TMGT/550 Competition Report O'CONOR ONLY

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Chapter 13 Tactical Enterprise IT Capabilities and Competencies The Enterprise IT Capabilities to Deliver Value with Information and IT

We defined Strategic IT Management as an application of strategic management principles. Among the definitions introduced in Chapter 1 is “marshaling all relevant enterprise resources to achieve success in enterprise strategies.” Marshaling all relevant enterprise resources is the foundation of the three tactical enterprise IT capabilities (Exhibit 13.1). These focus on:

▪ Information & Intelligence: The information and analytical resources in business and IT

▪ Service & Resource Optimization: The process, service, and technical resources throughout all IT in the enterprise

▪ Development & Transformation: The enterprise's total developmental resources, ranging from business process change through technical development and implementation

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Exhibit 13.1 Tactical Enterprise IT Capabilities

The challenges in the three areas are the same. In particular, the scope of the resources in each is larger than traditional IT-related processes normally consider. For example, the information resources are spread throughout the enterprise and beyond, to customers and supply chain and the economic environment. The developmental resources include traditional software development methods but also embrace culture, process, organizational, and individual development. The IT service resources include all IT sources, both within and without the enterprise. In all these cases the challenge is to

understand the scope, providing means to fully engage the resources (and stakeholders) in the process of delivering value, and dealing with the enterprise, business, and IT silos and cultures.

This means attention to the same basics—partnership, trust, leadership, IT services—that have occupied us in this book. In this case, these are exercised in the context of marshaling and managing the resources and providing the integrative common view of objectives and outcomes required.

Enterprise IT Capability: Information & Intelligence

This capability emphasizes the business's ability to marshal its vast information resources, including those that are externally obtained, and apply management, decision-making, control, and analytical techniques to extract maximum meaning and

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impact on business performance. This capability connects the business's ability with the technology required to manage and deploy information and appropriate tools to the business. (Exhibit 13.2 summarizes the objectives, expected outcomes, and examples of methodologies widely used.)

Exhibit 13.2 Examples of Information & Intelligence Objectives and Outcomes

From its beginnings as “data processing,” IT has been a two-sided coin: process versus data. In the old days, systems analysis practitioners argued which came first: Did one analyze the business processes and then define the data

needed, or did one define the data required for reports and transactions and then define the processes needed to produce the data? Of course, the answer is “yes.” Currently, with big data and analytics, attention is tending toward the data side.

Process is certainly vital, leading to optimization, cost reduction, and customer service; a lot of planning processes, such as enterprise architecture, devote considerable energy to the process side. But data, the addition of intelligence (e.g., analytics, “big data,” etc.), has added a significant new dimension to the power of information technology. (It is, of course, “information” technology.) The purpose of this enterprise IT capability is transforming the use of information and analysis in the business.

Methodologies have been packaged under terms such as business intelligence and business analytics. These are reflected in a plethora of tools and technical enterprise capabilities. And data architecture is an important subspecialty within enterprise architecture. The goals are the superior use of information (compared to the competition), providing competitive and innovative business forecasting and decision making. The challenge of turbulence adds the requirement for rapid, comprehensive, and responsive intelligence and forecasting.

The key to the Information & Intelligence enterprise IT capability is to mobilize the enterprise's understanding of the vast information resources of the enterprise, and to

Strategic IT Example Management Outcomes Objective for Superior

Value

Example Outcomes for Superior Response to Turbulence

Example Methods

Information Transform the & business Intelligence through use of

information and analysis

Superior use of information; competitive and innovative business forecasting and decisions

Rapid, comprehensive, responsive intelligence, forecasting

• Business Intelligence

• Business Analytics

• Data Architecture

Enterprise IT Capability

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connect these resources to their use in propelling the business forward. This is not a

technical matter; it involves culture and significant engagement of the business. 1

We do have a significant definitional problem that we need to clarify. We'll assert, a little later, that there's no one really in charge of enterprise

Information & Intelligence, in spite of the concept of the CIO, and that an enterprise has activities throughout its business organizations that deal with information, but not in a focused enterprise-wide fashion. A problem is that the word information is not often, perhaps never, used by itself in contemporary IT literature; rather, information is attached to words like management and organization and architecture, which are primarily the means of acquiring, managing, and delivering said information.

In short, it is largely an IT Supply discussion. Practically every current book and article about information and IT uses phrases like information strategy, strategic information plan, or information management, and what most of them mean is the IT enterprise, inclusive of planning, development, and delivery. An example definition is “an information strategy can be looked upon as a plan which sets the objectives and framework for the sustainable long-term development of an organization's

information and communication capabilities.” 2

Our co-author and his colleagues wrote this definition:

A complex of implicit or explicit visions, goals, guidelines, and plans with respect to the supply and the demand of formal information in an organization, sanctioned by management, intended to support the objectives of the organization

in the long run, while being able to adjust to the environment. 3

The “use of information” is in there, but the large majority of attention is on information management. A couple of good CIO-targeted books don't mention information as such at all; the books are instead about the role, function, and

effectiveness of the CIO and the IT organization. 4

Of course, these are critical issues—but they are not the point of Information & Intelligence.

So the question of enterprise IT capability is not one of structure or organization or control over information. Rather, the question is whether all the participants, whether business or IT, have the perspective of looking outside of their particular box, of understanding the opportunities and power of information—and the intelligence that can be deployed with it—for the benefit of the business. This is a holistic, cross-silo, integrative question, and not per se an architectural or structural one.

But a real challenge lies in the very strong interest in Information & Intelligence from every area of the business. It seems every business function (e.g., marketing, sales, customer services, logistics, and manufacturing, just to name a few) has developed real appreciation for information's role in their activities, and this increases day by day as the appeal of mining company or industry data becomes more apparent. This creates

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colossal, but siloed, energy—and significant incentives to bypass what may be thought of as the bureaucracy and limits of an enterprise's (and IT organization's) decision-

making processes. Vendors add to this, offering specific solutions directly to the business. While exciting, competitively important, and effective, the cumulative effect can be a mess. Moreover, the real value of the data may actually lie in cross-functional and cross-line-of-business acquisition and analysis, which makes the silo issues more significant.

As a modest example, an IBM web site 5

posted a four-stage measure of analytics capability:

1. Novice—individuals or teams are analyzing their own data with spreadsheets or basic query tools

2. Builder—teams are operating more collaboratively in analyzing data and trends

3. Leader—analytics are being carried out from multiple systems and the organization is defining operational and financial metrics across departmental lines

4. Master—data-driven decision-making is pervasive and the organization can set goals and allocate resources based on real-time insight

This shows the character of the enterprise IT capability for Information & Intelligence: not so much tools and techniques as the holistic, cross-organizational character of the activity. This example focuses on the decision and analytics aspects. The cross- enterprise aspects of data acquisition, beyond the limitations of individual silos and applications, remain; these, too, are a significant aspect of the capability.

What Is the Information & Intelligence Enterprise IT Capability?

We said in Chapter 1 that “an enterprise requires the capability to acquire, manage, analyze, and apply its vast information resources in all relevant enterprise areas.” Two related domains comprise this capability: one is related to the technology itself, the other related to the application of information in the business, from simple applications to enterprise-wide analytics. The more technical capabilities relate to the full information life cycle, from acquisition to analysis. The business-side capability is how these resources are applied.

