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3 (Annual)
(Strategic Business Strategic IT Projects Budget
5 8
Strategic IT Project Plan
Requirements (Annual)
Assessed Lights-On
Strategic IT Plan
Portfolios Budget
9 IT Plan
(Alignment, (Annual)
Technology) The IT Enterprise: Four “Lights-On” Asset Pools

Performance Measurement Metrics 12

Effective Planning
in the
Appropriate Resource Decisions
Business IT
Strategies Actions
Workable Budgets, Projects, and
Operational Plans
Value Chain
Performance Measurement Metrics

The answers lie in setting goals, adopting new practices, and influencing the cul-
ture of the company, in a way that shows both the long-term goal ”where we
want to be ” and the roadmap for getting there.

Management action is necessary to produce the desired outcomes.
The combination of process execution and taking action based on process
results was captured in the deliverables and roles charts introduced in Chapter
6 and repeated here.
Without regard to whether NIE practices are used, each of the nine deliv-
erables is part of how the company manages itself and its IT. Success in getting
from strategy to action (through the budget, annual, and operational plans of
every component in the business) depends on the holistic collection of manage-
ment actions. Management has to act, and the maturity of the processes them-
selves, along with the connections between them, determines the likelihood of
getting the right actions.4
Every deliverable important to getting from strategy to action is tied to an
NIE practice. See Exhibit 12.3. In other words, the management processes that
perform strategic planning, or prioritization, or creating the annual plan, require
the kind of activity and discipline that the NIE practice brings.
Requirement for Management Action

EXHIBIT 12.3 NIE Practice: Detailed Deliverables
Strategy-to-Bottom-Line Value Chain
Deliverable Name Deliverable Description NIE Practice
1 Business Strategic Demand/Supply Planning
Mission plus weighted
Intentions Innovation
Strategic Intentions
2 Assessed Portfolios Alignment
As-is alignment, service,
Strategic Planning

Performance Measurement
quality, technology, use
3 Strategic IT Agenda for Demand/Supply Planning
Strategic Intentions to
the Use of IT Strategic Initiatives
4 Strategic IT Plan Demand/Supply Planning
Strategic Intentions to
Strategic Initiatives
5 IT Strategic Demand/Supply Planning
Initiatives”3 to 5 years
Requirements Prioritization
horizon”portfolio format

6 Projects Real, doable projects Not an NIE deliverable

7 Annual Project Plan Prioritization
One year annual horizon”
with portfolio format
Annual/Tactical Planning

8 Annual Business Plan Documentation according Not an NIE deliverable
to company practices
9 Annual IT Plan Documentation according Not an NIE deliverable
to company practices
10 Annual and Capital Alignment, Prioritization
Documentation according
Project Budgets to company practices
11 Annual Lights-On Budget Alignment
Documentation according
to company practices
12 Performance Performance Measurement
Documentation according
Measurement Metrics to company practices

Furthermore, each of the NIE practices requires considerable involvement
and commitment by business and IT management teams. The heart of each prac-
tice is how the management team makes decisions about the relative importance
of business strategies, about the priorities for IT initiatives supporting those
strategies, about the alignment of current IT investments, and so forth. The
involvement lies in making the decisions. The commitment lies in following
through to the next step and creating the desired business outcomes.5
While this is being described in management process terms, the implications
are more fundamental. The situation can be described by the statement: “With-
out action, strategy is meaningless.” Here, without action, all of the ideas,
benefits, and potential outcomes to be delivered by NIE practices are equally
meaningless. In process terms, this means getting to the annual plans and budg-
ets, and getting management to commit to actions that will implement the deci-
sions made, the priorities established, and the strategies identified.
Management roles are critical as well (see Exhibit 12.4). In Chapter 11, we
introduced the management roles required, as a descriptor of the problems of
culture that we need to understand and overcome. In order to get to action,
management has to play the needed roles, and this may require dealing with cul-
ture as well.

