HOEKSTRA CONSULTING © 2014. TEL: +1 408 537 3416
A Guide towards a Strategic IT organizationFebruary, 2015
“CIOs must make IT a strategic differentiator, or perish.”Randall Spratt, EVP CIO & CTO McKesson
“A Transformational CIO drives business performance.” Ramón Baez. SVP and Global CIO HP
“ We need to shatter the delineation between the business and IT. IT is the business and the business is IT.” Janet Sherlock SVP & CIO Carter’s
“In this new era of computing, the role of the CIO has never been more strategic.” Jeanette Horan, Managing Director IBM
“Business leaders today must disrupt or be disrupted ~ to drive ideas to cast fast” Ashwin Ballal, VP & CIO KLA-Tencor Corporation
“Leading and innovating in the C-suite and into the boardroom is key for any transformational CIO.” Hunter Muller President & CEO HMG Strategy LLC
“It’s not about technology. It’s about how your business uses technology to win.” Roger Gurnani EVP & CIO Verizon
HOEKSTRA CONSULTING © 2014 [email protected] TEL: +1 408 537 3416 4/26/2015 2
Note: Quotes from http://www.hmgstrategy.com, 8/28/2014.
When you choose to become a Transformational CIO
Pragmatically, do you have:
▪ A plan for your journey?
▪ Are the right people in the right place?
▪ Do you understand and have agreement on the expectations the customers, partners, board, executives, peers and employees have of your IT department?
▪ Mitigation for corporate and security risks?
We have developed and proven:
▪ The maturity model to assess where you are
▪ The building blocks which can be adjusted and prioritized to meet your immediate and longer term needs
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The expectations are setNow What?
A Pragmatic Framework for Change
A. Corporate NeedsB. Create RunwayC. Right peopleD. Execute
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Maturity Model
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Stable
Strategic
Alignment
No surprises• Outages within SLA• Budget control• Data Governance• Know what you’re working on
• Align with the other functions• Cross functional roadmaps• Joined experiments (e.g.
mobile apps, big data, social)• Internal Operational Excellence• KTLO 10% cost reduction YoY
• IT is key component of setting and executing corporate strategy
• Enables lean business operations• Enables company growth through
alliance networks
Whole Enterprise
Functions
IT
Board
Executive
Internal IT
Elements needed to focus and deliver
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Agree on Needs, develop Vision
Right People
Create Runway
Execute
Describe in simple terms what the corporation and it’s customers need from IT
Get the right people on the bus – Focus on the right targets, mindset, skills, beliefs
Go through the maturity levels fast, deliberate, experiment, learn, adjust, keep the focus, transparent metrics, formalize to get economy of scale
Agree with your boss on a multi year roadmap to assure support for the journey
A
B
C
D
Understand the Needs of the Corporation, Growth and it’s CustomersDefine the Needs, Alternatives to meet them, Set Direction, Articulate what you Enable
Standardize on low cost devicesStrategy: Minimize Cost
Strategic Differentiator to be perceived as cutting edge attracting top talent
Strategy: Employees supported with Cutting Edge technology
Illustrative
Understand the strategic importance of each IT Service
• Engage with various levels in the other functions to understand needs and come to agreement on mutual expectations
• Cost structure shifts
Set the financial, operational, cultural direction early
7
Example of Choices to be Made: Employee Devices
A
OUTCOMEExecutive Vision statement on
IT Value Contribution
Create Runway
▪ Multi year roadmap
▪ Take accountability: Set direction with measurable checkpoints along the way
▪ Fiscally sound
▪ Headcount strategy and plan
▪ Vendor strategy and plan
▪ Steering Committee
▪ Cross functional focus
▪ Gain and maintain trust, mutual accountability
▪ Articulate how changes will be incorporated: pro-actively
▪ Experiments to be run, hypotheses to be tested
▪ Balance the financial, customer, internal business processes, learning and growth perspectives
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B