So the challenge is to maximize the availability of data and the ability of the enterprise to apply it. Players in these domains include those inside IT, such as enterprise architects and data architects, as well as business functional analysts in places like marketing. Vendors are a big factor as well. So the overall problem is that an enterprise's Information & Intelligence efforts confront many problems similar to those we mentioned in Planning & Innovation, such as silos, cycle-time challenges, limited vision, requirements for adaptability and flexibility, and impediments to quick solutions. How to overcome these is the

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challenge. What's necessary is the ability to transform the business use of information and analysis and provide rapid, comprehensive, responsive intelligence and forecasting.

But the problem is much more serious in the following way: There's no real overarching set of existing processes or methodologies—whether in business or IT— that focus specifically on Information & Intelligence, unlike for example the plethora of processes for planning in Planning & Innovation and the other enterprise IT capabilities. With the possible exception of data architecture (a subset of enterprise architecture), everything dealing with information is a part of another process or methodology, such as systems (project) development, software engineering, business process management, development operations (devops), market research, product development, and on and on. Everything has a piece of Information & Intelligence; no one owns it. This is a real problem that the enterprise IT capability—the connection between IT and business, across the silos of both—has to understand, and accordingly develop awareness of the issues. This is not a “control” issue; it is a coordination, awareness, partnership, common goals exploitation issue.

This leads to real opportunity and, at the same time, real risks. Every IT activity—and every business activity—deals with information in some fashion, perhaps as transactions, perhaps as web interactions, perhaps as databases maintained, perhaps as data collected throughout otherwise simple activities (as minor examples, meters, cameras, monitors, etc.). The enterprise is full of data passing through its processes, its facilities. The opportunity is to aggressively move toward understanding and capitalizing on all this, in ways not necessarily foreseen in more traditional views of information technology. This opportunity is both highly siloed—each functional and business area has the opportunity to exploit its data, and one sees this in the euphoric writing in professional and industry journals—and highly holistic; it is only when data is put together across the enterprise, across functional and business silos that the transformative insights and capabilities are perceived.

While these statements tend to emphasize the intelligence and analytic side of data, the underlying skills for managing data are as important. Indeed, a second major problem— sustainability and risk management—lurks in the background, with such matters as security, integrity, and architecture involved. Much of the power of Information & Intelligence is based on the assumption that its implementation will include necessary sustainability and characteristics. However, silos get in the way of providing these qualities; partnership and trust are part of the successful picture. (Of course, some aspects of analytics involve use of the enormous amounts of raw, unstructured data an enterprise collects. Nevertheless, the structural issues can still be hurdles.) This problem will be explored in more detail in the Service & Operational Excellence, Sourcing, and, to a certain extent, Service & Resource Optimization enterprise IT capabilities.

A third, less crystallized problem was raised earlier in the Part III Introduction, having to do with the cultural collision between structure/engineering on one hand and flexibility/speed/turbulence on the other. The desire to strive for stability and certainty (e.g., control, security, data structure, architecture) is endemic to IT, yet there is also a requirement to be flexible and even accept something less than perfection, as in data analytics, using unstructured, perhaps even unreliable (in traditional terms) data.

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The point ultimately is that enterprise IT capability requires both business and IT to be aware of and coordinate the solutions that exist throughout the enterprise. While some problems exist in areas such as application development and infrastructure (e.g., standards, security, etc.), their significance (and largely based on the seductiveness of the information solutions) is felt strongly here. In some ways it is overcoming what we might call the “data culture” in IT--for example, the current and ultimately narrow emphasis on big data and analytics treated as technical matters—to unleash the full power of information applied throughout the enterprise, but at the same time not giving up the important virtues of certainty, control, and so forth in the “engineering” culture.

The real enterprise IT capability is found in coordinating and setting expectations. But it is somewhat more complicated. While enormous interest is expressed throughout business and IT about things like big data and analytics, the voices in the background are saying things like “well, to really do these things one has to change the culture and the assumptions (mental models) business management has about the use of information in decision making.” For that matter, the whole business of decision making itself has to be changed. The real enterprise IT capability is therefore a much more holistic requirement that bundles together the technical issues (e.g., security) with the business issues (e.g., strategic opportunities in responding to customer wants and needs) with the practical issues (who exactly is going to do all this) and, more to the point, how the skills needed can be spread throughout the enterprise.

Traditionally these skills combine database, data collection, and data analysis resources, typically comprising infrastructure, software, and the technical skills to apply them. Of course this approach has exploded with the onset of “big data” and analytics, in which the resources include very nontraditional information sources and willingness to use less-than-perfectly structured data. These resources certainly cross silos in IT, and cross business units, extending to outside-the-enterprise sources. At the same time, the opportunities also cross business unit silos and outside-the- enterprise sources. While business units and business functional groups (e.g., marketing) possess significant energy and pursue opportunities within their domains, the future lies in cross-domain, cross-silo opportunities.

Accordingly, building the people resources in this area is a major challenge and raises all the trust/partnership/common goals challenges possible. At the same time, all forms of IT are involved—not just the traditional transactional system but all of the outside acquired (e.g., cloud) and do-it-yourself IT solutions have significant roles to play in collection and analysis of data, across all the domains. Yet people resources are needed.

The End Point

Information becomes the critical resource; management ability to access, maintain, and analyze gives meaning to the wealth of information available to the enterprise. Examples of business-based outcomes are shown in Exhibit 13.3. Overall, however, the enterprise IT capability to execute in terms of the life cycle of data—all forms of data— is critical. But simply being

able to get the data is not enough; producing the real business outcomes is critical, as shown in the exhibit.

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Exhibit 13.3 Example Business Outcomes for Information & Intelligence

Execution and Performance: Business Outcomes as the Basis for Credibility and Trust

Information & Intelligence Examples: Execution and Performance Business Outcomes for “Superior Business Value”

Information & Intelligence Examples: Execution and Performance Business Outcomes for “Superior Response to Turbulence and Uncertainty”

Strategic Innovation

• Strategic analysis

• Providing information foundation for strategic analysis

• Transformative strategic effectiveness

• Direct support for strategic intentions

• Transformative changes to the business model

• Transformative changes in relationships to market and customer

• Strategic innovation done more quickly

• Flexible, adaptable, integratable business and IT platforms

• Enterprise-wide applicability

Project Development & Benefit Realization

• Access to a universe of relevant and valuable data

• Adaptable solutions

• Integratable solutions

• Dynamic capabilities

Software Configuration & Development

• Successfully developed projects

• Successfully acquired software and solutions

• Adaptable solutions

• Dynamic capabilities

But what constitutes competency in execution in Information & Intelligence? We look at this in two dimensions. First, we are concerned about the competency of the execution in terms of the desired results for the enterprise, especially in the context of turbulence and uncertainty. Second, we examine how its performance matches up with the general partnership/trust/characteristics necessary.

