running it like a business-- why?

AS a Business or IN a Business?

Copyright 2014 Thavron Solutions, LLC


“You should run IT Like a Business…”


“You should run IT as if it were a Business…”


Frustrated Client: I have no idea what these costs are for……

These are the numbers our model generated … : CIO

…There is no more detail I can use to explain it to you : CIO


Frustrated Client: You need more Financial Discipline & I need more transparency…


Frustrated Client: You said the new infrastructure would be in place for this launch……

We have activated our best people on this to move it forward : CIO


Frustrated Client: It feels like no one is accountable and the performance of your team is never measured…….


Frustrated Client: I just heard we had a data breach……

Our forensics team is doing analysis on the system… : CIO

First reports show it was mis-labelled in the CMDB, : CIO

This caused it to get into the wrong security zone… : CIO


Frustrated Client: How could your data be such a mess ……

Frustrated Client: This not only put our people at risk, it is impacting our market position ……


HelpDesk Mgr: We have the results of the quarterly Surveys……

How could the results be this bad? : Application Tower Lead


HelpDesk Mgr: They say we don’t deliver solutions that matter

HelpDesk Mgr: They say…..


CIO: I need to decide where to focus resources……

CIO: But I am not sure where we are making a difference…..


CIO: Time to draft a memo to the tower leads,

CIO: they can help me decide who needs the resources most.


Would this be different if weran IT Like a Business….. ?


“You should run IT Like a Business…..”



IT should provide cost transparency



IT should provide cost transparency, be accountable for their commitments,



IT should provide cost transparency, be accountable for their commitments, handle data and information reliably,



IT should provide cost transparency, be accountable for their commitments, handle data and information reliably, with services that solve business problems



IT should provide cost transparency, be accountable for their commitments, handle data and information reliably, with services that solve business problems and provide bottom line value.

Performance

CostSatisfaction

Risk

Value


Financial LifecycleProduct Lifecycle

TM

Service Portfolio as Product Portfolio Investment

• Create a Policy Statement -A policy statement is the statement that contains the Business (investor's) goals and constraints.




• Develop an Investment Strategy - This entails creating a strategy that combines the Business goals and objectives with current market and IT Capabilities.





• Implement the Plan Created -This entails putting the investment strategy to work, investing resources and dollars in high value services and optimizing low value services. Measure the results regularly.





• Implement the Plan Created -This entails putting the investment strategy to work, investing resources and dollars in high value services and optimizing low value services. Measure the results regularly.

• Monitor and Update the Plan -Both capabilities and the Business needs change as time changes. As such, it is important to monitor for these changes as they occur and to update the plan to adjust for the changes that have occurred.


Service Portfolio Metrics

• Governance

• Financial

• Service performance/utilization metrics

• Market Analysis

Dashboard that ties in Cost, Value, Risk, Satisfaction and performance for executive review.


Service Portfolio Metrics Details

• http://thavron.com/the-service-portfolio-management-maturity-curve/

• http://thavron.com/service-portfolio-management-dashboard-a-sneak-peek/

• http://thavron.com/the-it-service-portfolio/


http://thavron.com/the-service-portfolio-management-maturity-curve/

http://thavron.com/service-portfolio-management-dashboard-a-sneak-peek/

Metrics for Portfolio Management Governance

• % of Services with service valuation performed

• % of Services with documented customers

• % of Services with active business cases

• % of Services linked to business outcomes

• % of Services with documented risks


Financial Metrics

• Services ranked according to Business Value

• Cost of Service as % of Revenue for Product Line

• % of Services with ROI achieved /% progress for ROI

• Budget Control measures for services

– Variance

– Control chart

– Demand impact analysis


Performance/Utilization Metrics

These should have ties to the Pattern of Business Activities ( PBAs)

• Utilization/Uptake trends

• Overall ratio customer facing services/IT Services

• % support service ( cost and/or utilization) per service

• Service demand trends

• Complaints


Market/Lifecycle Analytics

• Benchmarking

• Market Trends versus Service performance


Managing Value, Cost, Risk, Performance and Satisfaction IN a business:


Introducing the SVA – Service Value Agreement


SVA Detail


SVA Detail Animation


SVA for the Business- starting data



The call to “Run IT Like a Business” is the Business requesting thatIT Better Manage the Cost, Risk, Performance, Quality and ValueOf the IT Business Services they provide IN the Business.



IT can achieve this by working in partnership with the Business to:

• Define a Service Portfolio




• Define a Service Portfolio• Manage to critical portfolio metrics




• Define a Service Portfolio• Manage to critical portfolio metrics• Negotiate together the SVA for each service




• Define a Service Portfolio• Manage to critical portfolio metrics• Negotiate together the SVA for each service• Make the results available in an executive dashboard for transparency

Discussion


Follow up questions? Nan Braun [email protected] 765.252.4509 / http://thavron.com /@ThavronSol

Thavron Biases

• Systems Thinking

• Universal Business Service Model

• Manufacturing

– Lean (MESA Lean Manufacturing Strategic Initiative Guidebook author, Toyota Method via GM/Delphi)

• Modeling/Frameworks

• Common Sense


running it like a business-- why?

Business

thavron solutions

llc cio

llc frustrated client

llc helpdesk mgr

business problems

resources cio

mess frustrated client

cost transparency