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Strategic EA: The Bridge Between Business and IT Strategy
Anne Lapkin
Gartner Webinar
5 November 2008
Multiple Strategic Initiatives: A Recipe for Brownian Motion
Enterprise InformationManagement
Business IntelligenceCompetency Center
SOA CompetencyCenter
Business Process Improvement
PortfolioManagement
Program Management
EA
ITILLEAN
Key Issues
1. What is the business context, and how do I build the business context for my enterprise?
2. How do you leverage the business context for strategic initiatives in the enterprise?
3. How do you engage with business leaders to drive EA as strategy?
A Coherent Context for Strategic Initiatives Adds Value All Across the Enterprise
Run the Business
Grow the Business
Transform the Business
• Identify common goals and objectives across multiple strategic programs
• Identify synergies and opportunities for collaboration and sharing
• Understand discontinuities between business areas
• Exploit interdependencies between business areas
• Translate business vision and strategy into effective enterprise change
• Ensure coherence across multidimensional change programs
A Shared Business Context Helps Strategic Initiatives Work Together
Shared Business Context
Shared Goalsand Objectives
CommonConstraints
SynchronizedRoad Maps
CoherentExecution
Source: scottdesignworks.com
Business Context Defined
• The business context describes — through requirements, principles and models:- The strategic intent of the enterprise and its implications- The effect of external trends on the enterprise- The high-level constraints that will guide decision making to
ensure consistency with the strategic intent of the enterprise- The functional components of the enterprise, their
relationships with one another and with the enterprise ecosystem
• The business context informs the subsequent architecture work and ensures alignment of the strategic initiatives and governance mechanisms with the business strategy
BizGoals
Biz Strategy Creation
Adjust Operating
Model
Develop Annual
Operating Plan
ExecutionBusiness Planning
3-5 Year Operational
PlanStrategicIntents
The Linchpin!Implications?
Assumptions?
Integrate Planning Within the Envelope of Shared Implications and Assumptions
All functional entities impacted by strategic intent must share and compare implications, assumptions and
proposals using a consistent methodology.
What's In the Business Context?
1. A common requirements vision — a process for documenting and capturing:- The business strategies of the enterprise- The effect of environmental factors on the strategies of the
enterprise: 1) market pressures; 2) regulatory pressures; and 3) technology pressures
- The implications of the business strategy and environmental factors on: 1) the processes the business performs; 2) the people who perform the processes and how they are organized; 3) the information the business uses; and 4) the technologies that the business employs
2. A set of principles- Constraining architectural, implementation and governance
decisions to best support the business strategy
3. A functional model of the business
Creating the Business Context Is an Iterative Process
Documentstrategiesand trends
Documentimplications
Deriverequirements
Deriveprinciples
Create theanchor model
Validate ValidateValidateValidate
Business Context
PPM
BPCC
ITIL
BICC
EA
SOACC
It's Not Enough to Acknowledge External Trends — Acknowledge Their Impact Too
Trend Impact ImplicationThe market wants an integrated view of accounts
Banking and financial services customers are demanding more visibility across their accounts, with greater ease of use
We need a single view of the customer across all internal systems and customer-facing services
Compliance regulations are becoming more stringent
Regulatory compliance has forced us to increase the expenditure on and effectiveness of internal controls, resulting in increased cost
We must reduce compliance costs as a percentage of revenue, while leveraging the internal audit and controls to identify process efficiencies and customer experience improvement opportunities
Derive Your RequirementsBusiness change requirements —How must the business change?• Process• Organization• Finances• Culture
Institute personal bankers and account management process for high-net-worth customers
Business information requirements —what new types of information will be required ?
Customer profitability by individual customer and channel
Information technology requirements —what new technology capabilities must be provided?
Enterprise data warehouse and analytics
Business solution requirements — what programs will support our strategic objectives?
Customer analytics: retention and segmentation to evaluate the profitability of customers, market segments and product lines
Create Your Principles
Implications:• All lines of business must have a single, consistent
data source for customer information• We must have information and processes for
assessing customer profitability
Principle: Customer information is accessible across all lines of business, regardless of the product relationship to the customer.
Justification: Our strategy requires us to develop deeper, more-profitable relationships with customers by offering a one-stop resource for all of their financial services —personal as well as business.
Create an Anchor Model of the Enterprise
Strategic Plans
Strategic requirements
Processhierarchy
Process improvement
objectives
Processperformance
metrics
BPI initiativebusiness
case
OrganizationalBehaviors
Change management
Communications
Performance management
Competency centers
Programmanagement
Project management
Methods & Templates
Six Sigma, Lean, Kaizen,
Rummler-Brache and
more
SCOR, RosettaNet
Agile IT
Simulation/optimizationalgorithms
ABC
Balancedscorecard
Tools & Technologies
BPA
Visio
Paper/Post-Its
KM or process asset
repository
BPMS
ESB
….