The key end point for Information & Intelligence includes the following attributes:

1. Understand business information throughout the enterprise and in its competitive or government context

2. Reflect an enterprise-wide view of information—a holistic perspective that crosses business units and functions

3. Connect to business strategic planning processes and outcomes

TVPM (IT-Centric)

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4. See the connection between information and business processes

5. Understand the potentials for information in decision making, enterprise planning, and strategic thinking

6. Demonstrate awareness of external sources for information, including industry sources, and the strategic information related to customers and supply chain

7. Develop sources of trusted information

8. Achieve business outcomes such as those listed in Exhibit 13.3

The reader can ask whether these end-point attributes accurately describe the current practices in the enterprise and whether they apply to all IT sources in the IT ecosystem (e.g., sourcers, cloud).

This is a challenge for most IT organizations and providers in the IT ecosystem. While the business organizations may have great awareness of business information and its potential power, IT managers and professionals may not. The culture tends to focus on information delivery, relying on the business for understanding what it all means. And this may be a challenge for business as well, particularly as familiarity with the technical means for accomplishing the goals may be lacking.

The Total Value Performance Model (TVPM; see Chapter 2) describes actual performance outcomes for superior business value, and therefore credibility, that form the foundation for trust. Exhibit 13.3 shows outcome examples for Information & Intelligence.

The inherent nature of cross-domain, cross-silo business issues and similar cross- domain, cross-silo IT sources forces success in building the partnership. This heightens the requirement for aggressive business and IT leadership. For

example, commentators on advanced analytics—where the goal is to affect how decisions are made and to provide tools to support making those decisions—point out that this in itself is a significant leadership and culture challenge. It is not technical; it is the underlying business environment.

While technical issues such as architecture, security, and technical data management exist, the core values come from exploiting information throughout the enterprise. This process requires, at the least, trust founded on credibility of performance, transparency, common goals, common (business) language, and all the attributes of partnership and collaboration. It's unlikely that business units share their information, that business functional areas partner across silos, or that business and IT work together without the foundation of trust. At the same time, business and IT leadership sets the context and culture for the partnership. This strongly influences the assessment of the enterprise IT capability in Information & Intelligence and applies the lessons of Chapters 9, 10, and 11.

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The exploding sources of data change the partnerships as well. It is certainly not limited to traditional forms of transactional systems or even traditional online or Internet-driven applications. The typical enterprise is awash in all forms of data, instrumented, surveilled, and acquired through routine activities in all business pursuits. Exploiting this data requires partnership and leadership.

Enterprise IT Capability Requirements

In some ways, these requirements mirror those for Planning & Innovation. They need to be holistic, connect information to achieving business results, and so forth. Differences lie in the concept of marshaling resources, in this case information resources, and the recognition of processes to acquire manage and utilize information.

We introduced the enterprise IT capability requirements in Chapter 11, in five groups.

Strategic IT Management: The Systemic Capabilities for Producing the Outcomes with Information & Intelligence

A. Build Trust and Partnership among Business(es) and IT(s)

B. Provide Business and IT Leadership and Personal Responsibility

C. Adapt to Enterprise and Leadership Characteristics and Culture

Strategic IT Management: The Business Outcomes with Information &

Intelligence

D. Deliver Superior Business Value

E. Deliver Superior Response to Turbulence and Uncertainty

In considering these requirements, we should recognize that many of the underlying methodologies and processes don't yet exist in many enterprises, that accountability is diffused, and that considerable activities are outside the orbit of the traditional IT organization. Accordingly, more than the other enterprise IT capabilities, there's much more of a discovery, a developmental aspect of these issues. It is not so much restructuring or organizing a lot of existing activities (as it might be in planning, e.g.) as it recognizing the need to have these activities in the first place. At the very least, we should recognize the need to corral the nascent activities in many business areas, to maximize their value and move more rapidly up the learning curve. At the same time, many existing methodologies and process do have a significant information component, such as software development, design, web support, or customer service. These too need to be included in the consideration for these requirements.

But what exactly are we asking about here? Again, in Planning & Innovation we had a pretty good sense of our concern, namely the ways in which the enterprise conducts its various planning activities. Yes, planning is not a control or governance question, as many separate planning activities undoubtedly go on throughout the enterprise. Nevertheless, we understand what's meant by the enterprise IT capability, to be

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applied to all planning activities. Here, the understanding is not quite so clear, given that information-related activities are embedded in other activities, and given that in practical terms there's no one in charge. Although, is that not what a CIO does?

However, it is precisely the diffuse nature of information-related activity that places such a premium on understanding and developing the enterprise IT capability for Information & Intelligence.

Strategic IT Management: The Systemic Capabilities for Producing Outcomes with Information & Intelligence

Builds Credibility through IT's Execution and Performance (A1)

IT's basic contribution to business is making accurate, appropriate information available in ways the business can effectively and efficiently use. Specifically, are the end points listed in the prior section achieved? Failure here is fundamental to lack of credibility and trust.

Adds to Trust between Organizations (A2)

Sharing information between organizations breaks down the barriers and overcomes the silos. Much of the power of business analytics is based on holistically applying data across all organizations and business units. Failure here, with bad data or with hurdles to sharing, damages trust among the business organizations and between business and IT.

Enables Partnerships and Collaboration at All Levels and with All IT Sources (A3)

At least two elements come into play here. First is the relationship between IT and business; the information management process is not solely a technical matter but engages the business in understanding the opportunities and requirements for the entire information life cycle, from collection through analysis and reporting. This applies equally to the value of direct customer interaction and customer access to relevant customer data.

The second element is the collaboration across all IT sources. The strong silo tendency for IT implementation, whether in applications, databases, cloud-sourced capabilities, or even do-it-yourself IT, makes it challenging to integrate and share information across the boundaries. Yet collaboration is a core capability.

Supports Decision Making and Overcomes Bureaucracy (A5)

Experience has shown that effective use of information in analytics, planning, and decisions requires more than simple access to information; it requires a change in how

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decisions are made. Some commentators have talked about how it requires a basic change in business management decision-making culture.

At the same time, the business and IT silos make cross-silo decisions difficult, including the governance processes that apply.

IT Management Provides Necessary Leadership, with Emphasis on Culture, Trust, and Partnership with the Business (B2)

Overcoming the culture and partnership hurdles we've discussed in Chapters 9, 10, and 11 requires leadership. Overcoming the silos in information sharing, and providing direction for seeing the power of information analysis across the organization, requires leadership.

Business Management Provides Necessary Leadership with Emphasis on Culture, Trust, and Partnership with IT (B3)

Business leadership is perhaps more critical than IT leadership, as the major challenges lie in overcoming the cultures and silos in the many business organizations. As information analysis and business analytics become more widespread, overcoming the reluctance to change how decisions are made requires strong business leadership; it is a cultural change.

Applies Business Domain and Industry Perspective (C1)

While cross-silo information sharing is powerful, linking internal enterprise information to that acquired from the economic environment, from value chain, from end customers, and from the customers of the end customers represents enormous power and potential.

Applies Holistically across Silos, Organizations, and Other Processes (C2)

As described previously, sharing information across the silos and among the business units adds significant power and opportunity. It in many ways defines the opportunities.

Strategic IT Management: The Business Outcomes with Information & Intelligence

Chapter 11 defined two sets of outcomes required for enterprise IT capabilities, summarized as “produce superior business value” and “produce superior responses to turbulence and uncertainty.” Of the eight detailed requirements, the following apply particularly to Information & Intelligence.

