RJ Meehan Chief Technology Officer 27 April 2010 V1.1 Producing Metrics to Measure Strategy-Execution Alignment During ADM Phase E
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RJ MeehanChief Technology Officer
27 April 2010V1.1
Producing Metrics to Measure Strategy-Execution Alignment During ADM Phase E
Producing Metrics to Measure Strategy-Execution Alignment During ADM Phase E | 27 April 2010 2
Agenda
Key benefits of deriving these metrics
How to derive alignment metrics using traceability modelling
Key lessons learned and observations from using this approach "in the field"
Producing Metrics to Measure Strategy-Execution Alignment During ADM Phase E | 27 April 2010 3
•
Why phase E?−
That’s where you compile your candidate project portfolio (draft “Implementation and Migration Plan”)
•
TOGAF ADM v9 states:−
“When this phase is approached from an enterprise strategic change perspective, the identification of opportunities and solutions is done in a top-down fashion…”
−
However, in some circumstances the organizational environment does not allow for a top-down approach. In these circumstances this phase is approached in a tactical opportunistic way.” – i.e. bottom-up
•
Question - How do we know how well this project portfolio moves us towards the business vision?
TOGAF ADM Phase E – Opportunities & Solutions
What does TOGAF ADM v9 have to say about strategy-IT execution alignment?
Presenter
Presentation Notes
TOGAF ADM v9 does offer some other useful techniques here – see section “Part III: ADM Guidelines & Techniques > Migration Planning Techniques” In particular see the Business Value Assessment Technique. None of these give you a quantitative measure of alignment though. TOGAF ADM v9 deliverable that is relevant here is the Implementation and Migration Plan, which is drafted in Phase E and refined in Phase F. See “Part IV: Architecture Content Framework > Architectural Deliverables”. This alignment measurement continues into phase F as the “Implementation and Migration Plan” is refined a v1.0 version.
Producing Metrics to Measure Strategy-Execution Alignment During ADM Phase E | 27 April 2010 4
Alignment – an often used term
What are the symptoms of poor alignment that we see?
Introduction
What’s the opportunity?
“If you treasure it, measure it”−
What does this enable?
−
Is the target to have 100% alignment? Not necessarily –•
This is not an academic exercise for fun, it’s not a game•
Desired outcome is achievable, sensible alignment•
Stop once you’ve got the value from the process, until next time
Images: Salvatore Vuono / m_bartosch / FreeDigitalPhotos.net
Presenter
Presentation Notes
Symptoms of poor alignment Typically organisations know/suspect/”feel” that alignment is poor IT are accused of poor alignment ‘Pet’ projects Business projects may have conflicting goals, e.g. improved customer retention through ability for contact centre staff to give discounts conflicting with more sophisticated automated price differentiation Unclear/ill-defined business or IT strategy “If you treasure it, measure it” - then you can… Know where you are, and maybe perform some “upward” education Flush out problems with the defined business or IT strategy – which are not immediately obvious on first glance Track if alignment is going up or down – in the short term (cancelling the wrong projects, executing the right projects) and in the medium/long term – is our portfolio planning process getting better year-on-year – are we learning and executing the ADM better? Demonstrate the areas to target
Producing Metrics to Measure Strategy-Execution Alignment During ADM Phase E | 27 April 2010 5
In this case, we mean the alignment of…
•
We do not mean: measuring current IT estate alignment to business strategy, hence the words “alignment to execution”
•
Other parts of TOGAF ADM should identify these misalignments and derive a candidate project portfolio to address these gaps
Introduction
So what do we mean by business strategy-execution alignment?
Presenter
Presentation Notes
The IT change portfolio consists of what we are changing – typically… “change” programmes (new stuff) and “change to run” programmes, i.e. “keeping the lights on” better
Producing Metrics to Measure Strategy-Execution Alignment During ADM Phase E | 27 April 2010 6
Agenda
Key benefits of deriving these metrics
How to derive alignment metrics using traceability modelling
Key lessons learned and observations from using this approach "in the field"
Producing Metrics to Measure Strategy-Execution Alignment During ADM Phase E | 27 April 2010 7
•
Projects should not exist unless they support business strategy, i.e. if there is no traceable “business value”, then why are we doing it?
