the first 100 days for a new cio - using the innovation value institute it capability maturity...
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The First 100 Days for a New CIO - Using the Innovation Value Institute IT Capability Maturity Framework to Define a RoadmapTRANSCRIPT
The First 100 Days for a New CIO: Using the Innovation Value Institute IT Capability Maturity Framework to Define a Roadmap
Alan McSweeney
February 6, 2011 2
Objectives
• To describe how the IVI (Innovation Value Institute) IT CMF (IT Capability Maturity Framework) can be used to define an effective business oriented workplan for the first 100 days
February 6, 2011 3
Importance of the First 100 Days For a New CIO
• Important interval in the career of a newly appointed CIO
• You will find many issues and problems that were not immediatelyapparent
• Create a plan for the first 100 days that establishes priorities, approach, attitude, focus, tone, culture, standards
• Need to set the longer-term agenda and build solid foundation for its delivery
• Need to develop a vision for both the IT function and the business
• Must not get stuck in analysis paralysis or making quick decisions
• Short timeframe to assess current situation and what has to be done
• Need to demonstrate progress quickly
February 6, 2011 4
Achieving the Correct Balance
Spending the first 100 days
consumed with analysis and
planning activities with no
material and concrete results
Committing to a detailed
long-term plan and
associated organisational
and model with defined
roles and accountabilities
within the first 100 days
• Need to achieve balance between analysis paralysis and making long-term commitments too quickly
February 6, 2011 5
Information Requirements for First 100 Days
Gain understanding of organisation culture,
reporting lines, role of and expectations from IT
Gain understanding of in-flight projects,
initiatives
Gain understanding of current problems and
issues
Gain understanding of IT portfolio, landscape,
suppliers and infrastructure
Gain understanding of IT organisational structure, human resources, skills,
processes and competencies
Gain understanding of the status of IT budget and financial situation
Gain understanding of business strategy and linkage to IT strategy
Information Requirements for
First 100 Days
February 6, 2011 6
Objectives of First 100 Days
• Establish strong communications
• Establish relationships with business and demonstrate understanding and that you are listening
• Develop tactical plan
• Start to create strategic plan linked to business strategy
• Define success measurement criteria
• Initiate the creation of a strategic plan
• Demonstrate clarity of thought, vision and delivery
• Define guiding principles, governance, processes and methodologies
• Define target IT function operating structure and model
• Start to address high visibility/priority issues and problems
February 6, 2011 7
Benefits of Using the IT CMF Framework to Create 100 Day Action Plan
• Gathers high-level information quickly through structured consultative process
• Creates a high-level view of what is important and where deficiencies exist
• Demonstrates that you are listening
• A rapid engagement that provides quick feedback
• Allows an action plan to be established to focus on mix of strategic and day-to-day
• Establishes a measurement framework to allow progress be evaluated
• Focuses on how IT can deliver value to the business
• Focuses on creating a business-focused IT organisation
February 6, 2011 8
Roadmap for First 100 Days
Gather Information
Create Tactical Plan
Perform High Level IT CMF Assessment
Address High Visibility/ Priority
Problems and Issues
Start
Create Strategic Plan for IT
Deliver on Tactical Plan
Perform Optional
Detailed IT CMF Assessments
February 6, 2011 9
Business Vision
Business Strategy
Business Strategic
Aims
Business Strategic
Objectives
ChallengesCritical Success
FactorsMeasurements
Business Strategy
• Business develops a business strategy that contains defined high level aims and lower level objectives
• Each objective will be subject to challenges that have to be overcome.