Delivers Business Strategic Effectiveness (D1)

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This emphasizes the role of business leadership. The whole point is to use Information & Intelligence for competitive and performance purposes. Simply having it available is not enough.

Supports Innovation and Change (D2)

Providing insight into business opportunities—new products and services, different ways to interact with the customer, restructuring the supply chain, any aspect of business—is the point. Without this capability, the information is valueless.

Delivers Business Operational Effectiveness (D3)

Insights into cost, customer satisfaction, and new ways to transform how business is done are central to Information & Intelligence.

Information & Intelligence Scorecard

The following scorecards offer the opportunity for self-assessment as to the importance and current status of each stated required. Exhibit 13.4 covers the system requirements as described earlier in the chapter; Exhibit 13.5 covers the business outcomes needed. Exhibit 13.6 provides the scales to be used in the self assessments.

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Exhibit 13.4 Strategic IT Management: The Systemic Capabilities for Producing the Outcomes with Information & Intelligence

Importance Status

To what extent does the existing Information & Intelligence enterprise IT capability build credibility through IT's execution and performance? Specifically, are the end points achieved? (A1)

To what extent does the existing Information & Intelligence enterprise IT capability enable partnerships and collaboration at all levels and with all IT sources? (A4)

To what extent does the existing Information & Intelligence enterprise IT capability support decision making and overcome bureaucracy?

To what extent does IT management provide necessary leadership for the Information & Intelligence enterprise IT capability, with emphasis on culture, trust, and partnership with the business? (B2)

To what extent does business management provide necessary leadership for this Information & Intelligence enterprise IT capability, with emphasis on culture, trust, and partnership with IT? (B3)

To what extent does the existing Information & Intelligence enterprise IT capability apply business domain and industry perspective? (C1)

To what extent does the existing Information & Intelligence enterprise IT capability apply holistically across silos, organizations, and other processes? (C2)

Exhibit 13.5 Strategic IT Management: The Business Outcomes with Information & Intelligence

Importance Status

To what extent does the existing Information & Intelligence enterprise IT capability deliver business strategic effectiveness? (D1)

To what extent does the existing Information & Intelligence enterprise IT capability support innovation and change? (D2)

To what extent does the existing Information & Intelligence enterprise IT capability deliver business operational effectiveness? (D3)

To what extent does the existing Information & Intelligence enterprise IT capability deliver cost and risk mitigation? (D4)

Requirement for Outcomes

Requirements for Trust, Partnership, Leadership, and Services

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Exhibit 13.6 Scales for Self-Assessment

Importance Column

Status Column

The Importance reflects the degree management is concerned, and the extent to which this requirement will influence business success in the future. The Status reflects the extent to which the requirements statement is achieved today.

0 Not Applicable 0 Not Applicable

5 This requirement is critical to the enterprise

4 This requirement

is very important to the enterprise

3 This requirement

is of some importance to the enterprise

2 This requirement is interesting but not important

1 This requirement

is not important to the enterprise

5 Current Information & Intelligence activities often produce the required outcome

4 Current Information & Intelligence activities sometimes produce the required outcome

3 The required outcome is not produced through Information & Intelligence activities

2 Current Information & Intelligence activities sometimes make the outcome worse than required

1 Current Information & Intelligence activities often make the outcome worse than required

Description

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The reader is encouraged to revisit the Chapter 11 section named “Assessing Enterprise Performance against Requirements” and apply all 21 requirements to Information & Intelligence.

Bottom Line: Information & Intelligence Performance

Information & Intelligence performance comes down to three fundamental questions:

1. Do those who participate in Information & Intelligence activities (e.g., IT, business, consultants, etc.) actually perform well and produce the required business outcomes?

2. Will the Information & Intelligence activities add to trust and partnership? 3. Do the Information & Intelligence activities address change and flexibility sufficiently?

This is what Strategic IT Management and enterprise IT capabilities are about: getting positive answers to the three questions.

What Is the Enterprise to Do about Information & Intelligence?

Undoubtedly there's great interest in things like big data and business analytics. The question here is how best to mobilize the enterprise's capability for doing these sorts of things successfully. As we and others have remarked, this is as much a cultural issue as a technical one, and more of a cross-silo capability than

a simple functional or business unit initiative. These are discussed in Chapter 16.

What Are the Implications for the Individual Manager and Professional?

The key question for the reader: Do I have the perspective and visibility about the information of the enterprise, how it can be used, and the role that I as a manager or professional play in making progress in this area? The self-assessment can be used as a method for beginning to address this question. Chapter 16 will offer some thoughts on steps to be taken.

Enterprise IT Capability: Development & Transformation

This capability marshals the enterprise resources to develop and deliver business transformation and change through application, business process, and software development. Exhibit 13.7 summarizes the objectives and outcomes required for Development & Transformation, together with example methods commonly used.

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Exhibit 13.7 Examples of Development & Transformation Objectives and Outcomes

Project development is the cutting edge of IT services to the business and, of course, an area of challenge for many enterprises. Chapter 2 reported on the current state of success, which is not so good in terms of successful completion of projects. This is particularly problematic in two ways. First, successful project development is a primary indicator of the business IT relationship in terms of partnership, trust, credibility, and so forth. We focus on this in Chapter 3 (regarding the Staircase to Trust) and the TVPM. But second, it is the primary activity in terms of responding to turbulence and uncertainty. Everything that's difficult in doing projects well is even more

difficult when times get short and speed is required. And as an aside, this is the area that often feeds into the “do-it-yourself” phenomenon—when projects are difficult, slow, or not successful, the motivation for doing something else becomes strong— again bolstered by considerations of turbulence and uncertainty.

The overall purpose is to deliver business value, meaning transformation and change, with every IT investment and project. While every project needs to deliver business value, turbulence adds requirements for adaptability, responsiveness, and more attention to partnership. The many methods and processes include traditional software development life cycle (SDLC) means and agile and similar processes. But the role of the project management office (PMO), both in terms of governance and in terms of overall project performance and risk mitigation, is critical, along with overall project portfolio management.

A relatively recent Development & Transformation discussion has introduced the term technical debt to the issues. This reflects the degree to which development

Strategic IT Management Objective

Example Outcomes for Superior Value

Example Outcomes for Superior Response to Turbulence

Example Methods

Development & Deliver business Transformation value—transformation

and change—with every IT investment and project

Every project delivers business value linked to business strategic intentions and goals

Adaptability, responsiveness, partnerships, collaboration

• PMO

• SDLC

• Agile

• Project Portfolio Management

Enterprise IT Capability

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produces results with ongoing costs and risks, particularly maintenance and inability

to change. 6

What Is the Development & Transformation Enterprise IT Capability?

We say in Chapter 1 that “an enterprise requires the capability to develop, implement, and apply information and IT capabilities to change and transform business with superior returns.” The Development & Transformation enterprise IT capability focuses on more than just the completion of the project development steps, though that's important. It also extends to the objective of actually achieving the business change promised by projects. This is where the partnership and significant business –IT roles comes in. Change management has always been problematic, and is a prime concern to make the overall goals. Stepping back, though, the need for robust enterprise IT capability in this area—ensuring the overall performance of the methodologies employed in both the IT and business domains—is required.

