Innovation And It Alignment 121510 Abbreviated
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Transcript of Innovation And It Alignment 121510 Abbreviated
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ALYNDe LLC
By:Glenn A. Bunker
Partner
“Managing The Pace of Change and Complexity of Innovation by Aligning Your Business Strategy and IT Factory to Achieve Results”
ALYNDe LLC
© 2009 ALYNDe, LLC 2Transforming Innovation
Agenda
Review Marketplace Dynamics
Leadership Challenges: Understanding Your Strategic Direction
The Value Proposition for Innovation Lifecycle Management
Solution Management Approach and Common Challenges
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Review Marketplace Dynamics
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© 2009 ALYNDe, LLC 4Transforming Innovation
Introduction
Key contributors see Innovation Lifecycle Management (ILM) activities a little differently:
The Strategist sees ILM solutions as a way to improve the allocation of resources across the enterprise and to develop a strategically correct portfolio to support the corporate vision.
Finance looks to ILM solutions to improve the allocation of scarce financial resources more effectively while optimally achieving maximum shareholder value.
IT views ILM solutions as a means to prioritize and select the right projects to support business strategy, foster accountability and deliver results with a highly skilled but constrained workforce.
Business Units (LOB’s) see ILM solutions as the framework within which to manage the processes, collaboration and work needed to deliver products to customers faster -improving time to market performance, operational effectiveness and ROI.
CEO’s, CIO’s, COO’s, CFO’s and LOB Executives should look to ILM frameworks to deliver big wins with positive financial impacts within a climate of rapid change.
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© 2009 ALYNDe, LLC 5Transforming Innovation
Internal Pressures
External Pressures
Margin ZonePace of TechnologyChange
Mergers & Acquisitions
New Competitors Regulatory
Business Climate(New Markets,Innovation Complexity)
Resource Issues(Supply and DemandConstraints for SkilledWorkers)
Performance Pressures
Reduced Budgets
Constrained Workforce
There Are Pressures For Change…
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Causing Operational Concerns...
Including:
Disruptions to launch schedules and budgets for new business solutions, regulatory changes and demand complexity (managing dynamic demand)
Poor project planning, management and communications regarding issues that affect timely delivery of programs, products and services (time to market)
Shortages of critical resource skills, especially for emerging technologies, methodologies and business processes; Lack of tools for human resource capacity planning and optimization (workforce management)
Inefficient, “silo’ed” and redundant program and project management tools and procedures (program and project management)
Ineffective knowledge capture, search and distribution capability to improve problem solving and team performance (knowledge management)
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Forcing Consideration Of Solutions That...
Enable partners, employees, managers and executives to perform everyday activities themselves, anytime and anywhere in order to:
Create a culture that is comfortable with collaboration
Establish the concept of an integrated/virtual community
Manage the impact and complexity of innovation on your competitive posture
Streamline decision-making processes for new development opportunities
Allow management to focus on executing the company’s overall business strategy with the support of an agile IT operation
… Support “proactive” vs. “reactive” decision-making
The ultimate goal is to combine Process, People, Portfolio and Project Management best practices to help people improve the way they do their jobs.
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Leadership Challenges: Understanding Your Strategic Direction
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© 2009 ALYNDe, LLC 9Transforming Innovation
Executive Leadership is facing increasing pressure to control costs and improve operational performance for future business growth and profitability
Create an ILM Framework for
Managing Organizational Performance Improvement Measuring & Reporting
Calculate the return on investment for proposed IT investments by determining the expected business and technology costs and benefits.
Establish an Innovation Management Office to monitor status and manage risks.
Develop an effective Governance program that involves business and technology leaders.
Controlling & Managing Operations
Manage Product/Service portfolios and IT investments needed for effective support.
Identify strategic cost savings.
Define and monitor performance metrics and service level agreements.
Planning, Building & Integrating Business Solutions
Define effective strategic planning and governance processes.
Meet capital planning requirements for effective innovation.
Break down business unit silos and identify common applications and IT services needed to eliminate NVA work.
External Forces – Customers, Competitors & Technology
Trends
Capitalize on emerging technologies to achieve a competitive advantage.
Provide IT-enabled products and services before competitors.
