terry white ovum 2012 keynote 2a

1 © Copyright Ovum. All rights reserved.

Congress Keynote Modernizing IT to Meet Business WantsTen Cool Things to do with your IT Department

17 May 2011

Terry White: Research Director CXO [email protected]

+27 11 82 573 3887

mailto:[email protected]

© Copyright Ovum. All rights reserved. 2

Agenda

The three roles of IT

IT’s new ACT

Ten ways to ACT

Recommendations


What IS the role of IT in the organisation?

Is IT just EDP?

Is IT’s role to keep the lights on and the wheels turning?

How much time does IT spend doing technology?

And how much doing business?

Should the CIO be on the Board?


What do CEOs want?

Deliver IT without fuss, get involved in business improvement and give us appropriate leadership


Keep up the momentum

Bu

siness

Mom

en

tum

IT without fuss

Mass = staff, branches, geography etc.Speed = how fast and how dependent on continuityDirection = vision, mission, objectives Hygiene factor

Ticket to the game


And do the important ITB

usi

ness

Mom

en

tum

IT without fuss

Improve business results

InformationLeadership


Turn that sideways

IT without fuss

IT without fuss

Busi

ness

Mom

entu

m



Information leadership

InformationLeadership


What IT really does

IT without fuss

76%


22%


2%

Technology delivery

IT without fuss

20%


60%


20%

What the CEO wants


Getting from here to there is not a simple step


IT’s role?

Is IT just EDP?

Or is it ACT? – Applied Competitive Technologies?


Ten things to do to get IT’s ACT together

ACT 1: The mandate

ACT 2: Business results

ACT 3: The white space in organisations

ACT 4: Information leadership

ACT 5: Applied technologies

ACT 6: The technology life-cycle

ACT 7: IT skills

ACT 8: Outsourcing

ACT 9: Business-like IT

ACT 10: ACTing – implementing the idea


ACT 1: The mandate

Deliver IT without fuss, get involved in business improvements, provide appropriate leadership

IT’s posture: What business understands and what IT understands

It is a communication and clarity problem, not a mandate problem

And it is a trust problemDemonstrate competence

Meet commitments

Manage goodwill

Business focus

Next: Business results

Business wants not business needs


ACT 2: Business results

Never

Also never

When to talk about IT costs

The way to ACT is via business performance

Not as librarians


ACT 2: Business results – talking about costs

Crocodiles are your friends!

IT Costs

TransactionsComplexity

Year 1 Year 2 Next yearYear 3

Momentum

Next: White Space

IT costs are meaningless without a

business context

Business results define IT

performance


ACT 3: The white space in organisations

Content

Process

Business measures

Benefits realisation

Portfolio management

Next: Information Leadership

Involved in business not

delivering systems


ACT 4: Information leadership

Management is:

POEM

Plan

Organise

Execute

Monitor / Measure

Leadership is the management of:

Meaning

Attention

Self

Trust

Next: Applied Technology

Manage complexity – meaning and attention

Appropriate leadership is

framed by the organisation


ACT 5: Applied technologies

Getting to 20%• Introduce strict IT governance• Standardise your operations• Automate all your operations, to reduce the

need for IT involvement• Outsource: This is a complex answer as it

makes the “without fuss” part of IT someone else’s problem – but it requires strong supplier management

• Manage IT like a business: Business will only have confidence in IT’s abilities if they see IT run like a business, using business disciplines and techniques

• What else?

Business Focus

IT Focus

IT is seen to be active business partners who do the IT without fuss

Business expectations

IT spends most of its time doing behind the scenes activity

Current business perception of IT

Next: The life-cycle

Without fuss is more important than IT


ACT 6: The life-cycle

Earlylife

Running

Latelife

Development

Month

ly c

ost

s


ACT 6: The technology life-cycle (cont.)C

um

ula

tive c

ost

s

Costs

Benefits

Go live Breakeven



um

ula

tive c

ost

s

Costs Delay

ed B

enefi

ts



um

ula

tive c

ost

s

Costs 1

Incomplete benefits



um

ula

tive c

ost

s

Costs

Cut costs



um

ula

tive c

ost

s

Cut costs

Delayed and

Incomplete benefits

Next: Skills to ACT

Good enough now – not perfect later

Source, then buy, then build

(SAAS, then COTS, then Bespoke)


External FocusWorld trends, Industry trends, Technology trends

ACT 7: IT skills

25% -

50% -

75% -

100% -

0% -

Without fuss Business Involvement LeadershipTechnology

Supply

IT Roles ACT Roles

Technical Skillse.g. languages, tools and network administration

IT Management Skills e.g. project management, service management, IT assets, information management, communication

Business Management SkillsStrategic mgt, relationship mgt, mgt of information, financial analysis, vendor and contract mgt, procurement, business skills

Next: ACT and Outsourcing

Business wants IT to manage demand


ACT 8: Right-sourcing – The ACT Profile

Efficiency = Service / Cost / Risk

Maturity – governance, ‘without fuss’

Focus

Paths of action – people, options

Manage IT, don’t do IT

Next: Business-like IT

Source, then buy, then build

(SAAS, then COTS, then Bespoke)



ACT 9: Business-like IT

Revenue Acquisition

Sales / MarketingProduction Delivery

HR

IT

Supply Chain Management

Program Office

Finance

HR

IT

Supply Chain Management

Program Office

IT ‘Revenue’Mandate

Model

IT ProductionPlanBuild

IT DeliveryRun

IT Finance

IT HR

IT for IT

IT Supply Chain Management

IT DemandManagement

Next: Implementation

The language of business is

finance

Business wants IT to

manage demand


ACT 10: ACTing – implementing the idea

Why implementation fails: Organisational immune system Complexity Interconnectedness Big bang – is it real?

Choose one thing Do it well Repeat Do three in a year

Planned implementation

Actual implementation according to managersActual implementation according outsiders

100%

50%

10%

Adapted from Strategic Management: Alex Miller

Next: Recommendations

Business decides IT priorities

Business decides what’s valuable



Run the engine

Underlying logic to choosing IT initiatives

IT without fuss Improve Business Results

Information Leadership

CXO Advisor © Client distribution only

BrokenRegulation Respond to external forces

Service

Improve

Differentiate

IT services supply

Engine service

Improve

Create

Business value driven

Change delivery model

Service the business

Improve the business

Change the business

Strengthen Capabilities

Strengthen Engine Meaning Attention

Momentum lineFix

Deliver

Looming threat

Change the strategy

Change the environment



IT Financial Rationale / Objectives /

Policies

Funding & finance

BudgetingAllocation

andAccounting

Demand management

Service costing

Service chargeback

Operational utilisation

Value Management

The language of business is

finance



Policies

Funding & finance

BudgetingAllocation

andAccounting

Demand management

Service costing

Service chargeback


Value Management

Providing, planning for, allocating and managing IT financials

Managing the cost / use / value relationship

IT intensity drives

funding

Business decides what’s

valuable


Managing the business side of IT finance


Policies

Funding & finance

BudgetingAllocation

andAccounting

Demand management

Service costing

Service chargeback


Value Management

Managing the IT side of IT finance

Business wants IT to

manage demand

The language

of business is finance


Manage complexity – meaning and attention

IT intensity drives funding

The language of business is finance

Appropriate leadership is framed by the organisation

Business decides what’s valuable

Involved in business not delivering systems


Source, then buy, then build (SAAS, then COTS, then Bespoke)



Business wants not business needs

Without fuss is more important than IT

IT costs are meaningless without a business context

Business results define IT performance

terry white ovum 2012 keynote 2a

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