Enhancing Roadmap Actionability 69 EAEC6325910SYN HIGH-IMPACT CAPABILITY ROADMAPS Source: http://www.hoovers.com. OVERVIEW An approach to align technology solutions to strategic business objectives through capability roadmapping EXECUTIVE TEACHING Leverage the process used to create capability roadmaps to obtain a deeper shared understanding of strategic business goals and shift the dialogue with business partners away from short-term, project-based discussions. By broadening the conversation to include people, process, and technology, capabilities can achieve a more holistic understanding of the underlying need. COMPONENT TEACHINGS 1. Linking Business Strategy to Capabilities—Shift the dialogue between the IT liaison and business owner away from projects and toward long-term plans. 2. Establishing Capability Targets—Put capability target choices into financial terms to help business partners make better investment trade-off decisions. 3. Setting Capability Realization Horizons—Help business partners understand the business and technology implications of different paths to the target state. 4. Driving Application Rationalization—Explicitly link programs to business capabilities to ensure application retirement goals are being met. 5. Managing Demand—Use the capability roadmap to manage demand by reconciling new project requests against established goals. IMPLEMENTATION GUIDES ■ The Master–Planning Process, pp. 82–85 ■ Linking Business Strategy to Capabilities, pp. 86–87 ■ Establishing Capability Targets, pp. 88–92 ■ Managing Demand, pp. 93–94 COMPANY SNAPSHOT Merck & Co., Inc. Industry: Pharmaceuticals Through medicines, vaccines, biologic therapies, and consumer and animal products, Merck works with customers and operates in more than 140 countries to deliver innovative health solutions. Merck also demonstrates a commitment to increasing access to health care through far-reaching programs that donate and deliver products to the people who need them. 2009 Revenue: US$27.4 Billion -CEB Please note that the CEB program names referenced in this document have changed since the time of publication.
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
An approach to align technology solutions to strategic business objectives through capability roadmapping
EXECUTIVE TEACHING
Leverage the process used to create capability roadmaps to obtain a deeper shared understanding of strategic business goals and shift the dialogue with business partners away from short-term, project-based discussions. By broadening the conversation to include people, process, and technology, capabilities can achieve a more holistic understanding of the underlying need.
COMPONENT TEACHINGS
1. Linking Business Strategy to Capabilities—Shift the dialogue between the IT liaison and business owner away from projects and toward long-term plans.
2. Establishing Capability Targets—Put capability target choices into financial terms to help business partners make better investment trade-o� decisions.
3. Setting Capability Realization Horizons—Help business partners understand the business and technology implications of di�erent paths to the target state.
4. Driving Application Rationalization—Explicitly link programs to business capabilities to ensure application retirement goals are being met.
5. Managing Demand—Use the capability roadmap to manage demand by reconciling new project requests against established goals.
IMPLEMENTATION GUIDES
■ The Master–Planning Process, pp. 82–85 ■ Linking Business Strategy to Capabilities, pp. 86–87 ■ Establishing Capability Targets, pp. 88–92 ■ Managing Demand, pp. 93–94
COMPANY SNAPSHOT
Merck & Co., Inc.
Industry: Pharmaceuticals Through medicines, vaccines, biologic therapies, and consumer and animal products, Merck works with customers and operates in more than 140 countries to deliver innovative health solutions. Merck also demonstrates a commitment to increasing access to health care through far-reaching programs that donate and deliver products to the people who need them.
2009 Revenue: US$27.4 Billion
-CEB
Please note that the CEB program names referencedin this document have changed since the time of publication.
ENABLING BUSINESS OUTCOMESTo make the most progress on portfolio simplification e�orts, use capability roadmaps to align technology investments with business priorities.
Challenge
In a complex environment with more than 5,000 applications, more than 10,000 interfaces, and 35 di�erent technical environments, Merck was challenged to reduce IT maintenance and operations costs to increase funds available for strategic projects the business required.
Approach
Merck develops a master-planning process that EA provides to business units. The process uses capability roadmaps to identify consolidation opportunities and align new technology investments to strategic priorities.
Results
Merck reduces the total number of applications by 20% and increases the portion of the IT budget devoted to strategic investments by 50%.
-CEB
Please note that the CEB program names referencedin this document have changed since the time of publication.
THE MASTER-PLANNING PROCESSLeverage the process used to create capability roadmaps to obtain a deeper shared understanding of strategic business goals.
6–12 Weeks (Depending on Business Area Scope)
Current BusinessCapability
Current Solutions
Capability Roadmap
Strategy Identification
Future Business Capability
Future Solution
Business Value AddStrategic discussions are focused on long-range business priorities.