A particular problem is that IT projects tend to be the most silo-intensive activity. Projects are typically sponsored by a single business unit or function, and tend to be owned in IT in the systems development group, or if externally sourced, by a particular vendor. The exception, of course, is an enormous project (read enterprise resource planning, or ERP) involving almost everyone. In this case, the silos don't go away but can be a significant impediment in a variety of ways. And, for better or worse, the really significant things, the innovations that drive the enterprise and responses to turbulence, are enterprise-wide or, at least, cross silos.

This leads to a second major problem: Projects by themselves don't accomplish anything. The successful implementation and adoption of the

fruits of the development is what matters. This means effective change management at the detail level, but more broadly means organizational change, process change, and all the accouterments of transformation in the business. This can be a marked weakness in most organizations, particularly when the scope of change crosses silos.

The third problem area is the existence of a lot of IT-centric methodologies and processes, which may compete or may not be completely implemented. These range from agile, to SDLC, to PMO, to the particular methods for project prioritization. These too are silo intensive and tend to be technology intensive, which increases the problems of coordination, trust development, and partnership building. Added to this mix are the various roles of the PMO in enterprises. In some cases, the PMO is focused solely on IT and IT projects; in other enterprises, it has evolved into “program” management, including both business and IT components.

A fourth area of concern is the tendency for do-it-yourself and vendor-provided solutions to be active in the business units, bypassing the more formal aspects of IT project management such as architecture reviews, testing, and, in general, aspects of risk management. Here, though, we see clearly what the enterprise capability needs to

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include, in terms of the performance required of the business organization(s) and IT organization(s). The insight is that they are needed together, and need to be holistic across the affected organizations on both sides.

The End Point

Key elements of the Development & Transformation enterprise IT capability include:

1. Provide transparency to all development efforts: cost, performance, and risk, throughout the IT ecosystem.

2. Carry projects through to actually achieve business change.

3. Get the size of projects right, avoiding enormous and unending project development.

4. Clearly link business cases and projects to business strategies and strategic intentions.

5. Provide speed to implementation of solutions; increase speed of response.

6. Give significant attention to information and its capture, management, and use.

7. Prioritize properly, linking to business strategies and strategic intentions.

8.

Integrate development efforts across all sources of IT in the IT ecosystem.

9. Provide for appropriate standards without bureaucracy.

10. Do not add to “technical debt.”

11. Achieve business outcomes such as those listed in Exhibit 13.8.

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Exhibit 13.8 Example Development & Transformation Outcomes

Execution and Performance: The Actual Outcomes as the Basis for Credibility and Trust

Development & Transformation Examples: Execution and Performance Business Outcomes for “Superior Business Value”

Development & Transformation Examples: Execution and Performance for “Superior Response to Turbulence and Uncertainty”

Business Outcomes & Program Selection

• Effective business change management

• Priorities based on business strategies and requirements

• Clarity and agreement on business priorities

• Establish platforms for change

• Adaptability beyond individual business units

• Enterprise-wide applicability

Project Development & Benefit Realization

• Successfully implemented and operationalized projects

• Access to a domain of relevant and valuable data

• Adaptable solutions

• Integratable solutions

• Dynamic capabilities

Software Configuration & Development

• Successfully developed projects

• Successfully acquired software and solutions

• Adaptable solutions

• Dynamic capabilities

The reader can ask whether these end-point attributes accurately describe the current practices in the enterprise and whether they apply to all IT sources in the IT ecosystem (e.g., sourcers, cloud).

The point to all of this is to emphasize that enterprise IT capability is more—a lot more—than simply the ability to get projects done on time and on budget, although that's certainly a part of the TVPM we introduced in Chapter 2. More fundamentally, it is the enterprise's capability of really doing Development & Transformation the right way, and responding to turbulence quickly.

As projects are the cutting edge of delivering value and corresponding to turbulence, all of the overall enterprise IT capability requirements (see Chapter 11) apply. But some are more vital than others, as shown in Exhibit 13.8.

TVPM (ICT Context)

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also raises issues of standards and consistency of the ways in which new development

Enterprise IT Capability Requirements

The following assessment questions apply to all the ways Information & Intelligence activity—from technical design and implementation through the information life cycle—is conducted now in the enterprise. Our purpose is to show the gaps, thus providing guidance for future improvement. We are not focusing on the methodology and process details themselves, but rather the consequences of the specific methods and processes used.

Strategic IT Management: The Systemic Capabilities for Producing the Outcomes with Development & Transformation

Six of the 14 detailed systemic enterprise IT capability requirements, as defined in Chapter 11 apply particularly to Development & Transformation. Seven of the business outcome requirements apply.

The Enterprise Development & Transformation Capability Builds Credibility through IT's Execution and Performance (A1)

Chapter 2 made the point that failing to deliver IT projects damages credibility; simply getting projects done reflects itself in the TVPM (review Chapter 4, on the staircase to value). Enterprises simply have to get projects done. So development and transformation are vital requirements. The challenge extends well beyond having projects completed by IT; it extends to all sources of IT.

But it is more than simply credibility. Does Development & Transformation really produce the business outcomes? Specifically, are the end points listed in prior sections achieved? Is the software built successfully, or procured properly? Are the external services contracted effectively? Does the change management get done?

So this is also more than simply IT's execution. It is the execution in the context of the enterprise, engaging the business and other stakeholders. Simply, can the enterprise get it done?

The Enterprise Development & Transformation Capability Enables or Strengthens Partnerships and Collaboration at All Levels and with All IT Sources (A4)

The tendency in many enterprises is to keep projects in silos, engaging only one business unit or functional area. The exception is enterprise-wide projects. But generally, even the development activity for a single business unit is significantly strengthened by involvement of other units or, in the case of IT, other parts of the IT organization.

However, this adds to the potential for difficulties with competing agendas, lack of transparency, and all the attributes of mistrust between organizational units. The question here is the degree to which the existing processes for development understand these issues and actively work to overcome them.

The Enterprise Development & Transformation Capability Supports Decision Making and Overcomes Bureaucracy (A5)

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also raises issues of standards and consistency of the ways in which new development

Part of governance is prioritization and project portfolio management, often through a PMO or similar activity. This can add time and barriers to decision making. Similarly, business units and the enterprise as a whole can use business planning or IT planning processes to govern basic investment and performance management decisions, which can also add time and barriers to decision making. Other review processes, such as architecture review boards and procurement processes, in the case of acquired software or sourcing contracts, can have similar effects.

The challenge arises from the desirability of these sorts of governance and review processes: Architecture is good, procurement standards are good, planning is good, project portfolio management and oversight are good, and so on. The question here is whether, taken together, the enterprise has the capability to minimize the bureaucratic character of these processes, optimize the decision-making activities, and reduce the time required.

The Enterprise Development & Transformation Capability Employs Methodologies that Focus on Specific Business, Strategic Intentions, and Goals (B1)

In this context, this is key. Project development can be based on wish lists and squeaky-wheel responses rather than careful attention to (real) business requirements. One indicator is the degree to which the project documentation (e.g., business cases) refers to business strategy. Overall, the question is whether prospective IT investments are vetted based on documented connection to that which is important to the business of the enterprise.

