Post on 26-Mar-2015
advising on IT-business alignment
mwdmacehiterward-dutton
The challenges of
IT-business alignment
A presentation for Microsoft’s TechNet IT Director’s Strategy Day
Neil Macehiter, Partner
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 2
Agenda
A brief introduction to MWD Aligning IT and business Understanding business processes Understanding managed IT services Summary
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 3
A brief introduction to MWD
Strategic advice and consulting Focus on issues concerning IT-business
alignment– Driving more business value out of enterprise IT– Not about the “nuts and bolts” of individual
technologies
Core: two highly experienced industry analysts / practitioners– Sun, Oracle, Sybase, Ovum, Deloitte Consulting,
etc
Based in UK, Europe-wide capability
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 4advising on IT-business alignment
mwdmacehiterward-dutton
Aligning IT and business
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 5
IT-business alignment: multiple angles
IT
Business
Changeimplications
Changecapabilities,limitations
Investmentin capability
Deliveryof value
It’s not just about “building stuff that the business will use”
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 6
Why now?
Globalisation– Customers, partners, suppliers – and
competition– Connectedness driving sophisticated value
chains
Transparency– Industry regulations, consumer pressure and
competition driving openness
Service focus– Differentiation and shareholder value
increasingly derived from service experience
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 7
From a UK perspective
A healthy economy – albeit growing at a low rate– Spurred by public sector investment – With a knock-on effect on the IT market
Globalisation– >4000 (+400/year) UK-Sino joint ventures– Vonage launches UK VoIP service (01/05)– Tesco enters mortgage market with First Active (11/04)
Transparency– Corporate Responsibility (CORE) coalition– Government initiatives e.g. Extractive Industries Transparency
Initiative– International Financial Reporting Standards (IFRS)
Service Focus– BT launches mobile music service with UBC Media and Virgin Mobile
(06/05)– Amazon Services Europe to underpin M&S e-commerce systems
(04/05)
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 8
The real world
From Towards
Build, or buy vs. build
Application implementation
Buy AND build AND integrate
Back officeBusiness area investment
focusFront office and
beyond
“Personal productivity”
desktopIT access environment
Productivity desktop +
global access to resources
Data processingTechnology innovation
focus
Communication, collaboration,
integration
Older approaches fail to capture reality re: integration, communication, collaboration,
supply complexity
Outsourcing vs. in-house
delivery
Capability supply “Multi-sourcing”
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 9
A common language is the essential starting point
IT
Business
?
“Investment prioritised in terms of business need”
“Systems that deliver value to the business”
“Clear direction from the business about focus, strategy”
“Collaborative approach to implementing business change”
A common, agreed representation of business activity, goals
+A common, agreed view of how current and future IT provides structured support to the business in this context
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 10
Reflecting the environment in IT-business alignment
Business
IT
Busin
ess pr
oces
s
Busin
ess pr
oces
s
Busin
ess pr
oces
s
Busin
ess pr
oces
s
Busin
ess pr
oces
s
ManagedIT
serviceManage
dIT
service
ManagedIT
serviceManage
dIT
service
ManagedIT
service
A P P L I C A T I O N S & I N F O R M A T I O NI N F R A S T R U C T U R E
B U S I N E S S S T R A T E G Y
Business processesform the foundationof a commonlanguage
IT defines and delivers“business level” serviceswhich support the rightprocesses, the right way
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 11advising on IT-business alignment
mwdmacehiterward-dutton
Understanding business
processes
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 12
Business process
Applications
Data
The challenge
Activities, processesThe business
The real world doesn’t “decompose” nicely – and IT isn’tjust about things you build in-house
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 13
Providing structured support for business processes means understanding scope & scale of interactions
From
Data design tightly coupled to application design, and
application design to “user requirements” – very restricted
view of process needs
B u
s i n e
s sp r o
c e s s
Towards
B u
s i n
e s
s p
r o
c e
s s
Loosely-coupled resources provide services which are
designed to support the interactions that take place within a business process
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 14
IT approaches must consider business process support more broadly
B u
s i n
e s
s p
r o
c e
s s
Transactionalservices
Informationservices
Communication& collaboration
