IT StrategicAgility

Microsoft Solutions Forum 2004:Leveraging IT Infrastructure for Strategic Agility

MondaySeptember 6, 2004

Professor Peter Weill

© 2004 MIT Sloan CISR © 2004 MIT Sloan CISR -- WeillWeill Center for Information Systems Research

0

Leveraging IT Infrastructure for Strategic AgilityLeveraging IT Infrastructure for Strategic AgilityMicrosoft Solutions Forum 2004

Monday, September 6 2004

This research was made possible by the support of CISR sponsors.

Professor Peter Weill Director, Center for Information Systems Research (CISR)

MIT Sloan School of Management Phone: (617) 253-2348, Fax: (617) 253-4424

[email protected], http://mitsloan.mit.edu/cisr


1

CISR’sCISR’s MissionMission• Founded in 1974; CISR has a strong track

record of practice-based research on how firms manage & generate business value from IT

• Research is disseminated via electronic research briefings, working papers, research workshops & executive education programs including CISR Summer Session “Current Issues in Managing IT”http://mitsloan.mit.edu/cisr/education.php

– BT Group– DiamondCluster

International, Inc.– Gartner– Hewlett-Packard Co.

CISR 2003–2004 Research Topics• Business Models & IT Investments• Managing IT Architecture• Effective IT Governance• IT Outsourcing• The IT Portfolio — Benchmarks & Performance• NSF Project on IT Impacts• Measuring IT-related Risk• IT-enabled Change

Contact Information:3 Cambridge Center, NE20-336Cambridge, MA 02142Ph. 617-253-2348, Fax 617-253-4424 E-mail [email protected];http://mitsloan.mit.edu/cisr/

CISR gratefully acknowledges the support and contributions of its Research Patrons and Sponsors

MIT Sloan Center for Information Systems Research (CISR)

Center for Information Systems Research

– Intel Corp.– International Finance

Corp.– Merck & Co., Inc.– Merrill Lynch & Co., Inc.– MetLife– Mohegan Sun– Motorola, Inc.– National Kidney

Foundation (Singapore)– Nomura Research

Institute, Ltd. (Japan)– Pasco County, Florida– Pfizer Inc.– PFPC, Inc.– Qwest Communications– Raytheon Company– State Street Corp.– TRW Automotive, Inc.

CISR Sponsors– Aetna Inc.– Allmerica Financial Corp.– Allstate Insurance Co.– AstraZeneca

Pharmaceuticals, LP– Banknorth, N.A.– Biogen Idec– Campbell Soup Co.– Care USA– Celanese– ChevronTexaco Corp.– Det Norske Veritas

(Norway)– eFunds Corp.– EMC2

– Gillette Co.– Guardian Life Insurance

Co. of America

© 2004 MIT Sloan CISR

– IBM Corporation– Microsoft Corporation– Tata Consultancy

Services—America

CISR Research Patrons

7/21/04





2

Leveraging IT Infrastructure – what we know

Set of IT enabled business initiatives an enterprise can readily implement

Strategic Agility:

Requires mature collaboration between business unit heads and IT professionals

Partnership:

Need a framework for discussion and making informed infrastructure decisions

Common language:

Different types of strategic agility require distinct patterns of infrastructure capability and sourcing.

Choices needed:

Enterprises with more infrastructure have faster time to market for new products, higher revenue growths but lower short term ROAs (Weill & Broadbent ’98).

Trade off:

Infrastructure is 55%+ of IT investment, multi-layered –shared enterprise-wide and tailored for BUs.

What to share:

IT infrastructure can be either an enabler or a barrier to agility

Enabler vs. barrier:


3

Leveraging IT Infrastructure for Strategic Agility

Agenda

Leveraging IT InfrastructureIT Infrastructure as ServicesCase Study Types of IT Enabled Business InitiativesIT Infrastructure for Different Business InitiativesMaking Infrastructure Choices

“The times they are a changin’”Source: P.Weill, M. Subramani & M. Broadbent “Building IT Infrastructure for Strategic Agility,” Sloan Management Review, Vol. 44, No. 1, Fall 2002, pp 57–65.