The Enterprise Development & Transformation Capability Applies Business Domain and Industry Perspective (C1)

This relates to the previous requirement, the degree to which development processes used in setting and prioritizing requirements are based on the business context in which they apply.

The Enterprise Development & Transformation Capability Applies Holistically across Silos, Organizations, and Other Processes (C2)

This relates to the previous requirement emphasizing the engagement of business units, functions, and IT silos in the development of projects. This also raises issues of standards and consistency of the ways in which new development is done, both in-house development and procurement of sourced capabilities (e.g., software, cloud-based functionality, etc.).

Strategic IT Management: The Business Outcomes with Development & Transformation

The Enterprise Development & Transformation Capability Delivers or Supports Business Strategic Effectiveness (D1)

The heart of Development & Transformation is just this—produce real change to the business. It goes to the processes for identifying the opportunities through the entire cycle of change management, resulting in sustainable business strategic performance improvement, even transformation.

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also raises issues of standards and consistency of the ways in which new development

This requires more than just software development or procurement. And it requires more than just IT providing the technical aspects. This is an enterprise all-in capability and significantly tests whether the systemic capabilities for producing the outcomes spelled out in the previous section are achieved.

The Enterprise Development & Transformation Capability Delivers or Supports Innovation and Change (D2)

This extends the question of enterprise IT capability expressed previously. Here the focus is on the actual changes made possible through innovation development and the dramatic changes that may be necessary to successfully implement them.

The challenge is twofold. The first emphasizes the methods used to engage business and IT in the innovation thinking and planning. The second emphasizes the enterprise's will and capacity for actually doing what's necessary. Both are enterprise IT capability issues, not simply the methods themselves. This has to engage all needed stakeholders, in both business and IT.

The Enterprise Development & Transformation Capability Delivers or Supports Business Operational Effectiveness (D3)

This is the other side of the coin to business strategic effectiveness, namely the achievement of significant business performance improvement.

Development & Transformation Delivers or Supports Cost and Risk Mitigation (D4)

This too is related to business operational effectiveness, but with a specific focus on cost and risk.

The Enterprise Development & Transformation Capability Enables the Faster Understanding of Requirements (E1)

Turbulence and uncertainty demands the capability of fast response. Does the enterprise have this capability, or do the processes, methodologies, governance, and decision making bog things down?

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The Enterprise Development & Transformation Capability Enables the Development of Business Solutions and Plans Quickly Enough (E2)

While the prior requirements focus on understanding the issues, this issue is related to delivery. Whether through methods like agile, or simple development processes, does the enterprise have the capability to do things fast enough?

The Enterprise Development & Transformation Capability Delivers or Supports Adaptability and Flexibility in Its Solutions (E4)

The predominant IT culture tends to emphasize engineering, perfection, and standards. While these are good, these may also impede flexibility and adaptability. Similarly, architecture is a very important activity, but in this context needs to specifically focus on adaptability and flexibility.

Development & Transformation Scorecard

Exhibits 13.9 and 13.10 provide a self-assessment of the current status of Development & Transformation. Exhibit 13.11 gives the scales to be used.

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Exhibit 13.9 Strategic IT Management: The Systemic Capabilities for Producing the Outcomes with Development & Transformation Requirements for Trust, Partnership, Leadership, and Services

To what extent does the existing Development & Transformation enterprise IT capability build credibility through IT's execution and performance? Specifically, are the listed end points achieved? (A1)

To what extent does the existing Development & Transformation enterprise IT capability enable or strengthen partnerships and collaboration at all levels and with all IT sources? (A4)

To what extent does the existing Development & Transformation enterprise IT capability support decision making and overcome bureaucracy? (A5)

To what extent does the existing Development & Transformation enterprise IT capability employ methodologies that focus on specific business, strategic intentions, and goals? (B1)

To what extent does the existing Development & Transformation enterprise IT capability apply business domain and industry perspective? (C1)

To what extent does the existing Development & Transformation enterprise IT capability apply holistically across silos, organizations, and other processes? (C2)

Importance Status

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Exhibit 13.10 The Outcomes for Development & Transformation

Importance Status

To what extent does the existing Development & Transformation enterprise IT capability deliver or support business strategic effectiveness? (D1)

To what extent does the existing Development & Transformation enterprise IT capability deliver or support innovation and change? (D2)

To what extent does the existing Development & Transformation enterprise IT capability deliver or support business operational effectiveness? (D3)

To what extent does the existing Development & Transformation enterprise IT capability deliver or support cost and risk mitigation? (D4)

To what extent does the existing Development & Transformation enterprise IT capability enable the faster understanding of requirements? (D5)

To what extent does the existing Development & Transformation enterprise IT capability enable the development of business solutions and plans quickly enough? (E2)

To what extent does the existing Development & Transformation enterprise IT capability enable or support the deployment of solutions faster? (E3)

To what extent does the existing Development & Transformation enterprise IT capability deliver or support adaptability and flexibility in its solutions? (E4)

Requirement for Outcomes

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Exhibit 13.11 Scales for Self-Assessment of Development & Transformation

Importance Column

Status Column

The Importance reflects the degree management is concerned, and the extent to which this requirement will influence business success in the future. The Status reflects the extent to which the requirements statement is achieved today.

0 Not Applicable 0 Not Applicable

5 This requirement is critical to the enterprise

4 This requirement

is very important to the enterprise

3 This requirement

is of some importance to the enterprise

2 This requirement is interesting but not important

1 This requirement

is not important to the enterprise

5 Current Development & Transformation activities often produce the required outcome

4 Current Development & Transformation activities sometimes produce the required outcome

3 The outcome requirement is not produced through Development & Transformation activities

2 Current Development & Transformation activities sometimes make the outcome worse

1 Current Development & Transformation activities often make the outcome worse

Description

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While all 22 Enterprise IT Capability requirements are important, we've applied only those that in our experience are most important for Development & Transformation. The reader is encouraged to revisit Chapter 11 section titled “Assessing Enterprise Performance against Requirements” and apply all 21 requirements to Development & Transformation.

Bottom Line: Development & Transformation Performance

It comes down to three fundamentals questions:

1. Do those who participate in Development & Transformation activities (e.g., IT, business, consultants, etc.) actually perform well and produce the required business outcomes?

2. Will the Development & Transformation activities add to trust and partnership? 3. Do the Development & Transformation outcomes address change and flexibility

sufficiently?

This is what Strategic IT Management and enterprise IT capabilities are about: getting positive answers to these three questions.

What Is the Enterprise to Do about Its Development & Transformation Capabilities?

Development & Transformation is the cutting edge of IT in the enterprise. It is the vehicle for introducing change into the business and certainly the vehicle for responding to turbulence and change. It is often the primary means of interactions between business and IT, but it also suffers from the effects of silos, within business (among business units) and within IT (different IT sources, different parts of the IT enterprise). As a result, enterprise management responses to the issues raised here are important, but it extends

throughout business and IT management. The leverage of effective actions is large, and the importance of doing so significant.

What Are the Implications for the individual Manager and Professional?

