Delivery Documentaries are a behind the scenes look at how our Architects 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 can a business mitigate risk when considering transformational initiatives, and then accelerate the widespread adoption of new tools and technology? This example, provided by Luanne Middleton-Cross, an Architect, describes how she and her team helped a business evaluate initiatives and promote adoption of new ways of working among employees.
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 Architect helped a company assess business and IT strategy for several initiatives, and then designed training and conducted road shows to promote the adoption of new devices, applications, and new ways of working.
In this engagement, employees and management alike had been hampered by old technology when considering a vision for the future and deciding how best to perform work. The vision was constrained by obsolete assumptions. We demonstrated new possibilities to the business users, showing real changes in work techniques. Employees quickly became enthusiastic when seeing the technology come to life and understanding the options for transforming the way they work.
We began our work during a time when management changes were occurring. Consequently, our first efforts to promote our engagement stalled until new management was in place.
It soon became clear that the previous focus of our proposed initiatives did not resonate with the goals of the new CIO. We had originally considered methods for using a shared service model to build out and scale services so that the business could expand in the region.
The new CIO, who had experience transforming business services, was less interested than the prior CIO in our strategic guidance along these lines. To address the interests of the new management, we changed the focus of our participation. We began having conversations with the CIO about his prior successes, in which our products had played a role, and offered to help make the new strategy successful by first ensuring that it aligned with licenses held and could proceed from the state of technology currently in place. Then we focused on minimizing risk and accelerating adoption.
During this engagement, I worked as part of a very effective team that included an Architect (consulting services), an Account Technology Specialist (sales), and a Technical Account Manager (support). We worked closely together, though I was the single point of contact with the CIO. When the CIO needed something, I was able to relay the information to the correct side of our organization while presenting “One Microsoft” to the customer.
Compared to a typical assessment using the Value Realization Framework, which supports strategy development, this was a short piece that transitioned more into a validation of the various streams of strategy, such as:
We created several position papers assessing the business and IT strategy of the proposed initiatives, which included topics such as the transformation of the document management systems, data center transformation, upgrading desktops, enabling communication/collaboration, remote access, improving security, and adding more cloud-enabled features.
We engaged with a variety of stakeholders to validate the positioning. We met with HR and the Change Management team with regard to new ways of working; and we met with the Chief Security Officer about preparing for cloud migration.
Some of the technology streams were already running: for these our focus was on helping accelerate and remove risk from the initiatives. For others, rather than conduct the work ourselves, we participated in helping with the initiative planning phases. For example, we helped create an RFP to select a partner to use to implement communication and collaboration initiatives. We then participated in doing Technical Quality Assurance (TQA) reviews of the submitted proposals.
Although we are often only involved in initiative planning and delivery, we worked on a number of adoption and change management projects to help the business understand the new technology, prepare for deployment, and support the success of the initiatives. We performed this additional work during the value realization phase of the initiatives.
One of our first objectives was to counter obsolete assumptions held by employees and management when considering a vision for the future and deciding how best to perform work. Employees became enthusiastic when we demonstrated new possibilities and helped them understand their options for transforming the way they work.
We conducted persona analysis to identify and provide the most effective training for different roles at the business. We designed and delivered materials for presentation in a variety of local and remote settings, including face-to-face, online, videos, and self-service training. We also worked with our internal WorkSmart training team to provide useful “Tips and Tricks” sessions to the customer.
One effective driver for employees was the collection of available tools and apps (such as currency conversion, mapping, and so on) that users could run on their new devices. We provided several team members from Premier and Microsoft Consulting Services to discuss, implement, and deploy a company app store that made available a number of approved apps from the Windows App Marketplace, as well as custom apps.
We worked with our customer’s Business Engagement leads to develop and conduct a series of road shows about the new technologies being introduced, since our primary goal was to help ensure that people didn't have a negative experience when first using the new tools.
To this end, we created a “road show” that we held at each of the regional offices. A hardware vendor supplied a variety of devices configured with the new software from which employees could choose. During the road shows, we guided employees in trying out the new technology, and showed employees how to take advantage of new features, including communications and collaboration.
Having worked in an environment that previously restricted the types of devices available, employees were very excited to be able to have a choice of computers, and we assisted employees in understanding the benefits of different devices, and the tools to use to increase productivity.
The road shows were focused on making people comfortable with the new technology, and aware of how to best to get value out of it. For example, if a user was concerned about a new ribbon in the interface, we highlighted how to accomplish tasks with it, provided helpful tips for using the new applications, demonstrated how to get around, and even showed how to use shortcut controls that were customized for the business.
After only a few minutes of hands on tutoring, with just a few pointers about using line-of-business applications in the new environment, employees gained confidence and enthusiasm for the changes.
Some aspects of this engagement that were particularly noteworthy, and from which I learned, were:
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.
What steps does a rural university take to begin meeting begin serving a more widely dispersed and larger student body? This example, provided by Nashreen Hofmeester, describes how a Microsoft Architect helped the university assess capabilities and develop a roadmap for their journey into 21st century learning.
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 university create a roadmap for improving capabilities necessary to expand educational opportunities to a broader community. Work supporting the roadmap included researching global trends in higher education; assessing existing challenges, drivers, capabilities; and aligning business objectives and technology enablers.
I recently participated in an engagement with a rural university that sought to provide higher education to a widespread student body. I was part of a Microsoft Consulting Services team, and was brought in to help assess IT service capabilities and maturities, align business objectives with technology, and help ensure that the university achieve value from current initiatives, as well as chart the way forward to place the university at the forefront of rural higher education.
To learn about the existing challenges and objectives of the university, we held a series of discovery meetings. Some of the meetings used the Value Discovery Workshop approach we have established in our Value Realization Framework. Other meetings were focused group interviews.
The main objective of the university was to transform from traditional offerings and infrastructure to a "comprehensive university" that enabled a broad range of educational opportunities for a larger and widespread student body. The transformation has two phases, of which we are currently helping with the first.
As we continued our discovery, we quickly found that the existing infrastructure was out of date, many components were obsolete and no longer supported, existing services were not stable, and users experienced connectivity issues.
There was no simple path to migrating infrastructure, services, and data. In addition, the university was finding it very difficult, due to their location, to get access to people with the kinds of skills needed to transform and operate the infrastructure.
The university needed to improve the quality of services delivered to comply with government guidelines, attract and accommodate more students, and obtain more funding from students and the government.
We participated in many conversations about making the university more accessible to the surrounding communities, offering online education along with other forms of education, making the university more attractive to prospective students, and increasing enrollment.
In the national educational context in which this university operates, the government is encouraging traditional universities to expand offerings to include more technically-enabled education. The goal is especially pertinent to this university, which operates in a rural area where there is a need to contribute to regional economic growth.
The university was not geared up to interact with students using modern channels and infrastructure. The drivers for change were commonly understood and accepted at the university, but the means to reach them had not been identified.
The primary transformational goal of the university is to change to a “Smart University” in order to make teaching accessible to students attending online classes, as well as students that attended classes in person.
The value of this change is reflected not only in expanding the influence and availability of the university, but in the associated increase in revenue from government, students, and businesses.
Operational value is defined and measured differently in the domain of higher education than in a purely business environment, although increasing revenue is significant driver in both areas.
The university receives government funding based on student headcount, as well as tuition fees from students. In addition, the university receives funding to perform Research and Development work on behalf of local industries.
The university’s overriding business objective for modernizing infrastructure is to drive up the number of students, resulting in increased support from the government, and driving the agenda for Research and Development.
One of the most important activities we performed during this engagement was ensuring that we aligned business and technology goals early in the process.
Right from the start of the engagement, we focused on business objectives and mapped them to technology enablers. We used Benefits Dependency Networks (BDNs) to map from business drivers to investment objectives, and to help identify the benefits that would be achieved for various scenarios.
We also needed to determine how we would measure the success of initiatives, identifying quantifiable metrics that were meaningful to the university. We used many performance indicators identified by the university itself in a comprehensive business strategy document.
Unlike some public sector environments, we were able to work with hard metrics, such as:
To validate that we were correctly aligning business and technology goals, we identified primary stakeholders to review the documented alignment, as well as conducted face-to-face review validation meetings with executives.
One of the first steps on the road to meeting business objectives, prior to enabling a full set of innovative features, was to establish a new baseline infrastructure and solve connectivity issues. We gained the support of many sponsors, including the Vice Chancellor Operations of the university, by speaking about making it unnecessary to acquire updated hardware and support personnel by moving productivity applications to the cloud.
To better understand and evaluate the transformation plans from an operational point of view, the university was very dependent on the Dean of Information Technology.
The Vice Chancellor pulled the Dean into our work, and from the beginning he was open to engaging with us. In the end, the Dean was a strong advocate for our initiatives and played important roles in adoption and change management.
The Vice Chancellor was also instrumental in helping us identify and work with the relevant stakeholders for research and planning. We were fortunate that the university had, through resources in the business school, a good understanding of the value of business planning.
A great deal of remediation was necessary to support connectivity, communications, and collaboration. Even with enthusiastic support, we found the university did not have mature enough capabilities to conduct remediation themselves, or even to plan remediating initiatives. We realized that simply giving the IT department a remediation checklist was not enough – we had to find another mechanism to help ensure success at the end of the day.
Devices to support were seemingly endless. The university had hundreds of devices, and though many students still used the computer labs on campus to perform work, more technologically saavy students were rapidly introducing new and remote devices.
We had an existing Premier support agreement with the university, under which we actively helped drive remediation, including sending skilled personnel to the campus and IT facilities, and to assess and automate remediation.
After performing remediation to ensure that the infrastructure was capable of supporting the more innovative initiatives, we began assessing the capabilities of the data center to determine maturity, gaps, and needed changes.
To evaluate maturity and perform the assessment, we formed a multidisciplinary team that included an enterprise architect and a solution architect with a specialty in modern data centers, in addition to members of the Microsoft Global Practice for modern data centers, and Premier.
As I conducted the maturity assessment, I determined where the client was with capabilities, what workloads needed to be supported, and what levels of maturity were required to support the workloads.
We held a number of workshops and provided questionnaires to gather the background information necessary to understand the environment. During the process, I helped guide our team and the participants from the university, I facilitated workshops and interviews, and helped validate information among stakeholders and sponsors.
To validate our assessment, we prepared detailed review materials, with a strong emphasis on semantics, and provided information in a form that was familiar to our sponsors.
Prior to creating the planned deliverables relating to a transformation roadmap, we found that our sponsors and stakeholders had few clear cut ideas about the architectural principles that would guide them in making decisions about planning and solution delivery. I helped them identify their objectives by explaining the benefits of pertinent principles that have been useful in my experience. For example:
The primary deliverable we created was a roadmap that identified the components in place, the changes necessary, the investments for the next three years, and ongoing value realization activities. In addition, the roadmap points the way to future opportunities for leveraging the cloud, such as enhanced mobility and device support.
The roadmap is supported by a reference architecture from the perspective of the business (higher education), and a reference architecture from a technology perspective.
To encourage sharing and discussing the roadmap, we created poster size versions of it for displaying in strategic locations. These posters attracted a lot of attention, furthered discussion about the projects, helped us refine our deliverables, and supported adoption and change activities.
One of our main goals was to rapidly deliver value in terms of useful features and connectivity, even prior to data center transformation and migrating activities.
We first enabled the university to stay in touch with staff, students, and alumni by creating mailboxes and a collaborative environment supported in the cloud. With these tools, teachers can work online with students, and students can work online with each other. Students can also prepare projects for delivery, and can carry on discussions around topics of interest.
All of these features were delivered prior to sorting out the on premise data centers, modernizing, migrating, or refactoring applications – tasks that the university is still carrying out.
Several aspects of this engagement were notable, including:
The considerable value of a fully engaged client executive sponsor: Having the wholehearted support and active participation of the executive sponsor was key to our success for opening doors and decreasing the barriers to engagement from a business side, particularly with the academic staff of the university.