4

The base foundation of budgetedThe base foundation of budgeted--for IT capability (both for IT capability (both technical & human) as shared and reliable servicestechnical & human) as shared and reliable services

IT InfrastructureIT Infrastructure

Shared Information Technology ServicesShared Information Technology Services

Information Technology ComponentsInformation Technology Components

Fast changing local business applicationsFast changing local business applicationssuch as: claim processing, loan applications, such as: claim processing, loan applications, customer complaints support system, webcustomer complaints support system, web--based based client information, consortia, BU systemsclient information, consortia, BU systems

Shared and standard applications Shared and standard applications ––change less regularly such as change less regularly such as accounting, budgeting, HRMaccounting, budgeting, HRM

Services stable over time Services stable over time such as such as management of shared customer management of shared customer databases, PC/LAN access, securitydatabases, PC/LAN access, security

Source: Source: P. Weill & M. Broadbent P. Weill & M. Broadbent Leveraging the New Infrastructure: How Leveraging the New Infrastructure: How Market Leaders Capitalize on ITMarket Leaders Capitalize on IT, Harvard Business School Press, June 1998, Harvard Business School Press, June 1998

Human infrastructureHuman infrastructure of knowledge, of knowledge, skills, policies, standards & experienceskills, policies, standards & experience

ApplicationsApplications

IT ApplicationsIT Applications

LocalLocal

Shared and StandardShared and Standard

Human Information Technology InfrastructureHuman Information Technology Infrastructure

CommoditiesCommodities such as computers, such as computers, printers, routers, database software, printers, routers, database software, operating systems, card operating systems, card swipersswipers

IT Infrastructure is a Set of Shared and Reliable Services Centrally Coordinated


5

70 IT Infrastructure Servicesin 10 Clusters

IT A

rchi

tect

ure

& St

anda

rds

Customers, Business Partners, Public Infrastructures

IT Education

IT Management

IT Infrastructure

Facilities Managem

ent

Communications

Data Management

Electronic Channel Management

Application Infrastructure

Security & Risk

IT R&D

IT A

rchit

ectu

re

& St

anda

rds

Internal IT ApplicationsStandardized Interfaces

Agreed-Upon Standards

Source: P. Weill, M

. Subramaniand M

. Broadbent, “Building IT Infrastructure for Strategic Agility,” M

IT Sloan Managem

ent Review

, Vol. 44, N

o. 1, Fall 2002, pp 57–65.





6

IT Infrastructure Services –Applications Infrastructure % Have% Have Relative Relative

InvestmentInvestment

1 Set and communicate Internet policies (e.g., employee access, URL logging)

Applications InfrastructureApplications Infrastructure

2 Provide Internet capability and enforce policies

3 Set and communicate email policies (e.g., inappropriate and personal mail, harassment policies, filtering policies)

4 Provide email capability and enforce policies

5 Centralized management of applications(e.g., centralized management of applications owned by, or on behalf of, the business unit.)

6 Centralized management of infrastructure capacity (i.e., monitoring and optimizing server traffic and adding new capability.)

7 Integrated mobile computing applications (e.g., laptop dialup, ISP access, handheld infrastructures for internal users, etc.)

8 Enterprise Resource Planning (ERP) services (e.g., operating ERPs, implementing new modules, upgrading versions, etc.)

9 Middleware linking systems on different platforms (i.e., integrating web “shopfronts” to ERP systems)

10 Wireless applications (e.g., applications for wireless devices used by customers and partners)

11 Application services provision (ASP) (e.g., applications used by business units, centrally provided and charged by usage with an ASP model)

12 Workflow applications (e.g., applications to manage and monitor work flow, moving tasks between workstations)

100.0% 1.7

89.8%89.8% 3.73.7

93.3% 1.9

100.0% 1.8

93.3% 1.9

100.0% 4.5

100.0% 7.3

100.0% 4.2

92.3% 5.9

86.7% 7.1

69.2% 3.0

75.0% 2.6

64.3% 2.7

13 Payment transaction processing (e.g., electronics funds transfer {EFT}) 92.9% 3.7

Source: P. Weill and M. Vitale Place to Space: Migrating to e-Business Models, Harvard Business School Press, 2001 and MIT Sloan CISR Working Paper #329, IT Infrastructure for Strategic Agility by Peter Weill, Mani Subramani & Marianne Broadbent, April 2002.