Adapt to changing business models and partnerships.
Leadership Challenges
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Can You Identify With This Manager?
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“Managing is Harder Than it Looks…”
Integrating and over-customizing systems/processes to fit current stove pipes
Managing simultaneous rollout of multiple initiatives & scope creep beyond organizational capability to execute
Managing investment portfolio costs, benefits & capacity
Manage the entire investment portfolio & relevant information
Lack of critical skills at the right time due to poor resource planning
Managing demand & performing ‘real time’ what if analysis and simulations
Improve quality of decisions & reduce decision lead times
Identify losing project and product candidates (go/kill gating criteria)
Consolidating data from disparate systems and different sources
Automating methodology, workflows & processes
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To meet these business challenges while exceeding performance goals, an Innovation Lifecycle Management Framework is needed to
enable Operational Excellence, Customer Intimacy and Product Innovation strategies to levels consistent with your business
objectives.
Let your portfolio metrics reflect your emphasis…
Given These Challenges, What Is Your Strategic Direction?
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Given These Challenges, What Is Your Strategic Direction?
Focus on invention, creativity and experimentation
Willing to make one’s own products obsolete
Loosely-knit organization based on teams
Management systems that are results driven
A culture that encourages innovation
Focus on invention, creativity and experimentation
Willing to make one’s own products obsolete
Loosely-knit organization based on teams
Management systems that are results driven
A culture that encourages innovation
Organization built around the customer rather than the market
Emphasis on flexibility and responsiveness
Business structure that delegates decision making to the field
Culture that embraces specific rather than general solutions
Organization built around the customer rather than the market
Emphasis on flexibility and responsiveness
Business structure that delegates decision making to the field
Culture that embraces specific rather than general solutions
Low (total) price
Emphasis on efficiency and reliability
Hassle-free service
Standardized processes and operations
Management systems that measure and monitor transactions
Low (total) price
Emphasis on efficiency and reliability
Hassle-free service
Standardized processes and operations
Management systems that measure and monitor transactions
Operational Excellence
Customer Intimacy Product Innovation
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© 2009 ALYNDe, LLC 14Transforming Innovation
Questions Regarding Your Strategic Direction…
Lost in the process of reacting to market forces and organizational challenges is the need to extend your strategic
plans to a level of measurable operational effectiveness.
First and foremost, what existing processes, methods and/or tools give you confidence in your ability to meet or exceed performance objectives?
What do you find to be the greatest challenges regarding your ability to meet and/or exceed performance objectives? Are there innovation management, product development, resource planning & utilization, cross-departmental strategy coordination, process/workflow enablement and/or program management concerns?
What are your experiences to date with organizational Portfolio, Program, Project and Resource Management solutions? Positive? Beneficial? Ineffective?
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How would you grade your ability to link your organization’s strategic goals to the various work initiatives (product development programs, IT projects, application development, service management) that are planned? ...in process?
Do you have a well-defined IT Governance model that highlights the status of cost take-out or revenue-generating initiatives and the subsequent actions that deliver differentiated products and services to your customers?
Do your project teams have the ability to collaborate? …Inform Management? …Measure Performance?
Lost in the process of reacting to market forces and organizational challenges is the need to extend your strategic
plans to a level of measurable operational effectiveness.
Questions Regarding Your Strategic Direction…
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How would you grade your position as a “1st-Mover” within the markets/segments you serve?
Are consistent valuation methods and measures being used to determine such things as: 1. earned-value performance, 2. stage-gate performance, 3. financial impacts to on-going programs, and 4. post-delivery results for each program, project or service initiative?
Can your organization “load balance” the workforce for an optimal mix of internal (employee) and external (contractor, supplier, partner) personnel based upon cost and demand requirements?
Lost in the process of reacting to market forces and organizational challenges is the need to extend your strategic
plans to a level of measurable operational effectiveness.
Questions Regarding Your Strategic Direction…
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© 2009 ALYNDe, LLC 17Transforming Innovation
What are your goals
and aspirations?
Wherewill
you compete?
How will you winin your chosen
markets?
What capabilitiesmust be in
place to win?
What managementsystems are
required?
You will confront a set of cascading strategic choices...
