the impact analysis.

Given the rapidly evolving deployment and use of technologies, which move rapidly from ‘optional’ to ‘business critical’, a key challenge is to keep the disaster recovery plan current and relevant. Organisations therefore need to ensure not only that a disaster recovery plan is in place, but also that a regular review and refresh cycle is executed which keeps the business impact analysis and the recovery strategies up to date and reflective of actual technology usage across the organisation.


ConclusionThe coming decade presents considerable challenges for business leaders seeking to exploit IT and new technology innovations. The use of the internet continues to be extended in new and unexpected ways. Whereas in the past the main focus of IT investment has primarily been on seeking efficiency gains through automation and streamlining of processes, many of the new technology developments could be used either to enable further efficiency gains or to achieve some form of differentiation advantage. Many of the new technologies can help organisations differentiate themselves from their competitors in areas such as supplier relationships, customer service, and attracting and retaining talent. For example:

• Recent technology innovations in the social sphere are being adopted by organisations. They are being used to rethink the way businesses operate, whether in terms of the mobile workforce or external interactions with suppliers and customers

• Trends in IT continue to emphasise the importance of unlocking the value of data produced by IT transaction systems, and to recognise and manage the information assets of the organisation, in order to gain insight into operations and customers

• Innovations which may appear highly technical and only of concern to the IT department actually hold the potential to support a more agile and responsive business, with reduced time-to-market for new products and more flexible customer service.

As technologies can be used to enable different business outcomes depending on emphasis and intent, business leaders need to understand the potential advantages – and risks – of these new technologies to their organisation, and decide how they want to exploit them. This strategic intent needs to be implemented to ensure the potential of technology is actually delivered. For example, the adoption of cloud computing will not make an organisation more responsive unless it is accompanied by changes to business processes as part of a detailed strategy and implementation plan. Both the organisation and its IT function need clarity around the purpose (eg. efficiency or differentiation) behind adopting particular technologies or approaches. The strategic planning processes should ensure that the potential benefits and risks of disruptive technologies are an input to the business strategy, not a follow-on consideration. Business leaders therefore need to adopt leading practice strategy and governance approaches to make effective decisions on directing and targeting strategic IT investment.


Resources and further informationLinks

IT Governance Institute www.itgi.org

National Broadband network www.nbn.gov.au

Standard Business Reporting www.sbr.gov.au

XBRL www.xbrl.org/au

The Institute of Chartered accountants in Australia

www.charteredaccountants.com.au

Deloitte CIO services www.deloitte.com/view/en_AU/au/services/cio/index.htm

Deloitte technology consulting www.deloitte.com/view/en_AU/au/services/consulting/technology/index.htm

References

Deloitte, 2009 2009 Survey on IT-business balance Shaping the relationship between business and IT for the future

Top 20 technology issues checklist

Use the prompts below to identify the issues most relevant to you and your organisation.

Strategic alignment Yes No

Can we describe our organisation’s technology strategy simply and succinctly?

Has our board considered ongoing IT training for the directors?

Are IT supply and demand balanced for value?

What role does IT have in creating value in our organisation?

What is the nature/form of current IT capabilities?

How do current IT capabilities compare to business needs, competitors and the overall market?

Where is IT creating or not creating value in our organisation?

What are the risks and benefits associated with reducing IT spend?

Information management Yes No

Are we lacking high-quality financial and management information?

Do we struggle to obtain meaningful information across business domains?

Do we have problems with availability, consistency and accuracy of management information?

Are sales operations held back because of lack of insight into customers?

Do we have accurate and current information about supplier performance?

Do we know how much we spend on what and with whom?

Do we know what we need to know about our customers?

IT effectiveness Yes No

Are we ‘doing the right thing’ and ‘doing things right’ with our IT?

Do we have a strategy for how we manage social media?

Do we have a strategy to use social media and collaboration tools for competitive advantage?

Do we have a strategy for mobile workforce?

Is there clarity about how we decide where to target our IT investment?

Agility and innovation Yes No

Does the pace of change in our IT inhibit our ability to change the business?

Do IT projects take too long?

Does IT volunteer solutions which take the organisation forward?

Do we have a large disparate collection of legacy applications?

Operational efficiency Yes No

Is our IT spend appropriate to our IT strategy?

Does our IT strategy contribute to ‘greening’ our operations?

What is our strategy for sourcing IT services?

Do we have multiple pockets of IT capabilities that could be consolidated?

26Business briefing series: 20 issues on new technology


GlossaryTerms used in this document or commonly used in the context of these issues

Term Meaning

Business intelligence (BI) Catch-all term for management of information and analytics which provide insight into the operations of the business.

Business performance management (BPM) Combination of process management (workflow) applications and analytical reporting against KPIs of process efficiency.

Business rules management (BRM) Approach whereby the elements of processing logic, which are subject to change, are setup in a rules engine. This engine can be easily reconfigured without re-developing the core software application.

Cloud computing Computing services paid for on a subscription basis and delivered over the internet by a service provider.

Cube Part of a business intelligence solution, which takes data from the data warehouse and re-structures it to support specific types of reporting, for example a ‘sales cube’ or an ‘inventory cube’

Data warehouse (DW) A type of datastore specially designed to support analytical reporting

Datamart A small data warehouse

Decision support Specialised subset of business intelligence concerned with providing management the information needed to inform higher-level decision making

Electronic content management (ECM) Technology for managing all electronic content through the lifecycle of creation, revision, sharing, archiving and destruction. Often used in the context of content, which is published to the web. A subset of ILM.

Electronic document management (EDM) Technology for managing electronic documents through the lifecycle of creation, revision, sharing, archiving and destruction. A subset of ILM.

Information lifecycle management (ILM) Processes and technologies used to manage defined categories and items of information through the lifecyle of creation, sharing, archiving and destruction.

Information management The discipline of managing information as a strategic asset of the organisation.

Master data management (MDM) The management of the core strategic information assets of an organisation. A cornerstone of effective information management, business intelligence and data analytics.

Online General term referring to web applications i.e. websites.

Rules engine Specialised software package which holds business logic rules, processes data by applying the logic, and provides the results to other applications.

Service oriented architecture (SOA) Discipline of designing and building applications as collections of building blocks or ‘services’ which can be arranged and re-arranged to create new applications.

Social media Technology, usually web-based and mobile, supporting real-time messaging, multi-media sharing, discussion forums and chat.

Software as a service (SaaS) Business applications provided by a third party as an externally-hosted service.

Systems integration Joining together, by means of interfaces or integration layers, of separate applications such that they operate synchronously and allow business processes to flow across them.

Virtualisation Implementation within one physical server of several logical servers, each of which appears to the user to be a separate stand-alone machine.

Contact details

The Institute of Chartered Accountants in Australia33 Erskine Street, Sydney, NSW 2000

GPO Box 3921, Sydney, NSW 2001

Service 1300 137 322 Phone 02 9290 1344 Fax 02 9262 1512 Email [email protected]

charteredaccountants.com.au

Lee White General Manager of Leadership & Quality

Phone + 61 (2) 9290 5598 Email [email protected]

Deloitte

Grosvenor Place 225 George St, Sydney, NSW 2000

PO Box N250, Sydney, NSW 1217

Phone 02 9322 7000 Fax 02 9322 7001

www.deloitte.com.au

Patrick Lane Director/Consulting

Phone +61 (2) 93225244 Email [email protected]

Peter Ryan Partner

Phone +61 (0)2 9322 5693 Email [email protected]

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