7© 2004 Adapted from P. Weill and M. Broadbent, Leveraging the New Infrastructure: How Market Leaders Capitalize on IT, Harvard Business School Press, June 1998

Corporate UnitsCorporate Units

Order processingOrder processingCustomer portalsCustomer portalsProduct configurationProduct configurationKnowledge managementKnowledge management

Shared & standard Shared & standard applicationsapplications

Customer self serveCustomer self servePC/LAN servicePC/LAN serviceElectronic mailElectronic mailLarge scale processingLarge scale processingShared Customer Shared Customer

databasedatabase

VendorsVendorsTelecommunications Telecommunications service providersservice providers

Industry servicesIndustry services

BusinessBusinessUnit 1Unit 1

BusinessBusinessUnit 2Unit 2

EnterpriseEnterprise--wide INFRASTRUCTUREwide INFRASTRUCTURE

LOCALLOCALITIT

CORP INFRACORP INFRA A

B

PUBLIC INFRASTRUCTURE (eg. Internet, Vendors, Telco’s, Industry PUBLIC INFRASTRUCTURE (eg. Internet, Vendors, Telco’s, Industry Networks)Networks)

IT Infrastructure Services can be Deployed at Multiple Levels

“Our strategy is to move to a common infrastructure to fund a self serve enabling infrastructure – for example buy a world class personalization engine, something that no BU could afford to do by themselves…” Gravity: Innovate then later

capture in infrastructure

LOCALLOCALITIT

BU 1 INFRABU 1 INFRA

LOCALLOCALITIT

BU 2 INFRABU 2 INFRA

EnterpriseEnterprise--wide INFRASTRUCTUREwide INFRASTRUCTURE





8

Delta Airlines

3rd largest US Airline – revenue $15B+, 80,000+ people1997 New CEO and Delta was last on all 3 key customer metrics: on-time, complaints & baggage17 platforms - “can’t get from here to there on Y2K”IT infrastructure rebuilt around core processes to enhance the customer experience – multi-channel infrastructure servicing multiple customer segmentsDelta Nervous System - $1B plus 4 year renewal – still learning how to leverage 3 years later only airline to lead on all 3 key customer metrics2002 lead with innovative customer service features – pagers, boarding passes, kiosks, etc. 2003 still invested in IT while cutting total CAPEX but focus onROI < 12 months.2004 struggling with business model


9

DELTA’sDELTA’s Nervous SystemNervous System

Delta Nervous System

Delta Nervous System

Scanners

DesktopsFIDS

Laptops

RIDS

GIDSGate

ReadersVoice

Video

Cell Phones PDA's

Kiosks

Electronic Events

Electronic Ticket

HandHelds

Pagers

Location Maint. Equip.Schedule Flight Employee Aircraft Customer Ticket

OAGCRS

Operational PipelineOperational Pipeline

Crew

Catering

Cargo

Tower Gate TOCOCC

Terminal T A B C D E

Clean/ServiceAircraft

UnloadAircraft

FlightArrival andCloseout

MonitorFlight

FlightDepartureand Closeout

Load Aircraft

Prepare for FlightDeparture

AllocateResources

Resources

Customer ExperienceCustomer Experience

BaggageInflightBoardingCrownRoom

TicketCounterSkycapTravel

AgentReservationsSkymilesSkylinks

Personalization Digital Relationships Loyalty Programs

Core ServicesCore ServicesValue AddedValue Added

ServicesServices

Revenue Management Architecture

Support pricing and scheduling decisions:

Convert transaction data (flight, customer, fares) using decision models

G&A Architecture

Efficiently handle financial, human resource, and administrative needs:

ERP system provides architecture

Core ProductsCore Products

DNS Architecture

For further reading see E-Business at Delta Air Lines: Extracting Value from a Multi-Faceted Approach, J. Ross, MIT CISR Working Paper # 317, August 2001

Source Delta Airlines





10

Classifying IT-enabled Business Initiatives

On any position of the value netSupply side: Linkages to suppliersInternal: Organizing the business Demand side: Links to customers

In different types of exchangeB2B: Business to businessB2C: Business to consumer

With different purposesNew/existing productsNew/existing markets

Studied 180 business initiatives in 118 businesses in 89 top performing enterprises (top 3 in their industry) over a ten year period to 2002.

