Over the last few months I have met or spoken to a significant number of Forrester clients who are undertaking a business architecture initiative. As you can imagine, these initiatives have various sponsors and are at various levels of maturity. Some business architecture (BA) initiatives are being driven by chief information officers (CIOs) and chief technology officers (CTOs) wanting to get a seat, and become an influencer, at the strategic decision-making table. Whilst others are being driven by business executives, who either believe business design and transformation is a business responsibility or that IT has insufficient business competency to understand and deliver what is required.
The different levels of maturity struck me, as just like the English Premier League (that’s where real football is played, for those not in the know) there are the elite (the big boys – top five or six teams) and there are the also-rans/others. There are also the elite BA teams and the non-elite BA teams. The gap between these two groups is growing, which will be a nightmare for a non-elite BA leader benchmarking his initiative against other organizations. Where one could argue in the football reference it is money that divides the two groups, as this attracts better players and creates better teams, with BA teams it appears to be more based on focus. Less mature and non-elite BA teams focus their efforts primarily on the building of BA, reacting to siloed demand and then selling or pushing BA artifacts to stakeholders in the hope that they find these artifacts useful. Whereas, the elite BA teams focus on addressing stakeholder needs and the use of BA, delivering relevant BA services and allowing stakeholders to pull the BA artifacts that address the challenges they face.
Unfortunately I don’t often hear “strategy” and “IT service management (ITSM)” in the same sentence, unless of course someone is maligning the ITIL 2011 Service Strategy book or if an organization is justifying a significant investment in a new ITSM tool (to me this is too often the breeding ground for failed aspirations). Alternatively we often talk about (and are consumed by) tactical ITSM issues and our tactical responses. So where and what is your ITSM strategy? And where is your ITSM strategic plan?
If you have answers to these questions you probably don’t need to read this blog so feel free to choose another. If you don’t, don’t you think you should? I’ve stolen some written-word from my colleague Jean-Pierre Garbani to get you thinking.
What’s your strategy for ITSM strategy?
I’m not going to answer this – I just thought it a funny question. Better starter questions are probably: “What do I mean by strategy?” and “What is strategic planning?”
I can’t help but use the ever-useful Wikipedia for the first:
For many traditional IT organizations, BT Strategic Planning is a new approach to developing technology strategy. As such, it often raises more questions than answers. If you’d like to know how to get more answers then this blog post is for you (if not you can skip the rest).
To help you get stuck in and apply the strat planning framework in your environment, we’re scheduling a couple of webinars and a two-day workshop for this September. In the first webinar on Sept. 11, we’ll go into the best practices CIOs put in place in order to set up their teams for success in developing business technology strategy. In the second webinar on Sept. 14, we’ll explore the levers of BT value and how to successfully communicate BT value. While both webinars are connected, you don’t need to attend the first to get value from attending the second.
And if you are interested in rolling up your sleeves some more, I’m facilitating a two-day workshop on BT Strategic Planning on Sept 25th and 26th in San Francisco. This open workshop builds upon the successful custom workshops we deliver for clients looking to apply Forrester’s planning framework. Over the course of two full, mind-bending days, you will go through the entire strategy planning framework and learn how to apply it in your organization.
As regular readers of my blog will know, I’ve been talking about moving beyond alignment for a number of years now. The fact is, too many CIOs have been able to get by on the basis of managing the technology black box — and CEOs and CFOs have been complicit in allowing these same CIOs the freedom to do what they want within tightly controlled budgets, not wanting to sully their hands with “all that technology stuff.” But those days are rapidly coming to an end. The technology genie is out of the bottle; today’s business-unit leaders are more dependent on technology than ever before, and they are also much more tech-savvy. CIOs can no longer hide behind the technology black box — it’s time to change the IT game forever. It’s time for IT to drive business results and connect all technology investments to business outcomes.