Remediation challenges: It was important for us to understand the skill set, capability level, and maturity of IT service delivery for the university. We knew we should be prepared to provide actual remediation assistance in those cases where there was not sufficient skill. The initial position of the project team was that the client would be responsible for remediation, but it became evident at an early stage that this would delay the project.
Multiplier effect of embedded Enterprise Services Program (ESP): Embedding the Enterprise Services Program in a Microsoft Consulting Services project has provided us the opportunity to accelerate value realization, as well as identify additional opportunities for value realization for the university.
How do we measure value and value realization in the public sector? Public projects are typically conducted for the benefit of social welfare, quality of life, citizen safety, or other dimensions that can be difficult to quantify in the traditional sense of ROI.
This post, drawn from a paper by Stephen Kell, presents ideas about considering social value while comparing the impacts of various initiatives.
Social value metrics are often useful for representing the performance of a government or the social impact of an organization. Social impact may also be an important consideration when an Enterprise Architect compares the value and risk of an array of initiatives. Some examples of the practical situations that social value modeling can apply to include:
Evaluating Impact for Upgrading Metropolitan Digital Capabilities
Applying social value metrics to work done to date for the digital on such initiatives can be used to provide a basis for prioritizing and calculating the return on investment for future digital initiatives.
Choosing Between Initiatives of Change
In one engagement, business leaders compared the relative merits of spending money to upgrade hospital computer systems vs. spending money on a new hospital wing. Though expanding the hospital at first seemed the best option for expanding care, the quality of care was more impacted by improving physician access to patient information. This increase in efficiency reduced the length of patient stays and increased hospital capacity. Improving quality of care was a more important dimension than the capacity of the hospital. A detailed social analysis gave a different picture than an initial impression based on traditional ROI.
Representing Performance of Social Enterprises and Charities
Social Enterprises in this context are enterprises set up for reasons other than purely profit. They tend to have objectives such as reducing unemployment or employing people with certain disabilities or a marginalized section of the community, therefore their value needs to be expressed in term of the social impact as well as the P&L.
Charities are set up with specific social aims in mind so that the value add has to be in terms of social impact and not the P&L. Indeed, for a well-run charity the P&L will be close to zero.
Generating Corporate Citizenship Reports
Many companies such as Microsoft, now publish citizenship reports that are intended to represent the positive social impact of the company. Social value modeling can be used to assess such impact and the citizenship agenda of these companies.
Planning for Extreme Events
Extreme value theory, a type of mathematical analysis, can be used when considering the social value of implementing various initiatives to see how each of a set of proposed initiatives affects the risks associated with extreme events. The benefit will be the difference between the current Value at Risk and the Value at Risk after the initiative has been implemented.
Characterizing Full Value of Consulting Services
The value of consulting services has largely been assessed on the basis cost savings or risk reduction. Using a social value model, value can additionally be expressed in terms of social impact.
Value dimensions are, like beauty, very much in the eye of the beholder. Dimensions that are well-defined for the commercial sector are often more difficult to define or less relevant when applied to the public sector.
Often the main driver in the public sector is not money, but a desired social impact. Many government departments and charities have to balance budgets, while still achieving the social outcomes they pursue. To identify the most important value dimensions for a project, we need to understand how an organization is measured, how it is judged, and what it wants to achieve.
Increasingly, commercial companies are looking at their corporate citizenship and therefore are starting to have value dimensions other than financial. The techniques and methods outlined here are applicable to those situations as well.
Some value dimensions typically applied in the commercial sector include:
For the public sector, we need to consider additional value dimensions, such as:
These value dimensions are often obtained by consolidating multiple KPIs according to a social value model.
Many models exist defining KPIs for government regarding social impact investing and performance. Though some models attempt to be general, no model is definitive or correct for all governments and all initiatives, as social values vary. Corporations have also defined KPIs to reflect corporate citizenship, demonstrating how social modeling can be applied to corporations as well as government departments and charities.
Consolidating KPIs into Core Value Dimensions
To aid in comparison, the KPIs for public initiatives can be consolidated into the following core value dimensions:
Other dimensions to consider for core value include:
One of the issues when creating consolidated dimensions is that KPIs are measuring different units using different scales, so some way of normalizing them to a common unit and range needs to be used.
One method of doing this is to use an intermediate value (T-Value) as proposed by Charles Taylor (“Composite Indicators: Reporting KRIs to Senior Management.” The RMAJournal, 16-20. April, 2006). T-values are calculated by identifying thresholds for strongly positive, positive, neutral, negative, and strongly negative ranges within a KPI, normalizing the values among KPIs, and then averaging them.
Using this method, the T-Value can take values from -2 to +2, which can then be visualized using Spider diagrams.
The traditional Spider diagram, or more accurately the Kiviat chart, normally has a scale from 0 to 5. In the case of the value dimensions we are talking about, they can be both positive and negative. Therefore we use a scale from -2 to +2.
Anything outside the circle is positive; anything within the circle is detrimental to the value dimension. For example, a large construction project might produce the following chart, showing that the economic impact is very positive but the environmental impact is very negative.
In order to compare different investment initiatives, we can produce Spider diagrams for each initiative and then place them on a grid of costs against risks, as shown in the following figure. This helps us compare and analyze the relative benefits of the initiatives in order to make investment decisions.
A social value model has two parts: the Financial Benefits and the Social Impact. We mathematically model social value to enable us to evaluate, in a pseudo financial way, different initiatives or investment opportunities. We can apply analytical techniques to investments in social value in a similar way as commercial companies assess investments in increased revenue or productivity.
The basic social value model is a way of including non-financial benefits into the ROI and IRR calculations in order to do a comparison of investment opportunities where the main objective is not financial.
The benefits to consider are:
Financial Benefits
The purely financial benefits for an initiative form one side of the picture. The financial benefits need to be identified, weighted and then added up. Such benefits are generally in terms of cost savings or more efficient collection of revenue (taxes).
The steps to quantify the financial benefits are:
These benefits can be spread out over time and be represented by a series of time-related value measurements. We can work out the value per time interval (monthly, quarterly or yearly) and then apply discounted cash flow analysis.
Note also that some “benefits” may be negative because the effect of implementing the initiative may be to derive benefits in one area at the cost of benefits in another area.
Social Impact
The social impact is much more difficult to put a figure on, as well as being more emotive. The approach taken is as follows:
In the same way as the Financial Impact can be spread out over time, the Social Impact benefits can also be spread out over time. We can calculate the benefits per period, monthly, quarterly or yearly, and then apply techniques such as discounted cash flow.
Note also that some “benefits” may be negative because the effect of implementing the initiative may be to derive benefits in one area at the cost of another area. For instance there may be initiatives that have large economic benefits at the cost of the environment.
Calculating ROI and IRR
The methodology for calculating both ROI and IRR or indeed other financial measures uses a combination of the above Financial Benefits and Social Impacts in order to take into account the social impact of the investment or initiative. The process follows for the index values we use in our calculations, based on US dollars (other currencies would produce different scaling).
Alvarado, E.; Sandberg, D. V.; Pickford, S. G. “Modeling Large Forest Fires as Extreme Events.” Northwest Science, Vol 72: 66-75. 1998.
Franklin, J. “Operational Risk under Basel II: A model for Extreme Risk Evaluation. Banking and Financial Services Policy Report.” Volume 27, Number 10, 10-16. 2008.
Franklin, J., Sisson, S. A., Bergman, M. A., & Martin, J. K. “Evaluating Extreme Risks in Invasion Ecology: Learning from Banking Compliance.” Diversity and Distributions, Blackwell Publishing, 14, 581-591. 2008.
Abarbanel, H.; Koonin, S.; Levine, H.; MacDonald, G.; Rothaus, O. “Statistics of Extreme Events with Application to Climate.” McLean, Virginia: The Mitre Corporation. 1992.
Taylor, C. “Composite Indicators: Reporting KRIs to Senior Management.” The RMAJournal, 16-20. April, 2006.
A number of change management tools and models are not only useful when transforming a business or landing a project, but also in understanding why some businesses don’t operate effectively.
Two very important aspects of improving business in general and business transformation involve focusing on awareness and desire: to improve employee awareness of ways to work better, and increase desire to adopt new methods and technologies.
This post is based on the experiences and observations of Robbi Laurenson, a Microsoft Enterprise Architect and certified Prosci® consultant, who has found value in using change management principles in diagnosing organizational issues.
I recently began consulting with a company that has been struggling to effectively carry out strategic plans. It’s been easy to see at an intuitive level that there’s dysfunction in the business, but it’s been hard identifying or describing it explicitly and understanding how to approach solving it.
The problems have been especially evident as we’ve pursued changes in business operations and infrastructure. Attempting to carry out and manage necessary changes has revealed that there are deeper problems stemming from the organization itself that need to be addressed.
Morale has been low in this business, politics is evident around every corner, and there’s a lack of direction in current and planned activities.
One of the executives has turned out to be very negative about business changes. Other executives haven’t had the mandate to make decisions, and the business often seems paralyzed rather than able to effectively move forward.
Even just one problematic executive affected the larger organization. The leader was not engaged in the right ways, and was unaware of the impact this silent message was having on the rest of the organization. This was not driving the business in the right direction.
Though my influence as an Enterprise Architect is sometimes limited to driving specific initiative activities, I found this engagement largely about helping make the right things happen, in the midst of executive turmoil. I had to rely on a set of soft skills to help unblock the political situation.
I had an intuitive understanding of the organizational issues in this engagement, but I wanted a more structured approach that would help generate solutions. For example, after diagnosing business issues, we could address them during account planning, identifying key players if things go wrong, methodology for addressing organizational issues, and describing how tools and relationships can be used to communicate compelling value statements to the organization.
During this engagement, I attended Prosci® Change Management Training (see http://www.prosci.com/training/trainingoverview/).
I soon found myself mapping change management principles to diagnosing the organizational dysfunction at our client, as well as ideas for overcoming it.
The Prosci® ADKAR® model (see http://www.prosci.com/adkar-model/) describes a process that individuals go through in terms of change:
Specifically of interest to me were the phases of awareness and desire. I realized that communication issues relating to awareness were interfering with carrying out changes in my engagement, and that desire for change was ambivalent at high levels within the business.
Most people affected by change suffer from lack of awareness, which impacts all the other stages of change management. It often requires many contacts, using multiple types of media, to communicate to stakeholders. There are also different levels of awareness that people acquire about upcoming changes. Employees may be technically aware of a change without realizing that the change applies to their work.
Without adequate awareness, change does not happen smoothly, and sometimes does not happen at all. For example, one business that sublet some of their facilities forgot to inform the help desk about the new people using the equipment. When the change in facilities usage began, the help desk began getting calls from people they didn’t support, and conflict arose.
People also dislike having changes forced on them, without an explanation of the value of the change. This can make stakeholders feel that they are just cogs in a machine, without the need to know or understand. Stakeholders should understand why a change is better for them, as well as for the business. They should view opportunities enabled by the change, such as being more effective, and directly impacting the bottom line of the business.
Desire is a difficult stage of change to get through. How do you create desire in the face of resistance to change?
Keeping people informed helps overcome initial reactions against change. More desire is gained by clearly showing solutions that people will find useful.
But in most engagements, we should be building buy-in with ongoing participation of stakeholders and those who will be affected by the changes. Influencing desire begins early in the planning process. Invest in stakeholder engagement early. During this phase, it can be very useful to make a vocal champion out of someone who was antagonistic at the beginning, but who has since become a supporter of the changes.
Desire is not a set quality, especially as opinions change as changes are rolled out in phases. A great new system, with exciting and valuable benefits to the business may eventually cause someone to say, “Wait, they’re going to lay people off.” In this case, repair work needs to be done to raise the desire for the planned change and lower the risk of having adoption problems.
Desire is a fickle thing, and extremely dependent on keeping stakeholders informed of changes, value, and rationale. Changes must be seen as being well thought-out, and have involved the participation of stakeholders. Also, when business stakeholders communicate well with technical stakeholders during planning stages, IT has much more desire to enable business changes.
Both awareness and desire hinge on how you run communications through the change management process, especially in the disrupted world of a rapidly changing environment.
