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57 Cards in this Set
- Front
- Back
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What are the stages (steps) for the new approach to building business cases for IT investment?
Hint: 6 things |
1. Define business drivers and investment objectives
2. Identify benefits, measures, and owners 3. Structure the benefits 4. Identify organizational benefits enabling benefits 5. Determine the explicit value of each benefit 6. Identify costs and risks |
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What are the unique features of this new approach?
Hint: 5 things |
1. Non-financial benefits are also recognized
2. Measures are identified for all benefits, including subjective or qualitative benefits 3. Evidence is sought for the size of the benefits included 4. Benefits are explicitly linked to both the IT and business changes that are required to deliver them 5. Owners are identified for each benefit to ensure the business changes are achieved |
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What are the 3 types of business changes in structuring the benefits?
Hint: 3 things |
1. Do new things - that were not possible prior to the investment
2. Do things better - improve activities it must continue to do 3. Stop doing things - that are no longer necessary to operate the business successfully |
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What does the degree of explicitness mean?
What are the 4 levels of the degree of explicitness for the benefits? |
Degree of explicitness - how much is already known or can be determined about the benefit before the investment is made.
1. Financial benefits 2. Quantifiable benefits 3. Measurable benefits 4. Observable benefits |
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What is the difference between quantifiable benefits and measurable benefits?
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Quantifiable benefits - there is sufficient evidence to forecast how much improvements/benefit should result from the changes
Measurable benefits - although this aspect of performance is currently measured, or an appropriate measure could be implemented, it is not possible to estimate how much performance will improve when changes are implemented |
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Why does following this 6-step approach also improve the odds of implementation success?
Hint: 3 things |
1. Identifying all the potential benefits from the investment (3 times more likely in the successful organizations)
2. Quantifying those benefits (also 3 times more likely in the successful organizations) 3. Reviewing projects after implementation and transferring the lessons learned to new projects (twice as likely in the successful organizations) |
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What are the 5 principles for realizing benefits through IT?
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1. IT has no inherent value (value of tech is not in its possession/benefits result from effective use of IT assets)
2. Benefits arise when IT enables people to do things differently (more efficiently or more effectively) 3. Only business managers and users can release business benefits 4. All IT projects have outcomes, but not all outcomes are benefits 5. Benefits must be actively managed to be obtained |
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3 important aspects of the investment
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Ends (the target perfromance improvements)
Ways (the ways the business must work differently) Means (the enabling IT capabilities) |
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What are the 5 columns in a Benefits Dependency Network (BDN) - from right to left?
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BDN - explicitly link overall investments objectives and required benefits (the ends) with the business changes (the ways) necessary to deliver those benefits and the essential IT capabilities (the means) that enable these changes
IT Enablers ← Enabling Changes ← Business Changes ← Benefits ← Objectives |
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What is the difference between business changes and enabling changes?
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Business Changes – permanent changes to working practices, processes or relationships. Normally, these changes cannot be made until the new IT capabilities are available for use and other necessary enabling change have been made (Ex. from European paper manufacturer, “allocating more sales time to contact potential high-customer leads”)
Enabling Changes – “one-off” changes that are pre-requisites for making changes or bringing the new system into effective operation. Such as – defining and agreeing on new working practices, redesigning processes, agreeing on changes to job roles and responsibilities, establishing new performance management systems, and training in new business skills (Ex. from European paper manufacturer, training staff on how to use the new system, redefining customer segments, and agreeing to a new sales account management process) |
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Differences between problem-based intervention and innovation-based intervention?
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Both are likely to be present in large-scale IT projects, but the issues that need to be managed in each differ, and the impact of changes on employees and other stakeholders also differs
Problem-based interventions -- ends-driven (target improvements) because the goal is the target improvements -- to identify the most cost-effective and lowest-risk combination of IT and business changes to achieve the defined improvements (desired ends) –Overcome an existing disadvantage against competitors –Prevent performance from deteriorating in the future to a level that would put the organization at a competitive disadvantage –Achieve stated business targets –Remove constraints that are preventing opportunities from being taken Innovation-based intervention -- ways and means-driven (how the business needs to change, and means as the enabling IT capabilities) because the goal is to discover better ways of working by utilizing IT (the means) Invests in IT to exploit a business opportunity, to create potential competitive opportunities, or to build new organizational capabilities by: –Doing something new using IT –Doing something in a new way using IT –Using new IT to do something the organization could not do before |
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What is an example of the differences between problem-based intervention and innovation-based intervention?