Strategic Agility = set of business initiatives an enterprise can readily implement


11

Examples of Business Initiatives

Web site to disseminate the request for, and submission of, tenders for a water utility’s engineering works (Supply/B2B/Existing Product/Market).

Monitoring retail flooring product sales by manufacturer to reduce lead times and inventory (Demand/B2B/Existing Product/Market).

Online reservation systems to streamline bookings at franchisee and co-owned hotel properties (Demand & Internal/B2B/Existing Product/Market).

Bill payment and presentment by post office (Demand/B2C/Existing Product/New Market).

Enable pubs to purchase products from brewer via web site including stock levels, pricing, order tracking, cost comparisons and customized promotion deals (Demand/B2B/Existing Product/Market).

Business to business steel trading portal (Demand/B2B/New Market/New Product).

Publishing house creates all digital workflow (Internal)





12

Critical Infrastructure Capabilities Differ by Position on the Value Net*

SupplySupply DemandDemandInternal/ Business Internal/ Business OrganizingOrganizing

Focus infrastructure capabilities to needFocus infrastructure capabilities to need

Supply and internal initiatives locate more capabilities in the Supply and internal initiatives locate more capabilities in the BUsBUs

Demand side initiatives locate more capabilities enterpriseDemand side initiatives locate more capabilities enterprise--widewide

An enterpriseAn enterprise--wide approach to architecture and standards wide approach to architecture and standards setting is critical for allsetting is critical for all

IT Education

IT Management

IT Facilities Managem

ent

Communication

Data Management


Applications Infrastructure

Security & Risk

IT A

rchit

ectu

re

& St

anda

rds

IT R&D

IT Education

IT Management


ent

Communication

Data Management



Security & Risk

IT A

rchit

ectu

re

& St

anda

rds

IT R&D

IT Education

IT Management


ent

Communication

Data Management



Security & Risk

IT A

rchit

ectu

re

& St

anda

rds

IT R&D

Provided enterpriseProvided enterprise--widewide Provided at Business Unit levelProvided at Business Unit level

*All relationships shown are statistically significantSource: P.Weill, M. Subramani & M. Broadbent “Building IT Infrastructure for Strategic Agility,” Sloan Management Review, Vol. 44, No. 1, Fall 2002, pp 57–65.


13

Enterprises with Initiatives Across the Value Net Need Strong Capabilities

Provided enterpriseProvided enterprise--widewide Provided at Business Unit levelProvided at Business Unit level

Conflicting demandsaroundData Mgmt

*All relationships shown are statistically significant

IT Education

IT Management


ent

Communication

Data Management



Security & Risk

IT R&D

IT A

rchi

tect

ure

& St

anda

rds

“We have a data warehousing infrastructure project that is a ‘black hole for dollars.’ Started by marketing with no IT involvement with an outside firm to establish the data dictionary and data catalog…belief that we could bypass using programmers and end users would do their own work. Now we have data analysts (at $200/hr) who listen to user requests and extract reports.”

Source: P. Weill, M

. Subramaniand M


IT Sloan Managem

ent Review

, Vol. 44, N

o. 1, Fall 2002, pp 57–65.





14

Superior Infrastructure Capabilitiesfor different Strategic Initiatives*

Value Net

Supply Internal Demand B2B B2C New Products

New Markets

Infrastructure Services (number per cluster)

Firm Wide

Bus. Unit

Firm Wide

Bus. Unit

Firm Wide

Bus. Unit

Firm Wide

Bus. Unit

Firm Wide

Bus. Unit

Firm Wide

Bus. Unit

Firm Wide

Bus. Unit

Applications Infrastructure (13) X X X

Communications Infrastructure (7) X X

Data Management (6) X X X X

IT Facilities Management (5) X X X X

IT Management (4) X X X X

Security & Risk (4) X X X X

Architecture Standards (20) X X X

Channel Management (7) X X X

IT R&D (2) X X X X

IT Education (2) X

*Statistically significant correlation between leading with that type of IT enabling initiative and above industry average infrastructure capability in that service cluster.

Source: P. Weill, M

. Subramaniand M


IT Sloan Managem

ent Review

, Vol. 44, N

o. 1, Fall 2002, pp 57–65.


