Posted by Alexander Peters, Ph.D. on March 18, 2011
One of our clients recently asked us: “If I pay €100 million for IT, how can I generate more value?”
I am going to answer this question in detail during the upcoming Forrester Teleconference “Managing Portfolios Of Business-Process-Oriented IT Services”, on March 23, at 11 am ET. This blog post is an invitation for you to register. Here are the key takeaways and a few supporting arguments:
- Many IT organizations are not well-positioned to generate more business value. Forrester survey data suggest that IT organizations have not managed to improve their levels of business/IT alignment during the past three years. A majority of IT executives view the deployment of business-process-oriented models as the future of IT. But unfortunately, there are only few organizations that have implemented business-process-oriented models in IT. Most concerning: Many of the existing business process management (BPM) initiatives run outside IT. And, ironically, they look just like IT because they focus on deploying BPM tools such as application suites rather than optimizing business processes.
- IT and BPM need a common demand framework to get business technology’s (BT’s) complexity under control and generate more business value. Many IT organizations have implemented business/enterprise architecture (EA) programs to get BT’s complexity under control and generate more value from IT and BPM investments. We assert, however, that these EA programs are necessary but not sufficient. BPM and IT need a common framework, which Forrester calls demand management (DM), that takes care of five additional processes: governance, investment, performance, and risk and portfolio management.
- A business process-oriented portfolio of BT services is the decision-making basis for DM. Using ITIL as the basis for the definition, Forrester identifies the key benefits of a business-process-oriented portfolio of services as: 1) setting up clear accountabilities for the business process owner, BPM, and IT; 2) providing information for the optimized utilization of BPM and IT capabilities; and 3) tracking the money spent on BPM and IT.
- DM needs to implement seven steps to develop business-process-oriented portfolios of BT services. These steps are: 1) fix the governance process; 2) establish the governance team; 3) identify core and main business processes; 4) define the catalog of business and technical services; 5) provide individual activity-based descriptions for services; 6) determine service life-cycle costs; 7) provide the total BT costs per service. These steps look simple, but for many organizations with immature BPM initiatives and IT organizations that are only “broadly aligned” with the business, the implementation of business-process-oriented portfolios of services is transformational.
I look forward to welcoming you at the teleconference next Wednesday, 3/23 at 11am ET.