Microsoft has increasingly put focus on value realization over the past few years. Our team has been at the forefront of this journey and we’d like to share what we’ve learned with the broader community of practitioners to help bridge the gap between the state of the art and the state of the practice, as well as move the ball forward.
Our Value Realization Framework (VRF) team is part of Microsoft’s Enterprise Strategy Program The VRF team creates methodology, tools, and prescriptive guidance to help our Field practitioners to plan for and execute business value realization and business value acceleration. (More on this below.)
For clarity, in our context “Value Realization” is value extracted from a business-focused technology initiative. (And a key concept here is that value is in the eye of the stakeholder.)
The purpose of this blog is to give you a behind-the-scene look at how we support our Enterprise (large) customers in achieving Value Realization and to share stories from our Field practitioners around driving business outcomes through business capability transformation underpinned by technology.
You can think of this as opening up the doors and windows to our workshop, where we’ll share the raw, the real, and sometimes the radical, as we continue to learn and improve our Value Realization techniques. It’s an ongoing journey of learning and improvement.
Here are some of the types of things we’ll share on the blog:
First, for a little bit of context -- The mission of Enterprise Strategy is to help customers maximize value of their investments in our technologies. When customers sign up for the program, they get a Microsoft senior architect who helps them plan their strategy and execute programs of change. The architect leverages our methodologies, collective know-now, and unique access to Microsoft’s internal resources making sure that every customer gets the benefit of “100% of Microsoft.”
As you can imagine, there are a lot of Enterprise customers considering how to respond to and leverage Cloud, Mobile, Social, Big Data / Analytics. They are also thinking about how to adapt their business to a digital economy and how to digitize their processes and products accordingly. This is where an architect can help envision the future possibilities for the business and how an Enterprise can innovate and use technology for a competitive advantage.
But ultimately the value is in the change – we don’t stop at value identification or planning for value, we differentiate ourselves by emphasizing Value Realization. Our architects support customers through the entire lifecycle of initiative definition & prioritization, solution implementation, adoption until the anticipated business value is realized.
Our architects take a “business before technology” approach. They are chosen for their industry expertise (banking, healthcare, retail, etc.) and experience of linking business priorities to enabling technological solutions. They understand market drivers and business imperatives, and can rapidly help customers to build consensus around investment objectives, business benefits, required business change, and possible technological solutions to support the change.
Importantly, our architects never focus solely on technology. Even when the initiative moves into the solution implementation phase, we look at it as a holistic program of change with technological, people and process components, since for the business benefit to materialize all these dimensions need to be addressed. Of course the architect utilizes other, more technology-focused resources within Microsoft, but she herself remains the champion of business value realization with focus on business capabilities and business outcomes.
To help customers make the most of their investments in Microsoft products and technologies we need a “method.” That’s where the Microsoft Value Realization Framework comes into play.
In the simplest terms, it’s a value-driven, repeatable approach for our architects to identify, prioritize, and execute programs and projects that will help the customer realize and accelerate more business value. As mentioned earlier, we go beyond technology and consider other aspects of change (e.g. governance, adoption) to help reduce, as Gartner would put it, “value leakage.”
Specifically, the Microsoft Value Realization Framework helps Enterprise customers:
The Microsoft Value Realization Framework helps customer executives address the following questions:
An important aspect of the Microsoft Value Realization Framework is that it’s a multifaceted, multidiscipline view that connects technology to business outcomes and business transformation. The Microsoft Value Realization Framework effectively balances and blends a technological perspective with change management perspective and, most importantly, ever-present focus on business value.
We’ll be covering the Microsoft Value Realization Framework in more detail in future posts.
Value Realization Framework guides end-to-end advisory engagements that we undertake for, or rather, in partnership with our customers. In addition to that we have also uncovered a set of more granular services that could help our customers with specific aspects of their business-focused, but technology-driven initiatives. Having a defined set helps us get specific about the inputs, the outputs, the flow of activities, and helps customers understand what to expect.
Here is a brief summary of each Value Realization service:
Most of what you’ll see in this blog will be coming from our practitioners, so we felt it would be helpful to introduce them. We represent a team of seasoned experts with business acumen and architect backgrounds who can drive our “Business Before Technology” approach
With their industry focus and expertise, our practitioners can provide unique insight on the trends that matter in a highly relevant way. Instead of a generic discussion around Cloud, Mobile, Social, Big Data, they can talk to with great specificity how those are impacting the retail industry or the banking industry or healthcare, etc. They can share stories of what others in the industry are doing, and how technology is helping achieve business outcomes and business capability transformation.
And of course, as part of knowing the business, our practitioners know the KPIs that count, the value drivers that influence them, the pitfalls that lead to “value leakage.” This makes it a lot easier to connect technology back to the business in relevant ways, while accelerating business value and optimizing our customers’ investment in technology from both an economic value and from a strategic perspective.
This is probably enough context.
In subsequent posts we will share more detail on how our approach and services are working in the real-world, what Enterprise customers are finding most useful, what key learnings our architects are sharing. As this blog is meant to be for the benefit of the broad practitioner community, we will welcome your comments, inputs, posts that could advance our mission of helping businesses realize maximum value from their technology investments.
Please add your comments here and send your suggestions/submissions to vrblog@microsoft.com.
The Value Discovery Service is one of the Value Realization services that we mentioned in our earlier post, Welcome to the Value Realization Blog.
Many large enterprises, given the complexity of their business environment, operating model, and IT infrastructure find it difficult to visualize how best to use IT to achieve business goals of agility, cost-effectiveness, stronger customer relations, relevance, competitiveness, and, ultimately, improved shareholder value.
The Value Discovery Service helps to create consensus between business and IT stakeholders on what IT-enabled initiatives should be prioritized to generate the greatest business value and create desired capabilities within the organization.
When performing the Value Discovery Service, an Enterprise Architect and team first identify initial ideas and leads about the business’ priorities, tactics, and relevant scenarios that will likely deliver value to the business. These value-delivering scenarios are referred to as “hypotheses.” The Enterprise Architect then tests these hypotheses with business and IT stakeholders in the context of a one-day workshop, further developing scenarios, translating them into possible IT initiatives, and determining the priority of these initiatives.
The Value Discovery Service:
The Value Discovery Service can explore a single initiative, or many initiatives in which an enterprise is interested. The service produces a mutually agreed upon prioritized list of opportunities described by scenarios and value estimates, and provides recommendations about possible Microsoft’s involvement to maximize value.
A Summary Report documenting (i) the prioritized list of initiatives agreed upon by business and IT stakeholders at the workshop (with rationale), and (ii) initiative overviews describing initiatives’ objectives, future capability vision, key business/technology/people changes required, and value estimates.
Through the Value Discovery Service enterprises obtain:
Using information obtained from the enterprise, and expertise and proven practices from Microsoft, we:
Bank X has participated in mergers and acquisitions to increase their client base and portfolio of offerings. Over time the systems at the bank had become overly complex, with much duplication.
The bank decided to rationalize, simplify, and standardize its IT environment, but needed to define a way for implementing this change. The Value Discovery service from Microsoft helped to formulate and evaluate the possible approaches:
Not surprisingly, the final answer chosen by the bank mixed the approaches, but evaluating them initially in their pure form helped the stakeholders to crystallize their priorities, make the trade-offs, and build consensus.
License Agreement Value Roadmap is one of the services that Microsoft architects conduct with businesses as part of the Microsoft Value Realization Framework. It’s one of the Value Realization services that we mentioned in our earlier post, Welcome to the Value Realization Blog.
[The most common form of Microsoft licensing is “Enterprise Agreement,” which is why in our practice we typically refer to this Service as “Enterprise Agreement Value Roadmap”]
We perform the service to help businesses evaluate current returns on license investments and identify potential to maximize the business value from such investments by ensuring fuller, more effective, earlier use of purchased licenses.
A few questions that an architect might address about license value realization are:
Typically, this type of evaluation occurs near the end of a License Agreement, prior to renewal. But many businesses also like to look into value anytime a major strategic or vision change occurs, from the business or IT side.
One important role an architect plays is helping to clarify the definition of value in different business contexts. To precisely assess this value, an architect needs to review the business capabilities, priorities, and initiatives, in light of the broader business landscape -- all influencing and characterizing business value.
When a Microsoft architect performs the License Agreement Value Roadmap Service with a business:
The License Value Roadmap Service includes activities for assessing value, and for making recommendations to businesses about ways they can optimize the value they receive from license investments. Importantly, architects must go beyond simple auditing of licenses to create a comprehensive analysis:
After we create a value roadmap and present recommendations, the stakeholders at a business clearly understand the value of their investments, and the opportunities for increasing value.
License Agreement Value Roadmap documents how existing licenses are used by the business, what additional value could be derived from this pool of licenses, what specific initiatives would capture that additional value.
As the end of an Enterprise Agreement approached, the CIO Team and Director of Enterprise Licensing for a large bank began examining whether their IT investments were performing and producing value for the bank.
The bank had traditionally used a large amount of free open source software that met internal standards. However, stakeholders at the bank were finding that they needed capabilities that their solutions did not provide, and the IT teams and Head of End User Services were under pressure to meet quickly evolving business needs.
To gather the necessary information, the Microsoft architect consulted with directors and members of many teams at the bank, including:
The Microsoft architect developed an Enterprise Agreement Value Roadmap to help the bank evaluate licensing investments in light of priorities and results:
Delivery Documentaries are a behind the scenes look at how our Enterprise Architects (EAs) in the field perform Value Realization activities for customers. They are raw and real, and the purpose is to share what actually happens on the ground. They are always a learning opportunity, and we hope that over time we can help bridge the state of the art with the state of the practice, and continue to move the ball forward.
In this engagement, an Enterprise Architect supported a hospital facing challenges related to having no strategy for supporting user devices, as the devices rapidly proliferated among the staff.
The EA helped the hospital identify an actionable strategy, educate stakeholders about mobility issues, provide a strategic direction, and introduce a framework for addressing mobility. During the engagement, the EA worked primarily on-site, and with the close support of the engagement manager, services executive (SE), and account technology strategist (ATS).
During the engagement, the EA met with primary and secondary stakeholders to perform assessments, performed research into mobile strategies using existing IP and personal contacts, and created a deliverable that contained key findings for a mobility strategy, recommendations, trends, adoption frameworks, and best practices.
Contoso Hospital was having pre-sales conversations with an account executive (AE), ATS, and SE about the needs of the hospital for a mobile strategy. I began participating because I had experience working with mobility and BYOD (“Bring Your Own Device,” where employees use their own devices to perform work).
I was the point person in the pre-engagement meeting. Our goal for the meeting was to try to understand and scope the engagement. I was joined by the Microsoft delivery excellence director and the account team.
The initial stakeholders were IT decision makers, directors that report to the CIO. We set expectations right from the start about what a strategy is, and what it isn’t. We discussed that the deliverable would lay out priorities and address the issues that the hospital is experiencing now.
We discussed that the deliverable would achieve the following:
We discussed that the deliverable would not:
Over the course of the next two weeks, I visited again with the account team, and did some basic preparation for the engagement while the contracts were signed and the sales motion finalized.
The heart of the kickoff was level setting. During the kickoff, I communicate the following to the stakeholders:
I began working full-time on-site, finding it valuable to be close to the stakeholders. I was able to introduce myself, my work, and my associates. My account team also helped with appropriate introductions.
My engagement manager and account technology strategist attended assessment and planning meetings. They helped provide insight and ensure that we were working towards the goals of the engagement.
When I began working on the deliverable, I had a sense of the stakeholder priorities from the prior meetings, but to identify more details I needed to conduct a wider stakeholder assessment. I decided to use personas as a cornerstone for developing strategy, and for communicating about mobility tools and scenarios.
Following guidance from the key stakeholders, I identified primary, secondary, and additional stakeholders with which to perform assessments. I met stakeholders, learned about their roles, interests, and stakes in the mobility initiatives. For example: how mobility affected their activities, what they saw as the main issues and valuable opportunities, and the look of success.
