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242 CHART THE PATH TO IMPLEMENTATION


EXHIBIT 12.5 Connecting NIE Practices to Other Company Processes

Corporate Strategic Operations
Management Management
Processes Processes
Budgets
Strategic business
Procurement
planning
Human Resources
Capital planning and
budgeting


IT
Action
Resource
Business :

Planning Operationalizing
Decisions
Strategies
Business
Results




Technology
Management
Processes
Project Management/SDLC
Enterprise Architecture




them. We want to assess the maturity of the management processes used to estab-
lish, encourage, and strengthen the desired culture. The critically important
point is that the simple adoption of new practices such as prioritization is not
enough to significantly change company performance. The worldwide CIO for a
multi-business Fortune 500 company expressed the issue this way: “The CIOs in
each of our business units understand the principles. How do I get them to apply
them?” This is the problem of organizational change and cultural change. Getting
managers to adopt new ways of doing and thinking about things is never easy.
The Business Value Maturity Model , through assessing as-is management
processes, helps identify the cultural problems and disconnects that limit the com-
pany™s ability to act. It enables the establishment of targets for process improve-
ment and helps the company determine where improvement initiatives are needed.


USING THE BUSINESS VALUE MATURITY MODEL
A company uses the Business Value Maturity Model for two primary purposes:

1. To assess where the company is with its current practices relative to a stan-
dard model and relative to where the practices need to be to meet the com-
pany™s strategic requirements. In this way, the model helps the company to
identify process gaps that can impact IT™s contribution to shareholder value.
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Using the Business Value Maturity Model


EXHIBIT 12.6 Business Value Maturity Assessment
Business Value Maturity Model„
High-Level Assessment Form
Instructions
Practice Practice Description • Check the one that most closely describes the




Rank 1 to 9
Title current state of affairs.
(The description is established • Circle the one that most closely states what you
in Chapter 4.) believe is necessary to achieve Strategy to IT
Actions to Results.




Initial/Ad Hoc




Managed and
Nonexistent




Repeatable/




Measurable




Importance
Processes
Optimized
Process
Intuitive

Defined
Explicitly connecting IT strategies and
Demand/
plans to business strategic intentions.
Supply
0 1 2 3 4 5
Planning Establishing the business strategic
demand for IT, and then IT™s strategies
and plans for the supply of the necessary
IT capabilities.
Translating IT opportunities into new
Innovation
business strategic intentions and finding
0 1 2 3 4 5
new ways for IT to support existing
strategic intentions.

Assessing the business impact of new
Prioritization
IT initiatives and prioritizing them
0 1 2 3 4 5
according to strategic intentions.


Assessing the business impact and
Alignment
support of business strategic intentions of
0 1 2 3 4 5
the existing IT infrastructure,
applications, and services.
Assessing the quality and service levels
for existing IT resources, as input to
demand/supply planning.
Measuring IT performance in ways
Performance
related to the business and its strategic
Measurement
0 1 2 3 4 5
intentions.


Connecting the processes doing
Strategy-to-
planning, innovation, prioritization,
Bottom-Line
0 1 2 3 4 5
alignment, and performance measurement
Value Chain
with themselves and with the other
appropriate company processes.

Establishing and achieving IT™s business
IT Impact
value proposition.
Management 0 1 2 3 4 5
Managing IT based on business value
outcomes.
Establishing baseline, business value,
Portfolio
and performance information for the
Management
0 1 2 3 4 5
entire IT investment.


Establishing baseline, business value,
Culture
and performance information for the
Management 0 1 2 3 4 5
entire IT investment.




2. To establish the targets for process improvement. Because the model describes
the characteristics and requirements for each maturity level, a company can
use the model as a set of trail markers that indicate where the opportunities
244 CHART THE PATH TO IMPLEMENTATION


are for improving a specific practice. In this way, the company can set tar-
gets to improve its processes.

Using the Business Value Maturity Model for Assessment
The Business Value Assessment (see Exhibit 12.6) is a high-level simple instru-
ment that illustrates how a manager can self-assess the current maturity situation
for the company. The instrument also provides for defining the “to be” situa-
tion that the manager believes is necessary for the company to achieve its goals.
This high-level instrument does not show the detailed descriptions of each
maturity level ” for example, what describes “defined process” for a given
process. A full maturity assessment uses more detailed instruments that include
the description of each maturity level. However, a generic set of maturity level
descriptions is shown below:

Level 0: Nonexistent. No management processes apply the NIE practice to
produce the business outcome and thereby improve IT™s bottom-line impact
and control the IT spend.
Level 1: Initial/Ad Hoc. No formal management processes exist, but a few
managers attempt to apply the NIE practice to produce the business out-
come and thereby improve IT™s bottom-line impact and control the IT spend.
Level 2: Repeatable but Intuitive. No formal management processes exist,
but the idea of the NIE practice is understood and informally applied to
produce the business outcome and thereby improve IT™s bottom-line impact
and control the IT spend.
Level 3: Defined Process. Management processes exist to apply the NIE
practice, but there are no company-wide standards or enforcement to pro-
duce the business outcome and thereby improve IT™s bottom-line impact
and control the IT spend.
Level 4: Managed and Measurable. Management processes are standard
practices throughout the company, execution is monitored, and outcomes
are recognized to affect business in terms of producing the business outcome
and thereby improve IT™s bottom-line impact and control the IT spend.
Level 5: Optimized. Management processes that apply the NIE practice are
central to the company and continuously improved.

The person completing the surveys marks each goal, culture, or practice by
answering two basic questions:

1. Which maturity level best describes the situation in the company today?
What is the maturity of the company™s management process with respect to
seeking the goal, influencing the culture, or applying the practice?
2. Which maturity level best describes what the maturity should be, in order
for the company to realize its strategic intentions with the aid of IT?
245
Summary: The Business Value Maturity Model


Using the Business Value Maturity Model for Process Improvement
Assessments using the Business Value Maturity Model are useful for determining
where a company is in regard to a specific practice and describing where a com-
pany wants to be in its use of that practice. As with the SEI/CMM, not all com-
panies need to achieve, or can achieve, Level 5 in all practice areas. It is important
that management prioritize the implementation and improvement of NIE prac-
tices based upon their expected impact on IT™s contribution to shareholder value.
Once these priorities have been established, implementation and improvement
plans can be developed to address the Key Process and Cultural Elements asso-
ciated with the achievement of a given Maturity Level within a specific practice.
For example, as expressed in the generic maturity model (see Exhibit 12.1),
to move from Level 1 to Level 2 requires developing the relationship between
business and IT so that repeatable collaboration is possible and both parties deem
the results of this collaboration useful. Moving from Level 2 to Level 3 requires
actionable and commonly understood strategic intentions as a necessary part of
the defined process. Documentation and training around the defined process is
also required. In this way, the Business Value Maturity Model becomes a road-
map for practice improvement.


SUMMARY: THE BUSINESS VALUE MATURITY MODEL
We have introduced five business-driven NIE practices, portfolio management,
and the management culture hurdles that come with them. Taken together, they
raise key questions: How does one fundamentally change the way a company
manages IT? How do you fundamentally affect the behavior of your company?
The answers lie in setting appropriate goals, adopting new practices, and influ-
encing the culture of the company in a way that identifies both the long-term
goal and the roadmap for getting there.
Two main ideas summarize the use of the Business Value Maturity Model .
First, deciding exactly which NIE practices to introduce depends on where the
company is with respect to its needs and its ability to employ the practice effec-
tively. The correct starting point cannot be selected using a simple shotgun
approach; the appropriate choices depend on the state of current management

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