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creating an on-line sales channel to reach new customers, introducing vendor-managed inventory for key suppliers, allowing customers to undertake self-billing, deploying a data warehouse and analytics to automate operational decision making, and giving employees mobile technologies to work on-line from anywhere.
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What are the main purposes of problem-based and innovation-based interventions?
Hint: 2 things |
1. To understand how a combination of technology and organizational changes might allow the organization to pursue an opportunity to gain a competitive advantage
2. To identify what the organization needs to do to gain that advantage Two types of innovation-based interventions exist and both aim to create competitive advantage: Ways-driven and Means-driven |
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When dealing with innovation-based intervention, BDN calls our attention to...?
Hint: 2 things |
1. to understand how a combination of technology and organizational changes might allow the organization to pursue an opportunity to gain a competitive advantage
2. to identify what the organization needs to do to gain that advantage |
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What are the benefits of IT benefit management?
Hint: 4 things |
1. Clearer planning
2. Improved relationship between IT and business staff 3. Wiser investment 4. Increasing the benefits realized |
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Type of people involved in a change project?
Hint: 3 people |
1. Sponsor: the person or group that legitimizes the change. What type pf people is most suited for this? ( a respected business executive) – person needs to be: powerful/influential; well-respected/liked; a business person
2. Change agent: the person or group who causes the change to happen. 3. Target: the person or group who is being expected to change and at whom the change is aimed |
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Four parts of the change management feasibility survey, and what are their objectives?
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1. Assessing the scope of change—Whether the scope of the project is doable, or whether the organization is trying to change too much at one time
2. Assessing the sponsor’s commitment—Whether the sponsors are committed enough to push the change through, or whether they are sitting back expecting the organization to change on its own 3. Assessing change agents’ skills—Whether the change agents have the skills to implement the change, or whether they are not adept at rallying support 4. Evaluating the support or resistance from the target -- Which groups are receptive to the change and which are resistant |
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Implementation success factors for change management?
Hint: 4 things |
1. Top Management Support
2. User involvement and participation 3. Communication and communication 4. Cooptation—Bringing opposition into the process of designing and implementing a solution |
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What are common features of EIS?
Hint: 6 things |
1. Drill down (for details)
2. Color-coded green-yellow-red “alarm” feature 3. Trend analysis 4. User-friendly graphical interface 5. Environmental scanning 6. Communication—Integrated with email, calendar and other group support systems capabilities |
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Differences between strategic planning (identifying firm’s goals and objectives) vs. strategic management and implementation?
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actually do things differently to fulfill the goals and objectives, which can be facilitated by EIS
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Robert Kaplan developed the Balanced Scorecard method for determining executive information requirements?
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Lack comprehensive performance information on other organizational and business conditions
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Differences between outcome measures (lag indicators) and performance drivers (lead indicators)?
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Lag Indicator - is after the fact. Use this to help identify areas of improvement
Lead Indicator - helps you predict/plan for the future |
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Problems with traditional measures executives have been using
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they use narrow financial measures that lack comprehensive information on other important organizational conditions that go beyond symptoms (and get to root causes)
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Strategy map (2 examples) has many advantage, including:
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1. Effective communicating the strategy to all employees (a pictorial “story of our” strategy.
2. Individual employees can identify their contribution to company’s strategy. |
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Typically how many measures are included in each perspective on a Strategy Map?
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between 4-7
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They are called “balanced” since we are no longer restricted to narrow, mostly financial measures.
Hint: 3 things |
1. Short-term measures are balanced by long-term measures for Learning and Innovation.
2. We also balance internal (internal business perspectives) versus external (customer perspectives). 3. Balance between outcome measures (lag indicators) and performance drivers (lead indicators) |
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What is the “bridge” connecting (and translating) strategic vision and objectives into specific critical success factors for the various perspectives—“if my vision succeeds, how will I differ?”
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MIS VS EIS:
• Traditional MIS 1. Operational/tactical focus 2. Efficiency oriented – Doing things right • EIS 1. Effectiveness focus – Doing the right thing 2. Strategic management 3. Goal-oriented |
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The information infrastructure needed for successful EIS implementation. Usefulness and versatility of an EIS will be severely limited without these information resources?
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interconnected EIS server, data warehouses, web servers, etc.
