Technology for High Growth Organizations

Presented by Benjamin Lichtenwalner† © 2005

Education Penn State University: BS Management Science & Information Systems Lehigh University: MBA Concentrated in Corporate Entrepreneurship School of Hard Knocks: Lessons through experience

Experience Organizations:

Fortune 500: E-Business Division Start-upInc. 500: ERP Supporting Highest Growth PhaseNPO: Scaled Technology for 50% Growth 12 months

Positions Held:Support AnalystSoftware Developer RolesTechnical Lead (Software design / architecture)Project Manager RolesVice President of Technology (Responsible for all technology)

Lessons Learned All “Technology Projects” are Business Projects first Technology in high growth organizations is not “business as usual” Technology can make or break the success of high growth organizations

A quick background on who this guy Benjamin Lichtenwalner (Lick-ten-wäl-nur) is and why he is so interested in technology at high-growth organizations...

† © 2005Introduction > Objectives > Growth Types > Support > Alignment > Execution

Introduction

Overview

Objectives: What we will communicate today Growth Types: Distinguishing between primary types of growth Supporting Growth:

Timeline – Establishing the time frame for growth and support Resources – Determining what resources to apply and where to

place them Tools – Two of the most useful tools for supporting technology

growth Requirements – Gathering the details of the plan and putting

together the plan Business Alignment: Ensuring agreement, support and proper

prioritization Execution: Executing the plan and staying the course

This presentation captures an introduction to the key issues facing executives and Technology leaders in organizations experiencing rapid growth. The outcome should be a better understanding of these challenges, an introduction to some of the best practices and ideas for risk mitigation.

† © 2005Introduction > Objectives > Growth Types > Support > Alignment > Execution

Understanding the Challenges Distinguishing the types of growth and technology implications Aligning technology for support while still delivering value-added solutions

Framework of Best Practices Deriving best practices in:

Personnel Processes and Policies Systems

Leveraging existing tools in the industry: ITIL SOA Others

The importance of Strategy and Communication

This presentation captures an introduction to the key issues facing Technology departments and leaders in organizations experiencing high growth. The outcome should be a better understanding of these challenges and a framework for best practices in risk mitigation.

† © 2005Introduction > Objectives > Growth Types > Support > Alignment > Execution

Objectives

Types of Growth

Growth Types > Organic

Organic Common in smaller, entrepreneurial organizations Emphasizes scalability, policies & process management Often requires investment in infrastructure

At the most basic level, there are two types of growth that organizations encounter: Organic and Merger (including Acquisitions). Each type of growth has similar and unique challenges for technology.

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Infrastructure and Support

Mergers

Growth Types > Merger

Merger Common in larger, more mature organizations Emphasizes integration and resource alignment Often requires investment in management

At the most basic level, there are two types of growth that organizations encounter: Organic and Merger (including Acquisitions). Each type of growth has similar and unique challenges for technology.

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Mergers

Company ACompany B Infrastructure A

Infrastructure B

Supporting Growth

A quick technology turnaround with minimal service innovation or a longer timeline while maintaining moderate service innovations can be pursued.

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Rapid Approach Expedited growth support Minimal new solutions during scale up Minimal enhancements during scale up

Timeline > Rapid

Time

Inte

grat

e &

Sca

le

Shorter Time to Delivery of Integration

Growth StartIntegration &

Scale Finishes

Services Innovation

Timeline > ModerateA quick technology turnaround with minimal service innovation or a longer timeline while maintaining moderate service innovations can be pursued.

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Moderate Approach Gradual growth support Fewer restrictions on new solution development Fewer restrictions on service enhancements

Time

Integrate & Scale

Greater Time to Delivery of Integration

Growth StartIntegration &

Scale Finishes

Services Innovation

Resources > SchedulingThe planning and execution of growth support requires institutional knowledge of the technology environment. As a result, there is a balance of resource allocation against integration and scaling vs. service innovation.

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DevelopmentInfrastructure Project Business

Infrastructure Development Project Business

EF

FO

RT

Integration & Scalability

Innovation

RESOURCES

Trade Off Resources are required for both innovation and growth Institutional knowledge is a key factor for growth Trade off occurs between innovation and growth resources

Resources > StructureAs the organization grows, there will be a greater need for reporting relationship definition, maintenance and enforcement. Note that this does not negate an ability to remain entrepreneurial in nature..