Two of the most important people to the success of change management are the CEO of the business, and the immediate line manager where changes are occurring. There is often no substitute for these participants: other managers don’t generally have the same influence or effectiveness in driving conversations and setting direction about change.
When you enter an account, it’s important to know if someone in a leadership position is bucking something happening, without desire for change, or thinking things won’t work out. You need to understand this individual’s drivers and personal context in order to optimize your influence. You’ll need to get this person on board: If a leader doesn’t “feel it,” the leader can’t communicate the right message to others.
When trying to influence people to “come to the party,” different approaches are needed: sometimes you can approach executives directly, and sometimes you need to approach with subtlety.
Some of the techniques for influencing business leaders include:
As I was taking the Prosci® Change Management practitioner training, it immediately became evident to me that the principles were far reaching because they deal with the core of how we get things done – people changing. Much like TOGAF® did for the harder skills in Enterprise Architecture, Prosci® tools provided a language and a framework to describe and influence how, and more importantly why, we can employ other soft skills to land successful engagements.
It’s not enough just to plan and implement – the heart of Value Realization is in landing the change that engages an organization together in creating something better. That means winning the hearts and minds of everyone involved, from start to finish.
When I find that I am struggling to understand why an engagement is not turning out the way I want, turning to the human aspects of awareness and desire is often key to understanding the underlying restrictive dynamics.
I’ve realized that change management principles are both an essential tool for landing projects, and a critical lens for understanding the inner human mechanics of the organization. In this era where we are driving not only purchase and deployment of solutions, but also adoption and utilization, change management is going to be a key pillar of our success.
How do you build relationships with business executives? Often times your opportunity to shift from a fleeting, impersonal relationship with a senior business decision maker (BDM) to a more direct relationship stems from what you can do to build rapport and curiosity in a few unplanned moments.
For Microsoft Enterprise Architect Ron Lamb, the “win” is to gain interest from the BDM for a 1:1 meeting on a topic that is of great personal curiosity or challenge. You may have an unplanned meeting in a coffee room, elevator, or after completing a larger meeting. You have a few moments to create rapport and take the first steps in building a relationship that works on a new plane, one that transcends any specific initiative that you and Microsoft are working on at that moment. What techniques and patterns seem to work to gain that initial 1:1 opportunity, and then build upon it?
This post summarizes the experiences and observations of Ron Lamb, a Microsoft Enterprise Architect involved in business strategy planning.
Over the years I’ve expanded my services from technology into business-focused development and business strategy, especially as I’ve acquired more experience across many industries and around the world.
One of my career objectives has been to quickly build great relationships with chief executives and business decision makers during our engagements. Though my participation often begins as a subject matter expert or to help drive transformation, a personal connection creates opportunities to have a larger and broader impact, and perhaps even become a special resource to that executive. David Maister’s book “The Trusted Advisor” describes the opportunity and techniques best.
For me, an important part of creating rapport and building relationships is quickly opening the door for an exchange and testing of ideas, while presenting learnings from peers.
My goal is to help business executives walk away having learned something, with skills or insights that they didn’t have earlier. I want to provide individual value, in addition to the value I bring as a part of the project team.
In my short conversation with the executive, I share my focus on a challenge that I’ve been researching and struggling with and provide some provocative element of the challenge. I seek an indication that they are challenged / perplexed by the same thing, and if so, ask if perhaps I could invite them out for an opportunity to talk to them about it. I choose a challenge that I know the executive is also curious or concerned about. I share my understanding of the size of the challenge and the opportunity, the lack of a clear industry answer, and the risk of committing to a path that has a suspect likelihood of success. Business executives have a full plate of such highly unstructured, perplexing challenges, so perhaps not unsurprisingly, I often get a positive response.
The opportunity that I imply and hope an executive responds to, is an opportunity to:
Some of the characteristics of topics that work well include:
By demonstrating your willingness to share your insights / hypotheses, you’re putting some personal capital on the table. When executives recognize this, they may reward your openness by sharing their own personal insights and hypothesis.
Very importantly, this must be a “Safe Conversation.” What you are each sharing is to the benefit of each of you as individuals, and not to become the subject of the next day’s conversations amongst the project team, or at Microsoft. This also explains the value in having this type of conversation be 1:1.
To further cement the understanding that this is not part of the ongoing work, and is between the two of us, I arrange for the meeting to be over dinner or perhaps a social setting after work. That is, I’m not using the executive’s or my “chargeable” or business time for this discussion. I avoid meeting in the executive’s office or building. Otherwise, there is an implication that this is work associated with context of the executive’s role, and existing business relationships and contracts. Meeting at the office also introduces time pressures from the need to attend upcoming meetings. The goal is to create a level of separation between the existing client / partner relationship and a burgeoning trusted relationship / advisor connection.
Avoid topics closely tied to the work you have in play at the client. Remove any sense of conflict with the Microsoft or client teams. Try to avoid the project teams questioning, “Why are we not invited to this meeting?” You have to use your own knowledge of who to inform before such a meeting. It is also your challenge to do so in a way that removes the potential of a “gate keeper's” intercession.
Discussions that I’ve personally had with executives in this setting include.
I let executives know our meeting is meant to provide an opportunity to share insights and the opportunity for me to share with them information about what some of their peers in other industries have done when facing similar challenges. When discussing lessons learned (successes and equally important for lessons learned, failures), the executive can look at ways to apply ideas to their own situation and industry.
In the prior post, “Driving Business Transformation through Business Capabilities (Trends and Insights),” we discussed using business capabilities to support strategic business transformation. Here we’ll present more information about identifying and clarifying strategic objectives, and organizing clusters of capabilities within a strategic technology portfolio that also addresses infrastructure, team, data, and processes.
This article is based on the observations and experiences of Atul Totre, a Microsoft Enterprise Architect who has helped many organizations define strategy, assess business capabilities, and improve their strategic technology portfolios.
From the perspective of a business capability model, the driving force behind investment is to transform business capabilities.
But first a business must focus on strategic objectives and understanding how value is achieved through those objectives, before choosing capabilities to transform, and then doing so in ways that produce demonstrable strategic value.
Assessing capability requirements and maturity is very difficult if strategy issues are not resolved first to provide objectives and context. Early collaboration with business leaders about strategy helps ensure an organization realizes strategic business value when transforming business capabilities.
Questions to ask regarding strategy and the current state of the business include:
Once these questions are explored, additional information is identified for planning purposes, such as:
Microsoft Enterprise Architects have been increasingly involved with COOs and defining business strategy, as well as with CIOs and the IT organization. Enterprise Architects also become involved during strategy planning when IT organizations have difficulty mapping IT investments to the balance sheet, and have difficulty identifying return on business strategy and innovation.
When Enterprise Architects are involved further upstream, they are able to provide strategy planning services in many areas, having deep knowledge, broad industry experience, and active networks of expertise to draw on.
For example, one company having difficulty meeting supply chain KPIs began investing in more warehouses, without first identifying a more effective and valuable strategic solution of adding better analysis and distribution methods. After involving an Enterprise Architect, the company was able to translate business strategy to improved operations based on analytics and identify significant KPIs and the value contributions of improving the supply chain.
Each strategic objective may involve many capabilities, clustered into services, and dependent on data, infrastructure, people, and processes. The view of how capabilities will be matured, rather than how technology is deployed, better represents the value of long term investments.
When planning a technology portfolio to fulfill strategic business objectives, a team will ask:
More specifically, important portfolio considerations:
Do we have the right items in the portfolio?
Do we understand dependencies, risks, and assumptions?
What constraints should we consider in our portfolio?
When delivery is in progress, question include:
An organization often finds it easier to tie meaningful KPI’s to a portfolio of projects, rather than to single initiatives. For example, when attempting to improve metrics for a supply chain, a business might have a portfolio of projects comprised of productivity software, analytical tools, and inventory management applications – all together producing improved KPIs related to the supply chain.
Clearly associating a portfolio of projects with the value it will produce makes it easier to obtain funding for business transformation. Rather than attempting to fund new IT components in isolation, business leaders have more success funding, for example, improvements in warehouse management capabilities. Such improvements will involve broad investment in process changes, software, infrastructure, and integration -- but the value of the investment is clearly visible and aligned with business strategy.
This post is the first in a series about using business capabilities to support strategic business transformation. Upcoming posts will discuss more details about strategic planning, and building technology portfolios to meet business objectives.
This article is based on the observations of Atul Totre, who has helped many organizations define strategy, assess business capabilities, and develop transformation roadmaps.
When businesses consider business transformation, they do so to meet strategic business goals, not necessarily technology goals. Project teams throughout a business seek quantifiable value from maturing business capabilities, without focusing on details about IT, data center modernization, identity, or other infrastructure issues.
When business problems need to be solved, an organization using a business capability model can launch a planning program to first identify and clarify strategic objectives, and then consider the business capabilities that need to be transformed, prior to designing a technical solution.
After strategy and capabilities are aligned, solution teams can implement services as collections of capabilities, specifying the infrastructure, team, data, and process elements.
This method delivers an integrated plan for business value-driven transformation, aligning business strategy with technology investments and reducing cost and waste.
A business capability represents what a company needs to be able to do to carry out its business strategy, support its mission, and maintain its position in the marketplace. For example, to manage warehouses efficiently, one company has developed capabilities for integrated planning, advanced forecasting, and flexible supply chains.
Business capabilities are not intended to model processes or define how a business does work. By focusing on capabilities rather than processes, business leaders can create the right mix and sequence of initiatives to align with strategy, not just on doing things “better, faster, cheaper.”
Business capability models vary between businesses and industries. Even in a single business, several unaligned capability models may be in use at the same time. Often, the most difficult part of developing a capability model or approach is aligning the strategies of different groups, who often use different language to describe their priorities, and differing KPIs for monitoring success and making operational adjustments.
Without performing strategic alignment, though, it remains difficult to specify or implement the services that would enable the organization to realize strategic value from investments in transformation.
Business capabilities exist in hierarchies within an organization: Strategic capabilities are made up of underlying core business capabilities, and supported with enabling business capabilities. For example, corporate strategy is aligned with sales and product development capabilities, which in turn are enabled by human resources, IT, finance, and other capabilities.
Capabilities are aligned with business functions, business services, and business processes. For example, human resources capabilities include talent acquisition business function supported by recruiting.
Multiple services typically support a business function, with each service further described by groupings of aligned capabilities. For example, talent assessment, performance management, and career planning are services that comprise the talent management business function.
When managing business capabilities, a business establishes performance goals for capabilities based on the amount they contribute to the value proposition defined in the business strategy.
From the perspective of a business capability model, the driving force behind investment is to transform business capabilities. Capabilities are intended to support strategy; investments in projects enable the new and matured capabilities.
After defining strategic objectives, a planning team begins determining information about pertinent business capabilities, functions, and services. A business asks:
Early collaboration with business leaders about strategy helps ensure an organization realizes strategic business value when transforming their capabilities. A Microsoft Architect helps a business rationalize capabilities across departments and look at how strategy can be realized by maturing groups of capabilities.
Importantly, by focusing on strategic objectives first, and understanding how value is achieved through those objectives, capabilities can be chosen and matured in ways that address specific goals and KPIs, and produce demonstrable value. Microsoft Architects often become involved during strategy planning when organizations have difficulty mapping IT investments to the balance sheet or identifying return on business strategy and innovation.
Assessing capability requirements and maturity is very difficult if strategy issues are not resolved first. A strong understanding of strategy is needed to start answering the following questions, while giving appropriate context to them:
After defining strategy objectives, an organization considers the business capabilities that will enable the strategy.
Business capability work is largely conceptual, and precedes process modeling or designing physical implementations. The approach is shown in the following steps:
Since business capabilities can span departments, functions, and services, a business can assign shared responsibility for business capabilities among appropriate business groups. Considering capabilities intact, rather than breaking them down into enabling components, makes it easier to align transformation with strategic objectives, and in turn with the associated initiatives and benefits.