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Why it is possible to do a great job on implementing Balanced Scorecard and EIS, but the company still perform poorly?
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This means you don’t have the right business strategy in place.
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Difference between efficiency and effectiveness?
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Peter Drucker – efficiency means doing things right and effectiveness means doing the right thing
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Differences between dashboard and Balanced Scorecard
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Dashboard is just one way to display a message – a table or pie chart
Balance Scorecard a methodology that gives you a higher likely hood that the information will make a difference and will help you achieve your goals. |
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Why EIS is a new and “innovative” idea for executives – why it works?
Hint: 4 things |
1. identify their critical information needs, which have never been made explicit (they thought it is a “black art”),
2. Bringing ALL their critical information needs to ONE place to facilitate strategic monitoring and implementation, 3. powerful tools for effective strategic management—not only help you to work on the symptoms, but also on the underlying causes the strategic map serves as an effective tool for communicating the strategy throughout the firm 4. Orchestrate all related activities throughout the organization toward common strategic goals and objectives (lower level critical measures can be derived from top level measures) |
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In Article #12, the essence of performance management is presented and discussed with many cases. It illustrates 2 most important features of performance management –
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1. Help to transform strategies into actionable metrics with software that links enterprise strategy to core processes and activities.
2. Provide meaningful analysis to expose the cause-and-effect relationships that, if understood, could give profitable insight to decision makers. |
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Why the traditional process for supporting business strategy with IT does not work well?
Hint: 3 things |
1. Strategy isn’t clear.
• “Leveraging synergies” or “getting close to the customer” are difficult to implement. • Companies end up building IT Solutions instead of IT Capabilities. 2. Implementation is in a piecemeal, sequential process. • Each initiative is a separate solution, with a different technology. 3. Because IT is always reacting to the latest strategic initiative, IT is always a bottleneck. • IT never becomes an asset in shaping future opportunities. |
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Define the notion of “Enterprise Architecture”
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the organizing logic for business processes and IT infrastructure reflecting integration and standardization requirements of the company’s operating model
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How do you relate the enterprise architecture concept to the strategic alignment model?
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Enterprise Architecture is the organizing logic for business processes and IT infrastructure reflecting integration and standardization requirements of the company’s operating model
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To support the operating model, we develop the enterprise architecture with these four key elements. What are these 4 key elements?
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1. Core business processes
2. Shared data driving core processes 3. Key linking and automation technologies 4. Key customers |
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For each operating model, there is a ranked list of key elements for its enterprise architecture. What is the one on the top of the list for each operating model.
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1. For the Unification model, we first identify key customers / segments / channels (followed by key processes to be standardized)
2. For the Coordination Model, also start with key customers (segments and channels) shared across business units (followed by subset of data to be shared) 3. For the Diversification Model, start with technologies that can be shared to provide economies of scale and other benefits 4. For the replication model, we start with the key processes (to be standardized across all units). |
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What are the four maturity stages for enterprise architecture?
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1. Business Silos architecture
– companies look to maximize individual business unit or functional needs. 2. Standardized Technology architecture – technology standardization and centralization of technology management. 3. Optimized Core architecture – companywide data and process standardization, matching the operating model 4. Business Modularity architecture – reuse loosely-coupled IT-enabled business process components, thereby preserving global standards and enabling local differences |
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How did we apply enterprise architecture to analyze the Peachtree case? (e.g., what is the Peachtree’s maturity stage? What is their current operating model?)
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1. Current Operating Model: Diversification
2. Maturity Stage: First Stage – Business Silos Architecture |
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Why IT balanced scorecard can be used to help align IT and business?
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BSC is an integrating program that can provide the insight, visibility, consistency, and confidence needed to demonstrate value, link business and IT strategy, and improve the image of IT in the organization.
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What are the typical items for the 4 perspectives in an IT balanced scorecard?
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1. Financial Perspective
• Standard product fees within 10% of external benchmark. • Costs within agreed budget. • Business benefits achieved from IT-enabled projects. 2. Customer Perspective • Customer satisfaction. • Availability of service at the desktop. • Portfolio alignment with business objectives. • Functional quality of applications. 3. Internal Processes • Development projects to time and budget. • Data center and network up-time. • Responsiveness of help desk. • Deviations from the architecture. 4. Organizational Learning • Time spent on learning about the business. • Time spent educating and innovating with the business |
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Why “business benefits achieved from IT-enabled projects” is included in the financial perspective for the IT balanced scorecard?