• Achievement of the strategic objectives needs to be subject to measurements
February 6, 2011 10
Business Strategy Linkage to IT Strategy
• IT strategy follows from business strategy
• Ensure the organisation is making the best use of IT to deliver on its strategy
• Ensure the organisation is using IT effectively and efficiently
Business Vision
Business Strategy
Business Strategic Aims
Business Strategic
Objectives
IT Vision
IT Strategy
IT Architecture
IT Implementation Plans
and Business Cases
February 6, 2011 11
Innovation Value Institute (IVI) and IT-CMF (IT Capability Maturity Framework)
• IVI is developing an the IT-CMF as a systematic framework for improving IT capability and identifying and prioritising opportunities, reducing cost and optimising the business value of IT investments (see http://ivi.nuim.ie/)
− Based on an Intel framework and initially developed as part of Intel’s IT transformation (see Managing Information Technology for Business Value http://www.intel.com/intelpress/sum_bv.htm)
− Reviewed and tested with 200+ CIOs
• Objectives of IT CMF
− To assess current practices
− To understand opportunity and value of increasing maturity
− To bridge structural gaps in other assessment frameworks
February 6, 2011 12
IT CMF High Level Framework
• IT CMF structured into four high-level processes for value-oriented IT management
Managing IT Like a Business
Managingthe
IT Budget
Managing the IT Capability
Managing IT for Business Value
February 6, 2011 13
IT CMF High Level Framework
Managing IT for business value involves aligning IT investments to overall business benefits.
Underlying focus areas include value and benefits delivery and portfolio management.
Managing the IT capability is concerned with what information technology and the IT organisation can do collectively for the organisation.
Underlying focus areas include traditional IT factory functions like solutions delivery and services provisioning
Managing the IT budget involves effective financial management to reduce costs to free funds for investment in innovative IT solutions that deliver better value and performance.
Underlying focus areas include budget management and performance sustaining and making new investments and portfolio planning.
Managing IT like a business involved using solid professional business practices and applying them to the IT function and involves shifting the focus from production and technology to a focus on customers and services.
Underlying focus areas include leadership, governance, alignment and management processes.
Managing IT for Business Value
Managing the IT Capability
Managing the IT Budget
Managing IT Like a Business
February 6, 2011 14
IT CMF
• IT CMF is a meta-framework that identifies an IT organisation’s maturity in key critical practices− Comprehensive overarching framework that encompasses all relevant IT practices and
sits above implementation frameworks
− Does not mandate the use of specific implementation frameworks
• Identifies the key areas where the organisation wants or needs to improve to deliver business value− Identifies critical gaps in maturity that are preventing IT delivering business value
− Identifies appropriate levels of maturity for the organisation for critical IT processes
• Contains benchmarks to allow an organisation measure itself against similar organisations
• Defines a structure to allow improvements to be measured
• Implementation of specific critical practices improvements devolved to implementation frameworks
• Objective view of IT competency and maturity across all of IT
February 6, 2011 15
IT CMF Framework
• Contains− Assessment approach to determine an IT organisation's maturity
− Best practices associated with outcomes and metrics for their measurement
• Benefits− A comprehensive and detailed framework to collect and provide
management information on critical processes within the IT function of an organisation
− Processes designed, selected and defined as those that ensure that IT delivers business value
− Provides a view of the level of maturity of the IT function
− Identifies areas where effort should be focussed in order to addvalue
− Enable IT to be responsive to business needs
February 6, 2011 16
IT CMF Framework
• IT CMF framework closes the loop on Information Technology delivering value to the business
Managingthe IT
Budget
Managing IT Like a Business
Managing and
Delivering IT Capability
Managing IT for Realising
and AssessingValue
Closing the Loop
Between Cost and Value
February 6, 2011 17