I then started developing a BYOD strategy for the hospital. I accessed many resources during my research. Here are some examples of the resources I used:
In the final deliverable, I aimed to provide a focused collection of items for the hospital to explore. Here is a list of some of what I identified:
My final deliverable for Contoso Hospital was a presentation supported with a slide deck that included the following topics:
Is there more the story?
You bet.
This was only the beginning.
We thought it would be helpful to share some perspectives on how we are seeing customers realize and accelerate business value from the four Mega-Trends (Cloud, Mobile, Social, and Big Data/Analytics), so we asked one of our colleagues to share what he’s learned about how companies are getting business value from Mobility in the Enterprise..
Here is Arno Harteveld sharing his observations and insights on the Enterprise Mobile story …
In my current role I interact on a regular basis with customer executives during customer briefings regarding Enterprise Mobility which gives me an insight what drives customers and what customers are doing in this area. Microsoft recognizes four mega trends which are shifting the industry in profound ways how people work and how we do business. It is changing how we buy stuff and how we interact with others. There is a big opportunity to use the four mega trends to unleash business value.
We recognize mobility as one of the four mega trends (mobility, social, cloud and big data) that are changing how we work and how we conduct business. These four mega trends are likely to be the dominant forces of change in the coming decade and represent what is most important to Microsoft customers today:
These trends are revolutionizing how organizations engage customers, deliver innovative products and services, compete in a global economy, attract and retain talent, and manage expenses. This paper focuses on the effects—and potential uses—of mobile technology in this context.
It’s estimated that by 2016, one billion global consumers will have access to smartphones or tablets, which makes mobile technology a crucial medium for interacting with customers. Considering that 2.4 billion consumers connect to the Internet, one-third of the world’s population is a click away from your business, product, or service.[1][2] Mobile consumers have faster access to better information than ever before.
By 2015, the world's mobile worker population will reach 1.3 billion, representing 37.2 percent of the total workforce.[3] Working at away from an office desk has become the new normal.
To realize the potential benefits of the four mega trends, reevaluate business processes to get business value from mobile IT capabilities. Your organization can take advantage of mobile technology to adapt to today’s changing business environment; however, to do so, it must adapt new agile approaches to delivering technology options and services to both customers and employees. Any of the following three strategies can be used bring mobile technology into an organization:
Figure 1. Three strategies for integrating mobility into an organization[4]
Every organization has different needs, different capabilities, and different available resources. These strategies can help to tailor your mobility strategy to meet the current needs of your organization, and you can update your strategy over time as the organization’s needs, capabilities, or resources change. This paper provides guidance and examples of how these strategies can accelerate adoption of mobile technology in your organization.
The Run strategy outlines how organizations can adopt mobile technology in ways that make employees more productive and business processes more efficient, while at the same time controlling costs and maintaining a secure environment. The objective of this strategy is to reduce total cost of ownership to make the IT organization more efficient; this objective does not affect overall revenue directly, but it can make an organization more efficient while providing new mobility capabilities.
Your organization can adopt mobile technology in the following ways:
Adopting the run strategy will primarily affect mostly the IT organization. However, by carefully planning and implementing your mobility strategy, you can make improvements without compromising security or placing a significant new burden on your IT department. During this process, your organization may need to examine (and change, if needed) the way it does the following:
In addition, your IT organization may need to make changes in the way it supports the following capabilities:
There are a number of ways you can use mobile technology in your organization. This section describes the following popular uses:
The following figure provides an overview of how employees can use devices to work more flexibly and efficiently.
Figure 2. To bring mobility into current business processes, IT supports new ways of working
When your employees can work anywhere, your organization can realize the following benefits:
Implementing the ability to work anywhere is more complex than simply handing devices to your employees. You should adapt your business processes to use the new capabilities most efficiently. Your employees need to carefully consider the following:
In addition, your employees can consider new approaches to their work, such as:
The following figure provides an overview of how you can integrate externally owned devices into your operations.
Figure 3. Contractors bring their own devices into the corporate environment. After they register their devices on the corporate network, they can access corporate resources.
When contractors and other partners can use their own devices to work with you, your organization can bring them up to speed quickly and at the same time reduce device handling costs.
To use their own devices with your network, contractors and other partners need to understand the following:
Overall, your organization can mobile technology to work more effectively with contractors and business partners.
This strategy describes how a business can adopt mobile workstyles in ways that enhance existing business processes and develop new business processes. Organizations can increase revenue and profit by providing employees with new and more efficient ways to work while at the same time improving customer service and customer experiences.
In this strategy, your organization can use mobile technology to accomplish the following:
The changes required for this strategy impact both the IT organization and the lines of business. Planning and implementing such a strategy may require your business to examine (and change, if needed) the way it does the following:
There are a number of ways you can grow your organization’s current business by using mobile technology. This section describes the following popular approaches:
In highly competitive markets, mobile technology can increase the effectiveness of your sales force. Using mobile technology, your sellers can access customer data, product data, and sales data when they want, from wherever they want--even from a meeting with the customer. They can close transactions while still on site with the customer, and share data with sales colleagues. Figure 4 illustrates how this process can work.
Figure 4. A mobile sales rep can record transaction details, provide information to the customer (collaborating with peers as needed), and close the transaction
When your sales people can record, access, and collaborate on information anywhere, your organization can realize the following benefits:
Implementing this approach is more complex than simply handing devices to your sales people. You should adapt your business processes to use the new capabilities most efficiently. Your sales people can consider new approaches to their work, such as:
Using mobile devices, field service workers have access to the information they need when they need it:
Such access makes field service workers more efficient and, more importantly, increases the uptime of capital-intensive equipment. Figure 5 illustrates how field service workers can use mobile devices on the job.
Figure 5. By using a mobile device to receive schedules, store documents, collaborate with colleagues, and file reports, a field worker avoids extra trips to the office
By deploying mobility technology to field service workers, your organization can realize the following benefits:
Implementing this strategy might require redesigning or optimizing business processes instead of simply handing devices to your field service people. You should adapt your business processes to use the new capabilities most efficiently. Your field service people can consider new approaches to their work, such as:
BT (British Telecommunications plc) needed a mobile solution to support more than 6,000 OpenReach field engineers, who provide critical provisioning and repair services for BT (and its millions of customers). The laptops used to that point needed frequent repair and actually hindered customer service.
In December 2012, BT deployed 6,000 Panasonic Toughbook CF-C1s to the field engineers. Key features of the new systems included:
By adopting a mobile strategy based on Windows 8 devices, BT has realized benefits that include the following:
This strategy outlines how a business can adopt mobile technology with smart connected devices in ways that transform your business and give it a competitive edge. In this strategy, your business can take advantage of mobile technology in ways such as the following:
During this process, your organization may need to examine (and change, if needed) the way it does the following:
One approach to transforming an organization’s business is to provide an existing service in a new way that makes your service more economical for customers. For example, instead of providing maintenance service to on-site machinery on a set schedule, provide service on a custom schedule based on the usage of the machinery. As an example, consider Fabrikam, which manufactures and maintains elevators. To differentiate itself from its competition and generate revenue, Fabrikam uses mobile technology to customize maintenance schedules for its elevators. Figure 6 illustrates how this process can work.
Figure 6. Mobile technology generates the data needed for Fabrikam’s new service
By developing a new service that uses data generated by mobile technology, Fabrikam realizes the following benefits:
To plan and implement this strategy, Fabrikam needed to be able to do the following:
Another approach to transforming an organization’s business is to provide an existing service to new groups of customers—for example, customers in geographic areas that the organization has not dealt with before. A bank, for example, can tap new markets by delivering cloud-based services to mobile devices, as shown in Figure 7.
Figure 7. A bank reaches new markets by providing cloud-based services to mobile devices
By delivering services to a new market of mobile devices, the bank realizes the following benefits:
To plan and implement this strategy, the bank needed to be able to do the following:
This article provides overviews of three strategies to integrating mobility technology into an organization to accelerate business value:
To determine which approach or combination of approaches would be most effective for your organization, you can do the following:
[1] Kevin Turner, Financial Analyst Meeting, Microsoft, September 19, 2013
[2] World Internet Users Statistics Usage, June 2012
[3] Crook, Stacy K. et al, Worldwide Mobile Worker Population 2011-2015 Forecast. IDC Corporate USA, January 2012.
[4] Based on Hanford, Michael. The 'Lights-On' Portfolio, but How Many Lights?Gartner, Inc, 2010.
[5] Microsoft, Microsoft Case Studies, “BT: Telecom Boosts Field Staff Efficiency, Service with Latest Mobile Computing Platform.” 2013
What happens when a bank struggling to connect it’s IT investments to it’s business impact decides to implement a Value Realization Center of Excellence to turn things around? Let’s take a look …
This is a Delivery Documentary of an engagement led by the Microsoft Enterprise Strategy Program (ESP), which provided services to help customers realize the most value from their technology investments. In this engagement, a Solution Architect helped a customer to identify shortcomings of the current IT delivery model, and to produce better quality, value, and integration from IT solutions.
The Solution Architect and colleagues proposed that the bank establish a Value Realization Center of Excellence (COE), aligned with the organization of the bank. The Value Realization COE is designed to be responsible for quality deliverables, innovation using fewer commodity solutions, and efficiency from having more uptime and continuous value. The bank agreed to perform a one year assessment of the model while continuing to pursue other IT initiatives.
The Solution Architect was involved with the initial pre-sales, business development meetings; in creating the enterprise agreement; aligning the bank organization with the Value Realization Center of Excellence functions; performing value-based measurement; and engaging as needed upon request of the Services Executive.
During the past few years, Contoso Bank has had prior contact with many vendors, primarily to deploy isolated pieces of technology, and not always coordinated in ways designed to achieve maximum value.
The bank was lacking over-arching envisioning, planning, and value realization. In addition, the bank had not yet maximized and fully leveraged the agreement already held with our Enterprise Services team. One way to address these issues was to create and help staff a Center of Excellence and Innovation for Value Realization for Contoso Bank.
I began shaping a Center of Excellence to focus on three goals:
My next step was to talk to the executive sponsors as to the benefits they would realize if we had a more strategic partnership: one for which we established this Center of Excellence and staffed it with Enterprise Architects on work streams.
I spearheaded meetings to discuss the proposal with the Sr. VP of Contoso Bank, the CIO, and the CIO direct reports. The CIO became quickly interested in broadening the discussion to reveal more details.
Our meetings were just conversations in which the Services Executive, the Account Executive, the Executive Business Director, and I discussed the universe of the possible with the bank executives. We considered the different ways in which things would work and be structured.
We began planning and scheduling “alignment sessions” to involve next tier stakeholders, such as the VP’s in charge of strategy, innovation, revenue, and collaboration.
To prepare for the meetings, and as part of my role of developing the vision, I obtained information from experts in COE structure, and requested research materials from our Global Delivery department on spending patterns and the banking industry in general. I did not yet drill down into capabilities or adoption.
The alignment sessions included stakeholders from the bank and Microsoft participants, including the Services Executive, Account Technology Strategist, and the Account Executive. We also pulled in colleagues from other Microsoft teams.
During the alignment sessions, we started with just a notion and presented a few items about value realization to spur the discussion. But we primarily listened and learned, before we attempted to help shape things.
We used the alignment sessions to get everyone on board about the direction, methods, and budget for our efforts. We walked employees from the bank through the idea of simplifying and transforming the complex and costly to be more efficient and aligned to business requirements.
We painted in broad strokes how Enterprise Architects would be aligned to the structure that the bank already had in place. We didn’t portray that we had everything figured out. Instead, we brought insight from our research. We described successful patterns, and we obtained more information about how such patterns could be applied to the organization, considering the current level of architectural maturity.
The bank faced significant tasks to reach a higher level of maturity. But we demonstrated that this was an opportunity for implementing an easier service model using items they had already purchased. This would enable them to repurpose the IT staff, reduce complexity, reign in expenses, and make the transition to a more mature architecture. The bank could then begin considering offering their infrastructure as a service.
We emphasized that we have a number of Enterprise Architects focused in the areas the bank was transforming. We encouraged stakeholders to work with these service area specialists. Ultimately, we even provided a Program Manager for the Center of Excellence as well, since the bank was lacking the expertise.
