defining and implementing technology strategy

Defining and Implementing

Technology Strategy

Discussion Framework

March 20, 2001

- 2 -© 2001 Athens Group, Inc. Confidential and Proprietary

Contents

1. Introductions / AG Overview (5)2. Strategic Analysis vs. Technology Strategy (5)3. Technology Due Diligence and other useful

Frameworks (15)4. E-Business Strategy Case Study (20)5. Q & A


Who We Are

“Athens Group is an employee-owned consulting firm, integrating technology strategy and software

solutions.”


What We Do

Assessment Planning Implementation

•Risk Analysis•Risk Management Plan•Competitive Analysis•Recommendations

Due Diligence

•Technology Plans•Architecture Roadmaps

Strategic Planning

•Integration Architecture•Recommendations

Package Selection

•Turn-key solutions•“Glueware”

Package Integration

Complete software solutions

Software Development

Multi-project Oversight

Program Management

Dedicated Project Oversight

Project Management


We Assist Clients in the Application of Information Technology to Increase the Value of Their Business

Assessment Planning Implementation

Emerging Technologies

Change Management

(Business Integration)

Technology Strategy

• Internet Evolution (e-Business)

• Technology Due Diligence

• Appropriate Technology Selection

• M&A Due Diligence

• IT Benchmarking

• Business Alignment Evaluation

• Project Assessment

• IT Strategy & Plan

• Architecture Design

• Disaster Recovery Plans

• Requirements Definition

• Package Selection

• S/W Development Process

• Business Alignment & Goal Deployment

• IT Strategy Implementation

• Business Process Improvement

• Program / Project Management


What We Do: Knowledge Centers

eBusiness

CustomerRelationship

Management

Business PerformanceManagement

ManufacturingSystems

Hardware Integration


A Few of Our Clients…


Strategic Analysis vs. Technology Strategy• “Strategic” vs. “tactical” strategy• Response to specific situations:

– “We need to be an e-business by the end of the year!” --CEO

– “Should we acquire Abc corp?” --CEO– “Should I invest in Xyz.com corp?” --VC– “Do we need an ERP system? What is the best one for

us? –CIO– “How do we define and implement the right systems to

support our new business strategy?” --CEO


Common Tools

1. Technology Due Diligence Process 2. Risk Analysis3. Business Case Framework4. Project Prioritization5. Package Selection Process6. IT Roadmap


Technology Due Diligence

• Product vs. M&A• People• Process• Technology


Technology Due Diligence - People

• Develop some usable frameworks and collect metrics. –value is in comparison

• Starting point: Carnegie-Mellon SEI– http://www.sei.cmu.edu/cmm-p/

http://www.sei.cmu.edu/cmm-p/


Technology Due Diligence - Process

• Business and Engineering• Examples: order processing, customer support,

software development• Starting point:

– http://www.sei.cmu.edu/cmm/cmms/transition.html

http://www.sei.cmu.edu/cmm/cmms/transition.html


Technology Due Diligence - Technology

• Very situation-specific• Code reviews• Performance benchmarking• Security validation (see http://www.iss.net)• Architecture validation

– Scalability, integration, skillset• Customer interviews

http://www.iss.net/


Risk Analysis

• Simple Framework:– Identify Risks, Probability, Severity– Multiply Probability X Severity– Sort by risk– Develop mitigation strategy and contingency plan

for each high risk• Implement risk management process!• Example frameworks


Product Development Risk AnalysisProduct Area Team Size

6 Number of Team Members - includes 3 developers, engineering mgt. and support

Requirements1 10 Is there a one sentence product team and product description?2 5 Can the product team describe the target user ?3 5 Are the prerequisites and customer operating business environment documented ?4 8 Are the product team objectives understood by all stakeholders?5 8 Is there a prototype of the product team's product(s) ?6 4 Are the competitions' features documented side by side with this product areas'?7 8 Does this product team have access to the domain expertise needed for success?

8 8Is there a published schedule for the products and first customer deliveries for this product area ?

9 4 Has a complete cost analysis been completed along with break even scenarios ?10 0 Has a life cycle been defined for this product area ?11 8 Is a marketing/business development person part of the product team ?12 5 Is a staffing person part of the product team?

Risk Analysis Results

NewProduct v1.0 73 Preliminary score 80.3 Final score (preliminary score adjusted for team size)

Chance of Success: FairEvaluation: A good first pass. A product area with this score will likely experience high stress and shaky

team dynamics, and the product will ultimately be delivered with less functionality than desired at greater cost and with a longer schedule.