•
Two possible explanations:−
The declared strategy is wrong in some way, e.g. missing something
−
The project is a sub-optimal use of resources which would be better invested in some other way
•
Needs to be repeated at intervals, which depends on your TOGAF ADM EA refresh “cycle”
Deriving alignment metrics using traceability modelling
Fundamentals of the approach
Producing Metrics to Measure Strategy-Execution Alignment During ADM Phase E | 27 April 2010 8
Traceability Method
An overview…
Potential Discontinuity
req Traceability
Manage Costs
(from Corporate Strategy)
Diversify
(from Corporate Strategy)
Exit some markets
(from Corporate Strategy)
Decommission duplicate systems
(from Manage Costs)
Close London office
(from Manage Costs)
Acquire Company X
(from Diversify)
Launch product Y
(from Diversify)
Market products in Asia
(from Diversify)
Centralise operations centres
(from Exit some markets)
Provide all warranty support from US
(from Exit some markets)
Sell division Z
(from Exit some markets)
Name: TraceabilityAuthor: RMeehanVersion: 1.0Created: 16/04/2010 18:09:12Updated: 23/04/2010 08:03:54
Decommission System A
(from Projects1-10)
Network upgrade
(from Projects1-10)
Sales management tool implementation
(from Projects1-10)
Vision - Be a world class, market leading organisation
(from Corporate Strategy)
Image: djcodrin / FreeDigitalPhotos.net
0
1
2
3
4
No of times project realises a strategy
Strategy item A, $17.446m49%
Strategy Item B, $3.066m6%
Strategy Item C, $8.58m18%
Strategy Item D, $7.616m11%
Strategy Item E, $2.028m3%
Strategy Item F, $2.995m4%
Strategy Item G, $2.312m3%
Strategy Item H, $0.375m2%
Strategy Item I, $0.32m4%
Strategy Realisation
Presenter
Presentation Notes
Who does the work? Enterprise Architects(s) Which stakeholders are needed to provide input/validate the results? IT and business community Who are the results socialised with? Enterprise Architecture team – to help tune alignment and for process improvement reasons Business community – to validate that the IT change portfolio is providing the right ”coverage” of strategy goals, and that the spend per strategy goal vs benefits predicted is the right balance IT community – to validate the same from the other perspective Up the management chain – as a communication tool to indicate alignment, and basically how the company vision is mapped into execution
Producing Metrics to Measure Strategy-Execution Alignment During ADM Phase E | 27 April 2010 9
A demo of capturing the traceability…
req Traceability
Manage Costs
(from Corporate Strategy)
Div ersify
(from Corporate Strategy)
Exit some markets
(from Corporate Strategy)
Decommission duplicate systems
(from Manage Costs)
Close London office
(from Manage Costs)
Acquire Company X
(from Diversify)
Launch product Y
(from Diversify)
Market products in Asia
(from Diversify)
Centralise operations centres
(from Exit some markets)
Provide all warranty support from US
(from Exit some markets)
Sell division Z
(from Exit some markets)
Name: Traceabil ityAuthor: RMeehanVersion: 1.0Created: 16/04/2010 18:09:12Updated: 23/04/2010 08:03:54
Decommission System A
(from Projects1-10)
Network upgrade
(from Projects1-10)
Sales management tool implementation
(from Projects1-10)
Vision - Be a world class, market leading organisation
(from Corporate Strategy)
Producing Metrics to Measure Strategy-Execution Alignment During ADM Phase E | 27 April 2010 10
Example Results #1
Some strategy objectives barely have any projects to deliver them…
Strategy item A, $17.446m49%
Strategy Item B, $3.066m6%
Strategy Item C, $8.58m18%
Strategy Item D, $7.616m11%
Strategy Item E, $2.028m3%
Strategy Item F, $2.995m4%
Strategy Item G, $2.312m3%
Strategy Item H, $0.375m2%
Strategy Item I, $0.32m4%
Strategy Realisation
Presenter
Presentation Notes
This perspective allows a view of number of projects that can be traced back to specific strategy objectives, but also a view of the budget that will be spent to do so (which may be inconsistent with the business benefits received). Note that to achieve this view, project costs must be allocated across strategy goals, which can be subjective.
Producing Metrics to Measure Strategy-Execution Alignment During ADM Phase E | 27 April 2010 11
Example Results #2
0
1
2
3
4
No of times project realises a strategy
Some projects have no discernable relationship to strategy…
27% of projects not justified?
Presenter
Presentation Notes
Note that just because some projects cover more strategy objectives, this does not necessarily mean they are “better aligned”. A single project may, on its own, completely deliver a corporate goal.
Producing Metrics to Measure Strategy-Execution Alignment During ADM Phase E | 27 April 2010 12
Agenda
Key benefits of deriving these metrics
How to derive alignment metrics using traceability modelling
Key lessons learned and observations from using this approach "in the field"
Producing Metrics to Measure Strategy-Execution Alignment During ADM Phase E | 27 April 2010 13
Strategy deficiencies
•
Strategy objectives look well defined, but you realise they are not−
not specific enough
−
hard to measure when we are “done” and no timescale defined−
e.g. “Provide a world-class service” needs to be broken down into departmental objectives
•
It is not until the strategy is “tested” in this way that this becomes apparent
•
Strategy items need to be specified in “SMART” terms, i.e.−
Specific
−
Measurable−
Attainable
−
Relevant−
Time-based
Common observations #1
Key lessons learned and observations from using this approach "in the field“…
Presenter
Presentation Notes
Specificis it clear what it is? Measurabledo you know when you get there? Attainableis it an achievable goal? Relevantcan the objective owners make an impact on it? Time-baseddo you know when you need to get there by?
Producing Metrics to Measure Strategy-Execution Alignment During ADM Phase E | 27 April 2010 14
Project selection in TOGAF Phase E
•
Projects appear that seem to not be traceable to business strategy•
Often this is due to known but unstated strategy decisions−
e.g. “Keeping the lights on”/IT estate maintenance
•
“Personal/pet” projects stand out – there’s nowhere to hide!−
Takes the emotion out of their identification
−
Nothing wrong with pursuing pet projects – maybe the strategy is missing an “innovation” objective?
Common observations #2
Key lessons learned and observations from using this approach "in the field“…
Producing Metrics to Measure Strategy-Execution Alignment During ADM Phase E | 27 April 2010 15
•
Get started! To gain a “benchmark” understanding
•
Measure traceability on a 1-5 scale−
Not all traceability relationships are equal
•
Bring other project metrics into consideration (see phase F documentation)−
Not all projects are considered equal
−
Opportunity cost, risk etc
•
Build this analysis into your organisation’s customised TOGAF ADM framework−
As we know, EA methods need to “live and breathe”, not just be “point in time” endeavours
Where next?
Once you are ready to get more sophisticated…
Copyright © 2010, Smart421. All rights reserved.A copy of this presentation is available on request
RJ Meehan Chief Technology [email protected]
www.smart421.comFor more information, please visit our website
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