Category Archives: Business Alignment
>Simplifying IT Performance Measures
There is the old adage that you can only manage what you measure.
The problem is that most IT organizations either aren’t measuring much, aren’t measuring meaningful indicators, or aren’t measuring in a way that is aligned to the business.
Hence, we have organizations that can’t articulate, get their arms around, or seem to improve their IT performance—because they don’t really even know what their performance is—can anyone even spell p-e-r-f-o-r-m-a-n-c-e? While other organizations, turn out 32 page weekly performance reports in 10 point font that brings no true sense of “are we hitting or missing the mark” to anyone.
There is an interesting article in InformationWeek on a simple method for doing performance metrics for IT called “A Simple Scoring System for Complex Times.”
Obviously nothing is so simple, but the basic premise is that the IT organizations uses a scoring system of -1, 0, and +1 to capture the following:
– “Screw-ups” (-1)—This includes systems or network that goes down, projects that go bad, etc. While we want to minimize these, we don’t necessarily want to drive this category to nothing, since the cost for eliminating every possible error likely outweighs the benefits.
– “Doing the expected” (0)—This means keeping operations running or delivery projects on time and within budget. While this does not usually win the IT department lots of kudos, this category of operations is critical because it is about “keeping everything working smoothly.”
– “The wins” (+1)—This is where we innovate for the organization and encompasses adding new functionality and enhancements that create tangible business improvement. “+1 are what it’s all about. They’re why most of us got into this profession in the first place.” Clearly, not everything we do can be +1’s, since we have to maintain basic IT operational functions and not just add the new proverbial “cool stuff”, and also practically speaking because, the organization “can’t absorb the pace of change.”
So to some extent there is a healthy balance between making some mistakes from which we learn and grow (-1), creating an environment of operational excellence (0), and driving innovation for true business impact (+1).
In addition to measuring the indicators that IT organizations set out in their IT strategic and operational plans, this high-level scoring method could add a summary perspective for a straightforward CIO dashboard.
>Taking the Politics out of Enterprise Decision Making
Some people say power is primarily exerted through military might (“hard power”), others says it is through use of diplomacy—communications, economic assistance, and investing in the global good (“soft power”). Then, there is a new concept of employing the optimal mix of military might and diplomacy (“smart power”).
It’s interesting to me how the Department of Defense—military approach—and the Department of State—diplomatic approach—is as much alive and well in our enterprises as it is in the sphere of world politics to get what we want.
At work, for example, people vie—some more diplomatically and some more belligerently—for resources and influence to advance their agendas, programs, projects, and people. This is symptomatic of the organizational and functional silos that continue to predominate in our organizations. And as in the world of politics, there are often winners and losers, rather than winners and winners. Those who are the “experts” in the arts of diplomacy and war (i.e. in getting what they want) get the spoils, but often at the expense of what may be good for the organization as a whole.
Instead of power politics (hard, soft, or smart), organizations need to move to more deliberate, structured, and objective governance mechanisms. Good governance is defined more by quantifiable measures than by qualitative conjecture. Sound governance is driven by return on investment, risk mitigation, strategic business alignment, and technical compliance rather than I need, want, like, feel, and so forth. Facts need to rule over fiction. Governance should not be a game of power politics.
Henry Mintzberg, the well-known management scholar, identified three mechanisms for managers to exert influence in the organization (Wall Street Journal, 17 August 2009):
1. Managing action—“managers manage actions directly. They fight fires. They manage projects. They negotiate contracts.” They get things done.
2. Managing people—“managers deal with people who take the action, so thy motivate them and they build teams and they enhance the culture and train them and do things to get people to take more effective actions.”
3. Managing information—“managers manage information to drive people to tale action—through budgets and objectives and delegating tasks and designing organization structure.”
It is in the third item—managing information—that we have the choice of building sincere business cases and creating a genuine call to action or to devolve into power politics, exerting hard, soft, and smart influence to get what we want, when we want it, and how we want it.