When we finished these meetings, the sponsors understood the problems of continuing to grow the bank’s footprint of complexity, and the advantages of establishing a simpler service model.
We prepared a proposal for a one-year engagement to establish and assess a Center of Excellence within Contoso Bank for defining and managing value from IT projects.
I worked with the Services Executive to structure the engagement aligned with our three models:
We assigned an Enterprise Architect to each area to perform the following activities:
The assigned Enterprise Architects worked with executive sponsors. A lead architect within the Value Realization Center of Excellence managed the overall work, address blocking issues, decrease cycle times, and present possible solutions to problems as they arose.
The one year test of the Center of Excellence was a success, and enabled us to build trust in the model with our executive sponsors. Contoso Bank decided to engage additional staffing for the Value Realization Center of Excellence as a more permanent addition to the enterprise, in addition to managing the initiatives that were necessary for transforming to a more mature platform.
The managing architect of Contoso Bank is now the leader of the Value Realization Center of Excellence, with a team of Enterprise Architects, a Program Manager, and an Engagement Manager.
The team performs health checks on deliveries, and the Services Executive and Engagement Manager review the results with an executive committee with business sponsors and a proxy for the CFO.
Welcome to the Value Realization Team Blog!Delivery Documentary: Contoso Hospital Goes MobileThe Enterprise Mobile Story: How To Get Business Value from Enterprise MobilityIntroducing the Enterprise Agreement Value Roadmap ServiceIntroducing the Value Discovery Service
We thought it would be helpful to share some perspectives on how we are seeing customers realize and accelerate business value from the four Mega-Trends (Cloud, Mobile, Social, and Big Data/Analytics), so we asked one of our colleagues to share what he’s learned about how companies are getting business value from Cloud in the Enterprise..
Here is Paul Slater sharing his observations and insights on Value Realization with the Cloud …
As an architect in the Microsoft Services Applied Incubation team, I work with enterprises, service providers, public sector organizations and governments. I get to help these organizations define their cloud strategy, and put that strategy into action.
In this post, I’m going to explain some of the core challenges my team sees organizations face in cloud adoption, and how we propose that these are addressed.
Increasingly, cloud computing is a mainstream concept in organizations. At this point, pretty much everyone knows what cloud is, and who the major players are in private and public cloud computing. Yet adoption still has a long way to go, and many organizations still lack a coherent cloud strategy.
In part, we believe that this is driven by an economic reality. Sure, the cloud can transform the way IT is practiced, allowing organizations to focus on activities that add value, rather than low level infrastructure management. But moving to the new world is not free, and can be highly complex.
New organizations will typically jump into the cloud head first, but for most existing companies, cloud use is limited to net new development, applications reaching end of support in their existing environment, and applications where the migration path is well understood and the benefits well documented. The rest of the applications and data remain in underutilized datacenters, gradually approaching obsolescence.
Ironically, while this approach can be driven by economics, it can costs organizations real money. Hidden inside a portfolio of thousands of applications could be real opportunities for cost reduction or improved revenuefor the business.
And once a critical mass of applications and data move to the cloud, then there are opportunities for real savings and reinvestment. SANs can get shut down, entire network segments removed, platforms retired, facilities closed.
As my team works with customers and partners on their cloud strategy, we are starting to see a series of patterns emerge that suggest a different view of the cloud world. Firstly, as cloud becomes mainstream, it is starting to become the enabler of the other megatrends we so often hear talk about, namely Mobility, Social and Information. In effect, instead of this:
We are starting to see this:
Secondly, except for some very small organizations, hybrid computing models are a reality and they are here to stay. As organizations are deploying new applications they are making decisions on where they should deploy those applications, often by using a decision tree that looks something like this:
The result rapidly becomes a mix of applications sitting across different public and private clouds, but of course the complexity doesn’t stop there. Applications are often interconnected sets of components that may for technology, governance, risk, compliance or even political reasons may sit in different places. You will frequently end up with a mix rather like the picture below:
Another change we see is towards supplementing full public cloud and private cloud environments with in-country service providers. This allows enterprises and governments to choose a mix of services, and trade off cost, control and data sensitivity against each other.
Recognizing this trend, Microsoft is working closely with in country service providers to provide capabilities on a common Microsoft platform that supplement our public cloud and private cloud offerings, as shown in the following diagram.
Amidst all this complexity and confusion, we frequently get asked to help organizations chart there way forward, and while every organization is different, there are a set of hurdles that need to be cleared in most organizations in order to progress:
I’ll go into each of these in a little more detail.
My grandmother had an investment strategy – she put all her money in the mattress. In the same way many organizations have a cloud strategy, but the strategy isn’t necessarily well thought out, consistent, or even actively useful. Microsoft conducts workshops with organizations to help them establish an effective cloud strategy, and there are many things that need to be established in order for it to be useful. These include understanding the business drivers behind cloud adoption, architectural principles pertinent to cloud, capabilities of the organization to execute on the strategy, approach to net new and existing applications, what cost savings are projected and how they will be reinvested, what the business value is of the transition, and how risks associated with migration and the target environment will be managed. If organizations do not have their cloud strategy defined and accepted, it will be very difficult to build effective business cases. For example, moving one application to the cloud may result in a net increase in costs, as you pay for the new cloud service, and resources that you were previously using (technology and people) remain in the organization. Only once you combine each of these individual projects together are you likely to see significant cost savings to the organization.
Cloud eliminates much of the need to care about underlying infrastructure, but organizations still need to care about their data, and how that data is generated and manipulated via applications. After all, when organizations move to the cloud, it is their data and applications that actually move.
Many governments have realized the importance of information classification for some time, and are now in the process of mapping their information classification frameworks to specific cloud solutions, allowing them to determine what data can go where in a complex hybrid world. Some are reevaluating decisions previously made, in the light of changing costs and improved reliability in the public cloud, but also as a result of the Snowden revelations. Enterprise are typically playing catch up here, developing their own information classification frameworks and information strategies. Applications are another critical part of the puzzle, and many organizations do not even know what applications they own, let alone the value they bring to the organization.
We recommend that organizations move over time to make both enterprise information management and IT portfolio management core competencies. By developing a detailed understanding of all of the information and applications in the environment, they can measure the value they bring, and ensure that that value increases over time.
Cloud ready organizations look very different from traditional IT organizations. Many traditional system administration skills diminish or disappear. Other skills, such as architects to manage the transition, and rapid response cloud consultants who help determine the approach for deploying a new capability, and piece together the various parts of a hybrid system that need to work become much more important. Traditional technology siloes, such as compute, networking and storage become irrelevant and destructive.
Building the organization ready for cloud is a very significant challenge for most IT leaders. It can involve significant retooling of existing staff, and sometimes new resources are required. We have worked with our internal IT organization to understand more deeply the types of skills most suited for this new environment, and alongside technical acumen, three skills come to the fore – situational awareness, impact analysis and effective triage.
This is where the hard work really begins, but at least at this point it should be built upon a well-defined strategy for cloud, applications and information in the organization. The IT portfolio actually consists of a number of different related portfolios, as shown here:
Developing a full understanding of each of these portfolios, the dependencies they have on each other, and how they use data is a critical part of maximizing the value of any transition. That said, the reality is that many organizations at this stage will focus on one main area, the set of applications. They will trawl the application portfolio, looking for opportunities to move the cloud, either to improve capabilities, or to bring down costs.
The 5 R’s – Rehost, Refactor, Revise, Rebuild and Replace, are a good way to describe the work that needs to happen to applications. To this, we add two more – Retain and Retire, as in some cases you will actively choose to do nothing to the application, and in others you will eliminate it entirely from the portfolio as it is not adding value.
This kind of portfolio analysis is, unfortunately, always time consuming, and there are few shortcuts if done properly. There are literally hundreds of dimensions to consider when determining the right approach for an application. And to be effective, you need a combination of top down and bottom up analysis. Top down analysis of the portfolio starts at the business capability layer and helps to answer the question “what is the organization supposed to do?” Bottom up analysis starts with just a list of applications, and helps to answer the question “what is the organization actually doing?” There is frequently a surprising delta between the two, and that delta can be the source of significant cost reduction, or even potential innovation, as the organization finds a way to monetize existing capabilities.
Almost every large organization is likely to retain at least some capability on premise. And even those that don’t will likely use in country service providers. Organizations undergoing a cloud transition face a choice, maintain the existing datacenter footprint, consolidate datacenters without modernization, or embrace modernization to improve efficiency and capabilities of the portfolio.
To stay competitive in a cloud services world, Microsoft has fully embraced datacenter modernization. In fact we run some of the most modern datacenters in the world. We have invested more than $15 billion in an infrastructure that supports more than 200 online services, including Bing, Hotmail, MSN, Office 365, Xbox Live, and the Windows Azure platform. The Microsoft Global Foundation Services (GFS) organization is responsible for the Microsoft public cloud infrastructure, and comprises a large global portfolio of data centers, servers, content distribution networks, edge computing nodes, and fiber optic networks.
Sure, we run datacenters at scale far greater than most of our partners and customers. But we have realized that many of the lessons learned from our own experience apply directly to others. Key principles behind building and operating a modern datacenter include:
Organizations that design, build, and operate their data centers according to these principles will be positioned to provide reliable and flexible high-performance services at an effective price point. Those organizations that do not follow these principles will affect the cost and responsiveness of their IT services, and ultimately put their ability to remain competitive at risk.
Once organizations have a good understanding of the portfolio, and the proposed dispensation of their applications, they are now in a position to modernize the applications. As I already mentioned, a good way to think about this is through 7 Rs, but there are some important other considerations.
Firstly, modernization of an application represents a real opportunity to increase its value. So while rehosting an application may seem to be the easiest option, it is not always the best. To fully get to the value, you may need to refactor or even rebuild the application. However in a large portfolio, it can be difficult to build individual business cases for modernizing each individual application, so it’s important to go back to the overall cloud and application strategy and establish the value at that level.
Secondly, when determining candidates for application modernization, many organizations make the mistake of ignoring internal applications, leaving them to become more and more dated. This can have significant impact on productivity and on organizational morale.
Finally, if you are modernizing large numbers of applications in the organization, much of the work may be automated, or at least done following a standard pre-defined process. You may choose to build this yourself, or using a partner that has developed repeatable processes for doing this work.
Building applications for the cloud is requires a very different approach to traditional application development. In general you know very little about the underlying infrastructure, so you cannot rely upon redundancy in the underlying infrastructure to ensure uptime. Demand may scale unexpectedly for public cloud applications, or parts of an environment may fail. Application containers are not segregated from each other physically. Components may span multiple geographies, multiple security boundaries, and even multiple cloud service providers, and you may wish to move those components as platform capabilities improve or costs change. In addition to these challenges, there are huge opportunities to connect together social, mobile and information components into applications with capabilities that were formerly impossible.
To develop effectively for cloud, new skills are required. We have published guidance on this topic, called Failsafe: Guidance for Resilient Cloud Architectures. I’d highly recommend you read it and apply it to your own application services organization.
As I mentioned earlier, some of the larger economic benefits associated with cloud can only be realized by removing legacy environments, from servers and platforms to entire datacenters. This can be very difficult in many organizations – it is so much easier to new environments than retire existing environments. In some organizations, skills shortages are now starting to reach emergency proportions, with the workforce skilled in a particular application or platform literally dying out. Effective portfolio management and application lifecycle management can help with this problem, and it’s important to recognize that in most enterprises this is as much a political or cultural challenge as a technical one.
Fortunately, many organizations are now coming to terms with the fact that eliminating legacy environments has the capacity to redirect significant money away from keeping the lights on and towards technology that differentiates the organization. These organizations are providing top down mandates to enforce change, and ensuring that support for that change permeates throughout the organization.
As I’ve illustrated in this blog, simply building a set of cloud capabilities does not ensure that organizations or individuals will adopt cloud computing. While there are many benefits, the hurdles are big enough to make the journey difficult for most.
Recognizing this, some teams at Microsoft have made some significant investments to help our customers and partners undergo this transition. Our Enterprise Architects are working with organizations to help them define their cloud strategy, their approach to application and information strategy, and to analyze their portfolios. Our Cloud Vantage Services help organizations navigate the transition to Cloud. Some teams at Microsoft have also invested in helping our customers modernize applications, and here we are working directly with customers, but also through our partner ecosystem.