For each question, give the product development team 10 points if it is definitely true, 8 points if 80% true, 5 points if 50% true, 4 points if No but planned and 0 points if No and NOT planned. There is a maximum of 10 points per question.


The Business Case Is Built In A Logical Sequence Of Steps

StepStep55

StepStep44

StepStep33

StepStep22

StepStep11

• Understanding economic drivers of business• Understanding financial projections and historical trends

Financial DecompositionFinancial Decomposition

• Studies covering the key levers identified in the financial analysis• Baseline development

Findings based Opportunity Identification and BaselinesFindings based Opportunity Identification and Baselines

• Opportunity charts• Financial and operational assumptions

Finalizing the Business CaseFinalizing the Business Case

Validating Benefits with process ownersValidating Benefits with process owners

Quantifying Opportunities and determining Benefit LogicQuantifying Opportunities and determining Benefit Logic


Prioritization Frameworks

• Simple (matrix)• Weighted• Gated


Simple Prioritization – Applications Example

Strategic Impact

STRATEGICHIGH POTENTIAL

KEY OPERATIONALLEGACY

Applications that are critical to company’s

current business strategy

Applications that may be important to company’s future business strategy

Applications which company needs to run

business

Applications targeted for replacement / no further investment

Critical to Business Strategy


Weighted Prioritization ExampleProject Type

Project Name Estimated Project Costs / Year 1 (*1000)

Recurring Costs / Year

(*1000)

Strategic Alignment

25pts. Total

Mission Effective-

ness 20pts. Total

Organi-zational Impact 10pts. Total

Risk (of not

doing) 20pts. Total

Benefit Cost Ratio

25pts. Total

Total Score

100pts. Total

Strategy ERP $65 $5 23 20 10 18 22 93

Project Infrastructure Upgrade $400 $50 23 20 10 20 20 93

Project Web Applications $150 $75 23 20 7 17 21 88

Strategy Security $75 $5 20 17 8 18 24 87

Project ERP $1,350 $125 23 20 10 18 15 86

Project M & A Integration $125 $125 20 18 8 17 20 83

Strategy Web $75 $5 20 18 10 14 20 82

Strategy Acquisition & Remote Site Integration $40 $5 20 17 5 18 20 80

Project EIS $75 $10 20 17 7 13 20 77

Project External Website $75 $35 23 15 5 12 20 75

Strategy Customer Relationship $30 $5 20 15 7 12 20 74

Project Intranet $100 $25 18 16 8 13 17 72

Project CRM $350 $100 20 18 7 12 15 72

Strategy Infrastructure & System Reliability $45 $5 15 15 5 15 18 68

Project Professional Services Automation $75 $20 18 15 5 10 15 63

$3,030 $595


Gated Prioritization Example

P4: eBusiness Project Portfolio Prioritization Process

1: eBusiness Criteria

2: Define PotentialProjects2: Define PotentialProjects

Customers

Athens Group

DPI Execs

Customers

Athens Group

DPI Execs Distinct projects which mayprovide value in the eBusiness space

StakeholdersWhich stakeholders are most important to advance or maintain through eBusiness projects?

Business GoalsWhich DPI business goals are most important to advance through new eBusiness projects?

ImplementationCriteriaWhich implementation criteria are most important to consider when trading off potential projects?

PrioritizedPortfolio

Fund,Implement,Iterate

3: Rate Projects

Rate the capability of each project to fulfill each criteria

Athens Group

DPI Execs

Sco

ring

Alg

orit

hm


Package Selection Process

Confidential and Proprietary

Foundation

Develop Idealized Architecture

Task 2Review Business Process Map

Task 1 Define Critical MES Criteria

Task 3

• Release Project Website • Target Vendor List• Initialize DB Tools • Kickoff Meeting

Initiate

Select Top 4 Candidates

Evaluation

Select Top 2 Candidates

Decision

Integration Analysis

Task 10

Detailed Vendor Review & Demo

Task 11

Final Selection

Phase 2 Readiness

Develop Integration Plan and Systems

Architecture

Task 12

Evaluation Report

Task 13Develop

Implementation Plan

Task 14

Define Integration Requirements, Arch.