Business Value AddCurrent state evaluation enables capability prioritization.
Business Value Add Consensus and buy-in on future state solutions are achieved.
Business Value AddIT investments are clearly aligned with business priorities.
Output ■ Strategy on a Page
Outputs ■ Solution Evolution Plan ■ Capability Roadmap
Outputs ■ Capability Model ■ Capability Prioritization
Put capability target choices into financial terms to help business partners make better investment trade-o� decisions.
■ Merck’s EA group researches industry capability models and standards to help business partners assess current maturity and identify targets.
■ Rely on business partners’ internal assessments and maturity goals when industry benchmarking is not warranted.
“Business partners always want more than budgets allow. It’s our
job to help them assess where they need to be industry leaders and where it’s okay to meet the industry standard by illustrating the business costs and technical costs.”Paula KowalczykSenior Director, Business and Solutions
ArchitectureMerck & Co., Inc.
Capability Target Assessment Criteria
Merck’s EAs work with business partners to force trade-o�s between cost and capability targets across the following four dimensions: 1. People: Skills needed to support new capabilities and/or process improvements 2. Process: Level of process maturity and standardization required 3. Information: Quality and completeness of data required 4. Technology: Availability of tools that provide end-to-end support
Current Range of Capability Maturity
Average Capability Maturity
Initial Capability Target
Reset Capability Target
CapabilityBelow Industry Standard (IS-)
Industry Standard (IS)
Industry Leader (IL)
Distinctive Leader (DL)
Strategic and Tactical Financial Planning
Accounting to Reporting
Treasury and Capital Management
$2.5 M $4 M
$3 M$1.5 M
$5 M
See Implementation Guide, pp. 88–92.
-CEB
Please note that the CEB program names referencedin this document have changed since the time of publication.
Use the capability roadmap to manage demand by reconciling new project requests against established goals.
“We had new technology requests coming in from all over
the place. The roadmap allowed us to stop demand for two years. Now we have a plan, and when a new request comes in, we can assess if and how it fits within that existing plan.”Stacie Kyle IT Account Executive Merck & Co., Inc.
Already on roadmap?
Business Request: New Imperative
Yes. Adjust timing?
No. Aligned
to strategy?
No.
Yes. Forward?
No.
Yes.
Yes. Aligned to capability?
No. Review trade-o�s (what comes o�/gets delayed?) and adjust roadmap.
Yes. Review trade-o�s (what comes o�/gets delayed?) and adjust roadmap.
No.
No. Add capability?
Yes. Include capability in roadmap,
identify solutions, and make trade-o�s.
Yes. Existing solution?
See Implementation Guide, pp. 93–94.
-CEB
Please note that the CEB program names referencedin this document have changed since the time of publication.
1. Use capability roadmaps to achieve a deeper shared understanding of longer-term strategic business goals. Too often, conversations with the business focus on short-term, technology solutions. By broadening the conversation to include people, process, and technology, capabilities can achieve a more holistic understanding of the underlying need.
2. Give business partners flexibility when developing a capability roadmap by presenting them with multiple paths to the target state. To facilitate better trade-o� decisions, make sure they understand the financial implications of capability improvement choices.
3. Involve business partners in the roadmap creation process to increase their ownership of and accountability for specific roadmap outcomes. By tying roadmap milestones to application retirement and demand management objectives, getting business buy-in to more IT–centric goals becomes easier.
-CEB
Please note that the CEB program names referencedin this document have changed since the time of publication.
Objectives Deliver long-term view of business capabilities and processes required to meet strategic business priorities and potential solutions that meet business needs. Ensure alignment of business and IT strategies.
Major Activities 1. Understand Business Context/Environment (Business Strategy)
– Validate business strategy and priorities.
– Validate and identify business imperatives.
– Understand desired outcomes.
2. Assess and Prioritize Business Processes and Capabilities
– Identify required processes and business capabilities.
– Evaluate e�ectiveness of business processes and capabilities.
– Identify high-level information needs.
– Identify gaps and/or improvement opportunities for a process and/or capability.
– Determine business process and capability priorities.
3. Assess and Prioritize IT Solutions
– Map current IT applications to business capabilities.
– Document current IT solution landscape.
– Evaluate e�ectiveness of current IT solutions.
– Identify gaps and/or improvement opportunities for IT.
– Determine solution priorities.
– Develop future IT solution recommendation for the capabilities.
– Create high-level conceptual application landscape arranged by business capability.
4. Make Recommendations and Develop Business Capability Roadmap
– Develop business capability roadmap.
– Develop business case.
-CEB
Please note that the CEB program names referencedin this document have changed since the time of publication.