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Lack of Reporting Structure Adherence to Reporting Structure

Structured Decision Making

ProcessOption A

Option A

Option AOption B

Option C

Option A

OPTION X

Option X

Option AOption A Option B

A + B Modifications

Reporting structures automate structured decision-making Expedites communication Instils accountability / reduces finger-pointing Supports guided entrepreneurialism

Tools > ITILThere are a variety of tools available for tackling technology solutions in a high-growth organization. Applicable tools vary for each organization. However, two tools especially helpful in the growth of technology are the Information Technology Infrastructure Library (ITIL) and Service-Oriented Architecture (SOA).

1: http://www.itil-officialsite.com/home/home.asp† © 2005

Benefits Aligns business and technology around services Aligns organizations on consistent terminology Provides framework of best practices

Company A

Users / Manager /Application

Project Business

Customer /Manager /Service

Company B

User /Stakeholder /Solution

ProjectBusiness

User /Customer /Application

Company A&B ProjectBusiness

ITIL

ITIL

User / Customer / Service

Tools > SOAThere are a variety of tools available for tackling technology solutions in a high-growth organization. Applicable tools vary for each organization. However, two tools especially helpful in the growth of technology are the Information Technology Infrastructure Library (ITIL) and Service-Oriented Architecture (SOA).

1: http://www.itil-officialsite.com/home/home.asp† © 2005

Benefits Rapid integration and scaling of infrastructures Leverages existing technology investments Abstraction of interfaces from underlying technologies

Back-end SystemsBack-end Systems

Service-Oriented Architecture Middle Tier

DATA

Consistent Front-end Consistent Front-end

Service-Oriented Architecture Middle Tier

Services Integration Application Scaling

Governance > ProjectThere are three levels of technology oversight that should be established and maintained: Project, Divisional and Enterprise. Beyond formal governance councils, informal mechanisms should also be pursued to maintain business alignment at all levels.

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Benefits Facilitates regular status updates to stakeholders Promotes rapid responses for risk mitigation Aligns project team members and key stakeholders

Divisional Technology Governance

Project Manager

Project Member Y

User X

Project Member X

DELIVERABLE STATUS RISK DELIVERYDeliverable 1 On Schedule None June 1Deliverable 2 On Schedule None June 20Deliverable ... At Risk Resources July 12

User….

Project Owner

Project Member Z

Governance > DivisionalThere are three levels of technology oversight that should be established and maintained: Project, Divisional and Enterprise. Beyond formal governance councils, informal mechanisms should also be pursued to maintain business alignment at all levels.

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Benefits Establishes line of business and technology accountability Facilitates direct involvement of business owners Allows for frequent feedback and strong alignment

Divisional Technology Governance

Technology

Director X2

Director ...

VP LOB 2

PROJECT STATUS RISK DELIVERYLOB 2 Project X On Schedule None March 24LOB 2 Project Y At Risk Resources July 12LOB 2 Project Z Early None June 10

Director...

Governance > Enterprise There are three levels of technology oversight that should be established and maintained: Project, Divisional and Enterprise. Beyond formal governance councils, informal mechanisms should also be pursued to maintain business alignment at all levels.

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Benefits Establishes executive and technology accountability Minimizes risks through early warning and planning Enables alignment through portfolio management

Enterprise Technology Governance Council

CIO

President CXO...

VP LOB 1 VP LOB 2

CFO

PROJECT STATUS RISK DELIVERYLOB 1 Project A On Schedule None October 10LOB 1 Project B On Schedule None December 20LOB 1 Project C On Schedule None January 15LOB 2 Project X On Schedule None March 24LOB 2 Project Y At Risk Resources July 12LOB 2 Project Z Early None June 10

VP LOB...

Governance > InformalThere are three levels of technology oversight that should be established and maintained: Project, Divisional and Enterprise. Beyond formal governance councils, informal mechanisms should also be pursued to maintain business alignment at all levels.