Roadmaps can provide a multi-year view of technology investment needs for a capability, while supporting an integrated planning process. The language used in the roadmap is based on descriptions of key business functions, not systems. Planning discussions around these roadmaps relate to business problems, not technology.
We use several tools during a capability assessment, creating materials that become sources for the transformation roadmaps:
In the next post about using business capabilities to drive transformation, we’ll discuss more about the approach, strategy planning, and the value of defining a strategic technology portfolio to enable business capabilities.
What steps does a company take after finding out that large amounts of IP have been leaking into the hands of competitors? This example, provided by Sree Sundaram, describes how a Microsoft Architect helped a business create a strategy for protecting information.
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 create a strategy for changing employee behavior and business processes to stop IP leakage and support robust IP protection.
Though the IP protection strategy that was developed had technical underpinnings, this engagement was primarily about
Over the years, Contoso has witnessed their IP gradually leaking into the hands of competitors, and management has recently become aware of large releases of confidential material in very short amounts of time. Problems with IP protection have affected customers, partners, employees, and governing agencies on a global scale.
The company was in the process of deploying new productivity software and a collaboration platform, and IT had addressed the technical details of protecting data at rest and in transit. However, because IP leakage had previously occurred in similarly protected environments at the company, the stakeholders began to focus more on people and processes.
Contoso needed a business strategy, not a cyber security solution. Not only was technology maturity required for IP protection, but the business wanted to know how to change people and processes at the company to ensure adoption of new technology, and awareness of and adherence to policies. A strategy, envisioned target state, and a roadmap was necessary.
I did an extensive survey of Contoso, encompassing all global employees in different divisions and different roles.
To begin, I had access to the members of a business liaison committee that had been established for an earlier project. I met with each of the senior directors that made up the committee and described the help I thought was needed, and how I could represent their interests while addressing business goals.
The directors adamantly wanted to work from a business view, not from an IT view. Supporting this, I explained the methodology and strategy I would use to improve IP protection in light of business requirements, employee behavior, and operations.
I met early, and often, with the Chief Security Officer (CSO) of Contoso. I pledged that the conclusions and advice I offered would be rationalized and based on facts, and that I would present all assessments and recommendations to him so he could discuss with his team prior to wider distribution. During the engagement, I was also able to facilitate and improve his access to the IT team regarding the status of the work. As a significant stakeholder in the engagement, it was important to be able to build trust with the CSO and his team.
While independently meeting with stakeholders, I found that many employees were worried about their work being misrepresented by others, especially in regard to responsibilities for protecting information. In my role, I was able to have separate discussions, outside of formal workshops, to effectively gather information from employees who might otherwise have been reluctant to share ideas or point out problems.
Taking a business-focused approach was critical, even though IT was a champion of improving information protection. Prior experience with IT had left many business divisions feeling that their business needs were not being addressed.
I held several workshops, with different groups of stakeholders, to determine their business perspective of information protection. How did information protection and stolen IP affect and expose them? There were many stakeholders with differing views, but after our workshops, all participants were able to more clearly articulate their requirements and better participate in the entire conversation.
The stakeholders responsible for data classification at Contoso were interested in meeting to discuss how Microsoft performed data classification. We held a workshop about our methods, the challenges we faced, outcomes, and our place in the journey.
The legal staff had originally done the data classification work for the business. After I developed a more detailed data assessment survey, the staff was able to enlarge their vision of the work necessary, and requested that I assist them with implementing improved data classification methods.
Given the information that we had gathered, we assessed the maturity of the Contoso information protection maturity when considered against various models.
We assessed using models from Gartner and Forrester, as well as using the Microsoft Enterprise Information Management Architecture, and determined the maturity ranking, and a target ranking their could realistically strive for within a short amount of time.
Bringing in a team of SME’s, we determined how IP and information could be protected on-premises, and as the enterprise moved to the cloud. We created a Proof of Concept (POC) that detailed the target state, including a roadmap, value points, and deliverables.
As part of the POC, we provided insight from experts from MSIT about how Microsoft protects information and IP, and showed how Contoso could adapt our processes given their maturing capabilities.
After the POC was delivered, we held a workshop on the next steps. Participants included senior executives, the CSO, business stakeholders, legal, and IT. We were able to deliver a consistent message about implementing the recommended strategy and meeting requirements for information protection while expanding business operations to the cloud.
Innovation is hot. There are a huge number of articles about being innovative; every company wants to think of itself as innovative; consultants warn us that only innovative companies will survive and grow.
But what is innovation, and how can IT participate in a central and valuable way?
This post, written by Stephen Kell, explores these topics.
I believe the main characteristics of innovation are new ways of doing things that help an organization or community realize more value from strategies and investments.
For a company, benefits could be either greater efficiency, new revenue streams, or improved brand perception. For a not-for-profit organization, innovation could produce benefits that increase social impact and the value of services provided to a community.
In order to manage innovation ideas, I categorize innovation into three different types:
Continuous Service Improvement Innovation
Technology-Led Innovation
Business Innovation
Small changes or improvements which can have huge impacts on the cost and quality of service delivery
Cross-Industry technology mega-trends that have emerged to offer potential business value
New business models based on new value propositions, disruptive new entrants, technology disruptors.
Can be organizational, process, systems, or facilities.
Industry and market trends, drivers and disruptors and their business impact
Innovation distinguishes business from competition
By categorizing types of innovation, we can apply different processes to the different types of innovation.
Continuous Service Improvement
This type of innovation can come from anyone within the organization and the ideas are often collected by an ideas hub, enabling people to vote for the ideas. The ideas are then passed to a panel from IT and the business to decide whether to move forward with the ideas.
If the idea goes into production then the business often makes a token award to the innovator. These ideas are often small changes but can have a huge impact on the bottom line, making it worthwhile to collect the ideas and sift through them in order to find the real gems.
Technology Led Innovation
Technology Led Innovation is based on new technologies which are potentially disruptive. The IT organization monitors new and potentially disruptive technologies and assesses impact to the business. When valuable technologies are identified, they are then used to create a proof of concept. In order to realise full value, an enterprise will need to create a business change program to accompany the technology project.
This type of innovation is where the most value is derived, but also the most risk encountered. Here, business models are developed around new technology or new value propositions. Companies pursuing business innovation are seeking value propositions that are fundamentally different from that of their competitors. Innovative ideas end up at the board level, although initial ideas can come from anywhere in the company.
An example of a technology led business innovation is eBay, which imitates auction houses but with a different, more accessible business model.
A useful book that discusses this type of business innovation is “Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant,” W. Chan Kim and Renée Mauborgne, Harvard Business School Press, ISBN: 1591396190.
Companies are very dependent on technology in order to perform their business. The CIO should, therefore, be a key member of the executive management and be seen to be one of the leaders of business strategy and innovation.
However, all too often the CIO and IT department are seen to be the providers of infrastructure, a view that may inhibit innovation because of business restrictions to help ensure security and system integrity.
In order for the CIO and his IT department to be seen as a valued business partner, the CIO has to demonstrate how IT is adding real value to the business by business innovation. Otherwise the CIO may be side-lined as just a provider of infrastructure services, and the business will look for other sources of innovation to add value. Sometimes enterprises even establish rival organizations to IT under a Chief Digital Officer or a Chief Innovation Officer.
Though IT departments sometimes set up “innovation centers,” they all too often stay restricted to testing new technology or upgrades to existing applications or products, with little relevance to the business.
In order to be relevant to the business, innovations have to be linked to business strategy or business initiatives; innovations have to be solutions to business challenges; innovations need to focus on realizing more value from operations, sales, employees, customers, and other facets of the business.
The types of tools that can be useful to drive this relevance and to show the value of the innovations are:
These techniques are useful for demonstrating the relevance of innovations to a business and the value generated from innovations.
When discussing creativity or innovation, one mantra is “think outside the box.” However, I would instead agree with Luc de Brabandere (Thinking in New Boxes: A New Paradigm for Business Creativity, Random House, ISBN-10: 055384119X), who advocates thinking in different boxes.
Brabandere points out that people think in structures and models, not in a vacuum. Therefore a person’s thinking is bounded by the box that he or she is thinking in. In order to be truly innovative or creative a person needs to think in a different box.
The Beatles, one of the most creative bands that shaped the music we listened to for decades after they split up, thought about music in many boxes, including a new one that combined Indian music with jazz and blues. The band embraced the diversity of different cultures to come up with something truly innovative.
Similarly, by embracing the diversity of their employees, rather than trying to fit them to a mold, organizations can become more innovative. Organizations can find different boxes by challenging the way they look at themselves and exploring if there are other ways of categorizing themselves.
Innovation is the life-blood of an organization that wants to grow. But innovation must be linked to business value to be effective. Technology is one of the key drivers behind innovation and the CIO must be one of the innovation leaders in partner with the business. The business and IT leaders should not challenge the organization to think outside the box but rather provide pointers to different boxes that employees can think within to innovate in valuable ways.
In the prior post “Six Keys to Succeeding in the Changing Role of Enterprise CIO (Trends and Insights),” we summarized observations and experiences from a group of Microsoft Enterprise Architects about what differentiates successful CIOs from those that don’t do so well.
Here we’ll present brief examples of CIOs attempting to manage their organizations and rebuild the relationship between IT and the business, while:
Thanks to the following people for providing information and feedback for this article: Peter Deane, Larry Hanthorn, Johan Klut, Paul Lidbetter, Brian Loomis, Stephen Kell, Robbi Laurenson, Mary Lynn Pontier, Blessing Sibanyoni, and Sree Sundaram.
To make tough decisions, change IT organizations, and make those changes stick, a CIO must have a clear vision of how the IT organization should work, be able to articulate the strategy for the IT organization and for the business units it supports, and must lead an effective team.
Team-Building
In the past, CIO’s in one market were characterized by their autocratic approach to managing their organizations, and those organizations were frequently disrupted by competitive internal politicking between silos.
More recently, new CIOs have tended to take a more collaborative approach. They realize that the IT organizations need to work with networks of dependencies both internally and with vendors and suppliers. As the changes at the top level begin to ripple through the organizations, they begin to become more collaborative and effective.
A bank in this market has now had the same CIO now for five or six years. This CIO is continuing to do well and is making major savings in the company's IT budget by making clear strategies and plans, and communicating them widely.
To start establishing a vision for the IT organization and its role in the company, the CIO instilled a set of shared values among the team leads. The team leads committed to these in written values statements and leadership commitments.
The team leads and the CIO then traveled to the different company sites to engage the rest of the IT personnel and get them on board with this vision. The IT personnel also signed leadership commitments.
In order to keep IT personnel engaged in the organization and its goals, the CIO pays considerable attention to acquiring and managing talent, focusing on team building, and providing excellent collaborative experiences to employees.
Some CIOs have improved their IT operations by consolidating data centers and reducing the data center resources that their companies need. This process includes eliminating redundancies and rationalizing applications, workflows, and processes. These CIOs have also ensured that the processes are standardized, transferable, and leverage known best practices.
During such transformation, the CIO must help develop and communicate a clear set of governing principles. Without such principles, businesses seeking to improve IT operations will encounter many difficulties.
“Running 100 miles per hour with scissors”
One manufacturer recently replaced its CIO. This new CIO is making some leading edge changes, while dealing with an IT organization heavily burdened with legacy systems and processes.
The new approach, combined with new plans that the CEO recently announced, mark a dramatic change in approach for the IT organization. In the past, this company outsourced several services, but still managed to spend a very large amount of money on IT. The pace of change in IT processes and technology was relatively slow.
The new, but still problematic approach has two main components:
There is also an important piece missing from this CIOs approach: a clear set of governing principles. As a result, one stakeholder described the company's actions as "running 100 miles per hour with scissors." This IT organization may be particularly vulnerable to issues arising from unclear governing principles because the majority of the IT workforce consists of new hires. Some of these new employees have been hired from IT organizations in other companies, and are accustomed to doing things in certain ways.
Many other new employees have been recruited from colleges, and are new to working in corporate IT as well as working in teams. With these new hires, team development and skill transfer have become crucial to the IT organization.
