the first 100 days for a new cio - using the innovation value institut

The First 100 Days for a New CIO: Using the Innovation Value Institute IT Capability Maturity Framework to Define a Roadmap:

The First 100 Days for a New CIO: Using the Innovation Value Institute IT Capability Maturity Framework to Define a Roadmap Alan McSweeney

Objectives:

February 6, 2011 2 Objectives To describe how the IVI (Innovation Value Institute) IT CMF (IT Capability Maturity Framework) can be used to define an effective business oriented workplan for the first 100 days

Importance of the First 100 Days For a New CIO:

February 6, 2011 3 Importance of the First 100 Days For a New CIO Important interval in the career of a newly appointed CIO You will find many issues and problems that were not immediately apparent Create a plan for the first 100 days that establishes priorities, approach, attitude, focus, tone, culture, standards Need to set the longer-term agenda and build solid foundation for its delivery Need to develop a vision for both the IT function and the business Must not get stuck in analysis paralysis or making quick decisions Short timeframe to assess current situation and what has to be done Need to demonstrate progress quickly

Achieving the Correct Balance:

February 6, 2011 4 Achieving the Correct Balance Spending the first 100 days consumed with analysis and planning activities with no material and concrete results Committing to a detailed long-term plan and associated organisational and model with defined roles and accountabilities within the first 100 days Need to achieve balance between analysis paralysis and making long-term commitments too quickly

Information Requirements for First 100 Days:

February 6, 2011 5 Information Requirements for First 100 Days

Objectives of First 100 Days:

February 6, 2011 6 Objectives of First 100 Days Establish strong communications Establish relationships with business and demonstrate understanding and that you are listening Develop tactical plan Start to create strategic plan linked to business strategy Define success measurement criteria Initiate the creation of a strategic plan Demonstrate clarity of thought, vision and delivery Define guiding principles, governance, processes and methodologies Define target IT function operating structure and model Start to address high visibility/priority issues and problems

Benefits of Using the IT CMF Framework to Create 100 Day Action Plan:

February 6, 2011 7 Benefits of Using the IT CMF Framework to Create 100 Day Action Plan Gathers high-level information quickly through structured consultative process Creates a high-level view of what is important and where deficiencies exist Demonstrates that you are listening A rapid engagement that provides quick feedback Allows an action plan to be established to focus on mix of strategic and day-to-day Establishes a measurement framework to allow progress be evaluated Focuses on how IT can deliver value to the business Focuses on creating a business-focused IT organisation

Roadmap for First 100 Days:

February 6, 2011 8 Roadmap for First 100 Days Gather Information Create Tactical Plan Perform High Level IT CMF Assessment Address High Visibility/ Priority Problems and Issues Start Create Strategic Plan for IT Deliver on Tactical Plan Perform Optional Detailed IT CMF Assessments

Business Strategy:

February 6, 2011 9 Business Strategy Business develops a business strategy that contains defined high level aims and lower level objectives Each objective will be subject to challenges that have to be overcome. Achievement of the strategic objectives needs to be subject to measurements

Business Strategy Linkage to IT Strategy:

February 6, 2011 10 Business Strategy Linkage to IT Strategy IT strategy follows from business strategy Ensure the organisation is making the best use of IT to deliver on its strategy Ensure the organisation is using IT effectively and efficiently

Innovation Value Institute (IVI) and IT-CMF (IT Capability Maturity Framework):

February 6, 2011 11 Innovation Value Institute (IVI) and IT-CMF (IT Capability Maturity Framework) IVI is developing an the IT-CMF as a systematic framework for improving IT capability and identifying and prioritising opportunities, reducing cost and optimising the business value of IT investments (see http://ivi.nuim.ie/ ) Based on an Intel framework and initially developed as part of Intel’s IT transformation (see Managing Information Technology for Business Value http://www.intel.com/intelpress/sum_bv.htm ) Reviewed and tested with 200+ CIOs Objectives of IT CMF To assess current practices To understand opportunity and value of increasing maturity To bridge structural gaps in other assessment frameworks

IT CMF High Level Framework:

February 6, 2011 12 IT CMF High Level Framework IT CMF structured into four high-level processes for value-oriented IT management Managing IT Like a Business Managing the IT Budget Managing the IT Capability Managing IT for Business Value

IT CMF High Level Framework:

February 6, 2011 13 IT CMF High Level Framework Managing IT Like a Business Managing the IT Budget Managing the IT Capability Managing IT for Business Value Managing IT like a business involved using solid professional business practices and applying them to the IT function and involves shifting the focus from production and technology to a focus on customers and services. Underlying focus areas include leadership, governance, alignment and management processes. Managing the IT budget involves effective financial management to reduce costs to free funds for investment in innovative IT solutions that deliver better value and performance. Underlying focus areas include budget management and performance sustaining and making new investments and portfolio planning. Managing the IT capability is concerned with what information technology and the IT organisation can do collectively for the organisation. Underlying focus areas include traditional IT factory functions like solutions delivery and services provisioning Managing IT for business value involves aligning IT investments to overall business benefits. Underlying focus areas include value and benefits delivery and portfolio management.

IT CMF:

February 6, 2011 14 IT CMF IT CMF is a meta-framework that identifies an IT organisation’s maturity in key critical practices Comprehensive overarching framework that encompasses all relevant IT practices and sits above implementation frameworks Does not mandate the use of specific implementation frameworks Identifies the key areas where the organisation wants or needs to improve to deliver business value Identifies critical gaps in maturity that are preventing IT delivering business value Identifies appropriate levels of maturity for the organisation for critical IT processes Contains benchmarks to allow an organisation measure itself against similar organisations Defines a structure to allow improvements to be measured Implementation of specific critical practices improvements devolved to implementation frameworks Objective view of IT competency and maturity across all of IT

IT CMF Framework:

February 6, 2011 15 IT CMF Framework Contains Assessment approach to determine an IT organisation's maturity Best practices associated with outcomes and metrics for their measurement Benefits A comprehensive and detailed framework to collect and provide management information on critical processes within the IT function of an organisation Processes designed, selected and defined as those that ensure that IT delivers business value Provides a view of the level of maturity of the IT function Identifies areas where effort should be focussed in order to add value Enable IT to be responsive to business needs

IT CMF Framework:

February 6, 2011 16 IT CMF Framework IT CMF framework closes the loop on Information Technology delivering value to the business Managing the IT Budget Managing IT Like a Business Managing and Delivering IT Capability Managing IT for Realising and Assessing Value Closing the Loop Between Cost and Value

IT Capability Maturity Framework - Standard Framework to Benchmark IT’s Level of Value to Business :

February 6, 2011 17 IT Capability Maturity Framework - Standard Framework to Benchmark IT’s Level of Value to Business Five maturity levels to assess and optimise value of IT A comprehensive and detailed framework to collect and provide management information on critical processes within the IT function of an organisation Processes designed, selected and defined as those that ensure that IT delivers business value Provides a view of the level of maturity of the IT function Identifies areas where effort should be focussed in order to add value Enable IT to be responsive to business needs Value Centre 5 Investment Centre 4 Sustainable Economic Model Corporate Core Competency Optimised Value Expanded Funding Options Strategic Business Partner Options and Portfolio Management 3 Service Centre Systemic Cost Reduction Technology Expert ROI & Business Case 2 Cost Centre Predictable Performance Technology Supplier TCO 1 Managing IT Like a Business Managing the IT Budget Managing IT for Business Value Managing the IT Capability Beginning Initial Basic Intermediate Advanced Optimising One of the Tools Used to Manage Journey to Becoming a Value Centre

IT CMF Detailed Structure – Comprehensive View of Core Competencies Required of an IT Organisation :

February 6, 2011 18 IT CMF Detailed Structure – Comprehensive View of Core Competencies Required of an IT Organisation Managing IT Like a Business Managing the IT Budget Managing the IT Capability Managing IT for Business Value ITG IT Leadership & Governance FF Funding & Financing EAM Enterprise Architecture Management TCO Total Cost of Ownership BPM Business Process Management BGM Budget Management TIM Technical Infrastructure Management BAR Benefits Assessment & Realisation BP Business Planning PPP Portfolio Planning & Prioritisation PAM People Asset Management PM Portfolio Management SP Strategic Planning BOP Budget Oversight & Performance Analysis KAM Knowledge Asset Management DSM Demand & Supply Management RAM Relationship Asset Management CFP Capacity Forecasting & Planning RDE Research, Development, & Engineering RM Risk Management SD Solutions Delivery AA Accounting & Allocation SRP Service Provisioning ODP Organisation Design & Planning UTM User Training Management SRC Sourcing UED User Experience Design IM Innovation Management PPM Program & Project Management SAI Service Analytics & Intelligence SUM Supplier Management SICT Sustainable ICT CAM Capability Assessment & Management