Constraints

Task 6

Define Requirements, Categories, Priorities Task 5

Vendor Risk Analysis Task 7

Detailed Vendor Scoring Task 9

• Web

site/

Plan

Upd

ates

• W

eekly

Sta

tus

Repo

rt / M

eetin

g• R

equi

rem

ents

Man

agem

ent

• C

lient

Rev

iew

Proj

ect M

anag

emen

t

Compare to Vendor Capabilities

Task 4

Initial Demos Task 8

• Define Project Plan/Process

Package SelectionImplementation PlanArchitecture

4/26

6/7

6/27

8/2


Requirements Management / Package Selection Tool Example


Process Map (IDEF0) Example


Four Components of the Technology Strategy

Purpose:• Defines the organization’s reason for

existence• Identifies customers of the technology

organization & the value Technology provides

Guiding Principles:• Set the general direction for the

technology organization• Defines how it will operate• Provide a focal point for employees

Critical Success Factors:• Limited in number – the critical few• Identifies things that must go right to

be successful

Customers

New CustomersShare of WalletService Revenue

Financial

ROIBudget% of revenue

Employees

SatisfactionRetentionProductivity

Innovation

InvestmentsSkillsPatents

Measurement:


Framework for a Technology Roadmap

Framework• Time horizon• Strategic Elements

Current Environment

• Surveys• Staff Interviews• Management

Discussions• Capability

Assessment

Future Environment• Purpose• Guiding Principles• CSF’s• Measures

Build the Roadmap• Identify the gaps• Define objectives• Establish priorities• Target completion dates

People

Leadership

Processes

Structure

Applications

Computing

Technology

Networks


eBusiness Case Study

Integrating Business and Technology Strategies


The Assignment

• You are the CIO !

• The CEO informs you the BoD has requested a strategy & plan to

develop & implement competitive eBusiness capabilities for the

company.

• The initial set of these capabilities must be in-place within 12 months.


The Situation

• Global manufacturer of custom engineered, consumable production tools for the semiconductor industry

• 12 sites in 7 countries; growth through acquisition • Critical business drivers changing from technology leadership and

quality to also include speed of delivery and common face to global customers

• Your competitors are six months ahead of you in building their eBusiness capabilities

• Six months earlier you were assigned as CIO to form a consolidated, global IS organization reporting to yourself

• Last quarter, you began the implementation of a global ERP project as your top priority for the next 18 to 24 months


What Would You Do?

• What can you hope to accomplish in 12 months? What are some realistic objectives?

• What should be your approach? What “common tools” can be applied?

• What challenges should you expect? Within the IS organization; with other functional managers; with customers; with vendors / consultants?

• Where do you start?


Athens Group Approach

Global ITStrategy &Roadmap

eBusinessStrategy

PrioritizationProcess

WebPlatformSelection

OrderEntryWeb

Application

OrderStatusWeb

Application

FutureWeb

Applications

• Athens Group provided consulting services every step of the way:

- Strategy- Planning- Implementation

Business Goals and Priorities


Global IT Strategy & RoadmapGlobal IT

Strategy &Roadmap

eBusinessStrategy



OrderEntryWeb

Application

OrderStatusWeb

Application

FutureWeb

Applications


• Large global client with complex and diverse business needs • Information technology is a key competitive factor in overall

business success• Rapidly evolving technology landscape• Many priorities & limited resources

• Athens Group led a systematic analysis of business needs and technology trends in order to help create a unified IT strategy

• Client is assured that IT infrastructure can satisfy their business needs and keep them competitive

• IT organization can focus on delivering individual componentsOf the overall IT strategy

Business Need

Solution

Value


Global IT Strategy & Roadmap

• IT Strategy mapped to specific projects and laid out in a timeline over the next three years

• IT organization can forecast resource requirements and capabilities far in advance


Global eBusiness Strategy


eBusinessStrategy



OrderEntryWeb

Application

OrderStatusWeb

Application

FutureWeb

Applications



Global eBusiness Strategy• eBusiness strategy integrated with other IT projects to be completed in

the three year time horizon• Investments in eBusiness infrastructure can be made with confidence

App ServersP

ersonalization

AppleWebObjects

SunNetDynamics

SilverStream

B2B

XM

L

Open Market TransactIBM Net.CommerceEtc ...

Netegrity SiteminderVignette StoryServerEtc ...

Sterling Commerce(CONNECT, GENTRAN)

webMethods B2B 3.0

E-C

omm

erce


Prioritization ProcessGlobal IT

Strategy &Roadmap

eBusinessStrategy



OrderEntryWeb

Application

OrderStatusWeb

Application

FutureWeb

Applications



P4 Prioritization Process

P4: eBusiness Project Portfolio Prioritization Process

1: eBusiness Criteria

2: Define PotentialProjects2: Define PotentialProjects

Customers

Athens Group

DPI Execs

Customers

Athens Group

DPI Execs Distinct projects which mayprovide value in the eBusiness space

StakeholdersWhich stakeholders are most important to advance or maintain through eBusiness projects?

