Advising on IT-business alignment IT-Business Alignment – Challenges, Strategic/Operating...
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advising on IT-business alignment
IT-Business Alignment – Challenges,
Strategic/Operating Planning
advising on IT-business alignment
Aligning IT and business
IT-business alignment: multiple angles
IT
Business
Changeimplications
Changecapabilities,limitations
Investmentin capability
Deliveryof value
It’s not just about “building stuff that the business will use”
Why now- Reasons
Globalisation– Customers, partners, suppliers – and
competition– Connectedness driving sophisticated value
chains
Transparency– Industry regulations, consumer pressure and
competition driving openness
Service focus– Differentiation and shareholder value
increasingly derived from service experience
Example -from a UK perspective
A healthy economy – albeit growing at a low rate– Spurred by public sector investment – With a knock-on effect on the IT market
Globalisation– >4000 (+400/year) UK-Sino joint ventures– Vonage launches UK VoIP service (01/05)– Tesco enters mortgage market with First Active (11/04)
Transparency– Corporate Responsibility (CORE) coalition– Government initiatives e.g. Extractive Industries Transparency
Initiative– International Financial Reporting Standards (IFRS)
Service Focus– BT launches mobile music service with UBC Media and Virgin Mobile
(06/05)– Amazon Services Europe to underpin M&S e-commerce systems
(04/05)
The real world
From Towards
Build, or buy vs. build
Application implementation
Buy AND build AND integrate
Back officeBusiness area investment
focusFront office and
beyond
“Personal productivity”
desktopIT access environment
Productivity desktop +
global access to resources
Data processingTechnology innovation
focus
Communication, collaboration,
integration
Older approaches fail to capture reality re: integration, communication, collaboration,
supply complexity
Outsourcing vs. in-house
delivery
Capability supply “Multi-sourcing”
A common language is the essential starting point
IT
Business
?
“Investment prioritised in terms of business need”
“Systems that deliver value to the business”
“Clear direction from the business about focus, strategy”
“Collaborative approach to implementing business change”
A common, agreed representation of business activity, goals
+A common, agreed view of how current and future IT provides structured support to the business in this context
Reflecting the environment in IT-business alignment
Business
IT
Busin
ess pr
oces
s
Busin
ess pr
oces
s
Busin
ess pr
oces
s
Busin
ess pr
oces
s
Busin
ess pr
oces
s
ManagedIT
serviceManage
dIT
service
ManagedIT
serviceManage
dIT
service
ManagedIT
service
A P P L I C A T I O N S & I N F O R M A T I O NI N F R A S T R U C T U R E
B U S I N E S S S T R A T E G Y
Business processesform the foundationof a commonlanguage
IT defines and delivers“business level” serviceswhich support the rightprocesses, the right way
advising on IT-business alignment
Understanding business
processes
Business process
Applications
Data
The challenge
Activities, processesThe business
The real world doesn’t “decompose” nicely – and IT isn’tjust about things you build in-house
Providing structured support for business processes means understanding scope & scale of interactions
From
Data design tightly coupled to application design, and
application design to “user requirements” – very restricted
view of process needs
B u
s i n e
s sp r o
c e s s
Towards
B u
s i n
e s
s p
r o
c e
s s
Loosely-coupled resources provide services which are
designed to support the interactions that take place within a business process
IT approaches must consider business process support more broadly
B u
s i n
e s
s p
r o
c e
s s
Transactionalservices
Informationservices
Communication& collaboration
services
Support scenario: a mesh of
interactions
We have to model more than just transactional applications
A universe of business processes [1]
E E E E E
M M M
S
“Execution” processes – instances handle particular units of work within business activities
“Management” processes – instances oversee instances of execution processes
“Strategy” processes – instances oversee instances of management processes
A hierarchy of business processes
A universe of business processes [2]
E
E
E
M
M
S
Contribution to competitive differentiation
E
E
E
M
M
S
Non-differentiating(focus should be on efficiency)
Differentiating(focus should be on flexibility)
Observations on the nature of business processes
E
E
E
M
M
S
E
E
E
M
M
S
Increase
d structu
re, predict
ability
Increase
d colla
boration, a
d-hoc nature
Non-differentiating(focus should be on efficiency)
Differentiating(focus should be on flexibility)
A wider view of technical architecture
Level of
pro
cess
abst
ract
ion
Low
High
Non-differentiating Differentiating
“Strategy”business processes
“Management”business processes
“Execution”business processes
Business functions
“Pure” BPMS
“Tra
dit
ional”
app.