15

Assess Your Infrastructure Capability

Prioritize the nature of the strategic agility required using the three frameworks – requires choices and teamworkIdentify the current IT infrastructure capability in each of the ten clusters – i.e., complete the 10 infrastructure service cluster tables for your enterprise in the addendumCompare your infrastructure capability (10 tables) with future needs (from previous slide and 2 detailed slides in the addendum) for strategic agility, identifying pressure points Create an IT infrastructure investment plan to fill the gapsDesign a federal model for data managementEnsure architecture setting is deliberate, not defaultAssess IT governance “decision rights and accountability framework to encourage desirable behavior in the use of IT”*Explicitly link Strategy to Infrastructure - principles

*Further reading: Don’t Just Lead, Govern: Implementing Effective IT Governance, P. Weill & R. Woodham, MIT Sloan School Center for Information Systems Research (CISR) Working Paper #326, April 2002





16

Addendum: IT Infrastructure Services in Detail


17

Initiatives on the Value Net Intersect

InternallyInternallyFocused Focused

(50%)(50%)Supply Side: LinksSupply Side: Linksto Suppliers (76%)to Suppliers (76%)

Demand Side: LinksDemand Side: Linksto Customers (55%)to Customers (55%)

11%11%

6%6%

28%28%26%26%

12%12%

11%11%

7%7%

Source: P.Weill, M. Subramani & M. Broadbent “Building IT Infrastructure for Strategic Agility,” Sloan Management Review, Vol. 44, No. 1, Fall 2002, pp 57–65.





18

46%Implantable

medical device manufacturer

online catalog for hospitals orders

Market

15%Financial service

enterprise creating a new online

brokerage product for existing clients

7%Educational testing enterprise creating new application to enable online test

taking

32%US Hospitality

company creating a reverse auction site for hotel room

booking in UK

Product

Type of Initiative: New Product/Market

Existing

Existing

New

New


19

70 IT Infrastructure Servicesin 10 Clusters

Management Infrastructure Services1. IT Management (4 services)2. Architecture and Standards (20)

– E.g., Specify data architectures, setting high level guidelines and blueprint for the way data will be used and integrated

3. IT Education (2)4. IT R&D (2)Physical Infrastructure Services5. Applications Infrastructure (13)6. Communications (7)7. Data Management (6)8. Security (4)

– E.g., Provide a firewall on secure gateway services9. Channel Management (7)10. IT Infrastructure Facilities Management (5)





20

IT Infrastructure Services –Applications Infrastructure % Have% Have

Current Capability Current Capability (Inferior, Average, (Inferior, Average,

Superior) & Superior) & Sourcing (In, Out or Sourcing (In, Out or

Mix)Mix)

1 Set and communicate Internet policies (e.g., employee access, URL logging)

Applications InfrastructureApplications Infrastructure

2 Provide Internet capability and enforce policies

3 Set and communicate email policies (e.g., inappropriate and personal mail, harassment policies, filtering policies)

4 Provide email capability and enforce policies

5 Centralized management of applications(e.g., centralized management of applications owned by, or on behalf of, the business unit.)

6 Centralized management of infrastructure capacity (i.e., monitoring and optimizing server traffic and adding new capability.)

7 Integrated mobile computing applications (e.g., laptop dialup, ISP access, handheld infrastructures for internal users, etc.)

8 Enterprise Resource Planning (ERP) services (e.g., operating ERPs, implementing new modules, upgrading versions, etc.)

9 Middleware linking systems on different platforms (i.e., integrating web “shopfronts” to ERP systems)

10 Wireless applications (e.g., applications for wireless devices used by customers and partners)

11 Application services provision (ASP) (e.g., applications used by business units, centrally provided and charged by usage with an ASP model)

12 Workflow applications (e.g., applications to manage and monitor work flow, moving tasks between workstations)

100.0%

89.8%89.8%

93.3%

100.0%

93.3%

100.0%

100.0%

100.0%

92.3%

86.7%

69.2%

75.0%

64.3%

13 Payment transaction processing (e.g., electronics funds transfer {EFT}) 92.9%Source: P. Weill and M. Vitale Place to Space: Migrating to e-Business Models, Harvard Business School Press, 2001 and MIT Sloan CISR Working Paper #329, IT Infrastructure for Strategic Agility by Peter Weill, Mani Subramani & Marianne Broadbent, April 2002.