Today’s new CEOs are looking to CIOs and IT to make a direct impact on business goals from investments in technology. While every business must make technology investments to sustain operations, IT must move beyond simply keeping the lights on and connect the dots between effective growth strategies and new technology investments. This requires a different set of technology and business skills: different people, process, and technology in the IT organization. In fact, the organization is so different we now call it the business technology organization, or BT. The distinction between IT and BT is subtle but important. BT represents the fusion of the IT organization into the rest of the business. In a BT organization, the lines between IT and business units are blurred. What is important is a focus on the roles needed for effective business technology strategy execution. What’s not important are reporting lines.
Of late I’ve been considering a more mundane version of the ultimate question — what is the ideal metric to use when evaluating business technology strategies? The challenge is that we already have a diverse set of investment metrics from which to choose. There’s Return On Investment (ROI), Net Present Value (NPV), Internal Rate Of return (IRR) and Payback period to name a few of the most common. Yet I can’t help feeling they all lack a little something — the ability to connect the project with the desired business outcome, which for a strategy is the attainment of the goal.
Recently I’ve been working with clients to apply a different measure — the T2BI ratio:
Yes, that’s right — I’m suggesting CIOs should stop working on IT strategy. The days of developing a technology strategy that aligns to business strategy need to be behind us. Today’s CIOs must focus on business strategy.
Let’s face it: Does sound business strategy even exist today without technology? Most CEOs would likely agree that, unless you are running a lemonade stand, any successful business strategy must have solid technology at its core. The challenge for today’s CEOs is that, while planning business strategy in isolation from technology is sub-optimal, it remains the most common way business leaders develop strategy. And while there have been many great books about strategy, the specific challenges facing the CIO are largely absent.
It’s the perennial issue for many CIOs and often the No. 1 challenge for new CIOs: “How do I align IT with the business?” And while this is perhaps the most important challenge for IT groups struggling with a bad reputation across the business, it’s certainly not the most important challenge for IT groups with a solid track record of success. For these teams, the challenge is how to move beyond alignment.
In the report Beyond Alignment: BT Strategic Planning, I highlight how critical it is for IT to help formulate business strategy. The research suggests that how a firm develops and manages business strategy is pivotal to the question of how IT can move beyond alignment. Unfortunately, there are a number of challenges with this:
It's strange, but some things about the CIO role change very little from year to year -- and one of the most consistent priorities for CIOs has always been achieving better "alignment" with “the business.” But should this really be a top priority?
I can’t help it, I really dislike the term “alignment” -- it suggests to me that CIOs are trying to bring together two separate and distinct things: “the business” and “IT.” But the really successful CIOs already know this specific language sets everyone up to perceive IT as something apart from the business. And we all know that every business has technology woven intricately throughout -- to suggest technology is not a vital part of business success is simply wrong. So instead of talking about aligning IT with the rest of the business, we need to focus on ensuring the business is using technology to achieve defined goals and deliver business results.
Unfortunately, for many companies, IT appears to be in the software development business -- responding to “orders” from “internal customers” and busily delivering applications. CIOs need to ask: “what business are we in?” For most CIOs, the answer will undoubtedly NOT be the technology business. For these CIOs, the most precious skill IT can bring to the organization is business knowledge and process understanding coupled with technology know-how. By helping identify how technology can change the business dynamics and move the organization more efficiently toward its objectives, IT becomes the foundation for competitive advantage. In other words, IT needs to be in the business of helping shape business strategy.
According to an Advertising Age article that discussed a new IBM survey released today, many CMOs "believe that marketing's financial return on investment will become a key marker of success in the next three to five years." With continued economic turmoil, marketing leaders are facing increased pressure to measure their results, but faced with an overhwelming amount of data, finding the right KPI needles in the haystack of information can be overwhelming. To sift through this data overload, we are conducting research for a report on how leading marketers will be measuring success. Take our survey on ROI measurement to tell us how you are changing your ROI approach for 2012, and we'll send you a copy of the results so that you can see how others are navigating the ROI path.
Many clients have suggested their PMO mission is already elevated to this level. They now focus their efforts on everything from guiding business leaders through building a business case for the investments they want to make, to guiding decision-makers through selection from the portfolio of investment proposals, to tracking benefits realization and ROI after the fact. PMOs with this kind of business-focused, strategic mission have greater business impact and are often close partners with executives leading their firm.