IT Capability Maturity Framework - Standard Framework to Benchmark IT’s Level of Value to Business
• Five maturity levels to assess and optimise value of IT
• A comprehensive and detailed framework to collect and provide management information on critical processes within the IT function of an organisation
• Processes designed, selected and defined as those that ensure that IT delivers business value
• Provides a view of the level of maturity of the IT function
• Identifies areas where effort should be focussed in order to add value
• Enable IT to be responsive to business needs
Value Centre5
Investment
Centre4
Sustainable
Economic Model
Corporate Core
CompetencyOptimised Value
Expanded
Funding Options
Strategic
Business Partner
Options and
Portfolio
Management
3 Service CentreSystemic Cost
Reduction
Technology
Expert
ROI & Business
Case
2 Cost CentrePredictable
Performance
Technology
SupplierTCO
1
Managing IT Like
a Business
Managing the
IT BudgetManaging IT for
Business Value
Managing the
IT Capability
BeginningInitial
Basic
Intermediate
Advanced
Optimising
One of the Tools Used to Manage
Journey to Becoming a Value Centre
February 6, 2011 18
IT CMF Detailed Structure – Comprehensive View of Core Competencies Required of an IT Organisation
Managing IT Like a Business
Managing the
IT Budget
Managing the
IT Capability
Managing IT for Business Value
ITGIT Leadership & Governance
FF Funding & Financing EAMEnterprise Architecture Management
TCO Total Cost of Ownership
BPMBusiness Process Management
BGM
Budget Management TIMTechnical Infrastructure Management
BARBenefits Assessment & Realisation
BP Business Planning PPPPortfolio Planning & Prioritisation
PAM People Asset Management PM Portfolio Management
SP Strategic Planning BOPBudget Oversight & Performance Analysis
KAMKnowledge Asset Management
DSMDemand & Supply Management
RAMRelationship Asset Management
CFPCapacity Forecasting & Planning
RDEResearch, Development, & Engineering
RM Risk Management SD Solutions Delivery
AA Accounting & Allocation SRP Service Provisioning
ODPOrganisation Design & Planning
UTM User Training Management
SRC Sourcing UED User Experience Design
IM Innovation Management PPMProgram & Project Management
SAIService Analytics & Intelligence
SUM Supplier Management
SICT Sustainable ICT CAMCapability Assessment & Management
February 6, 2011 19
IT CMF High Level Assessment Overview
• Objective maturity assessment of IT management practices, identifying both gaps and potential over investments
Managing IT like a businessManaging the
IT capability
Managing IT
for business
value
Managing
the
IT budget
1
2
3
4
5
ITG BPM BP SP DSM CFP RM AA ODP SRC REM IM PQM SAI FF BGM PPP BOP EAM UMTPAM ICM RAM RDE SD SRPTIM UED PPM SUM VCM CAM TCO BAR PM IAP
Risk of competitive
disadvantage due to below
below-average maturity?
Can be applied across all IT functions
or in a selected set of areas
Risk of competitive
disadvantage due to
over-investment?
Industry Average
Organisation’s
Current
Maturity Level
Core
Competency
Area Within IT
CMF
Framework
February 6, 2011 20
IT Value Contribution Increases with Maturity
Maturity Level
3
Intermediate
High
Low
4
Advanced
2
Basic
5
Optimising
1
Initial
IT enables and drives business value creation and business opportunities
IT is fully aligned with business strategy and anticipates business needs
IT focuses on business value creation
Value oriented IT management using various industry best practices
IT directly contributes to business value creation in some areas
IT turns toward focusing on business value creation, but is mostly understood as service provider
IT mainly provides services allowing business to create value
IT focuses on delivering solutions for business needs, but not a value creator on its own
IT disconnected from business value creation
IT is not an integral part of value creation
IT Value Contribution
Increasing
contribution
to business
value as the
IT
organisation
increases its
maturity
Organisation must be able to translate
IT maturity into business value contribution
February 6, 2011 21
IT CMF Provides Framework to Link Business Strategy to IT Strategy
Business Vision
Business Strategy
Business Strategic Aims
Business Strategic
Objectives
Managing the IT Budget
Managing the IT Capability
Managing IT for Business
Value
Managing IT Like a Business
Business Context
ITContext
February 6, 2011 22
Using IT CMF to Define a Business Oriented Information Technology Strategy
Perform High Level Current State
Maturity Assessment
Identify Gaps Where the Organisation
Wants or Needs to Improve to Deliver