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It is critical that the CEO be able to see that IT is meaningfully linked to business goals and objectives (that they are actually accomplishing something) and critical that the CFO see that there is value gained from investing in IT.
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The benefits of using IT Balanced scorecard—examples of these benefits in BNSF.
Hint: 6 things |
1. Employees are more sensitive to IT costs.
2. IT staff clearly understands the impact of their work on business goals. 3. Gives the entire company a better idea of how much their business applications cost to run, which leads to a more prudent use of IT resources. 4. Ability to keep costs down. BNSF was able to keep costs flat while delivering increased service. 5. Provides more transparency into IT investments. Allowed BNSF to know where IT people need to shift technical and human resources so that IT can stay on top of the business’ needs. 6. Establishes credibility and visibility, aligning IT with the business it supports. For BNSF, this allowed the various departments to know that the IT department had investment teams and resources focused on their needs. |
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What are the six keys to IT Balanced Scorecard success? How BNSF followed these principles
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1. Elect a champion for each metric, someone who’s responsible for improving performance.
2. Review and update the Balanced Scorecard on a regular basis, ideally monthly, annually at the least. 3. Ensure new processes that are put in place for obtaining data to feed the Scorecard metrics are followed from month to month. 4. Don’t use the Balanced Scorecard for performance management until you’re absolutely sure you’re tracking the right metrics and that the data you are using is accurate. 5. Set metrics that are a stretch without being unreasonable. 6. Focus on your objectives and metrics before you think about what technology you are going to use to display Scorecard information. |
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Define IT governance
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Specifying the decision rights and accountability framework to encourage desirable behavior in using IT
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What questions should be asked regarding IT Governance?
Hint: 3 things |
What decisions must we make to ensure appropriate management and use of IT?
Who should make these decisions? How will we make and monitor these decisions? |
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What are the 5 decision types that make up the IT Governance framework?
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1. IT Principles – clarifying the business role of IT
2. IT Architecture – defining integration and standardization requirements 3. IT Infrastructure – determining shared and enabling services 4. Business Application Needs – specifying the business needs for IT applications (either purchased or internally developed) 5. IT Investment and Prioritization – choosing which initiatives to fund and how much to spend |
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What are the 6 governance archetypes that make up the IT Governance framework?
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1. Business Monarchy – top management
2. IT Monarchy – IT Specialists 3. Feudal – Each business unit makes independent choices 4. Federal – Combination of the corporate center and the business units with or without IT people involved 5. IT Duopoly – IT group and one other group (i.e. top management or business unit leaders) 6. Anarchy – Isolated individual or small group decision making |
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What is the difference between Federal and Duopoly governance archetype?
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A duopoly combines an IT group with one other group (e.g. top management or business unit leaders) while a federal archetype combines the corporate center and business units with or without IT people involved.
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What are the two popular mechanisms for duopolies. Which one includes IT relationship managers?
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1. Bicycle Wheel Model – includes IT relationship managers
2. T-Shaped – process team with IT members |
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What are the two dimensions of the System Portfolio Matrix. Identify the four types of projects based on the two dimensions.
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1. Potential Benefits (rewards) to the business
2. Project Risk • Routine projects – low benefits / low risk • Avoid – low benefits / high risk • Identify & Develop – high benefits / low risk • Cautiously Examine – high benefits / high risk |
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What is the purpose of the System Portfolio Matrix?
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Assess the risks and rewards of future business projects and create balance for the business system portfolio
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On Slide #26, look at the mini case (a Large US Software and Services Company: Anonymous), can you identify the governance archetype for the five important IT decisions.
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• IT principles – IT Duopoly
• Enterprise architecture – IT Monarchy • IT infrastructure strategies – IT Monarchy • Business needs – Federal • IT investment & prioritization – IT Duopoly |
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How do you relate IT governance to the strategic alignment model?
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IT governance is one of the three sets of choices involved in the I/T Strategy
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Six IT decisions are identified that IT People “shouldn’t make,” what are the three decisions that are related to strategy?
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• How much should we spend on IT?
• Which business processes should receive our IT dollars? • Which IT capabilities need to be companywide? |
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How do you relate the above to the IT governance framework
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Each set of decisions that need to be made which relate to the IT governance framework can be classified as one of 6 decision archetypes. In other words, who should make these decisions is a part of the IT governance framework and the second governance question.
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