When information is managed through the exertion of power, it can be skewed and distorted. Information can be manipulated, exaggerated, or even buried. Therefore, it is imperative to build governance mechanisms that set a level playing field for capturing, creating, calculating, and complying with a set of objective parameters that can be analyzed and evaluated in more absolute terms.
When we can develop decision support systems and governance mechanisms that take the gut, intuition, politics, and subjective management whim out of the process, we will make better and more productive decisions for the enterprise.
>Comments from OMB’s Chief Architect: Kshemendra Paul
>Recently, Kshemendra Paul, Chief Enterprise Architect, at the President’s Office of Management and Budget (OMB) made the following critical comments to me about business cases and pilots and incorporating these in the Systems Development Life Cycle:
“I was online and came across your site –
I had two comments I wanted to share. First, I would recommend you highlight a business case step, a formal decision to move out of select/conceptual planning and into control. While this is implied, it is such a crucial step and we don’t do it well – meaning that we don’t force programs to work through all of the kinks in terms of putting forward a real business case (tied to strong performance architecture).
Also, this is a step that is inevitably cross boundary – either on the mission side and for sure on the funding side.
Second, I’d like to see more emphasis on smaller scale rollout or piloting. The goal of which is to prove the original business case in a limited setting. Nothing goes as planned, so another objective is to have real world data to refine the over all plan.”
I completely agree with Kshemendra on the need to develop business cases and do them well for all new initiatives.
Organizations, all too often, in their zeal to get out new technologies, either skip this step altogether or do it as a “paper” (i.e. compliance) exercise. Symbolic, but wholly without intent to do due diligence and thus, without any genuine value.
Therefore, whenever we plan for new IT, we must ensure strategic business alignment, return on investment, and risk mitigation by developing and properly vetting business cases through the Enterprise Architecture and Investment Review Boards.
It’s great to want to move quickly, get ahead of the pack, and gain competitive advantage by deploying new technologies quickly, but we risk doing more harm than good, by acting rashly and without adequately thinking through and documenting the proposed investment, and vetting it with the breadth and depth of organizational leadership and subject matter experts.
Secondly, as to Kshemendra’s point on doing pilots to prove out the business case. This is an important part of proofing new ideas and technologies, before fully committing and investing. It’s a critical element in protecting the enterprise from errant IT investments in unproven technologies, immature business plans, and the lack of ability to execute.
Pilots should be incorporated along with concept of operations, proof of concepts, and prototypes in rolling out new IT. (See my blog http://usercentricea.blogspot.com/2007/08/conops-proof-of-concepts-prototypes.html)
With both business cases and pilots for new IT projects, it’s a clear case of “look before you leap.” This is good business and good IT!
>Andy Blumenthal Presents How Enterprise Architecture Shapes IT Governance
>Check out this SlideShare Presentation:
>What Not to Tell Your Boss and Enterprise Architecture
ComputerWorld Magazine, 20 June 2008, tells us five things you don’t want to tell the CIO and which I believe tracks closely with the enterprise architecture function and goals, as follows:
- “All about the technology — and nothing about the business”—just like enterprise architecture is about business driving technology, rather than doing technology for technology’s sake, so too the CIO is interested in aligning business and technology. So don’t just go to the CIO talking technology solutions unless you have a clear understanding and can articulate the business requirements.
- “There’s only one solution”—in enterprise architecture and IT governance, we validate requirements against the architecture—the baseline, the target, and the transition plan. It is especially important to check if there are existing systems, products, and standard that can be used to meet user requirements, rather than building or acquiring something from scratch. There is rarely only a single technology solution for a business problem. Therefore, we need to evaluate the proposed new IT investment in terms of the return on investment, risk management, strategic business alignment, and technical compliance. Additionally, we need to review the analysis of alternatives to make sure we are effectively managing our scarce IT resources.
- “Bad opinions about your colleagues”—EA planning and governance makes information transparent and enables better decision making. With EA information, vetting of IT investment and collaborative decision making, there is no need to point fingers at each other over failed IT projects. Instead, through sharing information and bringing IT project stakeholders together, we all have input into the decision process and share the project risk.