The CIO wants to focus on the business, and be able to measure how the IT organization contributes or gives back to the business. One of the main challenges is a workforce that is too new to understand the business well enough to carry this out. The organization is improving ways to understand and communicate business priorities, standards, and policies to create effective teams and meet business needs.
The most successful CIOs are involved in the business planning process, rather than "aligning" the IT organization with the business. These CIOs can express the value of IT to the business – how the IT organization can add more value to the business by acting as a partner, not simply acting in a support function.
The Microsoft Architects have observed that if the business units believe that the CIO understands their business needs, they are more likely to come to the CIO if they want a service change or new service (such as external cloud-based services). The CIO can take on the role of advisor and coordinator for the business unit.
IT as a Business Partner
One CIO has actively coordinated team-building efforts while overhauling the role of IT within the company. This CIO spends 50% of his time on the IT organization, and 50% on business-related projects.
During his work, the CIO talks with business unit heads and other business stakeholders. He also sits on the company board. He has direct access to the business unit heads, and is almost on an equal footing with them. In turn, they view him as a partner in the business.
The CIO has molded the rest of the IT organization to focus on partnering with the business. Previously, the IT organization focused on monitoring systems and reporting measurements and other statistics. Now, the IT organization focuses on outputs that are useful to the business.
The CIO has stated "It's not about effort, it's about outcome." The IT organization maintains cheap, agile test environments where personnel can experiment with new ideas and solutions. These are sandboxes where mistakes, considered inevitable in this type of work, cannot cause harm.
As a result of this strategy, in this company IT is not a cost center. It is a peer organization that contributes to the strategy and bottom line of the business. The IT organization comes up with business-transforming ideas and new products and services.
Recently, the CEO announced plans for substantial new investments in the company, with the majority allocated to IT projects. In addition to services, better communication, and faster processing, these investments will go toward analytics, digitization, and customer relationship management. The CIO has successfully expanded the role of the IT organization to become an invaluable business partner.
Recently, we surveyed a group of Microsoft Enterprise Architects to collect their observations about what differentiates successful CIOs from those that don’t do so well, based on experiences working with and observing CIOs in many different industries.
CIOs often have very limited tenures, lasting about 24 months in their positions. However, there are CIOs who beat this average, and who succeed in leading effective IT organizations. Most of these CIOs use similar strategies and follow similar patterns.
In recent years, to keep up with the changes in the IT environment—new technologies, new services, and new service models—the CIOs who have succeeded have worked to reprioritize the responsibilities and tasks of their IT organizations. These CIOs recognize two primary functions for their IT organizations:
The IT organization provides services on which the business depends.To maintain these services consistently at the level the business expects, the IT organization needs to operate according to a service management model.
In addition, when multiple data centers provide services, the services need to be standardized and globalized to remain consistent. These factors are especially important in companies that have outsourced services; IT organizations in such situations may spend more effort on interfacing with service providers than on fixing technical problems, and standardized service management processes are key to successful integration.
The IT organization helps the company function and compete successfully, thereby adding business value.The IT organization needs to function as a partner to the rest of the business – able to listen to their needs, offer solutions, and help with strategic planning. In general, in companies where the CIO reports to the CFO, the IT organization is functioning as a cost center that is separate from the rest of the business. In such cases, the IT organizations are not closely connected with their respective businesses, and the businesses do not see them as partners or contributors.
We asked Microsoft Architects what they saw successful CIOs doing that less successful CIOs did not do. Their observations boil down into six strategies that successful CIOs use in managing their organizations and rebuilding the relationship between the IT and the business:
In the view of the enterprise architects, the biggest challenges that today's CIOs face involve making tough decisions, changing their IT organizations, and making those changes stick.
To deal with these challenges, a CIO must have a clear vision of how the IT organization should work, and must lead an effective team. The CIO needs to develop a clear IT strategy that identifies what needs to happen, what resources are needed, and how to best use those resources. The CIO also needs to articulate the strategy for the IT organization and for the business units it supports, and needs to present a vision that explains why the strategy is important.
The CIO's area of responsibility is becoming extremely complex, and the role of the CIO is changing. Traditionally, a CIO managed assets within a company's boundaries. New phenomena such as cloud-based services mean that the CIO maintains control of the base IT platform, while managing outsourced or subscription services.
New device technologies mean that the CIO may also end up managing employee-owned devices. The company's boundaries are less relevant and the number of factors beyond the CIO's control has increased. In the meantime, CIOs are finding that business units want to consume services as utilities (like electricity), regardless of where those services come from.
The CIO could now be called the Chief Innovation Officer: the conduit that brings in the services, partners, and technology that the business units need.
As a result of this increasing complexity, the CIO can no longer expect to know everything needed to plan strategies for the IT organization. Some CIOs have realized that they need outside expertise in addition to their own knowledge, and they have benefitted by getting access to this expertise. They are forming strategic partnerships with vendors and service providers that go beyond products and services to the expertise involved.
The Microsoft Enterprise Strategy program is an example of a service provider acting in this role and responding to this need. Its premise is to establish a deep, long-lasting relationship based on trust and intimate knowledge of the customer's environment.
Not all CIOs have integrated this expertise into their environment yet; few have begun to consider service providers as "expertise assets."
The enterprise architects reported that CIOs who stay focused on technology—such as the number of servers they manage—and see cloud-based services as a threat tend to have more difficult relationships with business units.
Faced with this approach to IT, business units are more likely to bypass the IT organization and obtain the services they want on their own. The enterprise architects have seen such moves create significant difficulties for the IT organizations involved, and ultimately for the business as a whole.
Many CIOs today don't understand how convoluted and redundant their IT organizations have become. They may have been able to streamline some processes and reduce some costs by outsourcing, but these savings may diminish over time as provider costs increase.
Some CIOs have improved their IT operations by consolidating data centers and reducing the data center resources that their companies need. They have worked to globalize and streamline the infrastructure, applications, and processes that their IT organizations use.
This process includes eliminating redundancies and rationalizing applications, workflows, and processes. In companies with multiple data centers, these CIOs have worked to ensure that resources are fungible (consistent across all data centers; for example, personnel from one data center can function effectively in another data center, even in a different time zone).
These CIOs have also ensured that the processes are standardized, transferable, and leverage known best practices.
The most successful CIOs are focusing less on technology and more on outcomes that add value to the business. Most IT organizations today are supply-driven: they run certain services, and that's what they provide to the business.
However, demand-driven IT organizations usually function more effectively. In such organizations, CIOs analyze the business, assess the business needs, implement a solution, and effectively market that solution to the business. They can demonstrate the business value of IT investments and strategies. As new technology becomes available, they consider its possible uses, come up with new opportunities, and present those to the business.
In order to accurately understand what the business needs, most CIOs need to improve the communications between IT and the business.
Some CIOs have accomplished this by designating senior liaisons who aid communications between IT and the business units. Not only do these liaisons help IT identify what the business units need, they build faith within the business units that IT will listen to them and respond.
These liaisons can provide immediate feedback from the business units to the IT organization. In addition, because they have approachable points of contact with IT, the business units believe that IT hears, understands, and will address their issues.
Microsoft Architects have seen various types of liaisons, including:
The most successful CIOs are seen as peers by other business leaders in the company, instead of heads of cost centers that report to the CFO. Many of these CIOs have worked in business units or otherwise have business credibility. They are involved in the business planning process, rather than "aligning" the IT organization with the business.
The CIOs that can make this breakthrough are those that can express the value of IT to the business--how the IT organization can add more value to the business by acting as a partner than by acting as a support function.
To do this, CIOs need to use credible metrics to measure added business value, and track and communicate those metrics regularly. They need to be able to define business cases to support their actions in the same terms as the other business leaders in the company.
Microsoft Architects have observed that if the business units believe that the CIO understands their business needs, they are more likely to come to the CIO if they want a service change or new service (such as external cloud-based services). The CIO can then evaluate the request based on business needs and benefits, and determine the best way to accommodate the request. The CIO can take on the role of advisor and coordinator for the business unit.
In companies with CIOs that cannot or do not articulate this idea, Microsoft Architects report that IT organizations become less relevant to the business units, and a culture of conflict (rather than of partnership) may develop between IT and the business units.
In such situations, business units are more likely to bypass IT to buy services from external providers. When business units are not confident that the CIO understands their business needs, they are more likely to pursue changes like external cloud-based services on their own, bypassing the IT organization.
Many CIOs are trying to engage with the business at this level, but as far as Microsoft Architects have seen, only about 50% are succeeding.
Unfortunately, in many companies, the business units tend to react skeptically at first to such planning and prioritizing initiatives. They're not accustomed to discussing issues like productivity, risk management, and compliance with IT. They don't believe that IT understands their business processes or their ROI requirements.
It takes time and multiple conversations between the business units and the IT organizations to build the trust and credibility needed for the groups to work together effectively. Most companies are still working their way through this learning process.
The “Internet of Things” is made up of connected sensors and devices for just about any type of equipment, from phones to household items to heavy machinery. The Internet of Things makes it possible to monitor equipment in real time, as well as use predictive analytics to identify potential disruptions and malfunctions before they occur. The combination of monitoring and analytics can help businesses save huge amounts of money in avoiding defects and service disruptions.
This post is based on an upcoming white paper called “It’s not about Big Data, it’s about Big Insight” by Achim Granzen, Architect in the Data Insights Center of Excellence, with contributions from Ken Collins, Fidan Boylu, Philip Reilly, Benjamin Wright-Jones, and Delbert Murphy.
With new generations of connected devices appearing everywhere, the new world of data described in the post “Enabling Big Insight with Big Data (Trends and Insights)” is even more rich with possibilities. Whereas customer insights employ a mixture of traditional and new data attributes, the data produced by the Internet of Things can only be described by the flexible attributes associated with the new world of data. The Internet of Things produces data as diverse in format and structure as the devices themselves, detailed but often messy, plentiful, and generated outside organizational boundaries (physical as well as logical boundaries).
Gaining insight from this type of data is nearly impossible if managing and analyzing with traditional approaches, especially when time to insights is considered. However, this data holds information that is critical to an organization, as it can help lower damage and repair of equipment (predictive maintenance), prevent health and environmental hazards (event and incident monitoring), increase quality of services and products (performance management), and help optimize service operations (route optimization).
Sometimes, scenarios touch or even overlap, however it is ultimately the business goal that determines the scenario. Even consumer devices such as mobile phones and tablets are considered part of the Internet of Things, as they are essentially connected devices. Better understanding of the phone user’s – the customer’s – location, preferences, likes and interaction history enables customer insight. Monitoring the handset for early signs of equipment failure and detecting coverage gaps by location-specific signal strength analytics provides operational insight in terms of predictive maintenance and (network) performance management.
A key challenge for any operational insights scenario is the wide, potentially regional or global, distribution of the devices to be monitored and analyzed, Before the availability of large scale cloud-based services for ingesting, storing, and analyzing data, many of these scenarios were cumbersome to realize, and in many cases not feasible or plainly impossible.
Similarly, the huge variety of data types and formats in the past – each device having its own format and structure – made it extremely difficult to process data from such devices, let alone employ predictive analytics on a large scale of attributes and parameters.
Now, key technology capabilities can enable a typical analytics solution for operational insights, including:
An analytics solution for operational insights will mainly deal with externally created data, of a large variety of structure and format. Hence, a cloud analytics platform that enables this is a core component of any architecture. External data can be processed through a cloud based data ingestion, storage and management system, with support for streaming data. Most analytics such as predictive maintenance can be performed directly in the cloud, as it is normally not required (nor feasible) to bring that data on-premises.
Internal data from data warehouses and operational systems, which might be required to augment the data analyzed (for example, serial numbers and other basic equipment identification data) can be uploaded into the cloud analytics platform and stored in either structured or unstructured form.
To close the loop, analytics results need to be made available to the business, for further exploration and visualization by business analysts, or for inclusion in management dashboards and other reporting systems.