Practically everyone participates at one time or another in Development & Transformation activities, either as a part of requirements setting and managing implementation or as a part of developing the solution. As a result, practically everyone has some impact on all the issues raised here: culture, partnership, trust, timely responsiveness, and so forth. So take the self-assessment to see how one contributes or impedes the requirements achievement, an effective first step. Then consider how to strengthen the contribution, in partnership, trust, credibility, and speed terms. Chapter 19 gives advice on how to go about this.

Enterprise IT Capability: Service & Resource Optimization

Optimization covers all the IT services (e.g., the applications, infrastructure services, user services) and the underlying resources needed to provide them. Exhibit 13.12 summarizes the objectives and example outcomes to be produced and lists example methodologies commonly employed.

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Exhibit 13.12 Service & Resource Optimization

The complete IT investment in the enterprise—both ongoing “lights on” and projects—is described in five service portfolios:

1. Applications and Information Services

2. Direct Infrastructure Services

3. Technical (User) Services

4. Management Services

5. Project & Development Services

We describe these at length in Chapter 11.

Optimized service and resource portfolios based on cost, performance, risk, and value are the outcome for investment optimization, from the perspective of IT Supply. Optimized service portfolios also address quality and value from the business perspective. In turbulent times, this optimization extends to include factors such as adaptability, responsiveness, and flexibility. The processes and methodologies typically focus on the central IT organization's portfolios, but the investment and portfolio optimization coverage includes all IT, even outsourced and do-it-yourself IT

in the business units. 7

What Is the Service & Resource Optimization Enterprise IT Capability?

In Chapter 1, we say that “an enterprise requires the capability to optimize its sourcing, development, and application of all its IT services and resources, from all sources: internal IT, business-unit IT activities, sourcers, and ‘do-it-yourself’ IT activities.”

Strategic IT Example Management Outcomes Objective for Superior

Value

Example Outcomes for Superior Response to Turbulence

Example Methods

Service & Make effective Optimized Resource business-value service and Optimization and risk-based resource

IT investment portfolios for decisions cost,

performance, and risk

Adaptable, responsive service and resource portfolios, with reduced risk

• Portfolio Management for Applications, Infrastructure

Enterprise IT Capability

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We look at optimization in two ways. The first focuses on the IT services actually provided to the business. Exhibit 13.13 shows the five services provided by IT sources. Optimization works to establish that the cost and value of the services are, in fact, optimized, meaning that they meet business requirements at an appropriate cost. It is considerably more involved, however, in that considerations such as risk and total cost of ownership are part of the optimization mix, as well as those mentioned in the turbulence context, namely adaptability, responsiveness, and flexibility. An even more interesting problem is that multiple IT sources are possible (e.g., in-house IT, in- business-unit IT, sourcers, “cloud,” do-it-yourself services provide by a business activity or

individual). And, certainly, multiple business units are the destination for these services, which further complicates the basis for assessment/evaluation. For example, optimization explores the alignment of IT services to business strategy and needs;

multiple business targets makes the assessment multifaceted at best. 8

Exhibit 13.13 IT Service Portfolios

The End Point

Key Elements:

1. All IT services and resources are included, from throughout the IT ecosystem.

2. The technical and business risks in the IT services are documented.

3. The costs of IT services are documented.

4. Low-performing services are identified for mitigation planning. This covers value, quality, performance.

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5. IT services are identified and described, from all IT sources in the IT ecosystem.

6. The IT service portfolios are inclusive of all IT sources in the IT ecosystem.

7. Analysis and decision making are supported for all IT services.

8. The resources needed to deliver and support IT services are optimized.

9. There is information transparency about services and resources; decision making is encouraged for each service and resource (e.g., cost mitigation, risk mitigation, value enhancement.)

10. Business outcomes, such as those listed in Exhibit 13.14, are achieved.

Exhibit 13.14 Example Outcomes for Service & Resource Optimization

Execution and Performance — the Actual Outcomes as the Basis for Credibility and Trust

Service & Resource Optimization Examples: Execution and Performance Business Outcomes for “Superior Business Value”

Service & Resource Optimization Examples: Execution and Performance Business outcomes for “Superior Response to Turbulence and Uncertainty”

Business Outcomes & Program Selection

• Effective business change management

• Priorities based on business strategies and requirements

• Clarity and agreement on business priorities

• Establish platforms for change

• Adaptability beyond individual business units

• Enterprise-wide applicability

Project Development & Benefit Realization

• Successfully implemented and operationalized projects

• Access to a domain of relevant and valuable data

• Adaptable solutions

• Integratable solutions

• Dynamic capabilities

Software Configuration & Development

• Successfully developed projects

• Successfully acquired software and solutions

• Adaptable solutions

• Dynamic capabilities

Service Delivery • Supports cost and risk mitigation

• Meets requirements

• Provides cost transparency

• Provides performance transparency

• Flexible and adaptable

TVPM

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The reader can ask whether these end-point attributes accurately describe the current practices in the enterprise and whether they apply to all IT sources in the IT ecosystem (e.g., sourcers, cloud).

For the enterprise, from a holistic perspective, fundamental questions focus on overall risk (e.g., security exposures in the services, such as application services, project services), performance (e.g., stopping waste on low-performing services), and (perhaps most importantly) duplication. Any reasonably sized enterprise has multiple versions of many applications and services; cloud and do-it-yourself IT compound the problem.

The second way of looking at optimization is the underlying set of “pieced parts” that comprise the whole of the IT enterprise, wherever found in the organization. These pieced parts can be hardware, software, staff, contractual arrangements (e.g., contracted maintenance), or external services. This

approach looks at the collections of piece parts from a portfolio perspective and asks questions, for example, about optimal levels, means of financing (buy/lease, e.g.), and risks. In both cases, the core capability includes a) knowing what the component parts are (e.g., the exact services, the applications, the piece-parts); b) knowing who provides them; c) knowing who the users are; and d) adopting the appropriate methods for assessment and decision making.

A lot of this is old hat; IT organizations have always paid attention to their portfolios of resources and have applied appropriate means for assessment, including ferreting out duplication and underperforming components on which resources are wasted—or at least they should have been. Considerable ranges of tools and methodologies are available to make this possible. The

problem now is itself twofold. First, given the dispersion of IT sources in the IT ecosystem (e.g., sourcers, cloud, et al.) and IT utilization, an enterprise perspective rather than a silo perspective (IT source silo, business unit user silo) for optimization gives significant insight and leverage for making cost and value contributions. But even more so, the turbulence and uncertainty in today's environment ask for assessment and optimization capabilities beyond what most organizations have been doing.

Enterprise IT Capability Requirements

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This enterprise IT capability is the core of governance and collaboration in the enterprise, because it identifies exactly the services being provided the business, their performance and cost, and provides the tools for determining whether they are successful in producing business value.

Chapter 8 devoted considerable time to describing what these services are. This capability applies that information in specific ways to ensure that these services do, in fact, perform as needed and as promised. Moreover, this capability pays attention to accountability and whether the services viewed from the business in fact meet those requirements.

Systemic Capabilities for Producing the Outcomes with Service & Resource Optimization

Five of the 14 systemic requirements for Enterprise IT Capabilities, defined in Chapter 11, apply particularly to Service & Resource Optimization.