- “There’s no way”—With enterprise architecture, rather than say there’s no way to achieve enterprise goals or overcome technical challenges, we develop a target and plan for how we will do it. No, the goals are not achieved overnight, but rather by following a meticulous and vetted plan, usually over a period of three to five years, we can transform the enterprise.
- “A surprise”—Bosses don’t like surprises. In a professional setting, we usually like rational thinking, process, structure, and planning, so that we can effectively deal with the chaotic world out there. EA planning and structured governance helps the organization stay on course and not get surprised or thrown. The planning process itself involves looking at our strengths, weaknesses, opportunities, and threats, and makes us more self-aware and proactive as an organization, so there are less surprises waiting to ambush us.
EA helps us to NOT have to tell our boss, the CIO, things he doesn’t want to hear, because we are proactive in our approach to planning and governance.
>Good to Great and Enterprise Architecture
- Align technology with your mission—the key question that drives the enterprise’s technology is whether it fits directly with “what you are deeply passionate about…what you can be the best in the world at…[and] what drives your economic engine.”Through the User-centric EA target architecture, transition plan, and IT governance, EA moderates new investments in IT so they align with mission requirements and priorities.
- Technology enables mission execution—“Good-to-great companies used technology as an accelerator of momentum, not a creator of it…a company can’t remain a laggard and hope to be great, but technology by itself is never a primary cause of either of greatness or decline.” User-centric EA synthesizes business and technology information to enhance decision-making. EA ensures that the organization’s technology direction and investments enable mission.
- Culture of discipline—Good-to-great companies have disciplined thought and action. They “respond with thoughtfulness and creativity, driven by a compulsion to turn unrealized potential into results; mediocre companies react and lurch, motivated by fear of being left behind.” User-centric EA is a structured approach to managing and integrating business and technology. EA ensures that the organization follows an adaptable plan and does not get lurched around by the changing market, competition, or technology tides.
- Change incrementally—“‘crawl, walk, run’ can be a very effective approach, even during times of rapid and radical technological change.” User-centric EA develops the target and transition plan for the organization, which ensures an approach of incremental change. New IT investments and business process improvements are done in a phased approach, rather than trying to “eat the elephant in one bite.”
In short, User-centric EA is a perfect fit with the conclusions of Jim Collins research into good-to-great companies.
>IT Roles Are Changing and Enterprise Architecture
>These days, everyone likes to think that they are an architect and the ways things are going, soon this may become a reality.
ComputerWorld, 7 April 2008 reports that “New IT titles portend a revolution in IT roles.”
“Don’t expect to be part of an IT department. As a 21st century technology professional, your future—and most likely your desk—will be on the business side, and your title will likely be scrubbed of any hint of computers, databases, software, or data networks.”
Technology is being down-played and business requirements are in focus. This is good EA and common sense.
“IT is no longer a subset specialty. It is integrated into whatever work you’re trying to get done…IT is being disintermediated, but in a good way. It is being pushed farther up the food chain.”
IT is no longer being viewed as a mere utility to keep the network up, email running, and the dial tone on. Rather, IT folks are being seen as full partners with the business to solve problems. YES!
“No one know s exactly what to call these positions, but they definitely include more than pure technical skills. ‘If you’re a heads-down programmer, you’re at a terrible disadvantage.’”
The CTO of Animas, a web hosting company stated: “Outsourcing, globalization and the cost reduction for WAN technology all work to eliminate the need for systems administrators, help desk people, or developers. We don’t want developers on our staff for all of these technologies. We pretty much have kept only business-savvy people who we expect to be partners in each department and to come up with solutions.”
Solving business problems requires the ability to synthesize business and technology and let business drive technology. Hence, the new glorification and proliferation of architects in today’s organizations.
David McCue, the CIO of Computer Sciences Corp. says “You’ll see titles like ‘solutions architect’ and ‘product architect’ that convey involvement in providing the product or service to a purchaser.” Similarly, the CIO of TNS, a large market research company, stated: “everyone is either an architect or an engineer.”
