Optimize Your Execution by Aligning Business and IT

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Optimize Your Execution
by
Aligning Business and
IT
Thought Paper by Capstera.com
Satya S. Iluri Founder and CEO www.Capstera.com
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I know half my IT Budget is wasted, I just don't
know which half. (Modified from the famous
saying about advertising)
Enterprises the world over spend billions of
dollars on technology enablement of business
functions. A significant portion of those dollars
end up creating suboptimal solutions. Most IT
project problems are rooted in ambiguous
business definition, churn in requirements
gathering, scope creep beyond a minimum
marketable feature set, wild cost guestimations,
not planning for interdependencies, and a lack
of strong governance.
Everyone agrees that a sizeable portion of IT
projects fail to meet or under deliver on
expectations. However, while there is agreement
that most technology projects end up in trouble,
the business and technology teams disagree on
why IT projects fail.
Several research studies have shown that the
larger the budget and the longer the timelines,
the greater the cost and schedule overruns, and
the poorer the outcomes for IT projects. Business
and IT professionals, in fact, believe that 75
of IT projects are doomed from the start (Figure
1).
F ig u r e 1 . T h e P e r c e p t io n a n d R e
a l it y o f I T p r o j e c t s
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Dissonance and Divergence - The Business / IT
interface
A key aspect of this gloomy landscape is the
disconnect between business and IT. These teams
of smart and talented people lack a common
framework and language to communicate with one
another often leading to missed expectations,
frustration, and unnecessary churn.
For every CIO who hears the common refrain IT
takes forever and does not deliver what we want
and for every business leader who hears If only
business provided a big picture with a detailed
actionable roadmap, this thought paper strives
to address these issues and offers a framework to
solve them (Figure 2).
Figure 2. Does this Dialog sound familiar?
Business

IT Why does this button
Each BU wants build? to
the same thing at different times ss is We need
to go

incapable of quarters. Why
detail do you

the implications feature take so
something?

tweaks provided
needs are documents
are drowning in technical debt I cant wait for
other groups in
80 of what we do
is forward. Why not build for us

business keeps shifting
Busine
cost a million dollars to
different changes
thinking through
How much
to market in two
of their small
need to build
does a small
All business
Weve already
long to deliver?
urgent we
volumes of
unnecessary
rework because
the firm to agree to a path
requirements on us
and then add on stuff for others?
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Things that can go wrong and those that shouldnt
go wrong, always do!
Depending on the maturity of a firms people and
processes, large transformation projects
and programs may suffer from many of the
following issues.
Challenges
? Project and organizational goals unclear ?
Scope not well understood ? Lack of clarity
in business requirements ? Constantly evolving
needs and requirements ? Multiple projects
needing/building similar overlapping
capabilities ? Overlapping capabilities create
a complex web of interdependencies ? Time to
market considerations trump all others ? Thinking
is encumbered by current system constraints
rather than capability- based future evolution,
especially given the complex interdependencies
that are hard to untangle ? Focus on User
Interface rather than user experience (UXD) ?
Skill and role mismatch ? Lack of balance
between content and coordination
What happens if some or all of the challenges
afflict your enterprise projects and programs?
Implications
? Disjointed strategy, organizational goals,
and execution ? Scope creep due to ambiguity
of deliverables ? Increased complexity and cost
due to lack of reuse resulting in unnecessary
redundancy of capabilities ? Enablement of
convoluted processes rather than reengineering of
processes for the future ? Accumulation of
technical debt due to unnecessary expediency and
lack of rigor in architecture and design ?
Regular cost overruns and project delays ?
Suboptimal solution delivery and stakeholder
dissatisfaction
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How do we get out of this morass?
1.
Understand the business motivation
o It all should start with understanding the why.
The business motivation is the fountainhead
decision that leads to strategy, goals and
objectives. There are many models in the
industry to help enterprises capture the business
motivation - at Capstera, we use a model called
BuRST (Business Rationale, Strategy and
Tactics).
2.
Distill the strategy into a succinct target
operating model
o If the firms strategy resides in an ivory
tower, it does not help the programs or
projects downstream. It is essential to translate
the high level business motivation into a target
operating model. The target operating model
creates a blue print of the future state and
allows business to make the right strategic
choices to improve the way the organization,
business processes, IT and governance are
structured and managed.
3.
Focus on the What first focus on the
capabilities
o
Business capabilities are the foundational layer
of an enterprise. Business capability modeling
represents a stable description of what a
business does (capabilities) to reach its
objectives, instead of a dynamic description of
how it does it (processes). A capability map or
model decomposes what a business does into a
granular, hierarchical structure.
A capability model that is decomposed to a level
one or two captures a 30,000 foot view and mostly
works as wall art. It is essential that
capabilities are defined to be granular
(typically level 4-6), mutually exclusive,
collectively exhaustive and individually a whole
at each level of granularity.
o
o
Also it is paramount to capture rich content and
context for these capabilities. The capability
semantics will help define the business services,
which in turn will inform and influence the
coarseness and modularity of the IT services. The
MODAF (Ministry of Defense Architecture
Framework) SOV (Service Oriented Views) provides
a great exposition on how to transition from
Capabilities to IT services.
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4. Foster the discipline of composition and
capability reuse
o More often than not, projects and product
functionality are developed in silos. Instead, in
the new paradigm, a product or platform owner can
compose a new product or project by leveraging
the underlying capabilities as Lego blocks. Since
capability maps are cumulatively exhaustive, it
should be possible to describe each project and
product fully using the underlying capabilities
and how these capabilities are expected to be
used.
o Since the underlying capability map is mutually
exclusive, mapping projects and products helps
quickly identify overlaps across them, fostering
reuse, minimizing replication, lowering cost,
engendering agility, and speeding time to market
(Figure 3).
Figure 3. Capabilities help quickly identify
overlaps and fosters reuse
Business

