Managing IT Capital Investment Pertemuan 25-26

Matakuliah : A0774/Information Technology Capital Budgeting

Tahun : 2009

Manage IT as a Strategic Asset• Partnering for Success• The Importance of Relationships• Investing in Values

Manage IT as a Strategic Asset• Partnering for Success

– IT needs to be organized to rapidly respond to the needs of individual business groups

• The Importance of Relationships• Investing in Values

Manage IT as a Strategic Asset• Partnering for Success• The Importance of Relationships

– Competence– Mutual respect– Credibility– Business knowledge and perspective– Communication

• Investing in Values

Manage IT as a Strategic Asset• Partnering for Success• The Importance of Relationships

IT is no longer a cost center and a growing number of highly successful firms are recognizing this. IT is an investment and should be managed as such to increase revenue and profits. However recognizing and managing IT as an investment rather than a cost center is a difficult task and requires a significant cultural shift in most companies

• Investing in Values

Manage IT as a Strategic Asset• Partnering for Success• The Importance of Relationships• Investing in Values

– Consistent– Strategic– Adaptable– Repeatable under dynamically changing circumstances

Manage IT as a Strategic Asset• Partnering for Success• The Importance of Relationships• Investing in Values

Values are guiding principles, basic beliefs that are fundamental assumptions on which all subsequent actions are based.

Values are the essence of an individual or group and provide guidelines by which to make consistent decisions.

Investing in Actions

WhereWe Are

Actions Success

Inseparable from the business completely

aligned with business goals

Partnering Business teams

Managing IT as a strategic assets

Investing in Values

WhereWe Are

Actions Success

Inseparable from the business completely

aligned with business goals

Partnering Business teams

Managing IT as a strategic assets

Values

Partnering• Business Cases• Business Teams• Partnering Within IT• Operating Principles

Partnering• Business Cases• Business Teams• Partnering Within IT• Operating Principles

• Business Cases• Are the instruments through which project

priorities are created and set by a joint business unit/technology teams.

• Are required to address questions of enterprise business goals and technology goals

• Process forces individuals and organizational units to engage in a continuing dialogue.

• Business CasesAlignment with business objectives is a natural consequence

of jointly developed business cases for projects that fall within the business’s strategic plan.

Approval of the business case moves the business agenda forward and creates partnership and understanding during the process

A not insignificant objectives of this process is the respect of the business for IT’s understanding of the business and its strategic needs.

• Business Teams• Represent the fundamental relationship for

– Identifying– Specifying– Prioritizing– Creating IT value

• Business Teams

Business Unit ChampionChief Liaison with ITManages Project Champions

IT Systems Manager

Business Project ChampionDefines Business Requirements and ScopeManages Business Team

IT Systems Leader

Business Unit ChampionDedicated Team of Business UsersAccountable for Successful Capture and Implementation of Business Requirement

IT Developers

Partnering Within IT• Every member of a department needs to understand and

be kept up to date on any information that relates to what they are doing and what their partner are doing.

• Delegation of authority to the lowest practical level allows new ideas to be tested constantly on the front lines in multiple situations simultaneously.

• Many opportunities are recognized only at the front lines. This opportunities may be fleeting if not recognized at the source when they occur.

Partnering Within IT

NecessaryEvil

* Fix it Staff* Maintenance* No Client Services* No Business Coordination

ServiceProvider

* Customer Service Oriented* Performance Management* Standards* Help Desk* Training* Productivity* Business Apps

Business Partner

* Partnering Matrix* Revenue Enabling* Product Creation* Business Alignment* Relationship Management* Education

The evolution of IT as a business partner

Partnering Within ITEvolution of Alignment

  Necessary Evil Service Provider Business Partner

INFORMATION TECHNOLOGY

Maintenance

Customer service orientedPerformance managementMetricsStandards

Strategic AssetAligned with the business

APPLICATIONS DEVELOPMENT

Back officeProductivity tools

Management information Back office

Revenue enablingProduct creationWorkflow management

PERSONAL RPODUCTIVITY SERVICES

NonexistentWorkstation SupportTrainingHelp Desk

Desktop DevelopmentEducationIntegrated supportPersonal relationship

APPLICATION ARCHITECTURE

Dedicated by mainframe O/S

No application architecture group needed

Discipline and consistency of mainframe world is unavailable as an enterprise solution

Systems integration shows the need for an application architecture

Application architects only available through consulting firms and systems integrators

Strategic architecture includes adaptable application architecture

Aligned with the businessOperating efficienciesLeveragabilitySpeed to marketCost effectiveWeb enabled

Operating PrinciplesManaging IT as a Cost Center vs Managing IT as an InvestmentManaging IT as a Cost Center vs Managing IT as an Investment

Cost Center Management Managing IT as an Investment

Business throws projects requirements over transom (often as solutions masquerading as requirements)

Business teams including IT as a "business" work together to specify requirements

Priority set by user intuitionJointly developed business case used to determine

priority

Acceptations testing done by users when time permitted

Acceptance Testing done to exacting standards and scheduled with accountabilities and deliverables

Infrastructure as a reactive afterthoughtStrategic architecture/infrastructure as a

competitive advantage

Application development as an artApplication development as a science (discipline

and rigor)

Operating PrinciplesCost Center Management Managing IT as an Investment

Infrastructure as overhead IT Infrastructure as an Internal Service Provider

Task related communication (isolated) Relationships

Accept user requirements verbatim. Even worse, creating user requirements without the user

Ask the right questions and jointly specify requirements

No iterative requirements document Prototypes and proof of concepts

Projects belong to IT onlyAll projects require business units champions and

business project champions

Technology for technology's sake Alignment with business objectives

Reactionary/task oriented Proactive/relationship-objectives

Operating PrinciplesCost Center Management Managing IT as an Investment

Working in silos Teamwork/synergy

Mistrust Credibility

IT for IT's sake Customer-centric

Lack of metrics Performance metrics

Bureaucratic Adaptable

Follow orders Creative-Solutions

Authoritarian decision making Decentralization of decision making

Cost containmentBuild for efficiency and effectiveness, architect for

growth and business alignment

Venders managed by the users Vendors managed by IT

Vendor invoices go to the user Vendor invoice go to IT