IT Director Strategy Day UK Tech Landscape Neil Macehiter

mwd
macehiterward-dutton
The challenges of IT-business alignment
A presentation for Microsofts TechNet IT Directors Strategy Day

Neil Macehiter, Partner
advising on IT-business alignment
Agenda
A brief introduction to MWD Aligning IT and business Understanding business processes Understanding managed IT services Summary
Macehiter Ward-Dutton 2005
www.mwdadvisors.com
A brief introduction to MWD

Strategic advice and consulting Focus on issues concerning IT-business alignment
Driving more business value out of enterprise IT Not about the nuts and bolts of individual technologies
Core: two highly experienced industry analysts / practitioners

Sun, Oracle, Sybase, Ovum, Deloitte Consulting, etc
Based in UK, Europe-wide capability
www.mwdadvisors.com
mwd
Aligning IT and business
www.mwdadvisors.com
4 advising on IT-business alignment
IT-business alignment: multiple angles

Its not just about building stuff that the business will use
Business
Investment in capability Delivery of value Change capabilities, limitations
Change implications
IT
www.mwdadvisors.com
Why now?
Globalisation
Customers, partners, suppliers and competition Connectedness driving sophisticated value chains
Transparency
Industry regulations, consumer pressure and competition driving openness
Service focus
Differentiation and shareholder value increasingly derived from service experience
www.mwdadvisors.com
From a UK perspective
A healthy economy albeit growing at a low rate
Spurred by public sector investment With a knock-on effect on the IT market
Globalisation
>4000 (+400/year) UK-Sino joint ventures Vonage launches UK VoIP service (01/05) Tesco enters mortgage market with First Active (11/04)
Transparency
Corporate Responsibility (CORE) coalition Government initiatives e.g. Extractive Industries Transparency Initiative International Financial Reporting Standards (IFRS)
Service Focus
BT launches mobile music service with UBC Media and Virgin Mobile (06/05) Amazon Services Europe to underpin M&S e-commerce systems (04/05)
Macehiter Ward-Dutton 2005 www.mwdadvisors.com 7
The real world

From Build, or buy vs. build Back office Personal productivity desktop Data processing Outsourcing vs. in-house delivery Application implementation Towards Buy AND build AND integrate Front office and beyond Productivity desktop + global access to resources Communication, collaboration, integration Multi-sourcing
Business area investment focus
IT access environment
Technology innovation focus
Capability supply
Older approaches fail to capture reality re: integration, communication, collaboration, supply complexity
A common language is the essential starting point
Business
Investment prioritised in terms of business need Systems that deliver value to the business Clear direction from the business about focus, strategy Collaborative approach to implementing business change
A common, agreed representation of business activity, goals
?
IT
+
A common, agreed view of how current and future IT provides structured support to the business in this context
www.mwdadvisors.com
Reflecting the environment in IT-business alignment

Business
BUSINESS
ST R AT E GY
Business processes form the foundation of a common language
IT defines and delivers business level services which support the right processes, the right way
Managed IT service Managed IT service
Managed IT service Managed IT service
Managed IT service
IT
A P P L I CAT I O N S & I N F O R MAT I O N I N F RA ST R U CT U R E

www.mwdadvisors.com 10
mwd
Understanding business processes
www.mwdadvisors.com
The challenge
Business process
Applications The business Activities, processes Data
The real world doesnt decompose nicely and IT isnt just about things you build in-house
Providing structured support for business processes means understanding scope & scale of interactions
From Towards
Data design tightly coupled to application design, and application design to user requirements very restricted view of process needs
Macehiter Ward-Dutton 2005 www.mwdadvisors.com
Loosely-coupled resources provide services which are designed to support the interactions that take place within a business process
13
Business process
Business process
IT approaches must consider business process support more broadly
Support scenario: a mesh of interactions
Business process
Transactional services
Information services
Communication & collaboration services
We have to model more than just transactional applications

A universe of business processes [1]

A hierarchy of business processes
Strategy processes instances oversee instances of management processes
Management processes instances oversee instances of execution processes
Execution processes instances handle particular units of work within business activities
www.mwdadvisors.com
15
A universe of business processes [2]

Contribution to competitive differentiation
Non-differentiating
(focus should be on efficiency) Macehiter Ward-Dutton 2005 www.mwdadvisors.com
Differentiating
(focus should be on flexibility) 16
Observations on the nature of business processes
Non-differentiating
Differentiating
A resulting (wider) view of technical architecture

Strategy business processes Level of process abstraction High
Collaboration tools
Management business processes