services
Support scenario: a mesh of
interactions
We have to model more than just transactional applications
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 15
A universe of business processes [1]
E E E E E
M M M
S
“Execution” processes – instances handle particular units of work within business activities
“Management” processes – instances oversee instances of execution processes
“Strategy” processes – instances oversee instances of management processes
A hierarchy of business processes
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 16
A universe of business processes [2]
E
E
E
M
M
S
Contribution to competitive differentiation
E
E
E
M
M
S
Non-differentiating(focus should be on efficiency)
Differentiating(focus should be on flexibility)
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 17
Observations on the nature of business processes
E
E
E
M
M
S
E
E
E
M
M
S
Increase
d structu
re, predict
ability
Increase
d colla
boration, a
d-hoc nature
Non-differentiating(focus should be on efficiency)
Differentiating(focus should be on flexibility)
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 18
A resulting (wider) view of technical architecture
Level of
pro
cess
abst
ract
ion
Low
High
Non-differentiating Differentiating
“Strategy”business processes
“Management”business processes
“Execution”business processes
Business functions
“Pure” BPMS
“Tra
dit
ional”
app.
Develo
pm
ent
tools
&
fram
ew
ork
s
Collaboration tools
Simple portal
Business intelligencetools
Workflow
Composite service-basedapplication development &
integration
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 19advising on IT-business alignment
mwdmacehiterward-dutton
Understanding managed IT
services
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 20
So what is an IT service?
“CRM database
”
“Provide automated support for my sales
force”
“Update customer details”
Line of business perspective
IT operations perspective
Developer perspective
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 21
Managed IT services – aligned with business processes
Lifecycle servicesManaging the lifecycles of business functions and infrastructure
Business function servicesAutomating business functions
Infrastructure servicesProviding the platform
Users’ experiences of “managed IT service”
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 22
Contracts bring obligations for suppliers and consumers
Message FormatMessage Sequence
Functions
SecurityResponse Time
Throughput
Usage CostLiability Clauses
Trust
FunctionalTerms
QoSTerms
Commercial
Terms
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 23
An organising model for service-oriented IT in the context of IT-business alignment
How can we align flexibility / reusability
requirements for business software
functions, to business needs?
How can we trade-off flexibility / reusability of
business function services with
efficiency / openness requirements?
How can we ensure that the right consumers get
the right kind of experience from these
services, and do so cost-effectively?
How should infrastructure elements provide their services to
different business functions? How should
infrastructure be optimally managed?
How can QoS responsibility be
delegated to infrastructure in a way that is easily flexed in response to changing
requirements?
How can we minimise the cost and risk of
overall process support while creating an business support
environment with more moving parts?
How should we differentiate lifecycle
service levels for different kinds of business function,
infrastructure?
How should we define and enforce
development, fault-fix and change-request
priorities?
How can we demonstrate the overall
value of the services that the IT organisation
and its resources provide to the
business?
Functional contract aspects
Quality-of-Service contract aspects
Commercial contract aspects
Business function services
Infrastructure services
Lifecycle services
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 24
An example – business function service design
Level of
pro
cess
abst
ract
ion
Low
High
Non-differentiating(focus should be on efficiency)
Differentiating(focus should be on flexibility)
Business activity role
“Strategy”business processes
“Management”business processes
“Execution”business processes
Activity functions
Technical functions
Reusability importanceincreases
Openness, flexibility demands increase
Efficiency demand increases
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 25advising on IT-business alignment
mwdmacehiterward-dutton
Summary
© Macehiter Ward-Dutton 2005 www.mwdadvisors.com 26
Summary
Today’s business environment brings IT-business alignment to the fore– In terms of investment, delivery and change
Business processes provide a common language– But the organisational context of real-world business
processes is complex
Managed IT services must align with business process priorities– It’s about more than business function services
Services and their contracts provide an organising model for service-oriented IT