Answers to These Questions Force Strategic Choices…
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© 2009 ALYNDe, LLC 18Transforming Innovation
Understanding these choices means:
Your Strategy will become the pattern or plan that integrates your major goals, policies and action sequences into a cohesive measurement-enabled Framework …and positions your business within your competitive markets …in order to create a sustainable competitive advantage.
Where do you play?- Industry Segment(s)- Narrow vs. Broad Focus
How will you win?- Value Proposition- Sources of Competitive Advantage (Operational Effectiveness, Product Innovation, Customer Intimacy?)
How best to configure your portfolio management framework to measure business performance against strategy to deliver value to targeted customers as efficiently and effectively as possible?
You will confront a set of cascading strategic choices...
Answers to These Questions Force Strategic Choices…
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© 2009 ALYNDe, LLC 19Transforming Innovation
You should confront these choices to develop actionable strategies supported by:
Enterprise and IT Governance Frameworks (CoBIT, ITIL, etc),
Effective Innovation Management, Application and Product Development best practices (Stage-Gate, RUP, etc),
Workforce Optimization (Capacity Planning, Resource Leveling, etc), and
Project and Product Portfolio Management Best Practices
You will confront a set of cascading strategic choices...
Answers to These Questions Force Strategic Choices…
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© 2009 ALYNDe, LLC 20Transforming Innovation
Strategy: “The pattern or plan that integrates an organization’s major goals, policies and action sequences into a cohesive whole. A well-formulated strategy helps to marshal and allocate an organization’s resources into a unique and viable posture based on its relative internal competencies, shortcomings, anticipated changes in the environment and contingent moves by intelligent opponents.” *
Relative cost positionhigh low
OperationalEffectiveness
Str
ateg
ic A
dva
nta
ge
high
low
Val
ue
Operational Effectiveness
Strategic Advantage: Attained when action sequences fit the organization and when business processes support and enforce objectives within a measurable Governance Framework. This framework must support all roles with information that is needed to make decisions based upon relevant and timely metrics.
*J.B. (James) Quinn – (Quinn, J. (1980) “Strategies for change: Logical Incrementalism”, Irwin, Homewood)
Business Unit 5
Business Unit 2
Business Unit 4
Business Unit 1
Business Unit 3
These Choices Impact Your Strategy
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Because…
Strategy is affected by choosing which activities to perform and how to measure them
Strategic advantage occurs from the fit and alignment of those activities to your business strategy
Operational Effectiveness is achieved by performing the right activities at the right time with the right people to achieve desired performance results
Effective solutions impact both Strategic Advantage and Operational Effectiveness.“It’s hard to manage what you can’t measure”
Relative cost positionhigh low
OperationalEffectiveness
Str
ateg
ic A
dva
nta
ge
high
low
Val
ue
Operational Effectiveness
Business Unit 5
Business Unit 2
Business Unit 4
Business Unit 1
Business Unit 3
So, Why is Portfolio Management Important?
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© 2009 ALYNDe, LLC 22Transforming Innovation
Effective Business and IT alignment impacts both Strategic Advantage and Operational Effectiveness.
“Allows you to plan today rather than respond tomorrow...” Processes, technology and people
across business units are aligned in a coordinated environment to deliver high value at a low cost
Deliberate strategy to achieve improvement is sustainable
Operating Systems in place to avert potential threats to competitive position and financial performance
A Portfolio Management Framework transforms operating data into Insight
Relative cost positionhigh low
OperationalEffectiveness
Str
ateg
ic A
dva
nta
ge
high
low
Val
ue
Operational Effectiveness
Business Unit 5
Business Unit 2
Business Unit 4
Business Unit 1
Business Unit 3All Business Units
An Ideal Desired-State Situation
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The Value Proposition for Comprehensive Innovation Lifecycle Management
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© 2009 ALYNDe, LLC 24Transforming Innovation
Quality & Process Innovation: Portfolio Management, Six Sigma, Product Lifecycle Management Capability Maturity Indexing, Innovation Lifecycle Management, Stage-Gate.™
Solution Framework
PortfolioManagement
Capabilities Framework: Competence Development & Process Excellence, PMI & OPMI®, Lean Six Sigma (LSS)
Technology Enablers & Alliance Partners: Product Evaluation, Delivery Support & Development.