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Benefits Enhances credibility Establishes support ahead of formal governance Persists alignment between formal governance meetings

CXO...CFOPresidentCIO

Topics Tech Perspective Business PerspectiveIncreasing Risks Moderate LowChanging Processes High LowPersonnel Good ConcernNew Proposal Benefits Early SupportReprioritization Benefits Early Understanding

Governance > RollupThere are three levels of technology oversight that should be established and maintained: Project, Divisional and Enterprise. Beyond formal governance councils, informal mechanisms should also be pursued to maintain business alignment at all levels.

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Project

Divisional

Enterprise

Bi-Weekly

Monthly

Quarterly

PROJECT STATUSLOB 1 Project A On ScheduleLOB 1 Project B On ScheduleLOB 1 Project C On ScheduleLOB 2 Project X On ScheduleLOB 2 Project Y At RiskLOB 2 Project Z Early

PROJECT STATUSLOB 2 Project X On ScheduleLOB 2 Project Y At RiskLOB 2 Project Z Early

DELIVERABLE STATUSDeliverable 1 On ScheduleDeliverable 2 On ScheduleDeliverable ... At Risk

Varied

Business Alignment

Formal Advisory Boards Scorecards & Service Level

Agreements Integrated Mission, Vision &

Strategies

More Common in: Public Corporations Mature Organizations

Informal Regular Check-in Meetings Constant Communications Feedback Mechanisms

More Common in: Small & Mid-sized Businesses (SMBs) Non-Profit Organizations (NPOs)

As with all technology initiatives, enabling high organizational growth requires the business and technology objectives to be begin and remain closely aligned. This can be accomplished through formal or informal methods. Ideally, an organization implements both means of ensuring alignment throughout growth.

Advisory Board(s) Check-InsFeedback

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Supporting Growth: RequirementsThere are many different approaches to requirements gathering. However, below is a simple approach useful for growth planning requirements.

Step 1: Analysis of Systems - The existing systems should be evaluated, this is typically done through two channels:

Stakeholder Interviews – Key stakeholders, including leadership, “lieutenants” and power users should be interviewed. If the growth is merger-based, stakeholders in both organizations must be interviewed. The deliverable from these interviews should be a list of technologies working well, those working poorly and any that may be eliminated.

Technical Audit – Following stakeholder interviews, a comprehensive technical audit should be completed. This audit addresses both security and architecture. This audit often does not align with stakeholder preferences, possibly resulting in heavily used systems that pose security or architectural risks.

Step 2: Prioritization – To ensure alignment with the overall growth goals and the optimal use of resources, the list of services to be scaled and / or integrated should clearly be prioritized.

Cost Analysis – The costs of each initiative should be estimated. The quick turnaround necessary for these estimates necessitates a gauge of accuracy on the estimates (for example Integrating XYZ will cost $30k +/- %50).

Benefit Analysis – Each initiative is, at the heart of the matter, a cost / benefit analysis. Solutions such as Activity Based Cost analysis can deliver clarity in the prioritization process.

Step 3: Leadership Review – Based on the stakeholder interviews, technical audit and a cost / benefit analysis the final prioritization should be reviewed and approved by organizational leadership.

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Execution

Involve Technology Team Members EarlyBe certain to involve technology early. Ideally, the “lieutenants”

should involved up front and supportive of your plan before going to executive leadership. Regardless, before the organization-wide communications are delivered, first create buy in and support across technology through thorough communications, by providing them an opportunity for early feedback.

Communicate WITH the OrganizationWith executive leadership support and buy in from Technology

team members, executive leadership at the highest levels (CEO, President & CIO) should communicate the plan for technology growth to the entire organization. As milestones are reached, the organization should be informed regularly, being sure to highlight successes. It is critical these communications are not only one-way announcements, but a dialogue that creates a sense of investment and participation from key stakeholders.

Consistent Steering CommitteeDuring the creation of business alignment, a steering committee

for the growth plan should have been initiated. This committee should persist throughout implementation, meeting at regular intervals to ensure consistent alignment with the business units and focused discipline in avoiding the distraction of resources.

With an understanding of your organization’s plan for growth, a timeline, resources, strategic tools and alignment with the business, all you need to do is execute. We could spend hours on implementation alone, but below are some guidelines to follow throughout the implementation of your plan.

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“A good idea is worth a dollar.  The plan for implementing that idea is worth a million dollars.” - Laurie Beth Jones

Questions

Notes