Business intelligence tools
Simple portal Traditional app. Development tools & frameworks Workflow Pure BPMS
Execution business processes
Low
Composite service-based application development & integration
Business functions
Non-differentiating
Macehiter Ward-Dutton 2005 www.mwdadvisors.com
Differentiating
18
mwd
Understanding managed IT services
www.mwdadvisors.com
So what is an IT service?
Provide automated support for my sales force Update customer details CRM database
Line of business perspective
Developer perspective IT operations perspective
www.mwdadvisors.com
20
Managed IT services aligned with business processes

Users experiences of managed IT service
Lifecycle services
Managing the lifecycles of business functions and infrastructure
Business function services

Automating business functions
Infrastructure services
Providing the platform
www.mwdadvisors.com
21
Contracts bring obligations for suppliers and consumers
Message Format Message Sequence Functions

Functional Terms
Security Response Time Throughput
QoS Terms
Usage Cost Liability Clauses Trust
Commercial Terms
www.mwdadvisors.com
22
An organising model for service-oriented IT in the context of IT-business alignment

Functional contract aspects Quality-of-Service contract aspects
How can we trade-off flexibility / reusability of business function services with efficiency / openness requirements? How can QoS responsibility be delegated to infrastructure in a way that is easily flexed in response to changing requirements?
Commercial contract aspects

How can we ensure that the right consumers get the right kind of experience from these services, and do so cost-effectively? How can we minimise the cost and risk of overall process support while creating an business support environment with more moving parts? How can we demonstrate the overall value of the services that the IT organisation and its resources provide to the business?
Business function services
How can we align flexibility / reusability requirements for business software functions, to business needs? How should infrastructure elements provide their services to different business functions? How should infrastructure be optimally managed? How should we differentiate lifecycle service levels for different kinds of business function, infrastructure?
Infrastructure services
Lifecycle services
How should we define and enforce development, faultfix and change-request priorities?
www.mwdadvisors.com
23
An example business function service design

Strategy business processes Level of process abstraction High Management business processes Reusability importance increases Execution business processes
Low
Activity functions
Technical functions Non-differentiating

Differentiating
Business activity role
mwd
Summary
www.mwdadvisors.com
Summary
Todays business environment brings IT-business alignment to the fore
In terms of investment, delivery and change
Business processes provide a common language

But the organisational context of real-world business processes is complex
Managed IT services must align with business process priorities

Its about more than business function services
Services and their contracts provide an organising model for service-oriented IT


IT Director Strategy Day UK Tech Landscape Neil Macehiter

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IT Director Strategy Day UK Tech Landscape Neil Macehiter

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mwd

The challenges of IT-business alignment

A presentation for Microsofts TechNet IT Directors Strategy Day

advising on IT-business alignment

Macehiter Ward-Dutton 2005

A brief introduction to MWD

 Core: two highly experienced industry analysts / practitioners

 Based in UK, Europe-wide capability

Macehiter Ward-Dutton 2005

Aligning IT and business

Macehiter Ward-Dutton 2005

4 advising on IT-business alignment

IT-business alignment: multiple angles

Macehiter Ward-Dutton 2005

Macehiter Ward-Dutton 2005

The real world

Business area investment focus

Technology innovation focus

A common language is the essential starting point

A common, agreed representation of business activity, goals

Macehiter Ward-Dutton 2005

Reflecting the environment in IT-business alignment

Business processes form the foundation of a common language

Managed IT service Managed IT service

Managed IT service Managed IT service

A P P L I CAT I O N S & I N F O R MAT I O N I N F RA ST R U CT U R E

Macehiter Ward-Dutton 2005

Understanding business processes

Macehiter Ward-Dutton 2005

11 advising on IT-business alignment

Applications The business Activities, processes Data

IT approaches must consider business process support more broadly

Support scenario: a mesh of interactions

Communication & collaboration services

We have to model more than just transactional applications

A universe of business processes [1]

Management processes instances oversee instances of execution processes

Macehiter Ward-Dutton 2005

A universe of business processes [2]

Observations on the nature of business processes

A resulting (wider) view of technical architecture

Management business processes

Execution business processes

Composite service-based application development & integration

Understanding managed IT services

Macehiter Ward-Dutton 2005

19 advising on IT-business alignment

Line of business perspective

Developer perspective IT operations perspective

Macehiter Ward-Dutton 2005

Managed IT services aligned with business processes

Business function services

Macehiter Ward-Dutton 2005

Contracts bring obligations for suppliers and consumers

Message Format Message Sequence Functions

Security Response Time Throughput

Usage Cost Liability Clauses Trust

Macehiter Ward-Dutton 2005

An organising model for service-oriented IT in the context of IT-business alignment

Commercial contract aspects

Business function services

Macehiter Ward-Dutton 2005

An example business function service design

Core: two highly experienced industry analysts / practitioners

Based in UK, Europe-wide capability

Business processes provide a common language

Managed IT services must align with business process priorities

Services and their contracts provide an organising model for service-oriented IT