IT Project 8 projects/initiatives are

identified and managed, a
conglomeration of

avoiding unecessary capabilities and their

redundancy and
fostering evolution

reuse Program
4 Capabilities establish a common language
between business and IT
Products/services,
Overlap can be easily
Product 1
5. Define requirements as a way to evolve
capabilities over the long haul
o Some of the constant challenges in requirements
gathering and analysis are lack of consistent
granularity and detail, and disparateness of
requirements with hard to decipher
interdependencies across projects. By gathering
capability-specific instead of project-specific
requirements, interdependencies can be easily
spotted and the granularity and required detail
becomes immediately obvious. This small change
can go a long way in streamlining roadmaps and
eliminating churn.
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6.
Link funding to multi-year capability maturity,
not siloed projects
o Demanding change at the execution layer will
only yield minimal dividends if it is not driven
by the top and linked to tangible budgets and
resources. Funding capability refinements and
evolution over piecemeal projects can help ensure
that strategy drives execution with complete
short, medium and long-term view of expected
outcomes.
7.
Rationalize the application portfolio
o Rationalizing the application portfolio can
significantly reduce IT complexity. The
best approach to do this is using lenses to
evaluate the application footprint across
capabilities and quickly identify overlaps.
Lenses can also help assess each application
across key dimensions such as business value,
customer affinity, maintenance and support
costs, and architecture compatibility.
8.
Layer in process and data
o Once the capabilities are defined and the
landscape mapped and simplified, it is important
to understand how things work or should work. At
the highest level, one can start with Michael
Porters value chain concept to understand the
key demand and supply drivers and flows.
Stakeholder centric value streams, process models
and customer journey maps can further help
communicate the business processes and workflows.
9.
Monitor and measure against KPIs
o Some is not a number, soon is not a time. It
is essential to set up, monitor and measure
granular success metrics and performance
indicators across cost, timeliness and quality
of each area you want to make progress against.
KPIs have to be granular enough to quickly
identify and address any problems. If possible,
key metrics should be benchmarked against peers
to help provide a point of comparison and
highlight areas of opportunity.
10. Establish a capability-centric organization
design
o The pinnacle of this approach is structuring
the organization around capabilities, supported
by communities of practice and centers of
excellence. While it is easier said than done,
at least for core capabilities a notional
capability-centric organization model can
effectively complement the rest of the
traditional structure.
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Summary
It is possible to align business and IT around a
common framework and language, link execution
to strategy, and optimize the IT landscape. It
takes leadership, a holistic framework, and a
disciplined implementation plan to make the
transformation endeavor a success.
A capabilities-based approach can provide the
much needed bridge between business and IT.
Heres how you can get started
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Secure executive buy-in and support Unless the
top level support to a better way is not strong,
the changes will be peripheral and impact will be
minimal. Showcase small wins prior to firm-wide
roll out Avoid boiling the ocean. Pick a highly
visible project and celebrate the win. After
refining the approach with the lessons learnt,
move forward cautiously. This is an evolution,
not a revolution - The capabilities-based
framework is not a rip and replace method. It is
an evolution of various past frameworks and
approaches. You can mix it and match it with
different ideas for example, lean
manufacturing, extreme programming etc. Get
training and change management right Executive
fiat does not generally work in fostering
inherent and lasting change. Provide adequate
training and support throughout the process.
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?
?
If you are able to encourage your team to adopt
the capabilities-based framework to
enterprise transformation, you will see
? ? ? ? ? ? ? ? ?
A common language between business and
technology Better alignment and shared
vision Reduced requirements churn Capability
evolution, rather than project focus Significantly
lower IT complexity Focus on composition and
reuse Lower cost structure and faster time to
market Reduced complexity by avoiding application
proliferation Global optimization rather than
local optimization in silos
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What is Capstera and how can it help?
Capstera is a framework and software fusing
elements of business architecture, capability
mapping and requirements management to help
enterprises create and manage effective business
definitions and roadmaps, driving optimal IT
enablement and system development.
The Capstera framework eliminates many of the
problems with IT development because what
a company does (the capabilities) provides a
stable, strategy-driven and MECE (mutually
exclusive and cumulatively exhaustive) picture of
the business, helping identify and manage project
and product overlaps and conflicts quickly. On
the other hand, the current approach of focusing
on how a company does these (the processes)
tends to be a more fluid footing with frequent
cross-capability touch points that lead to
conflicts and complexity, requirements churn, and
potential points of failure.
To make your Enterprise Agile and Optimize your
IT, get started with CAPSTERA today.
Contact Satya S. Iluri, Founder and CEO Capstera
www.capstera.com Twitter _at_Capstera Email
Satya.iluri_at_capstera.com