IT CMF High Level Assessment Overview:

February 6, 2011 19 IT CMF High Level Assessment Overview Objective maturity assessment of IT management practices, identifying both gaps and potential over investments Managing IT like a business Managing the IT capability Managing IT for business value Managing the IT budget 1 2 3 4 5 ITG BPM BP SP DSM CFP RM AA ODP SRC REM IM PQM SAI FF BGM PPP BOP EAM UMT PAM ICM RAM RDE SD SRP TIM UED PPM SUM VCM CAM TCO BAR PM IAP Risk of competitive disadvantage due to below below-average maturity? Can be applied across all IT functions or in a selected set of areas Risk of competitive disadvantage due to over-investment? Industry Average Organisation’s Current Maturity Level Core Competency Area Within IT CMF Framework

IT Value Contribution Increases with Maturity:

February 6, 2011 20 IT Value Contribution Increases with Maturity Maturity Level 3 Intermediate High Low 4 Advanced 2 Basic 5 Optimising 1 Initial IT enables and drives business value creation and business opportunities IT is fully aligned with business strategy and anticipates business needs IT focuses on business value creation Value oriented IT management using various industry best practices IT directly contributes to business value creation in some areas IT turns toward focusing on business value creation, but is mostly understood as service provider IT mainly provides services allowing business to create value IT focuses on delivering solutions for business needs, but not a value creator on its own IT disconnected from business value creation IT is not an integral part of value creation IT Value Contribution Increasing contribution to business value as the IT organisation increases its maturity Organisation must be able to translate IT maturity into business value contribution

IT CMF Provides Framework to Link Business Strategy to IT Strategy:

February 6, 2011 21 IT CMF Provides Framework to Link Business Strategy to IT Strategy Managing the IT Budget Managing the IT Capability Managing IT for Business Value Managing IT Like a Business Business Context IT Context

Using IT CMF to Define a Business Oriented Information Technology Strategy:

February 6, 2011 22 Using IT CMF to Define a Business Oriented Information Technology Strategy Perform High Level Current State Maturity Assessment Identify Gaps Where the Organisation Wants or Needs to Improve to Deliver Business Value Perform Optional Detailed “Deep Dives” Into Specific Competency Areas, if Required, to Identify Detailed Gaps and Issues Define Overall Plan to Achieve Planned Process Maturity Levels

IT CMF Assessment Conducted in Three Phases and Takes Around 3-4 Weeks :

February 6, 2011 23 IT CMF Assessment Conducted in Three Phases and Takes Around 3-4 Weeks Week 2 Week 1 Week 4 Week 3 Beforehand Initial kick-off meeting and preparation Selection of assessment team Complete individual assessment (answering questionnaire) Collect additional data (based on data already consolidated in organisation) Prepare assessment report Initial maturity assessment Conduct individual interviews (for validation of initial maturity estimate) Milestones of assessment Review results and analyse findings Validated maturity assessment Final results (incl. action plan) Analysis of collected data and questionnaires Activity Identify practices to be implemented for improving maturity and business value Workshop to share and discuss assessment results and collect feedback on assessment Review initial results 1 2 3 Today 0 Final workshop Assessments consist of questionnaires that gather information Supported by best practice documentation and database of benchmarks

Sample IT-CMF High Level Assessment: Purpose of Performing Survey:

February 6, 2011 24 Sample IT-CMF High Level Assessment: Purpose of Performing Survey Objective was to measure the perceived importance and perceived current level of maturity/skills and desired level of maturity in two years in order to identify areas to focus on to derive the greatest benefit Measures maturity and importance along 32 critical processes – areas where IT should have good skills, experience and maturity - in order to ensure that the IT function delivers value to the business Allows comparison to other organisations Not just about measuring IT but also concerned with measuring how those outside IT view the IT function Primary focus in on IT delivering value to the business

Sample IT-CMF High Level Assessment: IT Posture:

February 6, 2011 25 Sample IT-CMF High Level Assessment: IT Posture Summarises view of Technology adoption preference Deployment of IT to support business activity IT in relation to competitive advantage IT and outsourcing preferences IT and business value management IT and business requirements management Level of IT investment Average score is 60 Organisation score is 42 General view is that the organisation do not view that full advantage is not taken of IT IT lags behind business needs rather than leads the business Lower than average investment in IT Not actively seeking innovation Not using IT for business value

Sample IT-CMF High Level Assessment: IT Value Performance:

February 6, 2011 26 Sample IT-CMF High Level Assessment: IT Value Performance Summarises the organisation’s view of the importance and actual perceived performance responses to the following questions Cost Effective Use of IT Effective Use of IT for Business Growth Effective Use of IT for Asset Utilisation Effective Use of IT for Business Flexibility Aggregate view of importance is very high – 16.5 out of 20 Aggregate view of performance is much lower – 10 out of 20 Gap between importance and performance

Sample IT-CMF High Level Assessment: High Level Process Maturity:

February 6, 2011 27 Sample IT-CMF High Level Assessment: High Level Process Maturity Generally low level 2 maturity across the four groups of IT competence areas Shows a low level of maturity across all processes Aspiring to increase of 1-1.5 maturity levels in all areas Shows a consistent desire to improve maturity across all processes A consistent increase of 1-1.5 maturity levels will require a large investment Need to balance the need to improve with the resources required Need to focus efforts on those areas that will yield the greatest benefit Low maturity in business value competencies Highest maturity in cost-related competencies Consistent aspiration to increase maturity across all competencies

Sample IT-CMF High Level Assessment: High Level Process Maturity:

February 6, 2011 28 Sample IT-CMF High Level Assessment: High Level Process Maturity Shows the current and desired maturity and 25 th , 50 th and 75 th percentiles of similar measures on benchmarked organisations Shows that the organisation is around the 25% percentile in terms of maturity across all processes when compared with other organisations 75% of organisations are currently more mature Stated desire is to exceed 75% percentile of maturity when compared with other organisations in two years – how realistic is this?

Sample IT-CMF High Level Assessment: Critical Processes Maturity:

February 6, 2011 29 Sample IT-CMF High Level Assessment: Critical Processes Maturity

Sample IT-CMF High Level Assessment: Critical Processes Maturity:

February 6, 2011 30 Sample IT-CMF High Level Assessment: Critical Processes Maturity Areas where the greatest improvement is desired Strategic Planning Innovation Management Enterprise Architecture Management Knowledge Management Capability Assessment and Management Total Cost of Ownership Benefits Assessment and Realisation Perceived core competency importance Risk Management Business Planning Portfolio Management IT Leadership and Governance Solutions Delivery Enterprise Architecture Management Strategic Planning

Sample IT-CMF High Level Assessment: Critical Processes Ranked by Importance:

February 6, 2011 31 Sample IT-CMF High Level Assessment: Critical Processes Ranked by Importance

Sample Using the IT CMF Assessment Results to Assist in Defining an Improvement Strategy:

February 6, 2011 32 Sample Using the IT CMF Assessment Results to Assist in Defining an Improvement Strategy Identify and focus on areas of required IT competency classified by their perceived importance and current maturity and prioritised by lack of balance Identify and focus maturity gaps in areas of required IT competency prioritised by importance Create a mixed approach

Sample IT-CMF High Level Assessment: Importance Vs Current Maturity:

February 6, 2011 33 Sample IT-CMF High Level Assessment: Importance Vs Current Maturity Shows the IT CMF process areas classified by their perceived importance and current maturity and prioritised by lack of balance Classification of current maturity and importance Identify overlap between low current maturity and high importance to recognise areas to focus on

Sample IT-CMF High Level Assessment: Importance Vs Current Maturity:

February 6, 2011 34 Sample IT-CMF High Level Assessment: Importance Vs Current Maturity

Sample IT-CMF High Level Assessment: Importance Vs Current Maturity:

February 6, 2011 35 Sample IT-CMF High Level Assessment: Importance Vs Current Maturity

Sample IT-CMF Matrix: Importance Vs Maturity Gap:

February 6, 2011 36 Sample IT-CMF Matrix: Importance Vs Maturity Gap Shows the process maturity gap (difference between perceived current maturity and desired future maturity) classified by perceived importance Risk Management Business Planning Portfolio Management IT Leadership and Governance Solutions Delivery Enterprise Architecture Management Strategic Planning