Business Value
Perform Optional Detailed “Deep
Dives” Into Specific Competency Areas,
if Required, to Identify Detailed Gaps and Issues
Define Overall Plan to Achieve Planned
Process Maturity Levels
February 6, 2011 23
IT CMF Assessment Conducted in Three Phases and Takes Around 3-4 Weeks
Week 2Week 1 Week 4Week 3Beforehand
Initial kick-off meeting and preparation
Selection of assessment team
Complete individual assessment
(answering questionnaire)
Collect additional data
(based on data already consolidated in organisation)
Prepare assessment report
Initial maturity
assessment
Conduct individual interviews
(for validation of initial maturity estimate)
Milestones of assessment
Review results and analyse findings
Validated
maturity
assessment
Final
results
(incl. action
plan)
Analysis of collected data and questionnaires
Activity
Identify practices to be implemented for
improving maturity and business value
Workshop to share and discuss assessment
results and collect feedback on assessment
Review initial
results
1
2
3
Today
0
Final
workshop
• Assessments consist of questionnaires that gather information
• Supported by best practice documentation and database of benchmarks
February 6, 2011 24
Sample IT-CMF High Level Assessment: Purpose of Performing Survey
• Objective was to measure the perceived importance and perceived current level of maturity/skills and desired level of maturity in two years in order to identify areas to focus on to derive the greatest benefit
• Measures maturity and importance along 32 critical processes – areas where IT should have good skills, experience and maturity - in order to ensure that the IT function delivers value to the business
• Allows comparison to other organisations
• Not just about measuring IT but also concerned with measuring how those outside IT view the IT function
• Primary focus in on IT delivering value to the business
February 6, 2011 25
Sample IT-CMF High Level Assessment: IT Posture
• Summarises view of− Technology adoption
preference− Deployment of IT to support
business activity− IT in relation to competitive
advantage− IT and outsourcing
preferences− IT and business value
management− IT and business requirements
management− Level of IT investment
• Average score is 60
• Organisation score is 42
• General view is that the organisation do not view that full advantage is not taken of IT
− IT lags behind business needs rather than leads the business
− Lower than average investment in IT
− Not actively seeking innovation
− Not using IT for business value
February 6, 2011 26
Sample IT-CMF High Level Assessment: IT Value Performance
• Summarises the organisation’s view of the importance and actual perceived performance responses to the following questions− Cost Effective Use of IT− Effective Use of IT for Business Growth− Effective Use of IT for Asset Utilisation− Effective Use of IT for Business Flexibility− Aggregate view of importance is very high – 16.5 out of 20
• Aggregate view of performance is much lower – 10 out of 20
• Gap between importance and performance
Importance Performance
Cost Effective Use of IT 4.5 3.2
Effective Use of IT for Business Growth 4 2.4
Effective Use of IT for Asset Utilisation 3.7 2.2
Effective Use of IT for Business Flexibility 4.3 2.2
Total 16.5 10
February 6, 2011 27
Sample IT-CMF High Level Assessment: High Level Process Maturity
• Generally low level 2 maturity across the four groups of IT competence areas− Shows a low level of maturity
across all processes
• Aspiring to increase of 1-1.5 maturity levels in all areas− Shows a consistent desire to
improve maturity across all processes
− A consistent increase of 1-1.5 maturity levels will require a large investment
− Need to balance the need to improve with the resources required
− Need to focus efforts on those areas that will yield the greatest benefit
Low maturity in business
value competencies
Highest maturity in
cost-related
competencies
Consistent aspiration to
increase maturity across all
competencies
February 6, 2011 28
Sample IT-CMF High Level Assessment: High Level Process Maturity
• Shows the current and desired maturity and 25th, 50th and 75th
percentiles of similar measures on benchmarked organisations
• Shows that the organisation is around the 25% percentile in terms of maturity across all processes when compared with other organisations
• 75% of organisations are currently more mature
• Stated desire is to exceed 75% percentile of maturity when compared with other organisations in two years – how realistic is this?
