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Stage 4 IT™s governance and planning
processes react well to
strategic requirements.
Stage 5 IT contributes innovative
directions leading to new
strategic intentions.
256 DEFINE WHAT™S NEXT


Understanding where management believes IT is, in these stages, leads to
appropriate goals and strategies for adapting Right Decisions/Right Results. A
simple test is shown in Exhibit 13.2. The answers are simple yes™s and no™s. The
company™s stage is the highest at which a “yes” is the answer. Where there are
differences between senior management and profit/loss managers, senior man-
agers™ views should prevail. The answers can be obtained directly from man-
agement, or can be estimated by the CIO or CFO. If the answer is “don™t know,”
this shows an opportunity for addressing planning and management disconnects
between the management groups and IT management.
The results are useful from several perspectives. The first is using the results
to set the stage for determining where to begin using Right Decisions/Right
Results. This is shown in Exhibit 13.3. A second perspective is the differences
between management groups. See Exhibit 13.2 for the data collection on per-
spectives. Senior management™s views are important, but from the perspective of
success in adopting new processes, the views of process managers and business
functional managers are at least as important. A third perspective is differences
between IT management and the other business managers. This is particularly
important in identifying disconnects between the management groups.
Based on the stage answers, management can consider the appropriate start-
ing place for Right Decisions/Right Results initiatives. The table that follows
identifies the focus of efforts according to the as-is stage; it does not preclude the


EXHIBIT 13.3 Establishing a Focus for Action
Company Stage Possible Focus for Management Efforts

Stage 1: IT does operations Prioritization: Controls the system backlog and improves overall project
well but does not do formation process, documentation, and business case development.
systems development well. Demand/Supply Planning: Leads to IT improvement strategies and
actions about systems development and project management.
Stage 2: IT does both Alignment: Leads to a better understanding of the match of the current
operations and systems portfolios to business requirements. Assures current resources applied
development well but does to right problems.
not respond well to new Prioritization: Better matches projects to business requirements.
tactical needs.
Stage 3: IT does Strategy-to-Bottom-Line Value Chain: Establishes process connections
operations, development, from strategic plan to IT plans and actions.
and tactical responses well Innovation: IT contributes to business plans.
but does not respond well to Demand/Supply Planning: Defines IT responses to strategic
new strategic requirements. requirements.
Prioritization: Matches projects to strategic requirements.
Alignment: Assures current resources applied to the right problems.
Stage 4: IT does Strategy-to-Bottom-Line Value Chain: Establishes process connections
operations, development, from strategic plan to IT plans and actions.
tactical, and strategic Innovation: IT contributes to business plans.
responses well but does Demand/Supply Planning: Defines IT responses to strategic
not contribute innovative requirements.
directions to business
planning.
Stage 5: IT does innovation Strategy-to-Bottom-Line Value Chain: Establishes improved process
well. connections from strategic plan to IT plans and actions.
257
Three Methods to Establish Right Decisions/Right Results Goals


use of other NIE practices. The practices identified can be adopted as a first step.
The roadmap then consists of moving forward in the stages of IT performance.

Method 2: Setting Goals Based on Business Value Maturity Model
The Business Value Maturity Model is another way to define the goals, based
on an as-is, to-be assessment of management processes. As we showed in Chap-
ter 12, a maturity model enables a management team to decide on what the
company needs to do to improve its ability to perform the individual NIE prac-
tices described in the Strategy-to-Bottom-Line Value Chain, as well as to con-
nect them effectively.


EXHIBIT 13.4 Business Value Maturity Model Applied
to NIE Practices ” Scorecard
The Right Decisions/Right Results Maturity Model
Scorecard
NIE Practice Business Bottom-Line Impact Maturity Maturity
As-Is To-Be
Strategic The company gains maximum strategic and
Demand/ operational impact from its IT investments.
Supply
Planning
Innovation The company excels in innovating through IT
in its products, processes, and performance.
Prioritization The company chooses the most valuable IT
investments.
Alignment The company achieves maximum returns from
its IT activities.
Performance Performance measures lead to improved IT
Measurement and business performance.
.
Strategy-to- IT processes, NIE Practices, and corporate
Bottom-Line processes are connected and consistent.
Value Chain
IT Impact IT™s contribution to business performance is
Management maximized.
Portfolio The entire IT investment contributes to business
Management performance.
Culture IT™s contribution to business performance is
Management maximized.



By conducting a maturity assessment and completing the Scorecard (see
Exhibit 13.4) using a framework such as that shown in the list below, the as-is
can be defined for a company. A to-be determination of where the company wants
to be identifies exactly where focus should be placed, to establish a goal for process
improvement. By doing so, company management can substantially improve
how it controls the IT spend, and produces improved IT bottom-line impact.
258 DEFINE WHAT™S NEXT


The basic indicators for maturity levels, described in Chapter 12, are:
Level 0”Nonexistent,
Level 1”Initial/Ad Hoc
Level 2”Repeatable but Intuitive
Level 3”Defined Process
Level 4”Managed and Measurable
Level 5”Optimized
Chapter 12 contains detailed definitions of each level as applied to each NIE
practice.


EXHIBIT 13.5 Assessment Form ” Part I
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. This is the As-Is.
(The description is established • Circle the one that most closely states what you
in Chapters 8 through 10.) believe is necessary to achieve Strategy-to-
Bottom-Line Value Chain goals. This is the To-Be.
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.
259
Three Methods to Establish Right Decisions/Right Results Goals


Exhibit 13.5 shows the scoring that can be used to define the as-is and to-
be. The scoring provides for both the as-is and the to-be on the same sheet. A
second scoring sheet that covers the NIE support areas is shown in Exhibit 13. 6.
This provides for rank-ordering the importance of the practice, and conse-
quently the steps to be followed in establishing a roadmap.


EXHIBIT 13.6 Assessment Form ”Part II
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. This is the As-Is.
(The description is established • Circle the one that most closely states what you
in Chapters 8 through 10.) believe is necessary to achieve Strategy-to-
Bottom-Line Value Chain goals. This is the To-Be.




Initial/Ad Hoc




Managed and
Nonexistent




Repeatable/




Measurable


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