Sample IT-CMF Matrix: Importance Vs Maturity Gap:

February 6, 2011 37 Sample IT-CMF Matrix: Importance Vs Maturity Gap

Sample IT-CMF High Level Assessment: Areas to Focus On:

February 6, 2011 38 Sample IT-CMF High Level Assessment: Areas to Focus On Areas where the greatest improvement is desired Strategic Planning Innovation Management Enterprise Architecture Management Knowledge Management Capability Assessment and Management Total Cost of Ownership Benefits Assessment and Realisation Areas of perceived importance Risk Management Business Planning Portfolio Management IT Leadership and Governance Solutions Delivery Enterprise Architecture Management Strategic Planning

Sample IT-CMF High Level Assessment: Recommendations for Action:

February 6, 2011 39 Sample IT-CMF High Level Assessment: Recommendations for Action Based on the analysis the greatest benefits will be derived from initiating projects in the following areas: Enterprise Architecture Management Total Cost of Ownership Benefits Assessment and Realisation Key building blocks to effective long-term development of professional IT function that delivers projects that create value Highest priority areas based on current skills and competence and importance to the organisation, now and in the future

Sample IT-CMF High Level Assessment: Enterprise Architecture Management Overview:

February 6, 2011 40 Sample IT-CMF High Level Assessment: Enterprise Architecture Management Overview Enterprise architecture management provides the necessary models and practices for defining, planning and managing the business and IT capabilities Models include business, data, applications and technology models and principles that support high-level enterprise assessments and investment trade-off decisions, as well as tactical, project-level designs and decisions Practices include architecture development, assessments, strategy development, policies, standards and compliance Value of increasing maturity Managed complexity by increasing commonality and simplifying architectural design Improved ROI by reducing development time and increasing speed to market Enhanced competitive advantage by increasing flexibility and introducing new capabilities Reduced business, IT and project-level risks by better planning Improved architecture management practices and governance

Sample IT-CMF High Level Assessment: Total Cost of Ownership Overview:

February 6, 2011 41 Sample IT-CMF High Level Assessment: Total Cost of Ownership Overview Understand how, why and from where IT is funded Determine the scale, scope and sources of funding for IT and assign financial resources to IT activities Establish a balance between Capital expenses and Operational expenses to optimise IT effectiveness Track and control direct and indirect costs associated with IT infrastructure and systems Understanding of total cost of ownership better informs budgeting and portfolio management processes Active, ongoing review and adjustment of the IT spending plan to systematically ensure that allocated budgets are being spent effectively and are within budget parameters and governance model Periodic offline review of IT spending vs. IT plan, which provides stimulus for re-profiling or reprioritisation of budgets Ensures that budget targets are being met and improves quality of future forecasts Policies, processes and tools used for calculating and distributing the costs of IT Range of methods such as chargeback, transfer pricing, and allocation may be used to manage the cost of IT services and to influence the demand for IT services within an organisation

Sample IT-CMF High Level Assessment: Benefits Assessment and Realisation Overview:

February 6, 2011 42 Sample IT-CMF High Level Assessment: Benefits Assessment and Realisation Overview Establishing a common language, measurement and valuation framework to express the potential and document the actual business value (i.e., public and private) and business benefits realised through IT-Enabled investments, as defined and recognised by all stakeholders. Systematic, objective and consistent organisational approaches to the following Benefits Planning Benefits Assessment Benefits Tracking and Measurement Benefit Realisation reporting Benefit Culture Enabling a business value culture where management optimises IT’s contribution to business objectives

Benefits of Using the IT CMF Framework in the First 100 Days of a New CIO:

February 6, 2011 43 Benefits of Using the IT CMF Framework in the First 100 Days of a New CIO IT CMF is a comprehensive overarching framework that encompasses all relevant IT practices Agnostic of specific implementation frameworks Covers entire landscape of IT competency IT CMF is business-value oriented Contains benchmarks to allow an organisation measure itself against similar organisations Defines a structure to allow improvements to be measured Identifies the key areas where the organisation wants or needs to improve to deliver business value Identifies critical gaps in maturity that are preventing IT delivering business value Identifies appropriate levels of maturity for the organisation for critical IT processes Ensures the IT strategy is soundly anchored on delivering business value

More Information:

February 6, 2011 44 More Information Alan McSweeney alan@alanmcsweeney.com