21

Communications and Data Management


CommunicationsCommunications 81.3%81.3%

1 Communications network services (e.g., full Service TCP/IP networks linking all points within a business)

2 Broadband communication services (e.g., higher bandwidth activities such as video)

3 Intranet capabilities (e.g., an intranet to support a variety of applications including publishing, company policies, directories, message boards etc)

4 Extranet capabilities (e.g., providing information and applications via TC/ICP protocols to a select group of customers and suppliers)

5 Workstation networks (e.g., workstation networks, LANs and POS networks)

6 EDI linkages to customers and suppliers

7 Electronic support to groups (e.g., groupware)

100.0%

71.4%

100.0%

93.3%

100.0%

84.6%

20.0%

Data ManagementData Management 78.0%78.0%1 Manage key data independent of applications (e.g., centralized product data)

2 Centralized data warehouse (summarizes key information from decentralized databases)

3 Data management advice and consultancy

4 Electronic provision of management information (e.g., EIS)

5 Storage farms or storage area networks (e.g., major storage separate from LANs and workstations)

6 Knowledge management (e.g., contact database, knowledge management architecture, knowledge databases, communities of practice)

100.0%

86.7%

69.2%

71.4%

86.7%

53.8%

% Have% HaveCurrent Capability Current Capability (Inferior, Average, (Inferior, Average,

Superior) & Sourcing Superior) & Sourcing (In, Out or Mix)(In, Out or Mix)





22

IT Management


IT ManagementIT Management 90.9%90.9%1 IS project management 93.3%

2 Negotiate with suppliers and outsourcers (e.g., centralized and negotiated pricing for software) 100.0%

3 Service level agreements (e.g., agreements between Corporate IT, outsourcers, and BU’s) 80.0%

4 IS planning, investment, and monitoring (e.g., forward plans and strategy, IT investment process,aligning IT to strategy, value management) 86.7%

Security & RiskSecurity & Risk 100.0%100.0%

1 Security policies for use of information systems (e.g., data protection, access privileges, and hacker protection) 100.0%

2 Enforce security policies for information systems 100.0%

3 Disaster planning for business applications 100.0%

4 Firewall on secure gateway services 100.0%

% Have% Have



Mix)Mix)


23

Architecture and Standards

5 Specify architectures (Work) (set high level guidelines and blueprint for the way work will be conducted) 84.6%

6 Enforce architectures (Data) (enforce compliance with high level architectures) 92.9%

7 Enforce architectures (Technology) (enforce compliance with high level architectures) 100.0%

8 Enforce architectures (Communications) (enforce compliance with high level architectures) 100.0%

9 Enforce architectures (Applications) (enforce compliance with high level architectures) 100.0%

10 Enforce architectures (Work) (enforce compliance with high level architectures) 84.6%

Architecture and Standards 95.5%

Source: P. Weill and M. Vitale Place to Space: Migrating to e-Business Models, Harvard Business School Press, 2001.4 Specify architectures (Applications) (set high level guidelines and blueprint for the way information technology applications will be used and integrated) 100.0%

1 Specify architectures (Data) (set high level guidelines and blueprint for the way data will be used and integrated) 92.9%

2 Specify architectures (Technology) (set high level guidelines and blueprint for the way technology will be used and integrated) 100.0%

3 Specify architectures (Communications) (set high level guidelines and blueprint for the way communications technology will be used and integrated) 100.0%


% Have% Have



Mix)Mix)





24

Architecture and Standards - Continued


Architecture and Standards (Continued)Architecture and Standards (Continued) 95.5%95.5%

17 Enforce standards for architecture (Technology) 100.0%

18 Enforce standards for architecture (Communications) 100.0%

19 Enforce standards for architecture (Applications) 100.0%

20 Enforce standards for architecture (Work) 84.6%

15 Set standards for IT architectures (Work) (Set SOE to implement work architectures) 84.6%

16 Enforce standards for architecture (Data) 92.9%

11 Set standards for IT architectures (Data) (Set standard operating environment (SOE) to implement data architectures) 92.9%