OUTCOMEExecutive buy-in on multi-year
journey
Right People
▪ Define a culture that drives the new philosophy
▪ Your workforce is key stone – Assess and make decisions fast. Doubters will kill momentum
▪ Put the best talent where change needs to happen
▪ Don’t be afraid to move people on
▪ Pull from proven frameworks and tools like ITSM and ServiceNow
▪ Invest in alignment with your financial department
Be crisp -
▪ Build performance management system directly linking the rewards to the objectives
▪ Articulate the evaluation criteria for each role
▪ People that feel uncomfortable, probably should be uncomfortable
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C
Execute
▪ Translate multi-year into quarterly themes
▪ Set aggressive, realistic financial, customer, internal business process, learning and growth objectives
▪ Implement a routine to review metrics,
▪ Move deliberatly towards required service levels
▪ Drive the right operational and cultural changes
▪ Celebrate reaching concrete measures
▪ Assure results are visible to corporation, customers and employees
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D
Learning and
Growth
Vision and Strategy
Financial
Internal Business
ProcessesCustomer
Appendix
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IT Maturing PathO
rder
Alig
nm
ent
Str
ateg
ic
Learning and Growth
Vision and Strategy
Financial
Internal Business
ProcessesCustomer
Learning and Growth
Vision and Strategy
Financial
Internal Business
ProcessesCustomer
Learning and Growth
Vision and Strategy
Financial
Internal Business
ProcessesCustomer
• Regulatory Compliance• Business Relationship Management
• Employee Productivity• Service Catalog
• Forecast & Cost Control• Asset & License compliance• Budget cycle
• Stabilize: Incident, issue, change, problem management• Demand insight: Request mngt, service roadmaps• Standardize operations
• Human Capital: Org Design• Information Capital: Centralize and formalize operational systems• Organizational Capital: culture, leadership, team
• Business prioritized resource allocation• Increase asset utilization• Supplier optimization
• Business prioritized resource allocation• Increase asset utilization• Supplier optimization
• Human Capital: company critical vs. outtask vs outsource. Career paths• Information Capital: centralize and optimize financial, customer, HR systems• Organizational Capital: 100% alignment with IT visions and strategy
• Human Capital: career paths• Information Capital: centralize and optimize financial, customer, HR systems• Organizational Capital: 100% alignment with corporate visions and strategy
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Vision and Strategy: Establish solid foundation. Right people in the right place, engage, control, fundamentals in place
Vision and Strategy: Change the conversation to jointly deliver high value to customers
Vision and Strategy: IT is key element of setting and realizing the corporate vision and strategy
“Companies get the IT Organization they deserve.” Mark Sunday, CIO Oracle
Chaos Order Alignment Strategic
Financial Surprises Predictable10% cost reduction on standard
services. Measurable ROI on changes
Investment in differentiating capabilities
Perception other functions
Never commit objective with a
dependency on IT
Slow, technical, but doesn’t break it all the time
IT is key partner in delivering functional objectives
IT is a key to the survival of the company
Ability to executeLate, over budget,
poor qualityPredictable. Order takers Deliver on roadmaps Operational Excellence
Culture Fire fighters Operators / Order Takers Enablers Drivers
Employee satisfaction
Low Split Excited Passionate, volunteer time
LeadershipDepending on
critical fewFocus on IT effectiveness
Shoulder to shoulder with other functional leaders
Deliver differentiators
Measurements Excel, ad hoc Operational, IT centric Linked to other functionsContribution to revenue, margin,
market perspective
SystemsSystems, what
systems?Key processes formalized and supported by central system
All IT processes supported by central system
Expanding systems into other functions, partners, customers
Meet Corporate needs?
No Some Operationally Strategically
Where are you (to be)?
