ProGoAlign - Creating heat maps to realize strategic alignment - Ben Roelens - NESMA 2013

ProGoAlign: creating heat maps to realize strategic alignment

NESMA najaarsconferentie: 21/11/2013 Ben Roelens

Contact information

Ben Roelens

Universiteit Gent Faculteit Economie en Bedrijfskunde

Tweekerkenstraat 2, 9000 Gent, België Ben.Roelens@UGent.be

www.mis.ugent.be

Outline

1. Background2. Introduction

a. Business-IT alignmentb. Strategic Alignment

3. ProGoAligna. Generalb. Top-down alignmentc. Bottom-up alignmentd. Result

4. Analysis optionsa. Ex anteb. Ex post

5. Discussion - Questions

Computer Science

1. Background

• Management Information Systems @ UGent

Focus: conceptual modeling of enterprises and other kinds of organizations and actors that engage in economic interactions

Increase understanding & facilitate communication To facilitate problem analysis & solution design To better engineer (IT) systems that support these phenomena

Economics MIS

2. Introduction

a. Business-IT alignment

Gained importance in the ’90s as:

• Concern about gaining value from IT investments Alignment is important to realize this

2. Introduction

a. Business-IT alignment

Ensures effective communication between business and IT professionals

– Business to IT: “What are the business needs?”– IT to Business: “What information, communication, processing

services, etc. IT can offer?”

2. Introduction

a. Business-IT alignmentAmsterdam framework for Information Management (AIM)

Maes R.: On the alliance of executive education and research in information management at the University of Amsterdam. INTERNATIONAL JOURNAL OF INFORMATION MANAGEMENT 23: 249-257 (2003).

2. Introduction

• Information & Communication can bridge the gap between Business & IT should be managed separately from the technology used to produce it

• Structure should be managed separately from operations as it is an important driver for the flexibility of an organization

2. Introductiona. Business-IT alignment

IT strategy is traditionally focused on the internal domain only

• Seen as an internal response to the business strategyIT too much seen as purely a support function (i.e. automation support)

• Strategy in management literature focuses on output markets rather than input markets

The IT marketplace is an input market where organizations acquire critical technological functionality to support and shape business strategies

2. Introduction

WHY

•Strategy

layer:

strategy

formulation

Conceptu

al model:

goal mod

el

WHAT

•Structural

layer:

strategy implementation

Conceptu

al model:

value

model

WHO

HOW

•Operational

layer:

strategy

operationalizatio

nConceptu

al model:

process

model

b. Strategic Alignment: applied on IT?

2. Introduction

b. Strategic Alignment: traditional

3. ProGoAlign

• Development of HEATMAPS between dependent elements of the different layers

NB: Method is not dependent on existing modelling languages

a. General

3. ProGoAlign

a. General: dependencies between layers

3. ProGoAlign

Definitions:

• Goal: Long-term desired result that a company wants to achieve

• Financial Structure: Representation of the costs resulting from acquiring resources, and the revenues in return for the offered value proposition.

• Value Proposition: Offered set of products and/or services that provide value to the customers and other partners, and competes in the overall value network.

• Core Competence: Ability to coordinate flows of resources through the value chain to realize the intended value proposition.

• Value Chain: Overall business process architecture that describes the structured set of activities that combine resources to created the necessary competences.

• Process Activities: Work to be done by participants within a collaboration.

a. General

3. ProGoAlign

Example

b. Top-down: prioritization – Analytic Hierarchy Process (AHP)

3. ProGoAlign

• Scale: 1: equal importance3: moderate importance of one over another5: essential or strong importance7: very strong importance9: extreme importance

• Priorities: based on the Eigenvalues of the matrix

b. Top-down: prioritization – Analytic Hierarchy Process (AHP)

3. ProGoAlign

Step 3: colour code (border of the elements)

b. Top-down: prioritization – Analytic Hierarchy Process (AHP)

3. ProGoAlign

Step 1: define appropriate measures & benchmarks for each element

avg. 1 year

avg. 5€/purchase

Step 2: measure performance in your organization

Step 3: colour code (surface of the elements)

Performance < benchmark redPerformance ≥ benchmark green

c. Bottom-up: measures

d. Result

3. ProGoAlign

4. Analysis options

• Complete model• Pareto efficiency• Critical path• Outsourcing opportunities• …

a. Ex ante decisions:

4. Analysis options

• Strategic process improvement: Determine for critical goals (red importance) which process

steps can be improved (red importance & execution)• Outsourcing decisions:

Determine for unimportant goals (green importance), which process step are candidate for outsourcing (green importance, red execution)

• Performance-based evaluation• …

b. Ex post analysis:

5. Discussion - Questions