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IT Strategy and
Business Strategy:
A Path to Alignment
Presented by:
Patrick Sue, Senior Consultant, Chartwell Inc.
Alonso Pérez, Partner, Consulting Director
and Practice Leader, Chartwell Inc.
from concept to outcome
Outcomes of Presentation
Objective of Presentation
What is Strategy?
In The Rise and Fall of Strategic Planning, Henry
Mintzberg identified the following aspects of
strategy in the literature:
Directional
• A pattern of behaviour over time
• An organization’s perspective on its business or its
concept of it
• A position, namely the determination of particular
products in particular markets
• A direction or guide going forward
Actionable
• A plan or course of action into the future
What is IT Strategy?
• Directional
– A pattern of behaviour over time, expressed as
principles, e.g. buy vs. build
– An IT organization’s perspective on its “business”,
expressed as policies, e.g. a Service Oriented
Architecture approach, outsourcing of applications
development
– A position on particular products, expressed as
standards - Linux but not Microsoft Windows,
MySQL not Oracle
– A direction or guide, expressed as defined target
architectures
• Actionable
– A course of action, expressed as a portfolio of
planned projects to be executed
February 22, 2006 (c) Chartwell Inc. 5
What does it mean to align IT from concept to outcome
* UPS vs. FedEx: Ground Wars, Business Week, May 21, 2001; IT Governance on One Page, Sloan, November 2004
February 22, 2006 (c) Chartwell Inc.
8
from concept to outcome
Transformation Enterprise
Strengths & Business
Business Strategy
Ideas
Weaknesses
Environmental Scan
Analysis
“To Be”
Products/Services
Technology
Environmental Scan
Business
Architecture 10
February 22, 2006 (c) Chartwell Inc.
IT Strategy – Directional
from concept to outcome
Functional Architectures
“To Be” Required
Products/
Capabilities
Services Retire Change in
Product information demand for the Product not
retired same information developed/ product
revised/ Log, classify, Regulations/ retired Product Regulatory prioritize Define information Planner/ introduced change information produc t/inventory Communications NO,
reject product/inventory change (demand, Change to Specialist product
change cost, fulfillment) knowledge or Product technology requirement revised
Marketing/
NO, revise awareness
campaign product
YES
YES
Review
Review Approve? Approver recommendation Approve? recommendation
NO
YES YES
Develop
Information information
Revise Product product
information Developer
product
Architecture
Unconstrained Logical
Logical
Fe
br
ua
ry
22
,
20
IT Principles, 06
(c)
Current Ch
Policies, & art
Applications we
ll
Standards In
Physical c.
+
Applications Portfolio
Target
Applications
11
Strategy Development - Actionable
Enterprise Business
from concept to outcome
Business Capability Gap
Strategy Analysis
Transformation
Initiatives
+
IT Gap
Target IT Analysis
Architecture
Costs & Benefits
+
IT and Business
Projects
Initiative
Prioritization
February 22, 2006 (c) Chartwell Inc.
1
2
Sample IT Strategy Principles from concept to outcome
Surveil
lance
Filing
Compliance Issue
Decision/Order
Energy Market
Interrogatory
Monitorin
Process Group
Applications
CCCUCUU
ole
Investigation
Enforcement
Enforcement
Stakeholder
Submission
Application
Participant
Complaint
UUCCUUUU
Transcript U Appeals
UUUUUUUU
Appeals
Response
Applications
Individual
Licence
Enquiry
Appeal
Board
Order
Audit
Dat
a
UCCCCUU from concept to outcome
Processing
Consultations
Policy and Code
UUCCCCUU
Management Development
Contact / Call / Call / Correspondence
CCCC
Handling
Correspon-
dence / RULES
U U U U U Complaint Resolution
Complaints
Audit of M arket
UUUUUUUU
Management
Participants
U C Complaint Resolution Policy
Compliance &
Enforcement Compliance and Code
U U U U C U C M arket Issues
Management
M anagement
Energy M arket
C
Surveillance
M onitoring of M arket
CC
Participants
Audit of M arket UU
Monitoring & U U
Participants
U
Surveillance
Energy M arket
UC
Analysis Surveillance
M onitoring of M arket
UC
Participants
Policy and Code
Rules
UU UU
Development
Management
Policy and Code
UUUUU
Development
UU
UU
CC
14
Unconstrained Applications
Architecture February 22,
2006 (c)
Chartwell Inc.
from concept to outcome
15
Current Applications Portfolio
Assessment Framework
High 100
CANDIDATES FOR:CANDIDATES FOR: 0
50100
“Enhance “Maintain”
business value”
50
• Should be replaced if
Low
CANDIDATES FOR:CANDIDATES FOR:
the replacement cost
can be justified against
“Retire or “Enhance
the limited value added
• Replacement with
Replace”technical
COTS as a distinct
project if cost justified
, 2006 (c) Chartwell Inc. from concept to outcome
Business Value
16
from concept to outcome
Governance
Portfolio Planning
from concept to outcome
18
from concept to outcome
Defined, standardized
processes that are followed
DEFINED
as documented
Initiative
Enterprise Portfolio
Transformation
Business
Ideas
Strategy
Transformation
Initiatives
Benefits
from concept to outcome