As mentioned earlier, an essential part of our cloud strategy is to provide in country services through cloud service providers, supplementing Microsoft public cloud offerings, and on premise private cloud capabilities. This can be particularly important for local and national governments, so we have also established a National Cloud strategy to support governments in their transition to cloud. You can find more information about their work here.
Looking forward, my team and other teams in Microsoft are continuing work to make cloud adoption easier, and the value proposition of cloud higher. For example we are investigating how organizations can more accurately understand in their existing datacenters, and align them to services, so that they know when moving makes sense from an economics perspective. We continue to explore innovations in datacenter and infrastructure design, and methods to reduce the costs associated with application modernization. And we are working to ensure that when applications are deployed to the cloud, they are done so in the most efficient and flexible way. This will allow applications to be seamlessly redeployed when the capabilities of the underlying infrastructure and platform alters.
While Cloud transformation is well underway, there is still a long way to go for many organizations, and the destination will continue to evolve. However, I’m happy to say that as an organization that is fully committed to the cloud, we will continue to invest in capabilities and services that help our customers and partners navigate the journey.
Welcome to the Value Realization Team Blog!Delivery Documentary: Contoso Hospital Goes MobileDelivery Documentary: Establishing a Value Realization Center of Excellence (COE) at Contoso BankMobile in the Enterprise: Value Realization with Enterprise MobilityIntroducing the Enterprise Agreement Value Roadmap ServiceIntroducing the Value Discovery Service
Architecture Options & Recommendations is one of the services that Microsoft architects conduct with businesses as part of the Microsoft Value Realization Framework. It’s one of the Value Realization services that we mentioned in our earlier post,Welcome to the Value Realization Blog.
Here we evaluate the architecture (in its broadest sense) across multiple perspectives – technical, business, social, commercial, and validate the proposed technology architecture(s) against the business imperatives, business architecture, business outcomes, and expected business value. All to enable various stakeholders to have their concerns about the proposed solutions evaluated and addressed.
The key here is that architectural choices are based on tested and proven practices recommended by Microsoft , as well as our value-driven approach.
When a business explores initiatives for modernizing, becoming more agile, or improving IT services, many tradeoffs become apparent: stakeholders must feasibly balance cost, value, future capability, security, business benefits, and technical demands.
Leaders throughout a business carefully examine their options and constraints, and ask questions such as:
An architect can help a business consider these questions and factors, and choose appropriate solutions and approaches for implementing them.
Microsoft Enterprise Architects provide a service called Architecture Options & Recommendations, which helps businesses explore their options, identify important tradeoffs, resulting in confident choices.
When we perform the Architecture Options & Recommendations service, we create a roadmap for the architecture is grounded in the business case and reduces the complexity for a given initiative.
We evaluate each architecture option against business objectives, business value, architecture principles, IT standards, commercial factors, constraints, and other aspects critical to the business.
Our objectives when identifying and evaluating architecture options include the following:
When performing the Architecture Options & Recommendations Service, a Microsoft architect and colleagues work with many members of the business. Participants include business executives, stakeholders, financial experts, and architectural review boards.
Architects learn about and take into account customer-specific options and constraints while identifying solutions and approaches. Throughout the process, we document rationale and choices with relevant details.
The Architecture Options & Recommendations Service provides documented and substantiated information about architectural tradeoffs and decisions. The service highlights proven and recommended solutions to enable an enterprise to make appropriate architectural choices. By using this nimble yet rigorous approach is key to creating and governing the architecture overtime.
Microsoft architects use well-known approaches to help businesses evaluate architecture options. We introduce additional value through many avenues:
To perform the service, a Microsoft architect uses information obtained from an enterprise, and expertise and proven practices from Microsoft. We generally follow these steps:
The Architecture Review Board of Contoso Bank became concerned about the growing complexity of the bank’s information architecture and line-of-business applications. Mergers during the last several years had increased the client base and portfolio of offerings for the bank.
As a result, the IT environment had become very complex and difficult to maintain. The Director of Group Technology expressed the impact of the complexity and how it adversely affected agility and time-to-market. We noted also that the technology team’s relationships were eroding with their business partners, such as Retail and Corporate.
The Architecture Review Board decided to evaluate architectural options that would help simplify and optimize the IT environment. Microsoft helped the enterprise architecture team, business representatives, and operations staff to review viable options that would reduce complexity.
Using an approach that was part consultative, and part collaborative, the Microsoft architect worked with the following stakeholders and participants:
The bank considered several options for producing a simpler architecture:
The Microsoft architect helped the Architecture Review Board and other participants to identify the valuable and feasible initiatives. The CIO, having a better understanding of the complexity of the bank’s needs, began pursuing and promoting ideas for configuring ready-made solutions, rather than building new solutions from scratch.
Portfolio Optimization is one of the services that Microsoft Enterprise Architects conduct with businesses as part of the Microsoft Value Realization Framework. It’s one of the Value Realization services that we mentioned in our earlier post, Welcome to the Value Realization Blog.
Through this service we help validate and prioritize initiatives and investments, and/or help the customer create and prioritize strategies.
This is where we get to marry a unique blend of technological and business expertise.
While it is called a Portfolio Optimization service, the focus is really on “Initiative” prioritization. We help the customer prioritize their portfolio of initiatives to maximize their value while driving strategic change.
In this service, we recommend changes to and/or reprioritization of the client’s portfolio of initiatives based on a clear understanding of the client’s business intent and ability to execute leading to near term value realization (NPV,IRR, Payback) as well as longer-term improvement of return on IT assets.
The Portfolio Optimization service assesses the client’s Business and IT portfolios including business capabilities, IT services, applications, technologies, and existing program/project portfolio to help execute the current business strategy, and accelerate business value.
When a Microsoft Enterprise Architect performs the Portfolio Optimization Consulting Service with a business:
The customer invests in strategic programs of change that enhance the current and future value of the IT Portfolio.
As part of the Portfolio Optimization consulting service, we aim to answer the following critical questions:
By getting agreement to the value of a given initiative, the time to value, and the ability to execute, the customer gets a clear picture of which initiatives to focus on in order to accelerate business value and maximize their investments.
Value Planning is one of the services that Microsoft Enterprise Architects conduct with businesses as part of the Microsoft Value Realization Framework. It’s one of the Value Realization services that we mentioned in our earlier post,Welcome to the Value Realization Blog.
The Value Planning Service establishes a framework assure that an initiative delivers value. The service identifies ways to capture and assess the value during a program of change. The focus of the service is on the totality of change that a client requires to derive business benefit, not just technology changes.
The Value Planning service produces a program plan, adoption plan, value scorecard, and governance plan to support a program of change. The Value Plan describes a program of change that accelerates business value for prioritized customer initiatives. The plan addresses multiple aspects of implementing the initiative, including deploying the solution, managing adoption and change management, and managing governance, risk, and compliance.
When a Microsoft Enterprise Architect performs the Value Planning consulting service with a business:
The service produces a comprehensive, time-specific plan (milestone-driven) to ensure the delivery of expected value and benefits through an analysis of expected benefits, drivers of value realization, and an agreed measurement system.
Using proven methods, and having access to a broad range of expertise and deep platform knowledge, a Microsoft Enterprise Architect brings distinctive value while helping enterprises perform value planning. Companies obtain:
Delivery Documentaries are a behind the scenes look at how our Enterprise Architects (EAs) in the field perform Value Realization activities for customers. The documentaries are raw and real, and the purpose is to share what actually happens on the ground. They are always a learning opportunity, and we hope that over time we can help bridge the state of the art with the state of the practice, and continue to move the ball forward.
How does an insurance company determine the best options for supporting employee productivity outside the office, while complying with necessary security requirements? Let’s take a look …
This is a Delivery Documentary of an engagement led by the Microsoft Enterprise Strategy Program (ESP), which provides services to help customers realize the most value from their technology investments. In this engagement, an Enterprise Architect helped a client develop a security strategy that would protect data while enabling employees to use their own devices for accessing company resources and services.
We had already guided Contoso Insurance towards creating a roadmap that aligned business goals enabling devices with technology. A service delivery plan was prepared, and I joined the engagement as part of the delivery team.
I had previously helped Contoso Insurance with some architecture planning, and had also driven a prior initiative. At the time, I was also participating in several technical efforts around device strategy, security and compliance, and remote access.
Although I originally intended to focus most of my efforts on solution architecture, the company did not have the right combination of internal resources to move the work forward, so I changed my focus to enterprise architecture to help orchestrate delivery while ensuring that Contoso would receive value throughout the planning process.
During the engagement, I also collaborated with other people from Microsoft, including enterprise architects, technology specialists, and members of the account team.
To optimize the engagement, we began applying components of the Enterprise Services Value Realization Framework (VRF).
During the first few weeks of this initiative, we performed an initial assessment of capabilities, and reviewed the enterprise agreement to identify ways to realize the most value from Contoso’s existing IT investments.
Contoso had previously been approaching the challenges of device security in a siloed way, separately attempting to transform several different areas: mobile device management, virtual desktops, and support for diverse end user devices. The company had a goal of increasing employee productivity, even while at home, turning couch time into productive time.
I introduced the Contoso architecture team to some of the larger issues involved in the transformation they were pursuing, such as multi-factor authentication, digital certificate management, enabling multiple operating systems. We had to carefully evaluate the scope of capabilities that Contoso was pursuing, looking for ways to enable the necessary security infrastructure.
After doing some focused assessment, we began conducting stakeholder interviews. I had an idea of the people I wanted to talk to, and began reaching out using prior relationships, as well as cold calling. I showed people the executive level briefing material we had used, and used it to start conversations.
I was able to obtain information from many business units throughout the company, including claims, legal, sales, external party management, and enterprise services.
We discussed how certain capabilities could address Contoso’s business drivers and investment objectives, and identified measurable benefits. The Contoso team was most interested in hearing their options, without rushing towards any particular solution.
For most of the stakeholders, we talked about the ways they wanted to do their business, not technical architecture. I never walked into a meeting with a solution, just questions and options.
For more technical meetings, such as with the core cross-disciplinary team responsible for device security, our discussions evaluated tradeoffs between the benefits and problems of a range of infrastructure solutions.
We looked at requirements from across the organization, looked at the best products to address those requirements, and considered how to integrate new technology with existing solutions already in place.
After gathering information from stakeholders about their pains, needs, and desires, we presented several options that would provide features to support various end user devices, mobility, security, and other important capabilities, while not incurring additional costs for hardware or licensing.
I then reviewed the enterprise portfolio with an eye toward eliminating redundancy, reducing licensing fees, and standardizing processes. We identified several security-related products, and others, that could be eliminated, as they were redundant with core platform services and other licensed applications.
After performing the assessment, stakeholder meetings, and portfolio review, we built out a vision for a program of change, identified a structure for the change. We aligned investment objectives, new capabilities, and benefits for the recommended changes.
Our recommendations presented solutions in a conceptual way that focused on capabilities and business outcomes, referencing architecture only at times.
Our services also included recommendations for adoption and change management, aligned to the new business processes and underlying architecture. For example, though many unnecessary applications needed to be eliminated, there was resistance, as some stakeholders had invested much time and money in the redundant software. Our recommendations for adoption planning promoted the use of the streamlined tools, highlighted the business value and business case, and addressed cultural changes.
Welcome to the Value Realization Team Blog!
Delivery Documentary: Contoso Hospital Goes Mobile
Delivery Documentary: Establishing a Value Realization Center of Excellence (COE) at Contoso Bank
Mobile in the Enterprise: Value Realization with Enterprise Mobility
Introducing the Enterprise Agreement Value Roadmap Service
Introducing the Value Discovery Service
Introducing the Portfolio Optimization Consulting Service
Introducing the Architecture Options and Recommendations Consulting Service
A business case is indispensable when a team seeks funding for a program of change. The business case provides a defensible financial position for an investment. The business case, and the value model on which it is based, clearly communicate the benefits, risks, and costs of an initiative.
Business Case Development is one of the services that Microsoft Enterprise Architects conduct with businesses as part of the Microsoft Value Realization Framework.