BUSINESS AND SOLUTIONS ARCHITECT/STRATEGIST JOB DESCRIPTION
Excerpted
Primary ActivitiesPrimary Activities Include, but Are Not Limited to the Following:
■ Serve as the senior leader of business and solutions architecture for Merck, focused on the enterprise domain.
■ Provide cross-organizational leadership to ensure that business and solution architectures developed within and by the corporation’s functional areas are aligned to a single enterprise future state.
■ Serve as a member of the Merck architecture design team providing architecture leadership and governance across the company.
■ Lead a team of senior business and solutions architects that engage with all areas of the IT and business community to develop current and future state architectures.
■ Provide solutions architecture leadership for the company’s most strategic, large, and complex business initiatives.
■ Work with and promote a community of enterprise, divisional, and international architects.
■ Study external, commercial solutions, and develop strategies for development and adoption.
■ Conduct capability benchmarking research to identify industry standards and help business partners set capability targets.
Knowledge/Experience/Skills
■ Bachelor’s degree or equivalent
■ Fifteen years of relevant work experience with demonstrated expertise in complex architecture development and business change
■ Demonstrated understanding of business process reengineering (BPR) is critical; must understand the business needs and interpret data gathered for the IT organization; in-depth skills in IT architecture and business process; strong skills in information, technology, and systems development
■ Capacity to think strategically; capable of applying BPR skills to complex problems to develop, articulate, and build support around a long-term vision and deliver concepts with quantifiable business value in support of that vision
■ Demonstrated record in assessing and leveraging information technologies
■ Demonstrated leadership in achieving shared objectives in a matrixed organization, coordinating projects and services across national boundaries, and building e�ective cross-functional teams
■ Ability to quickly develop relationships with line of business executives and build credibility with domain leaders
■ E�ective communicator with a strong customer service orientation; communicate e�ectively with internal management and external providers and suppliers; ability to lead and influence senior professionals; ability to develop, articulate, and build support around a long-term vision and deliver concepts with quantifiable business value in support of that vision
■ Team player who collaborates well with peers, subordinates, and superiors
■ High personal integrity, credibility, and energy
-CEB
Please note that the CEB program names referencedin this document have changed since the time of publication.
Business Goals Business Outcomes Business Imperatives
Provide stakeholders with accurate, timely, and compliant financial information in an e�ective and e¤cient manner through the use of global standard processes, information, and systems.
Realized by
Key Measures
Deliver on the 15 measurable outcomes as defined by the Finance Strategy Council.
Delivered by
Key Actions
Eliminate complexity and redundancy in processes and systems to drive operational e¤ciencies.
Business Capabilities
Capability Priorities Solution Imperatives
Engage operational teams to enable rationalized accounting to reporting and financial-planning capabilities.
Deliver an “above market” endstate solution.
IT Investments
IT Roadmap IT Program Portfolio
2009 2010 2011 2012
US
EMEAC
A/PA
LA
MX/PR
??
Funded by
Business strategy is enabled by:
Business capabilities are enabled by:
Delivered by
Key Solutions
-CEB
Please note that the CEB program names referencedin this document have changed since the time of publication.
CAPABILITY MATURITY-LEVEL DEFINITIONSFor formal industry benchmarking, Merck brings in outside expertise to provide an objective point of reference and identify capability gaps.
■ External consultants provide their experience working with other players in the space as well as their own views on the future of the industry.
Below Industry Standard
Industry Leader
Industry Standard
Distinctive Leader
Capabilities are not in line with industry and do not adequately support business needs.
Capabilities are on par with industry and support business needs, but there is opportunity for improvement.
Capabilities influence the future direction of the industry and support current and future business needs.
Source: Deloitte LLP.
-CEB
Please note that the CEB program names referencedin this document have changed since the time of publication.
Strategic and Tactical Financial-Planning Capability GapsIllustrative
Imperative (Drivers and Pain Points) Description of Capability Gap A�ected Capabilities Rationale (Why This Is Critical)
1. Define and adopt a standard global planning, budgeting, and forecasting process utilizing a common data source.
Disparate processes and inconsistent hierarchy definitions cause ine¤ciencies and complexity during planning cycles.
Annual Budget Development
Strategic and Tactical Financial Planning
Long-Range Operating Plan Development
Financial Forecasting
Long-Range Entity Plan Development
A standard process will improve e¤ciencies and cycle times, reduce iterations, and allow for a greater focus on strategy and planning. The end result is more accurate and timely forecasts.
2.
3.
4.
-CEB
Please note that the CEB program names referencedin this document have changed since the time of publication.