Post on 01-May-2018
File: CIPS99.PPT 1
Yogi Schulz
I. T. Value
CIPS Informatics ‘99Presenter: Yogi Schulz
InformationTechnologymust deliver Value!
“HOW WILL I EVER ADD
VALUE TO THE BUSINESS
WITH I. T.?”
File: CIPS99.PPT 2
Yogi Schulz
I. T. Value
PresentationOutline
Is I. T. delivering value?
Characteristics of systems
Achieving I. T. value
Managing systems for value
CEO - CIO relationship
Conclusions
Recommendations
OperationsPlanning
Partnership
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I. T. Value
Dilbert ExplainsBusiness Value
D960913
THE COMPANY ANNOUNCEDTHAT WE WILL “ABANDONOUR STRATEGY OFEFFICIENTLYPRODUCING VALUABLEPRODUCTS . . .”
Is I. T. Delivering Value?
No connectionbetween I. T. investments and business results
Organizations are unhappy with I. S. department performance
Strategic uses of I. T. are irrelevant to my industry
I. T. investmentsare a good thing
Organizations believeI. S. department is making an important contribution
Strategic uses of I. T. provide competitive
advantage
No way Definitely
Value is difficult to measure
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I. T. Value
Consequences ofI. T. Value Ambiguity
When we can’t articulate the value, we tend to focus on the cost
To many executives, the cost of I. T. appears:– substantial; even excessive– never-ending– not well managed
Creates I. T. direction toward:– under-investment– down-sizing– outsourcing
Value managementcan lead to a
superior outcome
VeritasGold
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I. T. Value
Characteristics ofToday’s Systems
Complex business processes/calculations
Complex data/data types
Large/valuable data volumes
Distributed access
Security requirements
Value is challenging to achieve
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I. T. Value
Most industriescan’t execute without I. T.
Could our researchers have evaluated as many alternatives without I. T?
Could our product developers have created new products as quickly without I. T?
Could our production department have produced as many units without I. T?
Could our marketers have achieved as much margin or volume without I. T?
Could our top management have evaluated a potential acquisition without I. T?
Valueis
imperative
Valueis
imperative
MerakPetroDesk
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Yogi Schulz
I. T. Value
Assessing I. T. Value
Approach
Focus
Measurement
Problems
Advantages
Aspects TraditionalView
Cost/benefit
EfficiencyDoing Things
Right
Easy to Selland Accept
MissedOpportunities
ValueView
Business Strategyincludes Cost
EffectivenessDoing the
Right Things
CreativeThinking
OrganizationalResistance
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I. T. Value
Steps ToAchieving I. T. Value - 1
What are you trying to achieve?– Identify the business objectives– Define supporting business strategies
What are your competitors/peers doing?– Assess competitor actions– Check direction/thinking of other industries
Why are the business objectives important to you?– Articulate the business value to be gained
How will you know you are successful?– Identify business end outcomes– Identify what business indicators will be measured
Align I. T.with the
Business
Align I. T.with the
Business
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I. T. Value
I. T. value is achievable
Steps ToAchieving I. T. Value - 2
Identify required business process changes
Determine I. T. support for business:– I. T. organization style– staff competencies– application portfolio– I. T. infrastructure
Define I. T. strategy that supports business
Make I. T. investments to support business success
Facet GIS
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I. T. Value
Manual Support
Tool
Value vs. System Capability
Improving System Capability
Increasing
SinglePoint
Solution
Multi-Point
Solution
InterfacedSolution
LooselyIntegratedSolution
TightlyIntegratedSolutionV
alue
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Yogi Schulz
I. T. Value
Value vs.Integration Cost
Increasing Costs
OptimumData Integration
Range Complexity Drivers:
number of interfaces
number of users/departments
number of locations
amount of business change
sophistication of end-users
Increasing
Value
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Yogi Schulz
I. T. Value
Improving Application Management
InstallSoftware
Plan & Manage Operation
Establish DataCustodianship
Enhance forIntegration
Align IT Strategywith Business
Value vs.Application Management
Increasing
Value
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Yogi Schulz
I. T. Value
Business/I. T.Partnership Results
I. T. Leadership
Bus
ines
s L
e ade
r shi
p
Needs well addressedSystem doesn’t workDevelopment ongoing
Meets important needsSystem works wellDevelopment completed
Meets few needsSystem really worksDevelopment quick
Meets no needsSystem doesn’t workDevelopment nevercompleted
Compromise
Chevron U. S. A.Downstream Marketing
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I. T. Value
CEO - CIO Relationship
Working poorly– CIO fired– most/all of IT outsourced– business objectives under-achieved; IT value missed
Working well– CIO well-regarded member of top management team– valuable parts of IT managed internally– business objectives achieved with IT value
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I. T. Value
How CIOs Self Destruct
Believe that I. T. budget is beyond challenge
Insist that business must trust superior, specialist knowledge
Focus on I. T.:– performance measures– administrative tasks
Achieve no conspicuous I. T. successes
Believe in I. T. strategies
Allow a large number of active development projects
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Yogi Schulz
I. T. Value
How CIOs Add Value
Focus obsessively on business imperatives
Interpret external I. T. success stories
Establish and maintain executive relationships
Communicate the I. T. performance record
Work to achieve a shared vision for the business
Enable business transformation
Insist on a small number of active development projects
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I. T. Value
How CEOs Fail the CIO
View IT as a support function
Focus on IT cost minimization
Believe that IT doesn’t apply to his industry
Manage IT as an adjunct to the business
Position the CIO as specialist functional manager
See the CIO as a high-paid technologist
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I. T. Value
How CEOs Support the CIO
Position the CIO as agent for change
Focus on IT effectiveness within business initiatives
Institutionalize business values for I. T.