“Although job titles for all of these emerging roles have yet to be standardized, the overall career-focus seems pretty clear: It’s all about business.”
Wise CIOs are changing their focus from day-to-day technology operations to strategic business issues. That’s the sweet spot where value can be added by the CIO.
Enterprise architecture and IT governance are the CIO’s levers to partner with the business and plan their IT more effectively and to govern it more soundly, so that IT investments are going to get the business side, the biggest bang for their buck.
>Google and Enterprise Architecture
User-centric Enterprise architecture is about capturing, processing, organizing, and effectively presenting business and technology information to make it valuable and actionable by the organization for planning and governance.
Google is a company that epitomizes this mission.
After reading a recent article in Harvard Business Review, April 2008, I came to really appreciate their amazing business practices and found many connections with User-centric EA.
- Organizing information–Google’s mission [is] ‘to organize the world’s information and make it universally accessible and useful.’” Similarly in User-centric EA, we seek to organize the enterprise’s information and make it useful, usable, easy to understand, and readily accessible to aid decision making.
- Business and technology go hand-in-hand—“Technology and strategy, at Google, are inseparable and mutually permeable—making it hard to say whether technology is the DNA of its strategy or the other way around.” Similarly, EA is the synthesis of business and technology in the organization, where business drives technology, rather than doing technology for technology’s sake.
- Long-term approach—“CEO Eric Schmidt has estimated that it will take 300 years to achieve the mission of organizing the world’s information…it illustrates Google’s long-term approach to building value and capability.” Similarly, EA is a planning and governance function. EA plans span many years, usually at least 5 years, but depending on the mission, as long as 20 years for business/IT projects with long research and development cycles like in military and space domains.
- Architectural control—“Architectural control resides in Google’s ability to track the significance of any new service, its ability to choose to provide or not provide the service, and its role as a key contributor to the service’s functional value.” This is achieved by network infrastructure consisting of approximately one million computers and a target audience of 132 million customers globally on which they can test and launch applications. In EA, control is exercised through a sound governance process that ensures sound IT investments are selected or not.
- Useful and usable—“The emphasis in this process is not on identifying the perfect offering, but rather on creating multiple potential useful offerings and letting the market decide which is best…among the company’s design principles are…usefulness first, usability later.” In User-centric EA, we also focus on the useful and usable products (although not in sequence). The point being that the EA must have clear value to the organization and its decision makers; we shun developing organizational shelfware or conducting ivory tower efforts.
- Data underscores decision making—“A key ingredient of innovation at the company is the extensive, aggressive use of data and testing to support ideas.” EA also relies on data (business and technical) for planning and governance. This is the nature of developing, maintaining, and leveraging use of EA through information products that establish the baseline, target, and transition plan of the organization. A viable plan is not one that is pulled from a hat, but one that is data-driven and vetted with executives, subject matter experts, and other stakeholders. Further, EA provides business intelligence for governance and decision making.
- Human capital—“If a company actually embraced—rather than merely paid lip service to—the idea that its people are its most important asset, it would treat employees much the way Google does.” This concept is embedded User-centric EA, where the architecture is driven by the needs and requirements of the users. Further, Human Capital is a distinct perspective in User-centric EA, where people are viewed as the hub for all business and IT success.
In short, Google is a highly User-centric EA-driven organization and is a model for many of its core tenets.
>Business Technology Trends and Enterprise Architecture
There are a number of key business technology trends that enterprise architects need to be aware of─McKinsey Quarterly reports these on 26 December 2007.
1) Managing Relationships
- Distributing co-creation—“The Internet and related technologies give companies radical new ways to harvest the talents of innovators working outside corporate boundaries. Today…companies routinely involve customers, suppliers, small specialist businesses, and independent contractors in the creation of new products. … By distributing innovation through the value chain, companies may reduce their costs and usher new products to market faster by eliminating the bottlenecks that come with total control.” Examples include Linux and Wikipedia
- Using consumers as innovators—“As the Internet has evolved–an evolution prompted in part by new Web 2.0 technologies–it has become a more widespread platform for interaction, communication, and activism…Companies that involve customers in design, testing, marketing (such as viral marketing), and the after-sales process get better insights into customer needs and behavior and may be able to cut the cost of acquiring customers, engender greater loyalty, and speed up development cycles.”
