Transitioning ICT to Provide Real Value to Customers

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Transitioning ICT to Provide Real Value to
Customers

• Presentation by Martin Wright
• Consulting Director, Infrassistance

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Value in your organisation

• Do your members worry about ICT value?
• Do you think they understand the difference
  between cost and value?
• Does anyone measure ICT value in your
  organisation?

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Personal Introduction

• Previous Career 25 years in Corporate IT
• Made and learnt from the successes and mistakes
• Currently Consultant Director, Infrassistance
• Driving value in
• Strategy and Architecture
• People and Organisation
• Governance, Policies Processes and Standards
• Technology
• Also President, Corporate IT Forum
• 150 members, 80 Corporate, 20 Government
• Series of masterclasses on IT value

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Workshop Scope

• The Definition of Value
• The Achievement of Value
• How to Communicate Value

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Personal Value

• Individually, we act as owners, having developed
  a keen sense of what is good and bad value at a
  personal level by balancing many factors of which
  cost is only one
• We also make two judgements on value
• its potential before starting out
• its reality at the end of the process
• This is easyso why is it so difficult for IT?

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IT is its own worst enemy?

• IT Governance
• Projects proceeding without clear business
  justification
• Lack of ownership, accountability and
  traceability for realising the promised benefits
• IT Technology
• Lack of a robust technology policy and the
  strength to defend it
• Built in obsolescence from the suppliers
• IT As a value provider
• Poor IT Procurement
• Missing the big picture
• IT on its own!
• The Oliver effect IT with the emphasis on
  technology and always coming back for more!
• De minimis funding requests just to get the
  project in

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Other Components of Value

• Risk
• Higher cost was acceptable as a means of reducing
  risk, now lower cost is used as a basis of
  justifying higher risk
• Time
• Time is an important part of value just too
  late versus just in time
• What delivered value previously may not now!

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Recognising Value by its Absence

• This is the easiest way of defining value
• Too costly
• Too late
• Doesnt work
• Too difficult

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Essentials of Real Value from IT
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The Three Areas

• Relationship between Business and IT
• IT Capability
• Business Requirements

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Business / IT Governance

• Forum for debate and communication
• Guidelines for use of IT in the business
• Agreement on common approaches and standards
• Agreement on basic principles governing the
  deployment and use of IT
• Clear decision making process and methodology
• Clear mandate and responsibilities

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Business / IT Financing

• Budget Setting
• IT Proposition appraisal

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Business / IT Communication

• Approach
• Informing not instructing
• Explaining not dictating
• Involving not distancing
• Active management of the relationship

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Key IT Capabilities

• Internal IT Governance
• Internal IT Processes
• Internal IT Resourcing / Sourcing
• Internal IT Architecture / Technology
• Internal IT Project Delivery

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Internal IT Governance

• Discipline in IT
• More than that required of the business
• Able to deal with scope and change
• Externalisation focus
• Customer first
• Business benefit focussed
• Flexible
• Aware of delivery schedules and deadline
• Taking ownership not abdicating responsibility

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IT Procurement Improvement Strategies

• Better specifications
• IT goals and objectives that can translate into
  procurement objectives
• Total Value Potential as well as TCO
• Real assessment of side factors
• Risk
• Complexity
• management distraction
• effort

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IT Value Extraction

• Also known as
• Sweating the assets
• Making the pips squeak
• Turning up the heat
• Having your cake and eating it
• Realising the benefits
• Leveraging the investment
• Taken to extremes it can
• damage the original concept of value delivery
• negate any agility to move or anticipate business
  cycle changes

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Business Strategy

• Is there a process - how to be involved
• Is there a document - who has it
• Has it reflected previous strategy?
• Day to day involvement
• relationship management

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Business Strategy Alignment

• It cannot be stressed enough that the alignment
  of IT Strategy with Business Strategy is the key
  plank with which IT investments can be made,
  justified and deliver real value
• Yet all too often strategies are not aligned or
  they do not exist

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Contributions to Business Thinking

• Ongoing informing processes
• Concept rooms
• Easy for the physical side
• Difficult for the architecture and information
  side
• Competitor IT capability developments
• Industry sector similar developments
• Business Continuity and IT Disaster Recovery
  capabilities

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IT as a Wasting Asset

• Software Suppliers
• Driving up functionality to make money
• Driving up performance requirements
• Only 20 is used
• Few viable long term strategies to ameliorate
• Hardware Suppliers
• Driving up performance to match software
• Replacement forced after 3 5 years for space /
  power / support reasons
• Datacentres the new wasting asset
• Aging, mainframe power densities, low air
  management capability
• Deferred replacement is only deferred - not
  nullified

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Communicating IT Value

• Internal means
• External means

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Internal IT Value

• Board Reporting
• Must relate to business important items
• Must reflect reality
• Balanced Scorecard
• Development and execution
• Key to the development of value

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External IT Value

• Benchmarks
• Tif, Compass, Gartner, Independents
• Designed to assess cost and efficiency
• Only describes value when combined with outputs
  and goals
• Part of a longer term value alignment and
  communication programme
• Must be tied into effectiveness of capability
  strategies

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External IT Value - ValuITion
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Some things to do IT Capability

• Perception (P) and Reality (R)
• Get basic service delivery right (R)
• Helpdesk first time fix gold service (P)
• Desktop supply (P)
• Rightsource resources (R)
• Develop a shared value programme for key and
  frontline staff (P) (R)
• Make communication a key theme for IT (P)
• Develop a BSM capability (P) (R)

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Some things to do IT Capability - 2

• Perception (P) and Reality (R)
• Create an internal expert led consultancy
  service (R) on processes and governance
• Develop a capability to accommodate new
  technology (R)

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Some things to do Business Requirements

• Perception (P) and Reality (R)
• Create new relationships with key movers and
  shakers (P) (R)
• Write down and validate your interpretation of
  business strategy (R)
• Set up a routine strategy developing forum (R)
• Strengthen governance process for validating
  business requirements (R)

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Some things to do IT / Business Relationships

• Perception (P) and Reality (R)
• Target top three most dissatisfied influential
  customers for informing (P)
• Develop a balanced scorecard or ValuITion style
  approach with key business areas (P) (R)
• Develop fresh approach to IT Funding (R)
• Develop the honesty approach to costs and
  risks (R)
• Introduce relationship management and shadowing
  (P) (R)

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Some things to do IT / Business Relationships

• Perception (P) and Reality (R)
• Responsibly saying no (R)

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How do your members value you?

• If the only thing you can measure is cost, then
  the only thing they will measure is cost
• Lowest cost alone may not be best value
• Dont wait - start now
• Dont waste time re-inventing the wheel
• It is difficult but achievable
• Assistance is available

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Contact Details

• Martin Wright Consulting Director
• Office 0845 1668 667
• Mobile [phone]
• Martin.wright_at_infrassistance.com
• www.infrassistance.com