The Business Case Development Service provides financial analysis based on a recommended architecture definition and planned program of change. A Microsoft Architect creates a business case and associated value model to produce detailed predictions of cash flows, costs, and benefits for a program.
When we perform the Business Case Development Service:
The Business Case Development Service produces a business case that illustrates the financial benefits of funding a program of change.
When a business engages a Microsoft Architect to perform Business Case Development, the business obtains:
To perform the service, a Microsoft Architect works with the account team, financial personnel from the client, and the management and steering committees for the program of change. Using information obtained from an enterprise, and expertise and proven practices from Microsoft:
During a well-planned initiative to improve business capabilities, a business achieves valuable results throughout the transformation, not just at the end of the project. To help ensure that value can be demonstrated and that a business is achieving objectives, a project team or architecture board can measure and track an initiative’s progress according to specified indicators.
To help a business track established KPI’s and measure value being realized during a project, a Microsoft Architect performs the Value Management Service.
When we perform value management, we measure and validate KPI’s that are integrated with the company’s commitments, its scorecard, and its cadence.
The Value Management Service:
During the Value Management Service, a Microsoft Architect performs many activities, including:
The Value Management Service helps ensure that the plan developed during the Value Planning Serviceis put into action in a way that stakeholders can measure and acknowledge benefits.
The Value Management Service provides a constant focus on delivery of projected business benefits, with full visibility of progress against an agreed plan. A business obtains:
To perform the Value Management service, a Microsoft Architect works with the account team, business and IT stakeholders, and the management and steering committees for the program of change.
1. We verify value measurement approach, confirming key metrics and KPIs that will be used to measure program benefits and costs.
2. We track program costs and benefits, collecting, analyzing, categorizing, and summarizing costs and benefits realized during the current reporting period and on a cumulative basis for the program.
3. We identify and mitigate risks to value realization. We review risks identified through program governance, risk and compliance efforts and adjust value realization projections based on the selected approach to risk mitigation.
4. We periodically aggregate and summarize value realization, measuring the costs and benefits realized by the program. We adjust future projections of value realization based on known risks.
5. We drive acknowledgement of value realization, gaining consensus of value to program stakeholders realized through the program of change.
As a business transforms, modernizes capabilities, and enables new ways of doing business, employees often need support and education to adopt new methods. Different businesses have different cultures, and different risks, when it comes to managing change and promoting adoption.
To help prepare for and manage change, and help ensure adoption, a Microsoft Architect performs the Adoption and Change Management Service. The service helps a business achieve more value from investments by carrying out plans for communicating changes, readiness and training, and support.
Adoption and Change Management is one of the services that Microsoft architects conduct with businesses as part of the Microsoft Value Realization Framework, introduced in our earlier post Welcome to the Value Realization Team’s Blog.
The Adoption and Change Management service assesses a client’s Adoption and Change Management capabilities, develops adoption plans (such as training and support plans), and provides oversight and mitigates risk during adoption.
The Adoption and Change Management Service:
The service includes activities for:
The Adoption and Change Management Service helps key stakeholders understand the changes that will occur within their organization and the impact these will have on employees, partners, and customers. The service produces a functioning Value Realization (or Adoption) Center of Excellence that supports value realization throughout adoption planning and execution.
The service promotes full stakeholder support for the overall program of change, and links value metrics to action plans.
The Adoption and Change Management Service provides access to proven offerings focused on enterprise adoption, and includes methods for monitoring and reporting adoption and the impact on value realized. Businesses obtain:
To perform the Adoption and Change Management Service:
We are all familiar with the many IT mega trends of today: Cloud, Social, Mobile, Big Data, the Internet of Things, etc. The common theme is clear; the role of Information Technology (IT) in the turbulent, digital economy has become absolutely critical in helping organizations respond and adapt to these mega trends.
No matter how dramatic the shifts in digital economy are, an essential requirement that has not diminished or changed is the crucial importance of creating shareholder value.
In today’s connected, global economy, boards and managers increasingly recognize that their primary responsibility is to maximize the total wealth-creating potential of the enterprises under their direction.
For today’s senior executives, finding the answers to the following three questions is still critical:
Even more fundamentally, answers cannot be had without first understanding the following topics:
The fundamental economic principle for creating shareholder value, or shareholder wealth, is for businesses to earn a profit that is greater than the cost of capital. This measure of profit, first described by the British economist Alfred Marshall 250 years ago, is called Economic Profit (EP) or Economic Value Added (EVA©). EP, sometimes called Residual Income, has been known to accountants for decades. EVA is also a standard part of MBA curriculum in most business schools. EP or EVA is a measure of shareholder value that has been adopted by thousands of companies globally.
The EVA framework uses a practical application of well-established corporate finance tenets. The two most important are:
EVA profit is measured by deducting the full cost of debt and equity capital from net operating profit after taxes (NOPAT).
EVA = Net Operating Profit after Tax - A Capital Charge EVA = NOPAT - Cost of Capital x Total Capital
Creating wealth requires that managers grow sales and manage costs. However, they must also effectively manage the capital provided by investors and lenders in order to create wealth.
Calculating company EVA shows whether shareholder value is being created. In order to de-construct the sources of economic value within the company, the economic value contribution of business units, customers and products need to be calculated as shown in the diagram below. Finally, the value contribution of IT services is revealed by tracing these services to the value drivers that impact products and customers.
Unpacking the definition of EVA, the Financial Value Drivers are revealed as:
Measuring IT’s impact on shareholder value is aided by a visual map showing the value drivers that create it.
Using Discounted Cash Flow
The economic value of the firm is simply the sum of the economic value of all the business units and initiatives undertaken by the firm. The best single measure of economic value is the present discounted value of cash flows; or Net Present Value (NPV). The process for calculating the NPV of an IT initiative is diagramed below:
Although there are many methods for mapping IT programs and initiatives to the financial Value Drivers of a company, the two most effective are Activity-Based Management and the Cranfield Business Dependency Network.
Activity-based management (ABM)
ABM is a method of identifying and evaluating activities that a business performs using activity-based costing to carry out a value chain analysis or a re-engineering initiative to improve strategic and operational decisions in an organization. Activity-based costing establishes relationships between overhead costs and activities so that overhead costs can be more precisely traced to products, services, or customer segments. Activity-based management focuses on managing activities to reduce costs and improve process productivity. Acorn Systems, an activity based costing software company, has combined ABC and EVA to calculate the Economic Value Contribution of customers. (1)
Benefits Dependency Network (BDN)
The Cranfield University in England has developed a Benefits Management program for delivering value from investments in business projects and change programs. The Benefits Dependency Network (BDN) is part of a convincing and robust business case. The business case must be aligned to the business drivers of an organization. The means of collecting the information may come in a highly structured process involving many workshops, discovery sessions, and interviews; or management might be able to quickly identify the business benefits or might even have them already documented. The goal is to ensure that the proposed investment is tied to real drivers for the organization. The BDN becomes the communication tool to ensure that management understands, and more importantly, agrees with the relationship between the proposed changes, the benefits, and their objectives and drivers.
The use of the BDN will help to facilitate the necessary discussion to answer the following questions, identified by Cranfield research as critical to the successful development of an effective business case:
Aligning IT initiatives with business goals and objectives is critical. The number one goal of any for profit organization is to improve shareholder value. Consequently, it is essential that technology executives demonstrate to their fellow executives and shareholders how the value of IT is measurable and traceable to shareholder value.
Footnotes
(1)Houston, TX, May 17, 2004-Stern Stewart, pioneer of its proprietary EVA® framework and Acorn Systems, the leader in profit and cost analytics, have partnered to deliver Customer Value Analytics (CVA), a solution that enables companies to measure and identify opportunities to increase the Economic Profit of their customers.
“Acorn Systems’ Consumption-Driven Costing is the most advanced and scalable profitability analytics package in the market today,” said G. Bennet Stewart III, Senior Partner, Stern Stewart. “With CVA companies can now accurately measure the economic profit of individual customers and customer segments and identify actions they can take to grow their most profitable customer base and to increase the profitability of underperforming customers.”
As a business moves through a program of change, strategic decisions are often required to ensure that business objectives are met.
To facilitate effective decision making throughout the program lifecycle, a Microsoft Enterprise Architect conducts the Program Governance, Risk, and Compliance Management Service. This service is a part of the Value Realization Framework, introduced in our earlier post Welcome to the Value Realization Team’s Blog.
The Program Governance, Risk and Compliance Management service develops Governance, Risk, and Compliance plans to support effective decision making throughout the program lifecycle. The service provides program oversight and status reporting to governance teams within the enterprise, such as steering committees and review boards.
The Program Governance, Risk, and Compliance Management Service:
While performing the service, a Microsoft Architect and team work with the enterprise executives, stakeholders, steering committees, and governance/review boards. The service includes activities for:
The Program Governance, Risk, and Compliance Management service creates effective oversight for a program of change, with appropriate mitigations for risk.
A Microsoft Architect helps scope and optimize governance, risk, and compliance actions for a specific program of change. A business obtains:
To perform the service, an Enterprise Architect works closely with stakeholders throughout a business, using methods for ensuring that technology decisions fully contribute to the value expected from initiatives.
What happens when a Microsoft Architect and team help a bank explore ways to improve business operations, and to provide better service to an expanded number of customers? Let’s see…
This is a Delivery Documentary of an engagement led by the Microsoft Enterprise Strategy Program (ESP), which provides services to help customers realize the most value from their technology investments. In this engagement, an Enterprise Architect helped a large bank envision, articulate, and prioritize strategic initiatives supporting business transformation.
To maintain the reputation the bank has for innovation, the bank needed to address many challenges in streamlining architectures involving multiple IT shops, the complexity of a federated group organization, IT services that often did not scale well, and database resources needing consolidation.
The engagement began with discussions about the nature of enterprise services, continued as the Enterprise Architect made personal connections with stakeholders and sponsors, and culminated with the creation of the service delivery plan based on input from sponsors, together with guidance from a network of experienced and knowledgeable people around the world.
Contoso Bank chose Enterprise Strategy to help understand the business aspirations of the bank and the technology that can enable them. This relationship started with the cooperation of the Sales Executive, Account Manager and Enterprise Strategy Program Lead.
The Sales Executive pulled me in for a meeting with the head of architecture to discuss what Enterprise Services is, and how it could benefit the bank.
Next, I joined the major account manager for a meeting with the executive sponsor for the bank’s engagement, the managing architect, and the engagement manager, to discuss the topics of interest to the bank, and how Microsoft can help.
The bank had identified these topics as the priorities to address from a technology perspective as well as from the business, people, and process perspectives:
To learn the primary concerns of the bank prior to the kickoff workshop, I…
Participants represented security, network, end-user computing, retail, and other areas of the bank.
I led them through our thinking about what we do:
I focused on outputs and deliverables we’ve used before, and the results we’ve seen.
I spent time sharing my personal stories and experience with innovation in the banking industry.
I then validated the thinking of the participants about the themes they had identified. Since this is a very technical-oriented engagement, it was helpful to have the Account Technology Specialist at the meeting to conduct the technical dive required for each theme.
This activity helped me define the problem statements and the pain in order to prioritize and compile the service delivery plan. I identified the people feeling these pains, because these were the people who would be the champions of the initiatives.
Then I sat with the sponsors and asked “What does success for the program look like to you?”
I emphasized that the value we would deliver was not just about delivering documents, but helping them achieve their goals and get what they need faster. We may provide a POV, a strategic plan, an architecture plan, a business case, and so on.
The sponsors said it would be great to get help with:
This information helped me to identify the best ways to allocate resources to the project.
The lead asked to learn more about the capabilities that Office 365 offers, and to have us help him articulate the value of new capabilities. I reviewed the tradeoffs between flexibility and cost in private and public cloud deployments, explaining that private clouds still have service management issues, but you have flexibility and control. A public cloud is has the least amount of flexibility, but it is the most available, enables work from anywhere, and is the most cost effective. A hybrid approach offers middle ground.
I reviewed my findings with the executive sponsor and together we developed a delivery approach that expedited the highest priority work.