Develo
pm
ent
tools
&
fram
ew
ork
s
Collaboration tools
Simple portal
Business intelligencetools
Workflow
Composite service-basedapplication development &
integration
advising on IT-business alignment
Understanding managed IT
services
So what is an IT service?
“CRM database
”
“Provide automated support for my sales
force”
“Update customer details”
Line of business perspective
IT operations perspective
Developer perspective
Managed IT services – aligned with business processes
Lifecycle servicesManaging the lifecycles of business functions and infrastructure
Business function servicesAutomating business functions
Infrastructure servicesProviding the platform
Users’ experiences of “managed IT service”
Contracts bring obligations for suppliers and consumers
Message FormatMessage Sequence
Functions
SecurityResponse Time
Throughput
Usage CostLiability Clauses
Trust
FunctionalTerms
QoSTerms
Commercial
Terms
An organising model for service-oriented IT in the context of IT-business alignment
How can we align flexibility / reusability
requirements for business software
functions, to business needs?
How can we trade-off flexibility / reusability of
business function services with
efficiency / openness requirements?
How can we ensure that the right consumers get
the right kind of experience from these
services, and do so cost-effectively?
How should infrastructure elements provide their services to
different business functions? How should
infrastructure be optimally managed?
How can QoS responsibility be
delegated to infrastructure in a way that is easily flexed in response to changing
requirements?
How can we minimise the cost and risk of
overall process support while creating an business support
environment with more moving parts?
How should we differentiate lifecycle
service levels for different kinds of business function,
infrastructure?
How should we define and enforce
development, fault-fix and change-request
priorities?
How can we demonstrate the overall
value of the services that the IT organisation
and its resources provide to the
business?
Functional contract aspects
Quality-of-Service contract aspects
Commercial contract aspects
Business function services
Infrastructure services
Lifecycle services
An example – business function service design
Level of
pro
cess
abst
ract
ion
Low
High
Non-differentiating(focus should be on efficiency)
Differentiating(focus should be on flexibility)
Business activity role
“Strategy”business processes
“Management”business processes
“Execution”business processes
Activity functions
Technical functions
Reusability importanceincreases
Openness, flexibility demands increase
Efficiency demand increases
Summary
Today’s business environment brings IT-business alignment to the fore– In terms of investment, delivery and change
Business processes provide a common language– But the organisational context of real-world business
processes is complex
Managed IT services must align with business process priorities– It’s about more than business function services
Services and their contracts provide an organising model for service-oriented IT
Business-IT alignment
Source: http://bill-poole.blogspot.com/2008/08/business-it-alignment.html
Business-IT alignment
Business-IT alignment
IT Strategy As with business strategy, IT strategy
involves identifying the long term view of the IT function of the business. It identifies the direction and scope of the IT function over the long term in order to achieve advantage for the organisation through its configuration of IT resources within a challenging environment to meet the needs of the business and to fulfil stakeholder expectations.
Business Architecture Business Architecture is the process of
defining the business functions, processes, capabilities, services, roles and reporting relationships that make up a business. Here, we are referring to Business Architecture applied at the enterprise level, rather than the solution level.
IT Architecture IT Architecture is often expressed as
Information Architecture, Application Architecture and Technology Architecture. I'll describe these architecture domains in more detail in future posts. In short, IT Architecture is the process of organising IT and information assets to support the business architecture and IT strategy.