The Business Context Informs BPI Initiatives
A BPI Framework for Success
Workforce Issues
Process skills
Roles and responsibilities
defined
Performance plan and incentivealignment
Training
Governance & Standards
Processchange
management
Process ownership
Compliance
Reporting
Notationstandards
SOAstandards
Analyticskills
Statistical and process skills
Business needs
Data management and integration
Tools andapplications
Businessskills
Business needs
Organization and processes
IT skills
The Business Context Informs Competency Centers
Business needs
Organization and processes
Tools andapplications
Integration and management
Source applications
Develop user
skills
Control funding
Define visionManage
programs
Organize methodology
leadership
Build technology blueprint
Establish standards
CC
The Business Context Provides Goals, Objectives and Performance Criteria for Managing the Portfolio
Increasing RiskIn
crea
sing
Val
ue
J
F
CM
GA
Increasing Risk
Incr
easi
ng V
alue
As-Is Portfolio
J
F
CM
GA
Target Portfolio
Size of circle = Project cost Color = Project health In troubleOn target At risk
H
My Enterprise Doesn't HAVE a Business Strategy
Stop Whining!At the end of the day, the important part of the business strategy is the four to six things that the enterprise wants to do differently in order to be more successful:
• Target high-growth markets
• Attract high-value customers with comprehensive online services
• Deepen the customer relationship
• Grow through mergers and acquisitions
A strategy articulates a vision or objective, and bounds the options for attaining it.
The Gartner Business Value Model — Making Implications and Assumptions Explicit
SupportSupportServicesServices
SupplySupplyManagementManagement
Aggregates(desired business outcomes)
Primes (leading performance indicators)BusinessAspect
DemandDemandManagementManagement
CustomerResponsiveness
SalesEffectiveness
MarketResponsiveness
Product DevelopmentEffectiveness
SupplierEffectiveness
OperationalEfficiencyHuman
ResourcesResponsiveness
InformationTechnology
ResponsivenessFinance and Regulatory
Responsiveness
On-TimeDelivery
ServiceAccuracy
AgreementEffectiveness
Target Market Index
Product PortfolioIndex
Sales OpportunityIndex
Sales PriceIndex
CustomerRetention Index
Market CoverageIndex
Market ShareIndex
Configure-abilityIndex
Channel Profitability Index
Opportunity/ThreatIndex
Cost of SalesIndex
Sales CycleIndex
ForecastAccuracy
Sales CloseIndex
New ProductsIndex
Feature FunctionIndex
Time-to-MarketIndex
R&D SuccessIndex
ServicePerformance
Order FillRate
MaterialQuality
Customer CarePerformance
TransformationRatio
Supplier On-TimeDelivery
Supplier ServicePerformance
Supplier OrderFill Rate
Supplier CarePerformance
Supplier MaterialQuality
Supplier ServiceAccuracy
Supplier Trans-formation Ratio
Supplier AgreementEffectiveness
Cash to CashCycle Time
ConversionCost
AssetUtilization
SigmaValue
Recruitment Effectiveness Index
HR AdvisoryIndex
BenefitsAdministration Index
HR TotalCost Index
Skills InventoryIndex
EmployeeTraining Index
SystemsPerformanceNew Projects
Index
IT SupportPerformance
IT TotalCost Index
PartnershipRatio
Service-LevelEffectiveness
ComplianceIndex
AccuracyIndex
AdvisoryIndex
Cost of ServiceIndex
What Is Our Strategy?
How Will It Impact Us? How Will We Execute?
Where Governance and Portfolio Management Fit
Go to Slide Master to add client's name, project #
Compliance Management
Project Management
Design, build, run
Enterprise GovernanceEnterprise GovernanceEnterprise Governance
Principles, models, standards, guidelines
Assessments Business metrics, pre-/postmortems
Strategic ResponseBusiness Strategy and
Intent Functions 1 … n
Future-State Requirements
Core Change Assumptions
Current-State Assessment
Gap Analysis
Alternative Analysis
Proposed Initiatives
Portfolio Management
Road Map
Business Value Model
Management Imperatives
CIOs and enterprise architects should:In the short term (when you get back to your desk)- Assess the clarity of your business context — make immediate
plans for remediation if necessary- Assess the drivers of your strategic initiatives and governance
programs for coherence
In the medium term (within six months)- Complete the articulation of your business context
• Requirements, principles AND models
- Define how enterprise programs should use the business context
In the long term (one year)- Assess program performance against your strategic objectives- Remix and repeat as necessary
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