Include the CIO on the top management team
Manage I. T. as integral to the business
DyadArgus Query
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I. T. Value
Conclusions
I. T. investments must deliver value to:– meet competitive threats– capture business opportunities
Business strategy can be successful if it incorporates I. T. strategy
All is for naught in climate of poor relationships
File: CIPS99.PPT 26
Yogi Schulz
I. T. ValueRecommendations
Allow no I. T. initiatives; only business initiatives with I. T. partnership
Build an I. T. strategy aligned with business strategy
Strengthen the CEO - CIO relationship
File: CIPS99.PPT 27
Yogi Schulz
I. T. Value
700, 400 - 5th Ave. S.W.Calgary, Alberta Canada T2P 0L6
Phone/Fax: (403) 249-5255E-mail: YogiSchulz@corvelle.com
Web: www.corvelle.com
President of Corvelle Management Consultants
Information technology management consulting
Project management and systems development
Computing Canada columnist
PPDM Association Board of Directors
I. T. must deliver Value!
Yogi Schulz
Management Consultants
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I. T. Value
Bibliography - 1
Center for Research on Information Technology and Organizations (CRITO) – http://www.crito.uci.edu/
A Decision Style Approach for Creating Customer Value through Business Information Systems – http://www.enersearch.se/research/ISES/ises4/mi/market.html
An Empirical Analysis of the Determinants of Information Systems Productivity and the Role of Outsourcing Policy– Yogesh Malhotra, 1995– http://www.brint.com/papers/outsourc/intro.htm
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I. T. Value
Bibliography - 2
Becoming the New Technology Executive– CIO Canada, June 1996, p. 39
DMR Group - Driving Up Investment Success Rates– http://www.dmr.ca/corporatif/en/services_and_solutions/benefits.htm
Glomark’s Economic Value Creation Methodology– http://www.glomark.com/maine.htm
The Information Paradox– John Thorpe & DMR Consulting Group staff, 1998
Information Technology and Tomorrow’s Manager– Linda M. Applegate, James I. Cash Jr., D. Quinn Mills– Harvard Business Review, Nov. - Dec. 1988, p. 128
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I. T. Value
Bibliography - 3
Information Technology for the 21st Century– http://www.inpo.navy.mil/it-21/outsrc.html
International IT Strategy Census 1999– COMPASS Analysis
IS & IT Management: Delivering Value With Information Technology – http://www.info-edge.com/5406toc.htm
Is Your CIO Adding Value?– Michael Earl & David Feeny– Sloan Management Review, Spring 1994, p. 11
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I. T. Value
Bibliography - 4
IT Outsourcing - Operational Improvement or Strategic Imperative?– C. Lawrence Meador, MIS Quarterly– http://www.mstnet.com/mstnet/articles/wp_outsrc/wp_outsrc.html
IT/Strategy Alignment - Identifying the Role of Information Technology in Competitive Strategy– C. Lawrence Meador, MIS Quarterly– http://www.mstnet.com/mstnet/articles/wp_it/wp_it.html
A Lean, Mean IT Machine – Lynda Radosevich, Infoworld, 26 July 1999– http://www.infoworld.com/cgi-bin/display/Archive.pl?/99/30/z01-
30.64.htm
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I. T. Value
Bibliography - 5
Measuring Information Technology Investment Payoff: Contemporary Approaches– Mo Adam Mahmood and Edward Szewczak, 1999– http://www.idea-group.com/investment.htm
Measuring the Strategic Value of Information Technology Investments– Kurt Conrad, The Sagebrush Group – http://www.sagebrushgroup.com/value.htm
Positive Support Review Inc.– http://www.psrinc.com/slides/sld001.htm
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I. T. Value
Bibliography - 6
The Role of IT in Business Process Reengineering– http://www.mentorgrp.com/pubs/mrrison.htm
S. C. Johnson, A portfolio-value approach– http://www2.computerworld.com/home/print9497.nsf/All/S
L0815jwax 15 August 1994
The Value of IT in the Manufacturing Sector– A Compass Business Consulting White Paper– Tim Randall, Manufacturing Consulting Services– http://www.compass-analysis.com/
What Factors are Impacting IT’s Effectiveness?– PM Network, June 1999, p. 31
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I. T. Value
Benefits of Alternative Strategies for Achieving Value
InsourceMaintain control
Set priorities
Build unique specialized skills
Create competitive advantage
Minimize costs?
OutsourceAccess superior expertise
Minimize infrastructure investments
Avoid mistakes
Minimize schedule?
Check out the bibliographyCheck out the bibliography