EXHIBIT 12.4 Management Roles
Deliverable Senior Business Technology Planning Process
Name Leadership Team Owner
Leadership Leadership
Team Team
1 Business Approve and Revise and Create initial draft
Strategic weight review strategic strategic intentions
Intentions intentions (strawman)
2 Assessed Review Assess Contribute to portfolio Manage portfolio
Portfolios development development
Strategic Planning Cycle

alignment, Assess portfolio/ Manage the
service, quality technology assessment process
3 Strategic IT Approve Develop IT Participate in IT Create the initial
Agenda for agenda agenda process drafts (strawman)
Use of IT
4 Strategic IT Review Review IT plan Develop IT plan Create the initial
Plan drafts (strawman)
5 IT Strategic Review Develop Participate in IT Drive the process
Requirements Requirements requirements process
6 Review and Create project Form detailed Assure that project
Projects formation works right
Approve large requirements projects and technical
projects requirements
and business
7 Annual Project Make Prioritization Establish annual Drive the process
Plan decisions or project plan and
approve funding
Annual/Tactical Planning Cycle

8 Annual Approve Review IT plans Advise Assure this happens
Business Plan Establish
business unit
9 Annual IT Plan Approve Review Develop IT plans Assure this happens
Establish budgets
10 Annual and Approve Develop Participate in budget Create initial draft
Capital budgets planning (strawman)
11 Annual Lights- Review Review Develop budget Create initial draft
On Budget (strawman)
Initiate plans
12 Performance Approve Establish Establish IT Assure this happens
Measurement performance metrics
business Create initial drafts
Metrics performance (strawman)

It comes down to changing management processes.
To be effective, NIE practices need to be embedded in the company™s man-
agement processes. While these management processes are company-specific,
the NIE practices are standard toolsets that can be applied to any company™s sit-
uation. The key is how the company™s management processes apply the NIE
Embedding NIE Practices into Management Processes

practices and the concepts and principles that underlie them. The company can-
not consistently achieve its goals of applying IT more effectively and increasing
shareholder value through IT without integrating strategy-to-bottom-line prac-
tices into its existing management processes.
Effective processes make things happen. The better defined and followed
the processes are, the better the performance of managers and organizations
becomes. Watts Humphreys said it best: Mature processes lead to disciplined
work, and disciplined work is what produces better and more predictable
results.6 Good practices enable their underlying processes to consistently achieve
their goals, while also establishing and reinforcing a congruent culture about
those goals. It is important to assess the maturity of management processes with
respect to the specific practices they use in order to determine the likelihood
that those processes will actually proceed from business strategy to IT action to
results ” the basic goal of New Information Economics.

Improving Management Process Connections
Increasing maturity by improving management process connections is equally
As we noted above, we are equally concerned with the connection of
processes, both within the NIE framework and between the IT-related processes
and the rest of the company™s business processes. If a company uses NIE™s Prior-
itization practice, higher impact projects will come to the top of the project queue.
But this is significant only if the result is connected to budgeting processes, man-
agement performance evaluation processes, tactical planning processes, and so
forth (see Exhibit 12.5). Using only the NIE Prioritization practice will achieve
little unless the prioritization outcome drives budgeting and resource decisions.
As stated previously, the overall problem is to translate a company™s busi-
ness strategies and goals into the right IT actions that produce the right busi-
ness results. But just the adoption of one or more new practices isn™t enough.
Ever since Information Economics appeared in 1988, there™s been a continual
evolution and advancement of “point solutions” to improving IT™s business im-
pact. (For example, the idea of investment portfolio management has emerged,
with many consultants and authors promoting its virtues. This follows manage-
ment™s interest in prioritization and strategic alignment.)
As a result, the Business Value Maturity Model looks at the individual
practice areas, as well as the overall, holistic set of processes that takes a com-
pany from its Strategy to IT Action to Results.

Maturity Model Goals ” Summary
The goals are overcoming management culture barriers and improving the com-
pany™s ability to act.
Culture affects and limits management processes by defining roles and expec-
tations, especially what roles managers play in and around IT and how they play


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