- Tapping into a world of talent—“Software and Internet technologies are making it easier and less costly for companies to integrate and manage the work of an expanding number of outsiders [globally], and this development opens up many contracting options for managers of corporate functions…This trend should gather steam in sectors such as software, health care delivery, professional services, and real estate, where companies can easily segment work into discrete tasks for independent contractors and then reaggregate it.”
- Extracting more value from interactions—“Technology tools that promote tacit interactions, such as wikis, virtual team environments, and videoconferencing, may become no less ubiquitous than computers are now. As companies learn to use these tools, they will develop managerial innovations–smarter and faster ways for individuals and teams to create value through interactions.”
2) Managing capital and assets
- Expanding the frontiers of automation—“Companies, governments, and other organizations have put in place systems to automate tasks and processes: forecasting and supply chain technologies; systems for enterprise resource planning, customer relationship management, and HR; product and customer databases; and Web sites. Now these systems are becoming interconnected through common standards for exchanging data and representing business processes in bits and bytes. What’s more, this information can be combined in new ways to automate an increasing array of broader activities, from inventory management to customer service…The trick is to strike the right balance between raising margins and making customers happy.”
- Unbundling production from delivery—“Technology helps companies to utilize fixed assets more efficiently by disaggregating monolithic systems into reusable components, measuring and metering the use of each, and billing for that use in ever smaller increments cost-effectively. Information and communications technologies handle the tracking and metering critical to the new models and make it possible to have effective allocation and capacity-planning systems.”
3) Leveraging information in new ways
- Putting more science into management—“Just as the Internet and productivity tools extend the reach of and provide leverage to desk-based workers, technology is helping managers exploit ever-greater amounts of data to make smarter decisions and develop the insights that create competitive advantages and new business models. From “ideagoras” (eBay-like marketplaces for ideas) to predictive markets to performance-management approaches, ubiquitous standards-based technologies promote aggregation, processing, and decision making based on the use of growing pools of rich data.”
- Making businesses from information—“Accumulated pools of data captured in a number of systems within large organizations or pulled together from many points of origin on the Web are the raw material for new information-based business opportunities…[For example,] A retailer using digital cameras to prevent shoplifting could also analyze the shopping patterns and traffic flows of customers through its stores, and could also use these insights to improve its layout or placement of promotional displays.
From a User-centric EA perspective, many of the business technology trends not only ring true, but are in fact essential to the practice of good User-centric EA.
- First, managing relationships, whether through co-creation with partners, customer involvement, outsourcing, or making interactions more valuable, all point to the “User-centric” aspect of User-centric EA, in which we bring the users, stakeholders, and subject matter experts collaboratively into the EA process to provide them more value from EA information products and governance services, so that the EA is useful and usable to them.
- Second, in terms of leveraging information “to make smarter decisions,” this is the value proposition of EA—information transparency to enhance decision-making. McKinsey underscores the growing importance of information, such as EA provides as follows: “Given the vast resources going into storing and processing information today, it’s hard to believe that we are only at an early stage in this trend. Yet we are. The quality and quantity of information available to any business will continue to grow explosively as the costs of monitoring and managing processes fall. Leaders should get out ahead of this trend to ensure that information makes organizations more effective, rather than less. Information is often power; broadening access and increasing transparency will inevitably influence organizational politics and power structures.”
- Third, in better managing capital assets through additional automation, interoperability of systems, and utilizing reusable components, these too are core elements and principles of EA, particularly in terms of applying and implementing technology (automation) to align with business requirements, and developing interoperable systems and using service oriented architecture to deliver reusable component services. This is all about more effective management of our technology base and the development of a farther reaching, stretch target to continue to get more value from technology.
All signs from Mckinsey point to the importance of User-centric EA as the way forward in this field.