Using feedback from the workshop, meetings with sponsors, and consultations with Microsoft colleagues, I prepared a service delivery plan.
Currently, I’m taking deep dives into each of the initiatives to determine current state, capabilities, and context.
Delivery Documentary: Security Strategy for Devices at Contoso Insurance
Written by Martin Sykes and Paul Lidbetter, this post is a prelude to an article they will publish following the World Cloud Forum in June, 2014.
The McKinsey 2013 survey of business and IT executives found that the top technology priority was to improve business effectiveness and information availability.
However, as leaders become more aware of the critical strategic role of IT, the survey found that leaders are also becoming less satisfied with how effective IT is within their organizations, with just 13% of respondents being completely or very effective at introducing new technologies faster or more effectively than competitors, compared with 22% last year.
The overall focus for many was to increase spending and capabilities on analytics and innovation while reducing spending on infrastructure.
Driven by the growing demand for business digitization, mobile and on-line services, and a need to increase business impact, some line-of-business groups are taking local leadership for some application development and service procurement activities, thereby acquiring and running pockets of their own services and devices. This trend is sweeping away the long evaluation cycles for new technologies and large solution deployments of traditional IT organizations.
The services being acquired by line-of-business IT are coming from the cloud, where design and deployment are no longer challenges for the organization. Now, ensuring adoption, change management and operational oversight become key to realizing the value.
Based on this dynamic environment and the fast growing delivery of product and associated solutions through cloud channels, is the age of the big refresh project coming to end? How does the role of IT within an organization need to change? This is the theme of a paper I have been writing with a colleague recently, that will be published later this year. Here are a few thoughts from that paper that relate specifically to value realization.
There have been some significant changes in how people can acquire and deploy services and devices that challenge the traditional dominance of the IT department. The trends are:
Faster technology cycles, which are now changing within the year, results in business change being always behind the curve and hence the question 'is this still the right investment?' must be asked more frequently. If an organization cannot continually ask this question across its portfolio then not only will opportunities for growth, innovation and differentiation be missed but valuable assets will be wasted, losing competitive advantage.
Faster solution service cycles, with business solutions delivered over cloud services updating in some cases every month place pressure on organizations to decide how (or even whether) to adopt the new functionality as it becomes available. IDC believes that 82% of all net-new software firms will provide their software as cloud services.
Business agility is demonstrated every day as business groups buy services online or bring their own devices to work to rapidly take advantage of new opportunities. Business leaders would probably not talk in these terms, but the reality is they are trying to repeatedly achieve faster delivery of value on investments before competitors achieve competitive parity.
The bulk of traditional IT seems irrelevant to those outside the IT organization in the light of these trends. And yet this is just the start of the change that IT departments will need to adapt to.
EVERY year will beat the previous on the number of service releases until we reach the point where EVERY service changes at least once EVERY year and through cloud subscriptions lands on EVERY device for EVERY one of our users without the IT department having to do anything.
A value management culture becomes the new cornerstone to create the IT-Business foundation for the future to deliver repeated capability improvements for continuous competitive advantage. The portfolio of business investments in IT need to be managed by the value they will deliver, and no longer by the investment profile or internal resource constraints.
Value management drives new approaches to portfolio management as well as a culture change at the top. We believe that to be successful organizations will manage a value portfolio (as opposed to an investment portfolio) for IT to achieve faster business value cycles, with business intelligence supporting governance processes to identify the business capabilities with the greatest value potential.
As well as impacting the role of IT in the organization, such a change to managing value also drives the change to a more pervasive role for IT and a more value focused mind set for the organization as a whole.
As organizations move towards a Value Management/Adoption focus versus a Business Justification/Deployment mind set the message 'we delivered on time and budget' is assumed, the 'we co-delivered measured value to the business and customers' is the future focus. Project Management Offices (PMOs) will change from just tracking the cost of programs and projects delivered to the value realized in the business, with PMs including adoption and realization of value measures in the project scope.
We are not in the business of predictions, but we can say what we are seeing our leading customers do in response to the challenges we have described. Some of these changes are quite disruptive to the existing approaches IT departments have taken, especially where they have outsourced all of IT provision.
IT leaders are managing two portfolios, one with technologies and applications that have become commoditized and can be run at the lowest cost for a standard service, and one where the technology is providing business differentiation.
With the trend over the last 20 years to outsource IT provision there has also been a trend to focus on IT mainly as a commodity. Outsourcing organizations have had a hard time balancing the low costs required of them with the occasional requests for new projects and differentiating capabilities. We are now seeing a clearer separation in the IT strategic planning process of these portfolios and of the sourcing strategies for each portfolio.
With the growth of cloud, mobile, big data and social computing we are seeing organizations make critical information available to ever more people on more devices. This significantly increases the surface area for data loss, or theft. IT remains the central body that must have a firm handle on identity and security policies. It is also the organization that can provide secure access to shared information services, through internal APIs, to allow business units to create their own applications and modernize their own business processes.
Value is a core component of many business cases, but when approval is received and the project commences the project manager is typically focused on delivering to time and cost. The value component is lost.
In leading organizations the project and program managers are now tasked with delivering the value described in the business case, resulting in a trend for shorter projects with better definition of the change processes and adoption metrics for users of business capabilities enabled by the IT systems.
As more solutions are delivered from the cloud, with no IT deployment project, there is also a need for IT staff to focus on change management and user adoption techniques to ensure the user community is able to get value from the new features regularly appearing in the on-line solutions.
This article highlights some ways that businesses are using app stores, based on the experience and observations of Microsoft Enterprise Architects.
The following contributors provided input from the field: Blessing Sibanyoni, Brad Clayton, Brian Loomis, Johan Klut, Larry Hanthorn, Peter Deane, and Robbi Laurenson.
For both customers and employees, the numbers and types of available mobile devices have exploded. At the same time, increases in the availability of broadband access, decreases in latency, and a drop in telecom costs have made mobile devices easier and cheaper to use.
In their off-work hours, employees have access to public application stores, and have become accustomed to the flexibility and agility of quickly downloading the functionality they want on any device when they want it. They want this flexibility at work, too.
Many companies have found that their customers are also familiar with public app stores, and have come to expect that type of service.
To satisfy this demand, many companies are investigating how they can use app stores, both to deliver apps to their customers and to manage employee applications.
This article looks at three ways in which companies are using app stores, and several of the factors that affect the feasibility of an app store and the effort that might be needed to adopt one.
Most businesses that have implemented app stores use them for mobile apps. Now, new Windows features are leading some businesses to explore the idea of using enterprise app stores to distribute and manage software (more than just mobile apps) for employees.
Windows 8 includes features that make it app store-friendly, helping to make app stores a more feasible approach for distributing apps to desktops as well as to mobile devices. Public app stores (Windows Store, GooglePlay, and iStore) have been around for a few years. Now enterprises can use management systems such as System Center Configuration Manager to build private enterprise app stores that can control app versioning and usage reporting. For example,
Some businesses are using public app stores instead of building private enterprise app stores. In some cases, these businesses don't have a System Center Configuration Manager deployment on which to build; in other cases, businesses want the flexibility to offer apps not only to employees but also to public customers.
One bank produces a number of mobile apps for both customers and employees. The bank decided to use the app stores to make their apps convenient and easy to access for both customers and employees. The customer apps provide access to banking services. The employee apps help employees do their jobs. The bank maintains control of which apps are generally available, and which apps are restricted. The bank also can keep tabs on which apps are popular, and who is using them.
The bank's development team worked with these stores to customize access to and delivery of the apps. For example, they have built a federated trust relationship between the identity stores that the app stores use and the bank's own Active Directory store. As a result, employees can use their bank credentials for the app stores, and the bank can manage employees' access permissions using its own directory.
As a further benefit, the app stores can deliver apps to both company-owned and external devices. The bank described previously takes advantage of this flexibility to support a BYOD program for its employees—they can use their own devices, which are not fully managed by the IT organization.
This approach saves significantly on device management costs. The bank does maintain one aspect of device management; to maintain the security of corporate data, the bank uses a Mobile Device Management (MDM) system to identify employee devices; if a device is reported stolen, the MDM can wipe it remotely.
In working with businesses that are investigating or adopting app stores, enterprise architects have identified several factors that a company that is considering an app store must deal with:
How do you manage your current infrastructure?
App stores automate policies and processes that govern and track who installs which apps. In this function, they resemble other asset management systems such as System Center Configuration Manager. If you do not already have processes in place for distributing and managing applications, you should develop them in order to take full advantage of the app store's capabilities.
Enterprise architects in the field have observed that companies who do not have mature asset management systems, or even solid approaches for distributing and managing applications, find it difficult to adopt app stores.
Can you migrate your legacy applications, or would you use the app store only for new apps?
App stores typically support apps that are discrete units that function independently. This is not true of most line-of-business applications. Those applications tend to be large, complex, and integrated with each other. These characteristics do not lend themselves to an app store model. Some companies still have line-of-business applications that run on mainframes; these applications would be even more difficult to update to an app-like format that could work with an app store.
For these reasons, many companies view an app store as a Greenfield project--something to start from scratch to use with new apps rather than legacy applications.
Do you have the development capabilities to build or adopt an app store and the apps for it?
Adopting an app store requires some development resources and capabilities, whether you build an enterprise app store or use a public app store. Obviously, the capabilities you need to design and build an enterprise app store depend on the current state of your infrastructure.
On the other hand, the capabilities you need to adopt a public app store depend on the way in which you intend to integrate the app store with your own systems. This integration process may include customizing the access controls and tracking mechanisms that the app store uses to accommodate your company's needs. Whichever type of app store you use, you also need to consider the development capabilities you need for apps—new apps, migrated apps based on legacy applications, or both.
Can your existing staff supply these capabilities, or do you need to hire additional staff? What training would your staff need?
What impact would an app store have on your business processes and budgeting systems?
In addition to budgeting for the app store adoption and app development, you may need to consider updating the chargeback and recovery models that your company uses. For many companies, the IT organization is not the only part of the company that needs to change its processes to move to an app store.
For example, some companies distribute IT costs through the business using a charge-back model (assigning costs to business units depending on software installations within that business unit). For these companies, moving to an app store not only means changing the mechanisms that track who has what software, but also updating the accounting and budgeting methods. Some companies may need to change their budgeting assumptions, or even change whether certain budget items are considered OpEx or CapEx.
If it's within the capabilities of your company, an app store--public or private--can provide an effective and flexible means to distribute and manage apps. An app store can provide desktop or mobile apps to employee computers or devices. And depending on the type of store, they can also provide customers with easy access to apps that deliver your company's services.
What happens when an insurance company looks into modernizing business applications to increase productivity, improve customer service, and create a more easily supportable ecosystem for their employees and customers? Let’s see…
This is a Delivery Documentary of an engagement led by the Microsoft Enterprise Strategy Program (ESP), which provides services to help customers realize value from their technology investments. In this engagement, an Enterprise Architect helped Contoso Health Insurance develop a strategy to transform the business with mobile devices, and to rationalize and streamline the enterprise application portfolio.
The Enterprise Architect worked with a team of colleagues and subject matter experts (SME’s) to help stakeholders and end users envision a mobility strategy that would increase productivity and improve customer service. In addition, the team provided recommendations for adopting a modern application platform that would improve app hosting and enable agile development and testing of apps.
I was originally brought into Contoso Health Insurance by a Project Lead responsible for workstations, in response to new requirements for supporting mobility, and multiple devices and platforms. We continuously reported our status, findings, and recommendations to the Project Lead, even prior to formal presentations to stakeholders.
We also brought in different recognized industry and regional SMEs in health care, a mobility architect, IT strategy consultants, and Microsoft IT about our use of system center. We established peer-to-peer connections between the Microsoft IT department, and the IT department of Contoso Health Insurance. This quickly revealed many different perspectives about the issues, priorities, and pain points.
Before starting detailed discovery, we facilitated kick off meetings where the executive sponsors, CIOs, and CTOs presented their perspectives on business value. These views guided us through the engagement as we identified and compared value propositions of different possible initiatives.