Figure 1. Schematic Architecture for a Primary Cloud-Based Analytics Platform
The above describes a typical architecture in a scenario where the majority of data is created outside of an organization. In scenarios where a large share of the data is created and available within an organization (i.e. not geographically distributed), the architecture will more closely resemble a hybrid approach, as discussed in the post “Customer Insight—The New Age of the Customer.”
The key theme in predictive maintenance is risk management, particularly reducing the risk of potential high cost events such as machine part failures or quality issues, by being able to take corrective action before the event occurs.
Predictive maintenance as a business scenario is not a newcomer on the stage, however the recent development and availability of cheap, interconnected sensors opens up a large number of use cases and scenarios, and the availability of cloud-based data ingestion and analysis dramatically reduces the need for complex infrastructure. Both trends make predictive maintenance much more pervasive than in the past, literally touching every household (for example, smart meters, energy use, and so on).
For example:
Avoid costly asset downtime and reduce maintenance costs
Contoso was struggling to deal with vehicle failures within its fleet management system. As a result of unexpected malfunction and the time wasted on the maintenance, the company was losing money and resources in correcting the issues after the failures happen.
By using extensive amounts of telematics data that are collected through on-board sensory systems integrated with environmental and product data, Contoso is able to use predictive machine learning methods to perform health tests on the current operating conditions of the vehicles and identify vehicles that require immediate maintenance action.
Reduce warranty claims due to unexpected failures
Contoso was struggling with frequent warranty claims on a certain line of its products due to unexpected failures.
Predictive maintenance now identifies when equipment in the field is likely to fail or need maintenance in order to predict future warranty claims costs and maximize uptime for equipment used to deliver service. By using predictive maintenance, Contoso is able to eliminate bad publicity and minimize resulting lost sales from negative customer product reviews.
Improve inventory management of spare parts by predicting failures
Contoso was having problems with predicting the inventory for its expensive parts that may have long lead times, leading to high inventory cost and risk of low inventory levels. The company needed just-in-time inventory management to reduce costs.
Using predictive analytics capabilities, the manufacturer can determine if certain products are likely to fail and then analyze the financial implications of the failure. The analysis also shows where the failures will occur and what the demand in a given region will be for the replacement parts. The manufacturer can then ensure that the correct supply of replacement parts can be available at the appropriate time.
Managing the performance of an organization, or of a part of its business, goes much beyond the classic financial reporting, best described as financial performance management. Using both descriptive and predictive analytics capabilities to track, analyze and improve the performance of a system (such as component production or discrete manufacturing) has a direct impact on the bottom line of an organization where every element of “waste” can attribute to significant costs.
Improve Production Quality Assurance and Yield
Contoso was having problems with its certain line of products coming out defective with some parts or the products not meeting quality standards. These needed to be recycled or fixed, which led to loss of time and effort and caused delays in the assembly and shipment of the products.
By using an analytics approach to examine the sensor data collected from the assembly line, Contoso is able to accelerate root-cause analysis to determine the source of the problem and sustain quality standards by understanding the key predictors in the assembly of the products that eventually leads to defects.
Safety is the key objective for event and incident management and monitoring, with potentially severe implications not only financially but in many cases to human lives. Especially in the natural resources and energy industries, health, safety and environmental (HSE) is a key concern in every aspect of the operations: problems can affect the lives of thousands, even millions of people.
Similarly, organizations secure locations, buildings, and events not only to prevent financial implications (intrusion, theft, damage) but also to address the safety of the public as well.
Better protect Health, Safety and Environment
Contoso was unable to achieve a near-real time view of their equipment condition, which is distributed over a large geographical region with difficult access. This led to situations where equipment malfunctioning was going unnoticed for a considerable period of time, causing severe HSE issues. With HSE being a key performance metric for Contoso, it was important to get an accurate picture of events, and mitigate any event that has happened.
Using a cloud-based remote equipment monitoring system, Contoso’s operations control center is able to get accurate and timely information on all of their equipment, visualized in an easy-to-understand format, and with capabilities to take direct action. As a result, potential hazards to the health and safety of their workers, as well as to the environment, can now be addressed much quicker, resulting in lower severity and an overall improved HSE KPI.
Improve Situational Awareness, Security and Tracking
Contoso City was challenged in analyzing data from various streams of public safety systems in a timely and consistent manner to present law enforcement and crime prevention officers with a concise description of a crisis situation, preventing them from acting quickly and precisely.
Using a consolidation and comparison system which can ingest a large variety of data types from video to license plate readers, and employing monitoring, visualization and analytics capabilities, Contoso City can now provide real-time analytics and improved situational awareness for the men and women on the front lines of law enforcement and crime prevention, which helps to further enhance public safety outcomes for Contoso City citizens.
Going well beyond the classic “Travelling Salesman” problem, route optimization applies to a multitude of scenarios where things have to be moved from A to B in the most optimal, most cost-effective, or most secure way: it applies to moving people (transportation from buses to planes), discrete goods (from parcels to containers) and resources and utilities (gas, water, electricity).
Besides “Where” (to optimize the transport mechanism or medium) – the How is equally important. This is particularly evident when dealing with power grids and networks, as there are many more elements involved (power plants, transformers, distribution stations, meters) than just the power lines.
For example,
Optimize Power Grids and Networks
With ever increasing pressure to conserve energy and reduce energy loss and peak loads, Contoso was struggling to analyze load patterns and distributions, and encouraged selected consumers to shift to off-peak hours.
By employing a network of smart meters connected to a cloud based data ingestion and analysis system, Contoso can monitor energy consumption and the effectiveness of off-peak special offers in real time, and take other corrective measures as required. The system also allows Contoso to analyze and predict electricity usage patterns much more detailed and accurate than ever before.
Optimize Traffic and Goods Movement
Contoso Airlines was challenged to increase their revenue per seat-kilometer (RPSK), primarily by optimizing ticket pricing, capacity and scheduling; and additionally by increasing ancillary revenue (non-ticket revenue). For example, the ability to accurately forecast seat upgrade demand for a given flight – based on a combination of factors such as flight, region, period of the year, loyalty program status, early/late purchase, etc. – would allow them to set the price of the premium seat accordingly. Contoso was unable to do a proper analysis based on data, as they lacked analytics and data preparation capabilities.
Using a cloud-based analytics solution leveraging Machine Learning, Contoso Airlines is now able to optimize the decision-making process for schedule optimization and for ancillary revenue. For example, they can priority rank customer attributes according to their relevance on customers’ propensity to upgrade their existing seat.
Customer insight is a prime objective for many business scenarios using Big Data. Such scenarios also provide examples of how organizations may have to change in order to reap the benefits of the “new world of data.”
Over the past several years, customer behavior, communication channels and buying mechanisms have irrevocably changed. As a result, organizations have adapted their marketing and sales techniques. The new richness of information about customers, though complex, presents the potential for deep insight that was not previously possible or feasible.
[For more details about the “new world of data” and data leadership, see the prior post “Enabling Big Insight with Big Data (Trends and Insights).”]
The new age of the customer represents, more than anything, a cultural change as consumers embark to embrace continuous learning and questioning of products, services, and messages. For customers, information to make buying decisions is now ubiquitous; they are armed with sufficient information to make decisions on the spot.
For organizations targeting those consumers, it means moving away from a steady state world, driven by processes and workflows, towards a constantly changing world described by new parameters such as context, device, and location. No longer can an organization rely on a one way marketing for a fixed (and fixated) audience.
Organizations can now get a very detailed understanding of who their customers are, how they are perceiving the organizational brand and its products, and how they are comparing the brand to competitors’ brands and products by analyzing the sentiment (tone) of public posts on social media.
Using (near) real-time capabilities, an organization can “keep an ear to the ground” about the current discussions regarding brands and products. This can provide direct and very accurate feedback on the impression on a target audience of a new marketing campaign or product launch, and enable an organization to immediately know and address overtly negative perceptions and take corrective actions to protect the brand.
Nowhere is the data evolution more obvious (and indeed more progressed) than in customer insights. The change of customer perspective from record-centric to interaction-focused is even more radical. The new way of marketing in this environment requires new insight and a far more detailed understanding of the customer than ever before, being:
These are all new attributes to consider in a complex total customer view. These attributes were neither available nor captured in the traditional world of customer data.
The new world of data goes beyond classic customer analytics which primarily builds upon internal, structured data. New data allows marketing organizations creates a multi-facetted single customer view with actionable business insights from such diverse sources as Point of Sale transaction data, loyalty data, online/web experience data, lifestyle information, market research and demographic data, marketing channel response data; and specifically social media and direct communications channels.
The classic customer analytics tools such as segmentation, churn, cross-/upsell, are enriched and complemented by text and sentiment analytics, marketing and advertising analytics to enable closed loop marketing and portfolio optimization, retail behavior prediction, customer service and satisfaction improvement, and brand research/protection.
Key technology capabilities for a typical customer insights analytics solution are:
An analytics solution for customer insights will always require the combining of internal, primarily structured data, with external, primarily semi-/unstructured data in an as seamless as possible manner. A hybrid analytics platform that enables this is a core component of any architecture. External data can be processed through a cloud-based data ingestion, storage and management system, with support for streaming data. Certain analytics such as sentiment analysis can be ideally performed directly in the cloud, as it is not always required (nor feasible) to bring that data on-premises.
Internal data from CRM and ERP systems, and data warehouses, can be brought into the hybrid analytics platform either through traditional ETL, or through an Extract-Load-Transform (ELT) process, using a non-structured format as (intermediate) storage before being transferred into a (temporary) structure as needed for specific analytics purposes. Also, analytics results must be fed back into operational systems to leverage them in business processes. For example, customer churn probability and best offers must be available to all customer contact points.
To close the loop, analytics results need to be made available to the business for further exploration and visualization by business analysts, or for inclusion in management dashboards and other reporting systems.
Figure 1. Schematic Architecture including a Hybrid Analytics Platform
When it comes to obtaining new customer insights, the possibilities and promises of exploiting social media are almost always at the forefront of an organization’s action plan. In the excitement over the seemingly endless possibilities for social media analytics it is of utmost importance to understand how social media works, and how it can be utilized. More than anything, this requires a social media strategy.
Promote the brand with social media and sentiment analytics
Contoso is struggling to deal with changing customer behavior and eroding brand perception. Competition from new market entrants presents additional challenges as they push new innovations, offer lower prices, and provide better overall customer experiences.
By tapping into the vast amounts of information generated through social media and connected devices, Contoso finds new opportunities to better understand their customer’s preferences and perceptions of their brand. The social data is easily combined with internal market data to gain deeper insights into brand awareness and profitable customer segments.
Targeting an organization’s existing customer base to drive additional revenue is a major objective for any marketing operations team. Improving the return of any marketing campaign, increasing the wallet share and tapping into new markets have always been and will remain top priorities.
Support better business and sales decision-making
Contoso is struggling to provide their business users with a unified view of all internal customer information: the services, sales and marketing teams have to struggle to assemble required information from a multitude of systems.
Using a consolidation approach across internal as well as external customer data, the Contoso IT organization is providing their business users with a 360-degree customer view for key business applications. Services, sales and marketing teams are able to react quickly and decisively in their daily business and sales decision making, as they have an accurate view of all customer information available to them at any time.
Implement effective customer segmentation to create targeted campaigns
Contoso is struggling to identify the main segments of their customer base accurately. As a consequence, they are not able to create targeted marketing campaigns, or place successful cross-/up-sell offers with their most profitable customers. A one-size-fits-all approach is increasingly responsible for a bad brand image.
By employing descriptive analytics, Contoso marketing professionals are able to identify and understand their customer segments better, and create specific offerings and campaigns targeted at each segment, which results in a much higher response rate and increased brand perception, as customers “feel understood” by Contoso.
Increase market and wallet share using predictive customer analytics
Contoso is struggling to increase their market and wallet share, and is unsuccessful in creating high return marketing campaigns. Competition from new market entrants presents additional challenges and lure once loyal customers away, resulting in an erosion of Contoso’s customer base.