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Corporate NeedsThe Outside – In perspective
Standard, Commodity Services
Business Process Support
Product / Service Delivery
Network, communication, employee productivity / support, storage, IS security
Support all value flows with integrated CRM, ERP (order, finance, HR), business intelligence. Excludes Engineering Productivity typically
Highly scalable, highly available production support
Revenue generation
Drive out operational ineffectiveness and inefficiencies
Provide infrastructure aligned with culture. 10% cost reduction / year
Corporate Need
Employee productivity and IT foundation
Minimize inefficiency and ineffectiveness
Deliver product / service to customers
IT Service (Solution) Key Value Driver Business Impact
1
2
3
Cloud companies only
All Companies
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Converge Voice, Video & Social NetworkBRINGING DIVERSE SOLUTIONS TOGETHER
Voice
telepresence
Video and
Voice
converge
Content
Delivery
Oracle Video
Platform
Oracle
Social
Networking
Social
Networking
Over the next 2+ years,
Global IT expects:
• Conversion of all video end points to all connect to all internal and external
• Voice and video to further converge up to the point where each user will have only one unique ID
• We also expect the video solution to integrate with Oracle social network
Conference
Rooms
Example Video Service
Fo
rward
lo
okin
gB
ackw
ard
lo
okin
g
Program/Project planning & execution
Service Cycle
Steering Committees consist of
Service Owners and Core
team. Decides on allocation of
budget and workforces.
Escalation path for teams,
monitors progress
Service capabilities formalize those
initiatives making a significant
impact on the CSF and service
metrics.
Allows for technology as well as
operational focused. All
deliverables needed to create
value are defined
Roadmaps reflect GIT’s
commitment to deliver new and
improvements to services
(attributes)
Build Run
Stakeholder
Advisory
Council
Operational
Reviews
FY13
Budget /
HC
Prioritized
Services
Strategic
Service
Reviews
Service Transition and PMO
Approved new items and changes
Roadmap
Desired
Future
State
Service Capability
Monitoring
Definition, transition, implementation /
deployment of new or enhanced
Service Capabilities
Realized benefits of projects
Financial, Customer, Operational
performance.
Capacity and Availability
Service Metrics
Need to Solution
Kickoff Event
• Value Case
• Stakeholder approval and commitment of resources to clarify requirements, look at options
Design Commit
• Specific stakeholder use scenarios, business requirements, and success measures validated
• Non-functional (e.g. Security, Audit, Compliance, IT Ops) requirements understood; confirm no showstoppers
• Commitment to invest in selecting and designing a solution based on a projected cost and schedule (still a major course correction available downstream)
Need
Stakeholder identifies a need or opportunity. IT consults
with Stakeholder(s) to lay out value to be realized, and discuss field of options
Clarify
Requirements
Stakeholder and IT Team defines specific needs and outcomes – Use Scenarios, Business Requirements &
Success Measures – while preparing the project plan
Approve
Design
Team designs the To-Be Solution (people, process, technology).
Stakeholders participate in demos, prototyping & functional design while
IT ensures architectural fit, supportability, compliance
Build & Accept
Solution
Solution is built and tested to specification while the organization
prepares for the change (e.g. documentation, training, support prep). Stakeholders (Business and IT) accept
the solution before it is approved to Go-Live
Build Commit
• Solution Design approved, after having been validated to meet success criteria and for architectural fit, supportability and compliance
• Commit to build & deploy solution
Deploy &
Stabilize
Solution is deployed and made stable in production, priority stakeholder issues are resolved
Value
Value assessed by Stakeholder(s) and IT according to success measurement
plan and leveraging IT Service Management processes; additional
actions may be taken in order to meet success criteria.
Project Close Event
• Functionality working according to specification
• Priority Stakeholder issues resolved or on path to resolution
• Organization ready for transition to regular production support
• Approved success measurement plan in place
Go-Live Readiness & Go-Live
• Solution accepted by Stakeholders
• Documentation in place andStakeholder(s) trained
• Post Go-Live support process, resources in place
• Solution approved for and then deployed to Production (Go-Live)
Need ValueClarity
Requirements
Approve
Design
Build & Accept
Solution
Deploy &
Stabilize
Needs expressed in business outcomes
Detailed definition of deliverables by tollgate (expectation)
Weekly Tollgate meetings
Weekly status reporting• Project, scope,
timeline, resources• Risks and Issues• Plan (Milestones
and detailed steps)
Short escalation path
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