12 Set standards for IT architectures (Technology) (Set SOE to implement technology architectures) 100.0%

13 Set standards for IT architectures (Communications) (Set SOE to implement communications architectures) 100.0%

14 Set standards for IT architectures (Applications) (Set SOE to implement applications architectures) 100.0%

% Have% HaveCurrent Capability Current Capability (Inferior, Average, (Inferior, Average,

Superior) & Sourcing Superior) & Sourcing (In, Out or Mix)(In, Out or Mix)


25

Channel Management and R&D


6 Mobile phones 30.0%

7 Mobile computing (e.g., via dial up, wireless networks) 30.0%

IT R&DIT R&D 83.3%83.3%1 Identify and test new technologies for business purposes 80.0%

2 Evaluate proposals for new information systems initiatives 86.7%

Channel Management provides electronic channel to the customer oChannel Management provides electronic channel to the customer or r partner to support multiple applicationspartner to support multiple applications 51.3%51.3%

1 EFTPOS/POS (electronic funds transfer/point of sale) 50.0%

2 Kiosks 30.0%

4 Call centers 85.7%

5 Interactive Voice Response (IVR) 33.3%

3 Web sites 100.0%

% Have% Have



Mix)Mix)





26

IT Education and Infrastructure Facilities Management


IT Facilities ManagementIT Facilities Management 51.3%51.3%

1 Large scale data processing facilities (e.g., mainframe) 92.9%

2 Server farms (e.g., mail server, web servers, and printer servers) 100.0%

3 Installation and maintenance of workstations and LANs 100.0%

IT EducationIT Education 82.1%82.1%1 Training and use of IT 85.7%

2 Management education for generating value from IT use 78.6%

4 Common systems development environment (e.g., create firm-wide competencies to develop or acquire applications, accreditation, etc.) 78.6%

5 Pilot new initiatives (e.g., pilot web ebusiness initiatives or product configuration tools for customers) 86.7%

% Have% Have



Mix)Mix)


27

Enterprise-Wide IT Infrastructure Capability for Strategic Initiatives

Value Net Supply Internal Demand B2B B2C New

Products New

Markets Capability Full Ave Low High Low High Low High Low High Low High Low High Low High

Application Infrastructure 13 8 6 6 7 6 6 6 6 Communications Infrastructure 7 5 4 4 4 4 4 4 4

Data Management 6 4 2 2 3 5 2 3 5 2 2 IT Facilities Management 5 4 2 2 3 5 2 3 5 3 3 5

IT Management 4 3 2 2 2 2 2 4 2 2

Security & Risk 4 3 2 2 3 4 2 3 5 2 2 4 Architecture Standards 20 16 13 18 15 19 15 19 14 15 14 14 Channel Management 7 3 2 2 2 2 2 2 2

IT R&D 2 1 0 1 0 1 2 0 0 0

IT Education 2 1 0 0 0 0 0 1 2 0

Average = the average # of services of all firms studied

High = the minimum # of services for high capability when that service cluster was statistically significant for the type of strategic initiative

Low = minimum capability required





28

Business Unit IT Infrastructure Capability for Strategic Initiatives

Value Net Supply Internal Demand B2B B2C New

Products New

Markets Capability Full Ave Low High Low High Low High Low High Low High Low High Low High

Application Infrastructure 13 3 2 6 2 6 1 2 5 0 2 1 Communications Infrastructure 7 1 0 2 0 2 0 0 0 0 0

Data Management 6 1 0 3 0 3 0 0 0 0 0 IT Facilities Management 5 1 0 0 0 0 2 0 0 0

IT Management 4 1 0 2 0 2 0 0 2 0 0 0

Security & Risk 4 1 0 0 0 0 2 0 0 0 Architecture Standards 20 3 1 0 0 1 0 0 0 Channel Management 7 1 0 0 2 0 2 0 0 0 3 0

IT R&D 2 0 0 0 0 1 0 0 2 0 1 0

IT Education 2 1 0 0 0 0 0 0 0

Average = the average # of services of all firms studied

High = the minimum # of services for high capability when that service cluster was statistically significant for the type of strategic initiative

Low = minimum capability required

IT StrategicAgility

Documents

Transcript of IT StrategicAgility