By employing predictive analytics on their aggregated customer data, Contoso is able to understand customer preferences, intentions of changing brands, customer lifetime value; and discover the highest yield route to driving market and wallet share. The internal data is easily augmented with external data to gain deeper insights into customer preferences and profitable segments.
Despite the trends towards new channels and means of interactions between an organization and its customers, the traditional call-center is nowhere near to becoming obsolete. On the contrary: businesses are offering more and more services without an actual physical or local presence (for example, car insurance), making call centers a primary means of communication for these online services, as well as for traditional businesses shifting services to a lower cost mode of operation.
Maximize customer retention and satisfaction through improved service
Contoso Call Center is challenged by the inability of agents to access all relevant customer information when in a call, which results in a low customer satisfaction and cancellation of services. Contoso needs to capture data from customer service interactions and provide real-time customer insight to help call center staff deliver high quality service experiences to customers.
Employing an analytics solution within their call center operations, Contoso can now provide call center staff with a complete view of the customer in real-time. This leads to an overall improvement of the quality of their customer service, with agents having at their fingertips a combined view of customer preferences and profitability. Contoso call center operations can also capture and integrate call center performance data at the individual customer level, including call volume, call duration, and resolution status to identify past performance and take corrective action where necessary to continuously improve the customer experience.
Big Data is at the forefront of the minds of many business leaders, in different domains and industries. In addition, with the widespread hype about Big Data in the media, many businesses have begun looking to spearhead technology initiatives with Big Data features.
When considering such initiatives, it’s important to keep in mind that Big Data is a tool, not a task. When planning, an enterprise must define and focus on business objectives and outcomes that will determine the success of the technology initiatives.
This post, and several future ones, are based on an upcoming white paper called “It’s not about Big Data, it’s about Big Insight” by Achim Granzen, Architect in the Data Insights Center of Excellence.
The following contributors and reviewers provided input to the white paper from which these posts were drawn: Ken Collins, Fidan Boylu, Philip Reilly, Benjamin Wright-Jones, and Delbert Murphy.
In less than a decade, data and information have moved from the back-room of enterprises to become critical business assets. Data that was previously locked away in structured applications is now made available everywhere, in every form and format.
Across every industry and every organization, data and information have become “first class” citizens, producing new knowledge and insight. New technologies and techniques add significant capabilities to mature Business Intelligence (BI) and Business Analytics solutions for enabling enterprises to obtain business insights.
While most of the current definitions of Big Data are descriptive, a more encompassing definition includes the potential value proposition as well, as in the following description:
“Big Data represents the trends, technologies, and potential for organizations to obtain valuable insight from large collections of structured, unstructured, and fast-moving data.”
Traditional BI uses data from internal business transactions and operations. The infrastructure for supporting such data includes Enterprise Resource Planning (ERP) systems, data warehousing with extract-transform-load and query & reporting capabilities, Online Analytical Processing (OLAP) analysis, and data mining.
In such an environment, data may have attributes such as:
These attributes typically describe a system of records (for example, customer records).
The traditional BI model does not go away—it is enhanced and expanded as technology progresses, for example adding self-service BI capabilities for business users. Traditional BI will continue to be the approach of choice in certain business domains, such as managing corporate financial performance.
However, the traditional BI model and technologies are not well-suited to use semi-structured or unstructured data, especially in case of the data originating outside the boundaries of an organization.
For example, strategic business insights can be derived from audio/video/images, text/xml documents, web logs and click streams, social media postings, data from sensors/devices, and event and streaming data.
In this new world, data has attributes such as:
These attributes typically describe a system of interactions or engagements (for example, interactions with customers).
Traditional relational databases are not well suited to handle such data. With the arrival of Big Data technologies and techniques, it is now possible to bring these data sources into the decision-making process in a financially feasible and timely (often near real-time) manner. Some examples are:
The following illustration shows how the traditional BI model is expanded to include the new data types, new sources, and new technology capabilities commonly grouped under the term Big Data. Traditional BI is represented in green; Big Data elements are represented in blue.
Figure 1. Expanding the traditional BI model in the new world of data
This new world of data has implications throughout the entire organization. Besides the technology impact outlined in the previous section, it impacts an organization’s culture, processes and people. All of these dimensions have to change and adapt, to enable an organization to succeed.
Processes
Business Analytics is an agent for change; ideally it results in a constant loop of asking questions, gaining insights, taking action, measuring results, then asking new questions to get new insights.
Processes in an organization have to adapt to this cycle of constant change. This also affects the way business departments and IT collaborate (or more often than not, fail to collaborate).
The constant insight loop requires a constant and close collaboration to ensure that all undertakings are driven by business questions and result in achieving a set of business objectives. Technology is the means to achieving these objectives.
People
With the now all-popular and ever present Data Scientist taking center stage in any discussion of new roles and skills required to tap into the value of data, the need for close alignment with the business might well justify a more to-the-point description as a “Business Scientist”: a Data Scientist with sufficient business domain expertise to provide the “missing link” (for example, a Marketing Scientist).
Such a role is not an IT or technology role anymore, but solidly anchored in the business, and the key skills are not just about academic qualification, but particularly on the application in a business scenario.
Culture
All of the above can only really happen in a culture that fosters sharing and insight, essentially a data driven culture. Organizations are adding C-level data roles, in the form of a Chief Data Officer (CDA), or Chief Analytics Officer (CAO). These positions recognize the value of data as a strategic asset of the organization – a major cultural change for most organizations.
IT departments these days are often tasked to “start with Big Data;” however, without a clear business objective, such endeavors rarely lead to success. Rather, initiatives should focus on a concrete business objective such as Customer Insights (or Citizen Insights), Predictive Maintenance and Management, and so on.
Two important scenarios (to be discussed more in the next posts), are based on Big Data are Customer Insight and Operational Insight.
Customer Insight
Customer Insight is one of the prime areas when looking at business scenarios impacted by the evolution of data. It is also a prime example of how an entire business has to change in order to reap the benefits of that evolution, as customer behavior, communication channels and buying mechanisms have irrevocably changed over the past 5 to 7 years. As a consequence, the way organizations market and sell has changed already, but the new complexity also comes with the potential for new and deep insight previously neither possible nor feasible.
Operational Insight
With the rise of the Internet of Things – connected sensors and devices for just about any type of equipment, from phones to household items to heavy machinery – it becomes possible to not only monitor equipment in real time, but to use predictive analytics to identify potential disruptions and malfunctions before they occur, thus saving huge amounts of money on defects and service disruptions.
Starting with an understanding of the desired business outcomes is imperative for any undertaking which aims at obtaining insights in the new world of data. New technologies and techniques, along with disruptive market trends, provide the playing field for exciting new ways of running, managing and changing an organization. Analytics is the agent for change, enabling new insights, leading to new ideas, leading to new questions – a perpetual cycle of insight and action.
Figure 2. Perpetual Analytics Cycle
Integrating a perpetual analytics cycle is definitely not something that can be solved by just new technology – it is an enabler, but not sufficient. As outlined earlier, the new world of data requires people with new skills, new ways of looking at business process, and a new culture that values data and insight based decisions making. In addition, the benefits of analytics can only be reaped in a truly collaborative environment of business functions and IT functions.
Figure 3. Four Critical Dimension for succeeding in Analytics
Analytics has the power to change an organization (uncovering new business areas, new ways of doing business, new products and services), therefore managing that change across the four critical dimensions People – Processes – Technology - Culture is the key for succeeding in Analytics. In upcoming posts, we will discuss Customer Insight and Operational Insight scenarios as examples.
Enterprises are increasingly moving services out of the realm of IT, and business units now obtain many services for themselves from providers other than their IT organizations. During and after the process of moving services out of IT, IT and business units may have overlapping responsibilities, and will benefit from establishing formal roles, liaisons, and oversight during transitions in service.
This article continues exploring the move of services out of the IT organization, using industry examples to illustrate topics in the post “What Happens When You Move Services out of IT? (Trends and Insights)”
Thanks to the following people for providing information and feedback for this article: Brad Clayton, Larry Hanthorn, Brian Loomis, Stephen Kell, Blessing Sibanyoni, and Sree Sundaram.
To drive moves from internal IT to external cloud-based services, more and more the business units are creating their own CIO-type roles.
Typically, such business units each designate a senior business leader (or someone who reports directly to such a leader) to act as a liaison with the IT organization. These high-visibility liaisons help manage the business units’ supply and demand relationships with the IT organization.
For manufacturing organizations, such as chemical and auto manufacturers, functions such as IT are usually centralized; individual business units may have designated “liaisons” to coordinate with the IT organization.
However, business units sometimes run particular applications or services outside of the central IT organization. Such applications or services tend to serve specialized functions or require specialized environments, such as:
For these businesses, running such applications and services outside of IT is not a new development; they have been operating this way for some time. In each case, the decision to run (or at least start) an initiative in a business unit instead of IT originates at a fairly high level; for example, from a sales director who wants to standardize his organization on a common process or product.
In some cases, the business units may hand the new application or service off to IT at a later time, when the new application or service is operating to the business unit’s satisfaction.
Three factors usually determine whether a business unit attempts to run a service on its own:
“Alignment” between the IT Organization and the Business Unit
How well does the IT organization understand and respect the priorities of the business unit? The two types of organizations may have significantly different priorities. For example, both may care about saving costs while maximizing value—however, they may define value very differently.
This type of disparity may become especially problematic in companies that use a “tax” model to fund IT (each business unit contributes a percentage of its budget to fund IT). The IT organization uses the resulting budget as it sees fit to provide services to the business units. Unfortunately, if the IT organization does not accommodate the priorities of the business units, the services may not meet the needs of the business units.
If sufficiently dissatisfied, the business units may use their own budgets to seek alternative solutions (and may seek to reduce the contribution they provide to the IT budget to compensate).
Skills and Resources of the IT Organization
Does the IT organization have the appropriate capabilities to provide the services that the business units want? This issue becomes particularly important when the business units need highly specialized or flexible services.
In general, IT provides services efficiently using consolidated, monolithic systems. Custom-tuning solutions for different business units is far less efficient, especially if different business units have significantly different needs. The IT organization may not even have the skills in house that are required to customize solutions in this way.
Some IT organizations find it embarrassing to admit that they don’t have the specific skills needed. However, if it does not have the right expertise, the IT organization may misinterpret the business unit’s requirements and produce a solution that does not satisfy the business unit at all.
Responsiveness of the IT Organization
Is the IT organization willing to work with the business unit to find solutions, and can it develop solutions in the timeframe that the business unit requires? In particular, companies have found this to be an issue when data access and security is involved.
In one case, a business unit was working with experts outside the company and needed to share data with them. The IT organization refused to grant the outside experts access to the data. The business unit found a way to share the data anyway, going around IT to do so.
In another case, a company wanted a secure central repository for IP. The IT organization took on this project, but worked in isolation without getting feedback from the business units that would be using it. As a result, the repository was not ready when the business units needed it. Long before the project was complete, a scientist left the company (and the country) taking confidential information with him to use for his own purposes. The company suffered a substantial loss of business and had to give up that line of research entirely.
In general, these changes can have a transformative impact on an organization, and for employees and IT they require a shift in mindset similar to the historical move from mainframes to desktop PCs and servers.
Cost savings vary depending on the type of change; for example, moving from internal IT-managed stores to cloud-based storage services can produce massive cost savings. Other services may not necessarily be cheaper when moved off of internal servers, but are definitely more agile. Faster provisioning and reduced time to market for new services are crucial for organizations in highly competitive markets.
Both the business units and the IT organizations can benefit from this distributed arrangement. Business units can get better, more responsive services without taking responsibility for the whole infrastructure involved. IT organizations can narrow their areas of responsibility to better achieve valuable objectives.
One particular finance company is moving line of business (LOB) applications and services out of its central IT organization. The decision to do so was made at the vice-presidential level.
The heads of the business units determined that the internal IT organization was not responsive enough to the needs of the business units: it was not flexible enough, and what changes it did make were far too slow.