The Enterprise Service & Resource Optimization Capability Builds Credibility through IT's Execution and Performance (A1)

A fundamental question is whether Service & Resource Optimization activities happen in the enterprise at all and whether they apply to all sources of IT (central/corporate, business unit, sourced, do it yourself). Specifically, are the end points achieved?

The governance processes with optimization provide monitoring and decision making about the services and resources. To the extent this is collaborative with the business units and the IT organizations, the transparency provided is a strong factor in documenting and communicating IT's execution and performance. The question here is the degree to which this occurs.

The Enterprise Service & Resource Optimization Capability Supports Decision Making and Overcomes Bureaucracy (A5)

The essence of Service & Resource Optimization is portfolio management applied to services and IT assets. This is executed in governance and review processes and perhaps in

annual planning exercises, budgeting exercises, and similar activities. Whether these work in a timely fashion and avoid the problems of bureaucratic behavior is the question here.

The Enterprise Service & Resource Optimization Capability Employs Methodologies that Focus on Specific Business, Strategic Intentions, and Goals (B1)

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Any optimization necessarily involves connecting services and resources to the business requirements, strategies, and goals. The issue here is the degree to which this happens.

The Enterprise Service & Resource Optimization Capability Applies Business Domain and Industry Perspective (C1)

Comparability to other businesses and industries, together with awareness of elements such as risk and cost, becomes part of the optimization decision processes. The issue here is the degree to which this perspective is part of the optimization processes.

The Enterprise Service & Resource Optimization Capability Applies Holistically across Silos, Organizations, and Other Processes (C2)

The nature of enterprise-level Service & Resource Optimization activities is to permit contrasts and comparison across silos, resulting in effective decision making.

Business Outcomes with Service & Resource Optimization

Three of the eight business outcome requirements for Enterprise IT Capabilities, defined in Chapter 11, apply particularly to Service & Resource Optimization.

The Enterprise Service & Resource Optimization Capability Delivers or Supports Business Strategic Effectiveness (D1)

The nature of Service & Resource Optimization is to analyze the connection of current deployed services and resources against business requirements, in this case to determine support of the business strategies. This is central to optimization.

The Enterprise Service & Resource Optimization Capability Delivers or Supports Business Operational Effectiveness (D3)

Similarly, the analysis applies to current requirements for business operations and costs. This too is central to optimization.

Service & Resource Optimization Delivers or Supports Cost and Risk Mitigation (D4)

The optimization decision making includes risk and cost as a core element of the factors to be considered.

Service & Resource Optimization Scorecard

The system and business outcome requirements for Service & Resource Optimization are listed in Exhibit 13.15 and Exhibit 13.16, for self-assessment. Exhibit 13.17 provides the scales to be used

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.

Exhibit 13.15 Strategic IT Management: The Systemic Capabilities for Producing the Outcomes with Service & Resource Optimization

Importance Status

To what extent does the existing Service & Resource Optimization enterprise IT capability build credibility through IT's execution and performance? Specifically, are the end points achieved? A1

To what extent does the existing Service & Resource Optimization enterprise IT capability support decision making and overcome bureaucracy? (A5)

To what extent does the existing Service & Resource Optimization enterprise IT capability employ methodologies that focus on specific business, strategic intentions, and goals? (B1)

To what extent does IT management provide necessary leadership for these Service & Resource Optimization enterprise capabilities, with emphasis on culture, trust, and partners (ip with the business? (B2)

To what extent does business management provide necessary leadership for this Service & Resource Optimization enterprise IT capability, with emphasis on culture, trust, and partnership with IT? (B3)

To what extent does this Service & Resource Optimization enterprise IT capability proactively address the business environment? (B4)

To what extent does this Service & Resource Optimization enterprise IT capability establish accountability for the processes and outcomes? (B5)

To what extent does the existing Service & Resource Optimization enterprise IT capability apply business domain and industry perspective? (C1)

To what extent does the existing Service & Resource Optimization enterprise IT capability apply holistically across silos, organizations, and other processes? (C2)

Requirements for Trust, Partnership, Leadership, and Services

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Exhibit 13.16 Strategic IT Management: The Business Outcomes with Service & Resource Optimization

Exhibit 13.17 Scorecard for This Assessment

Importance Column

Status Column

The Importance reflects the degree management is concerned and the extent to which this requirement will influence business success in the future. The Status reflects the extent to which the requirements statement is achieved today.

0 Not Applicable 0 Not Applicable

5 This requirement is critical to the enterprise

4 This requirement

is very important to the enterprise

3 This requirement

is of some importance to the enterprise

2 This requirement is interesting but not important

1 This requirement

is not important to the enterprise

5 Current Service & Resource Optimization activities often produce the required outcome

4 Current Service & Resource Optimization activities sometimes produce the required outcome

3 The required outcome is not produced through Service & Resource Optimization activities

2 Current Service & Resource Optimization Activities sometimes make the outcome worse

1 Current Service & Resource Optimization activities often make the outcome worse

Importance Status

To what extent does the existing Service & Resource Optimization enterprise IT capability deliver or support business strategic effectiveness? (D1)

To what extent does the existing Service & Resource Optimization enterprise IT capability deliver or support business operational effectiveness? (D3)

To what extent does the existing Service & Resource Optimization enterprise IT capability deliver or support cost and risk mitigation? (D4)

Requirement for Outcomes

Description

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The reader is encouraged to revisit Chapter 11 section titled “Assessing Enterprise Performance Against Requirements” and apply all 21 requirements to Service & Resource Optimization.

Bottom Line: Service & Resource Optimization Performance

Service & Resource Optimization comes down to three fundamental questions:

1. Do those who participate in Service & Resource Optimization activities (e.g., IT, business, consultants, etc.) actually perform well and produce business outcomes?

2. Will the Service & Resource Optimization activities add to trust and partnership?

3. Do the Service & Resource Optimization outcomes address change and flexibility sufficiently?

This is what Strategic IT Management and enterprise IT capabilities are about: getting positive answers to these three questions.

What Is the Enterprise to Do about Its Service & Resource Optimization?

Most enterprises do not pay as close attention to ongoing IT activities as they do to project prioritization. This is understandable, given that projects are the cutting edge for IT innovation, but the real money is in the ongoing services and costs. Further, as Chapter 8 pointed out, conceiving of IT as a set of services is relatively new in the sense of service management principles applied from the business perspective. Consequently, enterprise response has culture and practice challenges, made more complex by the proliferation of IT sources available to the business. Corralling all that for management/governance purposes is a significant step. Chapter 16 and Chapter 18's Message 5 offer some suggestions.

What Are the Implications for the Individual Manager and Professional?

The notion of IT as a business service viewed from the business perspective is helpful to the individual manager for understanding and managing IT. Practically everyone in the business is either a provider or a consumer of IT services. Understanding this and the implications for performance improvement that can occur thought resource optimization is a key contribution to the success of IT. Self-assessment makes this possible.

Summary: Tactical Enterprise IT Capabilities and Competencies

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Marshaling the relevant enterprise resources to achieve success in its strategic and operational strategies forms the foundation for Strategic IT Management. Tactical management capabilities focus on the management of