Industry Standards: IEEE, ISO, DoD, SEI CMM and CMMI ®, GAAP (SOP 98-1)
Integration Services
Project and Program
Management
NPDLifecycle
Management
Innovation Governance
Built on a foundation of fully integrated solutions designed to drive the creation of measurable business value through the timely and efficient deployment of
enabling methods, process, and technologies.
Comprehensive Innovation ManagementFramework Structure
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© 2009 ALYNDe, LLC 25Transforming Innovation
Innovation Lifecycle Management (ILM) is based upon a framework of fully integrated Application Components designed to drive the creation of measurable business value.
This is accomplished through the timely and cost effective deployment of enabling processes, technologies and resources.
Value from PPM
Portfo
lio M
anag
emen
t
Execution ManagementPerform
ance-based
BudgetingValueFromILM
Comprehensive Innovation ManagementILM solutions are “Frameworks”
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© 2009 ALYNDe, LLC 26Transforming Innovation
Measure investment results
Improve visibility of all proposed and active
investments
Objectively prioritize and select investments
Align investments with strategy
Improve portfolio balance
Establish linkages between results and resources
Improve alignment of strategy, targets and budgets
Improve collaborationamong planning, budgeting, financial, and program staff
Capture full costs of all resources identified with achieving goals and objectives
Efficiently allocate critical resourcesImprove quality and predictability through standard processes and leading practicesManage program schedules and costs & Identify and mitigate risks and issues
What you need to do… What you are able to do…
What you really can do…
Portfo
lio M
anag
emen
t
Execution Management
Performance-based
BudgetingValueFromILM
Comprehensive Innovation ManagementILM Framework - Value Proposition
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Solution Management Approach and Common Challenges
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© 2009 ALYNDe, LLC 35Transforming Innovation
Solution Management Approach
4 fundamental principles:
1. Structure change in manageable steps
Each implementation phase should deliver measurable benefits and build toward your overall objectives
2. Implement each step-change quickly
Faster user adoption, reduced risk and quicker business benefits
3. Transfer knowledge with collaborative workshops
Each phase is delivered through workshops with clearly defined objectives, scope and deliverables to ensure effective knowledge transfer to your user teams
4. Address all aspects of business change
Successful change programs address organizational, cultural, and technical aspects. Effective workshops ensure that each area is aligned to specific business objectives of the change program
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© 2009 ALYNDe, LLC 36Transforming Innovation
Common Challenges for IT Organizations
Running IT as a business demonstrates that IT can provide value-add in customer facing, internal facing and shareholder facing functions reliably and at competitive prices (compared to external providers)
Effective portfolio management helps to maximize the financial return on new Innovation investments and actively manages the “tail” of Innovation—the replacement/retirement of legacy products and services that have reached the end of their useful lives
Alignment of business and IT so that IT delivers the right services to the business at the highest quality and most competitive cost to support “differentiation through innovation”
Providing complete, accurate, meaningful and consistent reporting to customer, internal (corporate, business units, project teams), and shareholder constituents
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© 2009 ALYNDe, LLC 37Transforming Innovation
Common Challenges for IT Organizations
Shortening cycle times and reducing costs of key innovation processes through automation, self-service and elimination of manual, paper-based business transactions – creating a lean operational infrastructure that strives to eliminate non value-added work.
Diffusion and adoption of common information systems which increase common business processes across the company, reduce information latency, increase information flow and allow for an “apples-to-apples” comparison of disparate businesses in a complete, accurate and timely manner without manual intervention or “one-off” reconciliation processes and reports
Managing regulatory adherence and compliance transparently so that performance audits are “non-events”
Providing “one version of the truth“ by supporting key business performance drivers, business intelligence maturity, information architecture and stewardship of information standards
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© 2009 ALYNDe, LLC 39Transforming Innovation
Thank You!
This presentation was prepared by:
1978 Stafford PlaceMarietta, GA 30062
Glenn A. BunkerPartner
Tel: 770.565.4366Fax: 770.565.4366
Mobile: 770.377.7061E-mail: [email protected]
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