Business GoalsWhich DPI business goals are most important to advance through new eBusiness projects?

ImplementationCriteriaWhich implementation criteria are most important to consider when trading off potential projects?

PrioritizedPortfolio

Fund,Implement,Iterate

3: Rate Projects

Rate the capability of each project to fulfill each criteria

Athens Group

DPI Execs

Scor

ing

Alg

orit

hm


Web Platform Package Selection


eBusinessStrategy



OrderEntryWeb

Application

OrderStatusWeb

Application

FutureWeb

Applications



Web Platform Package Selection• Systematic analysis of

platform technologies and vendors with consideration of many factors:

- Scalability- Security- Personalization- Internationalization- Fault tolerance- Developer availability- etc …

• Client can make a rational selection based on a documented comparison of the options


Online Order Entry System


eBusinessStrategy



OrderEntryWeb

Application

OrderStatusWeb

Application

FutureWeb

Applications



Online Order Entry System

•Order entry wizard leads the customer through a complex process step-by-step

•System creates custom screens for an order based on answers from earlier screens

•Orders are entered more quickly and with fewer errors

•Client saves time and money; Client’s customers save time and money.


Order Status System


eBusinessStrategy



OrderEntryWeb

Application

OrderStatusWeb

Application

FutureWeb

Applications



Order Status System•Customers can see the status of all their orders in just the format they want – even set up multiple custom views.

•Customers can get additional details on an order with another click of the mouse.

•Customers can set up a schedule to get status delivered by email or fax just when they need it.

•Customers can even request that order status be delivered to their local system via XML.


Questions/Discussion


Athens Group Overview


Mission Statement• Be a trusted partner of our clients.• Provide solutions to business problems through a marriage of

systems thinking and appropriate technology.• Maximize the potential of knowledge workers through a work

environment based on mutual support, cooperation, and professional excellence.

• Provide the foundation for high quality of life for our employees.• Demonstrate that humanizing the workplace is not only

compatible with business success, but is a competitive advantage.

• Be an asset to our communities.


How We Do It: Our Strengths

• The best people• The right process• The appropriate

technology


How We Do It: People

• Our employee-owned model attracts the very best talent

• Industry-leading retention rate• Employee-owned = Personal responsibility• Respect for the project and project team

The best people = the best results for our clients


How We Do It: Technology

• Technology breadth and expertise• Industry-leading domain experience• Commitment to up-to-date technical training • No ties to any particular vendor, environment or

tool-set


How We Do it: the Right Process

Needs Assessme

nt

Plan

Project

Plans

Specifications

Databases

ROI Analysi

s

Risk Analysi

s

Adap

tIm

prov

e

Observe

Analyze

Management Plan

Risk

Reduction Planning

Estim

atin

g

Training

Configuration

Managem

ent

Qu

ali

tyR

esearch


Value to Clients

• Three levels of value: – Technology– Process– Domain

• High-value consulting • Experienced (>15 years on average)


Additional Value to Clients• Experienced consultants that combine business

strategy with technical knowledge• Proven, effective process• Automated tools • No allegiance to a specific vendor• Extensive domain and industry knowledge• Full Lifecycle Capability


What We Do: Knowledge Centers

• Knowledge Center: a specific solution area in which Athens Group has deep experience and proven expertise.

• Knowledge Centers are supported by our knowledgebase of successful client engagements and internal investments.


Employee Value Proposition

• Organizational: Employee Control– Employee ownership– Democratic decision-making

• Professional: Challenge and Growth– Technology, process and domain skills– A commitment to training

• Personal: Quality of Life– Excellent compensation and benefits– Overtime discouraged, not congratulated


Value to Community

• Five Leadership Austin alumni ++• Two Profiles in Power award winners• One assistant faculty member at Southwest Texas State

University


Value to Community (2)

• Community leadershipCommunity leadership: Greater Austin Chamber of Commerce, Austin YouthWorks, Open Door School, Austin Music Commission, Women’s Legislative Days Steering Committee, Big Brothers Big Sisters, United Way, Leadership Austin, Leadership Texas and GACC Blue Ribbon Task Force on Light Rail, ACC Center for Non-Profits

• Professional leadershipProfessional leadership: Software Quality Institute, Her Domain of Austin, Delphi Users Group, Oracle Users Group, Austin Software Council, Austin Software Process Improvement Network (ASPIN), Technology Business Network, Computer Science 2000

defining and implementing technology strategy

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