We had many meetings with individuals, teams, and sub-teams to explore the areas in which we could make valuable changes. The discussions focused on productivity, optimization, and security. We were just finding out the lay of the land, not making recommendations yet. The breadth of topics was comprehensive, covering business processes, platforms, how apps are hosted, standards, security policies, industry trends, and more.
In some cases, we provided information and guidance from Microsoft SME’s. For example, we drilled more into the nature of information protection strategies, bring your own device strategies, and measuring results from such changes. The detailed guidance that helped at the beginning of the engagement included information about:
During the discovery process, we reviewed the pains and needs of the company as expressed by the CIO, CTO, and many stakeholders. We conducted activities to help executives and stakeholders envision their goals, and discussed business goals that could impact the architecture. We also presented some context about how our recommendations could be addressed, while maintaining a focus on business objectives.
To make the discovery process as efficient as possible, we first focused on capturing as much information as we could. We then took a short break from the process to gather additional data and perform analysis to support discussions of business value. After preparing a summary of our findings, we met again with executives and stakeholders to validate our findings.
The validation meetings revealed more about the details we needed to frame our recommendations, especially in emphasizing value to all stakeholders. For example, one discussion we had in the first week of discovery was around security and identity management. We found they had many security-related systems, each handling different aspects. There were also projects in progress for updating some of the systems.
When we analyzed this area, we found that a new overarching project was necessary to provide the desired benefits. When we met again to validate our findings, we talked to the security team and confirmed that we were on the same page with them about the value of these projects.
We created a report of our recommendations and presented it to our sponsor to review. After discussing the details with the sponsor, and other business leaders, we met with a broad audience. During the meeting we discussed what we had done so far, itemized the areas we looked at, described what we had found, and talked about the areas that we suggest receive the most focus.
Our presentation covered these topics:
We had an additional recommendations meeting with stakeholders who would be paying for the work. In this meeting we focused on the high value areas of work, quantitative measurements, the expected return on investment, and the cost. We identified a number of strategic changes that created a large enough value proposition to offset the cost of adding an architecture resource.
During this meeting, one of the company’s directors gave a presentation validating our work, providing additional support for our recommendations.
In summary, we proposed the following work streams, which a Microsoft Architect could help drive.
Application Rationalization
Numerous overlapping applications were deployed within different areas of the Contoso organization. Prior efforts to rationalize, integrate, or migrate applications had been unproductive; many applications no longer had active owners or anyone in the business with knowledge of how to modernize them. In some cases, IT had to maintain support for old operating systems on servers and workstations to enable outdated applications to continue working.
We proposed to rationalize the portfolio to identify apps to retire, and which apps they already have that can provide modern app capabilities they desire.
Modern Applications and App Hosting
There was no standardized app platform at Contoso, preventing effective mobile use of business apps, creating service-level problems, and hindering the creation of modern apps.
We proposed that moving to a platform that would enable modern apps, demonstrated prototypes and pilots from industry teams (such as healthcare and insurance), and quickly gained support from management to move forward on this work-stream.
We created a number of deliverables during the engagement in the process of collecting, analyzing, and presenting information:
Delivery Documentary: Business Transformation at Contoso Bank
This example, provided by Atul Totre, describes what happens when a Microsoft Architect finds that one of the projects he was called in to help with is not likely to produce the expected return on investment. What steps led to this finding, and what changes did the Microsoft Architect recommend to help the business succeed? Let’s find out…
A Microsoft Architect was called to help with a project that he assessed and found was not likely to produce the expected value. After thoroughly assessing the project and interviewing stakeholders, the enterprise architect presented his findings to the CIO and other top stakeholders. After reviewing and discussing the evidence, they agreed that continuing the project was not in the best interests of the business, and the resources involved could provide more value in other projects.
I began helping a business with a multi-year project to design and implement a new Identity and Access Management (IAM) system. The project had begun after an internal audit found that most of the IT systems failed the security compliance checks. The new system was supposed to replace the multiple identity systems currently in use at various facilities, to help bring the systems back into compliance with security standards.
Because the audit results had attracted attention within the company, the IAM project was well-funded, even though it was not expected to significantly change productivity. Its main impact was expected to reduce risk and improve understanding (and manageability) of the affected systems.
When asking for Microsoft’s help with the IAM project, the CIO expressed skepticism about the project’s progress. In the CIO’s opinion, the project was too big and there was a lack of structure in the approach of the internal project team. As the first priority, the CIO was looking for leadership and guidance from Microsoft to help:
After these steps were complete, the engagement could move on to redefining the strategy, roadmap, and plans for the IAM project.
For the first part of the engagement, I worked with five customer stakeholders and stakeholder groups:
Within a few weeks, I expected to have assessed the current state of the IAM initiative, including:
I also made a preliminary assessment of the expected (“To Be”) state of the IAM system following the current project. This assessment covered:
I also talked to the stakeholders and others to gain the perspective of the business on the IAM initiative. During discussions with the stakeholders, I also provided information about best practices for IAM strategy, as identified by Microsoft.
Following the assessment, I spent the next period on initiative planning and stakeholder workshops. The results of this planning process included roadmaps for business capabilities, the IT service model, and technology for the initiative for the current year, and a strategic roadmap for the initiative for the next 3 to 5 years.
To keep the stakeholders informed during the engagement, I regularly reported status:
I completed the first assessments, which included infrastructure optimization, maturity, compliance, as well as investment assessments, and a standard ESP initiative assessment. The information I gathered during this process helped me understand:
As I conducted my assessment and discussed it with business leaders and stakeholders, I began to see factors that contributed to the problems that the initiative was having.
I began a deeper examination of the IAM initiative based on my own perspective, knowledge, and experience. I found it to be a “horizontal” initiative that affected business groups throughout the organization, affecting operations throughout the organization. And it would cost a lot of money to implement. To succeed, the initiative must have support and ownership beyond the IT organization, and it must take the concerns and considerations of the business priorities into account.
In addition, I confirmed the CIO’s view that there was a lack of structure in the project team’s approach. In my experience, an initiative of this scope and size must be built on detailed structural analysis and strategic work, which was lacking.
To complicate matters, although the CIO had defined priorities for the IT organization, the strategies for supporting those priorities were not yet fully defined. Without those, it would be difficult to determine how to bring the initiative in line with those priorities (or if that realignment was even feasible).
I concluded that the business was unlikely to succeed with the current initiative, which did not directly address the needs of the business, and did not have enough support to succeed. The business would have to finalize strategies supporting its eight IT priorities, or face ongoing difficulties in defining a identity and access management solution that would be satisfactory across the business.
I presented my results to the CIO and the leadership team at their regularly scheduled meetings and used that forum to start the larger conversation about the identity and access management needs of the business. I shared my analysis, showing that the current path would not produce a solution that met the needs of the business, and I recommended that the business would be better off not spending money on a solution until having identified one with a better chance of success.
After reviewing my recommendations, the CIO agreed that the IAM initiative in its current form could not provide the needed return on investment, and he made the call to shelve the project.
The business also released the third-party consultants that had been helping with the IAM initiative, and redeployed its internal resources to address other initiatives:
When a company begins to use cloud services, it finds itself facing new challenges to its approach on security. Cloud-based services can affect many different aspects of security, ranging from the security features of new apps in development to the way a company defines the security measures for internal data.
The relative importance of each of these issues varies from company to company, depending on factors such as industry, regulatory environment, and the types of cloud services under consideration. Microsoft’s Enterprise Architects have helped a number of businesses adopt cloud-based services.
This article, based on the observations and experiences of Microsoft Architects, presents ten questions that can help your company identify security issues you may encounter when using cloud services.
1. How thoroughly has your organization defined its general security policy? Do you have platform-agnostic guidelines to apply as new security issues arise?
Without overall guidelines to fall back on, personnel may end up applying security measures ad hoc and interpreting applicable regulations on the fly. Microsoft Architects have worked with companies that operated in this manner—in such companies, the security measures applied to documents may depend more on where the documents are stored than their content.
For example, the protections applied in a web store may differ from those applied in another file share simply because different people were responsible for configuring them. A fractured security picture makes it very difficult for companies to specify which content may be used with cloud services and which content cannot be used with cloud services.
2. How flexible are your security systems? How much work will it take to accommodate the cloud-based service?
This work includes the technical changes needed to ensure that the cloud-based service can interact with your systems in the ways intended (and only those ways), and that the users have appropriate levels of access to the service.
Some companies have legacy technology that makes it difficult to modify security models and processes. For example, Microsoft Architects have worked with manufacturing companies, and have found that their systems tend to change more slowly than in other companies. As a result, these companies seem to accumulate legacy systems that tend to dominate any new technology and standardize approaches to issues such as security.
3. Do the Governance, Risk, and Compliance (GRC) requirements for your organization take cloud-based services into account? If not, do you expect them to change?
When using cloud-based services, some of the biggest challenges that businesses face relate to GRC requirements. Many businesses need to update their audit and compliance testing processes to account for transactions that may cross multiple environments.
Some regulatory agencies have not yet updated their requirements to account for cloud-based services. As a result, the companies they regulate face the choice of waiting to use cloud-services until the regulations are in place, or going ahead in the belief that the benefits outweigh the possible ramifications.
4. Is your IT organization accustomed to assessing value in terms of risks, costs, and benefits?
Microsoft Architects have observed that IT organizations become inflexible and risk averse when they become aware of risks without having a complete understanding of their context. These organizations find it difficult to change how they operate.
5. Are you building apps or APIs for customers or partners that incorporate cloud-based services?
Companies are using new approaches to partition functionality between LOB apps and cloud-based services, and to encrypt data that the cloud-based services process and store.
As customers become more comfortable using cloud-based services, companies that develop software and APIs that have strict security requirements are exploring ways to incorporate cloud-based services in a secure manner. Their customers expect the APIs to be sufficiently granular to meet their needs and able to keep their data secure as it passes through the cloud.
In the past, some businesses expected their customers would question the security of cloud-based apps and APIs. However, this resistance has dropped off over the past year.
6. Will your apps collect consumer information? How will you keep that information secure?
Based on what they have seen, some Microsoft Architects expect the issues of security and privacy to receive increasing legal and political attention as consumers evaluate how companies use the consumer data they collect.
7. Are you considering whether to add cloud capability to legacy applications?
Depending on the architecture of the legacy applications, it may be difficult to adapt them to work with cloud services.
8. Do you use a single identity management system for your company? Can this system (or multiple systems in use) integrate with cloud-based services?
Not all identity management solutions can integrate with cloud-based services, or federate with external identity stores.
9. Does your company organize data logically and classify it according to its security requirements?
If your employees will be using cloud-based services, you need to consider what company information will be involved. What information can pass through the cloud or be stored there? What information must stay on premises? How will you keep cloud-based information synchronized with on-premises information, and how will you protect it all? If you are allowing employees to use their own (unmanaged) devices with the cloud service, can you ensure that only appropriate information ends up on those devices?
Microsoft Architects have worked with many businesses who hadn't given much thought to their information architecture and classification systems before. Faced with unmanaged devices and cloud-bases services, they needed to analyze their content, streamline it, and classify it according to type, impact, and sensitivity. Further, they needed to develop an organizational system to make management tasks more feasible.
10. Are all levels of your business aware of the need to organize and secure data appropriately?
In many businesses, the IT organizations and upper levels of the business are aware of these concerns, but many levels of the business are not. The upper levels now have to work to drive that concern to the rest of their businesses. For example, employees that use web services to store documents at home occasionally use the same web services to store sensitive company documents, without considering deeper security implications.
What happens when a company considers strategies for enabling future business transformation by focusing on the business organization as a whole, rather than just the IT organization and practices? Let’s see…
This is a Delivery Documentary of an engagement led by the Microsoft Enterprise Strategy Program (ESP), which provides services to help customers realize the most value from their technology investments. In this engagement, an Enterprise Architect helped the company examine possible strategies for its future approach to business transformation with information and technology.
Rather than focusing on a particular IT solution, this engagement was more about integrating technology into business strategy. As such, the analyses addressed the business organization as a whole instead of just the IT organization and practices.
A consultant for the company connected me to an executive within the business. The executive was interested in a holistic analysis of problems facing the business (and the industry as a whole).