February 6, 2011 29
Sample IT-CMF High Level Assessment: Critical Processes Maturity
February 6, 2011 30
Sample IT-CMF High Level Assessment: Critical Processes Maturity
• Areas where the greatest improvement is desired
1. Strategic Planning
2. Innovation Management
3. Enterprise Architecture Management
4. Knowledge Management
5. Capability Assessment and Management
6. Total Cost of Ownership
7. Benefits Assessment and Realisation
• Perceived core competency importance
1. Risk Management
2. Business Planning
3. Portfolio Management
4. IT Leadership and Governance
5. Solutions Delivery
6. Enterprise Architecture Management
7. Strategic Planning
February 6, 2011 31
Sample IT-CMF High Level Assessment: Critical Processes Ranked by Importance
February 6, 2011 32
Sample Using the IT CMF Assessment Results to Assist in Defining an Improvement Strategy
1. Identify and focus on areas of required IT competency classified by their perceived importance and current maturity and prioritised by lack of balance
2. Identify and focus maturity gaps in areas of required IT competency prioritised by importance
3. Create a mixed approach
February 6, 2011 33
Sample IT-CMF High Level Assessment: Importance Vs Current Maturity
• Shows the IT CMF process areas classified by their perceived importance and current maturity and prioritised by lack of balance
• Classification of current maturity and importance
• Identify overlap between low current maturity and high importance to recognise areas to focus on Importance
Matu
rity
February 6, 2011 34
Sample IT-CMF High Level Assessment: Importance Vs Current Maturity
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0
SAI
FF
BGM
PPP
BOP
EAM
TIM
PAMKM
RAM
DSM
SDSRP
UTM
UED
PPM
SUM
CAM
TCO
BAR
PMITG
BPM
BP
SP
CFP RDERM
AA
ODP
SRC
IM
Importance
Ma
turi
ty
February 6, 2011 35
Sample IT-CMF High Level Assessment: Importance Vs Current Maturity
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0
SAI
FF
BGMPPP
BOP
EAM
TIM
PAMKM
RAM
ITG
SD
SRP
UTM
UED
PPM
SUM
CAM
TCO
BAR
PM RM
AA
ODP
BPM
BP RDE
SP
DSM
CFP
SRC
IM
Importance
Ma
turi
ty
February 6, 2011 36
Sample IT-CMF Matrix: Importance Vs Maturity Gap
• Shows the process maturity gap (difference between perceived current maturity and desired future maturity) classified by perceived importance
1. Risk Management
2. Business Planning
3. Portfolio Management
4. IT Leadership and Governance
5. Solutions Delivery
6. Enterprise Architecture Management
7. Strategic Planning
February 6, 2011 37
Sample IT-CMF Matrix: Importance Vs Maturity GapPrimary Focus Area
More Important / Greater Maturity Gap
Secondary Focus Area
More Important / Lesser Maturity Gap
Tertiary Focus Area
Lesser Importance / Greater Maturity Gap
Tolerable Stragglers
Lesser Importance / Lesser Maturity Gap
Importance
2010 – 2012 Maturity Gap
3.4
3.5
3.6
3.7
3.8
3.9
4.0
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
5.0
5.1
ODP
AA
RM
CFP
DSM
SP
BP
BPM
ITG
0.3 3.02.92.82.72.62.52.42.32.22.10.20.0
PM
BAR
TCO
CAM
SUM
PPM
UED
UTM
SRP
SD
RDE
RAM
KM
PAM
TIM
EAM
BOPPPP
BGM
FF
SAI
IM
SRC
-0.1 0.90.80.70.60.50.4 3.12.01.91.81.71.61.51.41.31.21.10.1 1.0
Average Maturity Gap
CapBiz
ValBud
February 6, 2011 38
Sample IT-CMF High Level Assessment: Areas to Focus On
• Areas where the greatest improvement is desired
− Strategic Planning
− Innovation Management
− Enterprise Architecture Management
− Knowledge Management
− Capability Assessment and Management
− Total Cost of Ownership
− Benefits Assessment and Realisation
• Areas of perceived importance
− Risk Management
− Business Planning
− Portfolio Management
− IT Leadership and Governance
− Solutions Delivery
− Enterprise Architecture Management
− Strategic Planning
February 6, 2011 39
Sample IT-CMF High Level Assessment: Recommendations for Action
• Based on the analysis the greatest benefits will be derived from initiating projects in the following areas:
− Enterprise Architecture Management
− Total Cost of Ownership
− Benefits Assessment and Realisation