From the point of view of the IT organization, the changes that the business units wanted would not be cost effective (for IT). Therefore, the IT organization helped the business units move services:
The change did not involve any change in budget or resources for the IT organization, although it may be able to redistribute its focus to produce cost savings in the long term.
Preliminary indications are that both the business units and the IT organization are satisfied with the progress so far. The services do not necessarily cost less, but the business units are happier with the quality of service. They can make changes to their services more quickly, and their external partners can provide solutions specific to them (instead of general solutions that have to serve all of the business units). The new arrangement has eased tensions between the business units and the IT organization.
So far, the main challenge that the company has faced involves GRC. Previously, the IT organization was responsible for GRC and data security issues. However, the new arrangement moved PII data out of the IT organization’s domain, and the business units were not familiar with GRC issues. The new services and applications potentially put PII data at risk. To resolve this problem, the IT organization stepped back in to monitor GRC and to work with the business units to maintain data security.
Business unit consumers seem to be largely happy with the results of moving to cloud-based services. By and large, they aren’t worrying about bigger, longer-term issues (even though some groups, such as Marketing, probably should be).
In general, the IT organizations have concerns about security, reliability, integrity, and so forth that the business units may not consider. Such concerns (in addition to potential loss of budget or headcount) may deter IT organizations from supporting the business units in these changes—or at least motivate the IT organizations to bring such changes under their control.
A national government identified IT as one of many areas where the government must reduce costs. To implement this initiative, the government established a network of leaders for the digital initiatives, consisting of a leader from each main government department.
This new organizational structure overlaps the existing IT structure, in which each main government department has a CIO who runs an IT organization, which includes data centers and outsourcing agreements with external system integrators. The new digital leaders (Chief Digital Officers, or CDOs) in each department have organizational ranks equal to or higher than the CIO, though they have a smaller organizational budgets.
Responsibilities are being divided between the two structures:
One unforeseen impact has been the departure of CIO personnel. CIOs tend to see the CDOs as rivals, especially as the CDOs’ areas of responsibility grow.
Microsoft Enterprise Architects have observed many businesses moving services out of the realm of IT. In addition to this trend, business units are increasingly obtaining services for themselves from providers other than their IT organizations.
This article explores the consequences of moving services out of the IT organization. What challenges have these organizations faced? What impacts did these changes have (foreseen and unforeseen)? How did business and IT employees respond?
In general, the process of moving services out of IT starts with utility services such as email, instant messaging, and hosting; these functions are easy to move out of IT to cloud-based services (as opposed to more complex functions such as Business Intelligence). Some companies have gone further, making business units responsible for the LOB applications and services they use (or for whole functional areas), whether they partner with a third party or not.
The primary motivation behind this trend comes from two drivers:
CEOs and business leaders are reconsidering the purpose and role of IT, looking for ways to reduce costs. IT requires a significant budget, but the value it adds to the business is often difficult to quantify.
At the same time, in many companies the IT organizations have not met the needs of the business units they serve, and business units are considering whether they can get services from other providers or run the services themselves.
Compared to the services offered by the IT organizations, external cloud providers appear to offer cheaper, faster, more responsive service. Because of the large scale at which cloud providers operate, and because cloud providers do not have the same legacy processes and bureaucracy, internal IT organizations find this level of service difficult to match.
This trend encompasses a range of changes in how business units obtain IT-related services, from subscribing to cloud-based services such as email to developing and running their own applications. Many companies are still in an experimental stage, trying to find the balance that works best for them.
Subscribing to third-party cloud services
A common approach is to subscribe to third-party services (such as Office 365) instead of relying on the internal IT organization to provide these services. For example:
Other companies are outsourcing or “smartsourcing” particular capabilities, ranging from storage synchronization to Helpdesk service.
Moving specialized services to the business units
Some companies have been leaving IT in charge of the more general functions, and moving more specialized functions to the appropriate business units. For example, the IT organization develops and maintains centralized data stores, while business units develop and run the LOB reporting tools, analysis intelligence, websites, or other applications. In addition to outsourcing, some business units run their cloud-based social networking and financial lifestyle management web sites.
Microsoft Architects have observed business units design and develop an LOB system, and then hand it off to IT to run. In other cases, business units may contract with third parties to develop or run the LOB system as a cloud service.
Some companies are also moving whole areas of responsibility out of the IT organization and into the business units. For example, one company made its business units individually responsible for their own information security, moving that responsibility out of the centralized IT organization. Each business unit created a Chief Security Officer role. The IT organization helped the business units set up their information security programs, including appropriate governance protocols and training.
More and more the business units are creating their own CIO-type roles to drive a further move from internal IT to external cloud-based services.
To coordinate this distributed functionality, the business units involved typically each designate a senior business leader (or someone who reports directly to such a leader) to act as a liaison with the IT organization. These high-visibility liaisons help manage the business units’ supply and demand relationships with the IT organization.
The move to services that are external to the IT organization is still a new thing for many companies. As was the case when outsourcing emerged as a trend years ago, they are still finding the best balance between internal and external services. Microsoft has worked with companies as they go through the process of dividing functions between the IT organizations and the business units, and noted several challenges.
Business units and IT organizations do business differently. Projects that require them to interact must account for differences in funding models, and differences between business cycles and IT cycles.
Companies may struggle to define the new relationships and boundaries between the business units and IT, including the roles of liaisons. The issues to address may include:
A big factor that makes this process difficult is that many companies do not have enough information to make the best decisions:
Both the business units and the IT organizations can benefit from this distributed arrangement. Business units can get better, more responsive services without taking responsibility for the whole infrastructure involved. IT organizations may lose some headcount and some control over the service systems, but the more enlightened organizations are aware that they cannot meet all of the needs of all of the business units they serve. By narrowing their area of responsibility, they may be able to better achieve their overall objectives.
The attitude of the IT organization to moving services to the business units can range from positive to overwhelmingly negative. The culture of a company and the implementation approach it takes may be the most important factors controlling the reaction.
In some cases, IT organizations have supported the transfer of functions to the business units; these IT organizations are fully aware that they are not able to meet all of the needs of the business units, and can see how by moving functions they can focus more effectively on the services that remain in their jurisdiction and still control costs.
However, IT organizations often feel that they are competing against cloud-based services, and in some companies other business units have in fact used cloud services as leverage against IT in conflicts over resources. Other more specific reactions include:
This article explores common objectives many companies have when using cloud technology, as well as the impacts they may need to consider. When companies use the cloud to reach customers and support employees, many business areas may be impacted, and IT organizations need to adapt to changing IT functions.
The following contributors provided input for this post: Blessing Sibanyoni, Brian Loomis, Johan Klut, Larry Hanthorn, Mary Lynn Pontier, Peter Deane, Robbi Laurenson, Sree Sundaram, and Stephen Kell.
Consumers have become accustomed to using cloud-based services and devices; as a result, companies have customers who are more informed and more demanding, and expect rapid responses. For example, banks are exploring how they can use cloud-based services for a variety of new opportunities, new service possibilities, and new markets. In addition, some banks are developing mobile apps that can work with these services.
Other companies are developing cloud-friendly APIs so that their customers and business partners can more easily connect their own systems to the companies’ systems, regardless of what technologies each party uses.
Many companies see cloud technology as a way to improve their own agility and flexibility in dealing with customers:
By subscribing to cloud-based services for their employees to use, companies seek to improve the agility of their own business processes:
At many companies, IT organizations are exploring ways to reduce their workloads (and costs) using cloud-based services; in particular, by replacing in-house systems with cloud-based services from external providers. Some IT organizations are outsourcing specialized services, so that they do not have to maintain the necessary systems and expertise.
An increasing number of IT organizations are outsourcing email service for these reasons. Others are outsourcing data management, as described previously. IT organizations are also exploring ways to replace legacy systems with cloud-based services in order to avoid issues with the support lifecycle.
Some IT organizations are subscribing to evergreen services (services that undergo frequent changes and updates) in order to reduce their own burden of managing updates. The post Evergreen IT—Getting the Most Value (Trends and Insights) explores the factors and impacts that come with this approach to using cloud-based services.
Companies have found that using cloud-based technology can impact their operations in a number of ways, both intended and unintended. To get the best value out of a cloud-based service, the IT organization may need to change:
The expectations of employees are changing; many have more advanced technology at home than they do at work. They are accustomed to using social tools to communicate, and want access to them at work as well as at home. More and more, employees are demanding that companies either allow them to work using their own devices, or provide similar technology. Employees are also pushing for these companies to modify their formal business processes to produce a more flexible work environment.
In addition, business units are expecting increasingly agile and rapid response from IT organizations. In some companies, IT organizations are still using processes that were designed for services that took many months or years to design, build, and deploy. In such companies, the growing gap between the expectations of the business units and the actual responses of the IT organization has been highly frustrating for the business units.
For example, the Human Resources unit of one business decided to use a social network to link and communicate with recruits. To accomplish this, HR requested that IT procure appropriate subscriptions to Yammer. In response, the IT organization wanted to consider options and review business cases. However, as far as HR was concerned, the decision was already final and they were ready for the service.
Microsoft Architects have seen that this kind of frustration can lead business units to circumvent their IT organizations to use new technologies and services. In the past, business units did not have this capability, but with cloud-based services, such maneuvers are increasingly feasible.
IT organizations are not used to dealing with this kind of behavior, and are coming to terms with the idea of adapting in order to maintain their authority (or even their relevance). They need to update their processes to account for new services and engage with the business units to provide appropriate services in a timely manner.
Cloud technology has provided the opportunity for some companies to change the way they outsource. Historically, many large-scale service providers have relied on economies of scale to produce stable, non-changing services. In addition, the actual outsourcing deals often involved multi-year contracts between the company and the service provider.
Large enterprises have found that such commitments hinder their flexibility and agility. If the IT organization identifies a provider that fits the company better, the existing contract may prevent them from changing providers. If the internal applications that the IT organization manages depend on a service from an external provider, the IT organization may be limited in how they can change the internal applications until the service provider makes compatible changes. In a business environment where flexibility and agility are increasingly important, such limitations are becoming significant problems.
These enterprises see cloud-based services as potentially much more agile than traditional outsourced services. As the existing contracts conclude, enterprises are beginning to experiment with different types and scales of outsourcing arrangements available with cloud-based services.
Some Microsoft Architects predict that as companies increasingly rely on services that operate across public networks and infrastructure, the companies may become more tolerant of non-guaranteed service levels. In addition, companies may find that they can optimize their agility and flexibility by compromising between services that offer "best of breed" performance and those that offer "fit for purpose" performance.
For cloud-based services, updates and feature changes are the responsibility of the service provider rather than the IT organization. This can reduce the workload of the IT organization. However, the fact that the IT organization no longer controls updates and maintenance intervals brings its own complications.
The significance of this factor varies depending on the type of service involved. So-called evergreen services change and update frequently (on the order of weeks or months), resulting in a number of challenges for IT organizations. Other services may not change nearly as rapidly.
Even when using services that do not change frequently, the IT organization needs to keep an eye on the provider’s update schedule and the way the service integrates with in-house systems. The IT organization is responsible for keeping the in-house systems compatible with the cloud-based service. Some IT organizations minimize this issue by strictly limiting such integration, but this solution is not always practical.
In companies that produce APIs or other applications that depend on such cloud-based services, developers need to pay much more attention to version control and release processes, so that updates do not disrupt customers.
The security implications and challenges of cloud technology are complex. Considerations about security and cloud services are covered in the post 10 Questions to Evaluate Security and Cloud Services (Trends and Insights).
Using cloud-based services, companies have new opportunities to add or improve revenue streams, improve agility, and reduce IT costs. However, managing an environment that includes (or delivers) cloud-based services affects the IT organization's emphasis and its operational model. Using cloud-based services is likely to require an IT organization to:
The extent of these effects depends in part on the types of services the business wants and the extent to which those services must integrate with in-house systems. As a result, the IT organization is likely to need to shift its culture and mindset as well as its capabilities.
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.
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:
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:
Welcome to the Value Realization Team Blog!
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)
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.
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:
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: Contoso Hospital Goes Mobile
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
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.
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.