The consultant and I researched the industry. We found that in the domain of the company’s business, the following issues are currently affecting production, and those affects are increasing:
Defining the Scope and Assembling a Team
The consultant and I discussed some possible approaches to help solve challenges around meeting resource demands. We considered analyzing the business processes and overhauling them according to “Lean” methodology, but we decided that this approach would take too long. We considered treating the issue as a knowledge management problem or a workflow improvement problem, but both approaches were too small in scope to address the problem effectively.
We finally decided to target our analysis on all of the processes associated with obtaining resources, and by examining the value chain. We planned to gain a holistic view of these processes, taking the following factors into account:
Our goal in this analysis was to produce a roadmap that Contoso can use over time to create the technology, functionality, and information that to support the needed business capability. Contoso already had implemented a number of solutions for providing workers with information they needed to do their jobs; however, these solutions did not share information and workers had to access multiple applications during tasks. A holistic approach would be more efficient.
We planned to center our analysis on models of the business, generating and revising those models based on meetings with workers involved in core processes. We wanted to develop models that would be sophisticated enough to simulate the business processes and operations. We would then be able to:
At this point, the following additional resources joined the team:
The team members helped write the vision document for the next phase of work. They also planned out the workshops that we needed to hold with the staff.
We met with business leaders at the company to explain our approach, which would use information gathered from the workers themselves to model the current business environment and processes. Based on these models, we would be able to recommend changes that would help close the capability gap through leveraging the appropriate technology.
To gather the information, we held a series of workshops that were designed based on our previous experiences with such engagements.
Our goals for the workshops were to:
The workshops themselves focused on learning about the workers: who they were, what they did, why and how they did it, and who they worked with. We asked for their goals and the problems that they commonly dealt with, separating personal and business issues.
We also asked them to rank these issues. We approached these sessions from both the user experience and business architecture points of view. Our user experience and business architecture experts helped refine and facilitate the workshops so that both areas could be addressed in a single, continuous session.
We worked with Contoso staff to create preliminary models based on industry research, benchmarks, knowledge management and search theory, and so forth. We were able to start expanding and revising the models as we obtained specific information from the workers themselves.
We applied statistical techniques to the ranked goals and problems; the results provided insight into priorities. We also defined a taxonomy that the team could use to describe the data and results.
In general, we looked for patterns in the workers’ responses, issues and priorities that were common to both the junior and senior workers, and areas in which the groups differed. We noted the impacts of the worker’s environments, perspectives, and variations in data handling.
We modeled Contoso’s organizational maturity with respect to its workers, business, knowledge, and the ways in which information was used and distributed. This model was particularly important for Contoso because the business processes were not written down, but instead were embedded in the organizational culture.
Using this information, we produced an agent-based process model for engineering processes using personas and meaningful scenarios. Contoso outlined the scenarios of interest.
Finally, we identified a set of themes based on the workshop data, defined changes that Contoso could make that would yield measureable benefits, and mapped dependencies and relationships among those benefits. We mapped the themes and benefits into a model focused on capability.
We presented our results and recommendations to several different sets of stakeholders, from engineers to executives. We adapted our presentations to the audience. Where appropriate, we used formats that the company used internally.
We organized our findings into three deliverables:
Going Mobile at Contoso Hospital (Delivery Documentary)
Establishing a Value Realization Center of Excellence (COE) at Contoso Bank (Delivery Documentary)
Security Strategy for Devices at Contoso Insurance (Delivery Documentary)
Business Transformation at Contoso Bank (Delivery Documentary)
Modern Apps at Contoso Health Insurance (Delivery Documentary)
When “Stop” is the Most Valuable Answer (Delivery Documentary)
What happens when a business that is struggling with a problematic project brings in a Microsoft Architect to help create a recovery plan? Let’s see…
This is a Delivery Documentary of an engagement led by the Microsoft Enterprise Strategy Program (ESP), which provides services to help customers realize the most value from their technology investments. In this engagement, the Enterprise Architect led a team in diagnosing issues with a problematic project and recommending a recovery plan.
This project involved assessing and correcting the course of an existing project: developing a customer relationship management (CRM) system using agile methodology. As the deliverable for this engagement, the sponsors requested a new roadmap for the project that accounted for the current organizational goals.
I reviewed the available information on the project to date, including the engagement proposal, the existing project roadmap, and the previous status presentations and other presentations about the engagement’s history and issues.
We held the first meeting with the executive stakeholders to define the engagement and set expectations. To address problems arising from a lack of communication during the initial project, we recommended that we create a governance board to receive weekly status reports on the engagement. The stakeholders agreed, and the board consisted of the following members:
I explained that we would gather data about the project by holding workshops with the employees that would be using the CRM system at the agency headquarters and in each of the affected divisions. I asked the business stakeholders to recommend participants for the workshops, including representatives of the IT group that would be supporting and managing the system. To ensure that everybody involved had the same understanding of the workshops, I requested that all participants attend a single kickoff meeting.
I gathered the resources I would need from both Microsoft and the business. We brought in a Microsoft CRM expert to act as a SME with regard to the project itself. The company provided a resource to help schedule meetings and workshops, and a SME who was familiar with both the business and the technology of the organization.
The team would provide insights into daily operations, as well as the applications and infrastructure that employees used. In addition, the team also reviewed the models of business and technology processes, and provided feedback.
We conducted workshops separately for the headquarters of the organization, and for each division that the CRM system affected.
At the workshops, we collected information from employees, including:
We asked participants to assign ranks and weights to these goals. We could then prioritize the problems and features based on the goals they impacted.
We analyzed the data for each business division, as well as across all divisions. The rank and weight assignments provided raw data for statistical analysis. We used methods such as standard deviation to refine cases where participants in a single group provided ranges of rankings instead of consistent rankings. We also examined dependencies, patterns, agreements, and disagreements both within and across divisions.
The various divisions did have some common goals and initiatives, but they also had markedly different priorities. For example, some employees saw no value in the CRM system because the features that had been implemented so far were not useful to them.
Some groups had conflicting priorities: For example, in one division, employees who answered phone requests from customers were rewarded for keeping the calls as brief as possible; as a result, they collected minimal information from the customers, and often neglected to collect and record the information needed by other divisions.
Other factors in the analysis included, for example, observations that communication issues between the divisions were a recurring problem, and the processes that the CRM system was supposed to support were not well documented. We also noted mistakes that had been made over the course of the project.
We identified themes that would impact the final roadmap. Updating the roadmap itself was primarily the work of the CRM SME. In addition to the roadmap itself, we prepared general recommendations for improving the structure and governance of the project, and for improving the relationships between the parties involved.
As part of these recommendations, we emphasized that the business continue using the governance board that was established for this project, and expand the board to include both field representatives and representatives of stakeholders higher in the organization.
The stakeholders accepted the updated roadmap and recommendations that we presented, and agreed to resume the project with our help.
The following actions on our part were key to forming a great relationship with the business and becoming trusted advisors to the stakeholders:
In general, this engagement demonstrated that:
Evergreen IT refers to running services comprised of components that are always up to date. Evergreen IT encompasses not only the services at the user level, but all of the underlying infrastructure, whether onsite or outsourced. Many organizations believe that evergreen IT holds promise for reducing the resources and energy they need to expend on providing the up-to-date and flexible services that their users are demanding.
This article, based on the experience and observations of Microsoft Enterprise Architects, explores the nature of evergreen IT and what it requires of IT systems, as well as the challenges that IT organizations face in pursuing the most common types of evergreen IT solutions.
The following contributors provided input: Johan Klut, Larry Hanthorn, Mary Lynn Pontier, Peter Deane, Robbi Laurenson, Sree Sundaram, and Stephen Kell.
Companies like the idea of offering applications that are always up-to-date or that can change quickly in response to business needs. Companies also seek to provide this flexibility while reducing the time and expense required to do so.
However, most companies find these goals next to impossible to reach using their current systems, technology, and management approaches. As systems have become increasingly complex, the amount of effort and expense needed to maintain them has increased, and the prospect of making changes to them has become daunting. Businesses may have to change their IT strategies and infrastructure to pursue evergreen IT.
For IT organizations that want to keep all of their systems in-house, converting to evergreen IT is similar to modernizing their data centers:
Many companies aren't interested in an extensive overhaul of their IT systems. As a more economical solution, many companies conclude that the best way to control the burden of updates and restore flexibility to their systems is to replace some of them with cloud-based evergreen services.
However, simply subscribing to an evergreen service does not make an IT organization evergreen. In order to get the full value out of an evergreen service, the IT organization still needs to modify its systems and strategies to become at least partly evergreen itself. Integrating with an evergreen service impacts at least the following areas:
Subscribing to an evergreen service is only one step toward providing users with an evergreen experience. The IT organization needs to make sure that its applications and their supporting infrastructure are compatible with the service, and—most importantly—that it can maintain that compatibility as the provider updates the service.
For example, some companies have published APIs to facilitate business-to-business integration with both their suppliers and customers. Their IT organizations now have to think of themselves as service providers, and provide versioning support and backward compatibility for the API customers. These IT organizations need to be sure that an updating service won't disrupt these APIs.
Smaller companies typically find it easier to adapt their IT organizations and technology to evergreen IT. For example, multiple standardized but configurable systems are easier to update than multiple custom one-off systems. But standardizing systems is easier to accomplish for smaller organizations than for larger organizations that may be burdened by accumulated legacy systems.
The IT organization's operations and management processes need to account for and respond to factors that originate outside the company—outside of the traditional IT domain. These impacts can affect many different areas of operations and management, some obvious and some less so. Issues that the IT organization may need to deal with include:
How should the change management processes accommodate the evergreen service?
An IT organization that is mature enough to successfully integrate an outsourced service typically uses a change management system to log all change proposals and approvals for the managed systems. However, an evergreen service provider is unlikely to send its frequent updates through each customer's change management process. The IT organization needs to confirm what kind of communications or notifications the provider can supply.
How should the incident management processes accommodate the evergreen service?
If there is an interruption in service, incident management processes need to trigger immediate remedial action as well as appropriate communication between the business and the service provider to help resolve the issue. Microsoft, for example, is helping businesses using Office 365 to adjust their incident management processes.
What privacy and data security standards must be applied to this service?
In a general sense, using a cloud-based evergreen service means treating the internet as part of the business network and the business network as part of the internet. The IT organization must ensure that the data processed, communicated, or stored by the service is appropriately protected. In addition, the IT organization must ensure that integrating the service into its systems does not introduce vulnerabilities or possible avenues of attack.
How does the company's regulatory environment affect the way it can use the service?
Regulations may restrict how a business can use a cloud-based service. For example, some countries require that companies store certain types of data onsite, and not in the cloud. In other cases, regulations may restrict the ways in which the IT organization can integrate the service into its systems.
How do budgets need to shift to accommodate the evergreen service?
Typically, subscribing to an evergreen service reduces a company’s capital spending on IT, while increasing its operational (service) spending. Depending on the magnitude of the service costs involved, such a change may take a full budget cycle to implement. In addition, implementing the service may incur substantial one-time costs for training, communication, and change management. In the long term, the business may have to adjust its budget cycle to accommodate the evergreen service billing schedule.
Does the IT organization's Help desk need to support the evergreen service, or does the service provider include support?
What legal issues may arise from using the service?
Although the IT organization may not need to maintain as many systems as before, it needs to keep the remaining systems coordinated with a constantly changing evergreen service.
To do this, the IT organization needs to improve its agility and efficiency. Many companies have built their IT organizations around the need to design, build, and run large-scale services—projects that can span years. Adapting to an environment where services may update every few weeks or months—with updated content under the control of an external provider—can be challenging, especially for large IT organizations.
The IT organization needs to maintain a close relationship with the business units and other customers it supports. As the evergreen service changes, the IT organization needs to communicate any potential disruptions to the business units, and provide information about new or changed features. In addition, the IT organization needs to understand the needs of the business units and make sure that the service is meeting those needs.
IT organizations can pursue evergreen IT as a means to improve the level of service to the business while controlling costs. To get the full value out of evergreen IT, the IT organization needs to do more than just subscribe to a cloud-based evergreen service: Effectively using that service may mean changing existing systems, revising management processes, and changing the way the IT organization interacts with the business it serves.