• Key building blocks to effective long-term development of professional IT function that delivers projects that create value
• Highest priority areas based on current skills and competence and importance to the organisation, now and in the future
February 6, 2011 40
Sample IT-CMF High Level Assessment: Enterprise Architecture Management Overview
• Enterprise architecture management provides the necessary modelsand practices for defining, planning and managing the business and IT capabilities− Models include business, data, applications and technology models and
principles that support high-level enterprise assessments and investment trade-off decisions, as well as tactical, project-level designs and decisions
− Practices include architecture development, assessments, strategy development, policies, standards and compliance
• Value of increasing maturity− Managed complexity by increasing commonality and simplifying architectural
design
− Improved ROI by reducing development time and increasing speed to market
− Enhanced competitive advantage by increasing flexibility and introducing new capabilities
− Reduced business, IT and project-level risks by better planning
− Improved architecture management practices and governance
February 6, 2011 41
Sample IT-CMF High Level Assessment: Total Cost of Ownership Overview
• Understand how, why and from where IT is funded− Determine the scale, scope and sources of funding for IT and assign financial resources
to IT activities− Establish a balance between Capital expenses and Operational expenses to optimise IT
effectiveness
• Track and control direct and indirect costs associated with IT infrastructure and systems− Understanding of total cost of ownership better informs budgeting and portfolio
management processes
• Active, ongoing review and adjustment of the IT spending plan to systematically ensure that allocated budgets are being spent effectively and are within budget parameters and governance model
• Periodic offline review of IT spending vs. IT plan, which provides stimulus for re-profiling or reprioritisation of budgets− Ensures that budget targets are being met and improves quality of future forecasts
• Policies, processes and tools used for calculating and distributing the costs of IT− Range of methods such as chargeback, transfer pricing, and allocation may be used to
manage the cost of IT services and to influence the demand for IT services within an organisation
February 6, 2011 42
Sample IT-CMF High Level Assessment: Benefits Assessment and Realisation Overview
• Establishing a common language, measurement and valuation framework to express the potential and document the actual business value (i.e., public and private) and business benefits realised through IT-Enabled investments, as defined and recognised by all stakeholders.
• Systematic, objective and consistent organisational approaches to the following− Benefits Planning
− Benefits Assessment
− Benefits Tracking and Measurement
− Benefit Realisation reporting
− Benefit Culture
• Enabling a business value culture where management optimises IT’s contribution to business objectives
February 6, 2011 43
Benefits of Using the IT CMF Framework in the First 100 Days of a New CIO
• IT CMF is a comprehensive overarching framework that encompasses all relevant IT practices− Agnostic of specific implementation frameworks
• Covers entire landscape of IT competency
• IT CMF is business-value oriented
• Contains benchmarks to allow an organisation measure itself against similar organisations
• Defines a structure to allow improvements to be measured
• Identifies the key areas where the organisation wants or needs to improve to deliver business value
• Identifies critical gaps in maturity that are preventing IT delivering business value
• Identifies appropriate levels of maturity for the organisation for critical IT processes
• Ensures the IT strategy is soundly anchored on delivering business value
