CONFIRMING CRITICAL PORTFOLIO CONTENT Pertemuan 13-14 Matakuliah : A0824/IT Investment Portfolio Tahun : 2009 CONFIRMING CRITICAL PORTFOLIO CONTENT Pertemuan 13-14 However beautiful the strategy, you should occasionally look at the results. ~ Winston Churchill

Critical Enterprise Results Chains The Strategy Map The strategy map is a visual communications tool that identifies the critical processes and their results and how those results are linked together to implement an organization’s strategies for achieving its strategic goals. The strategy map provides a blueprint an organization can follow to align its processes, people, and information technology for superior performance The strategy map can give a manager the grounds for justifying a business process improvement investment if the process is not producing the required results. Bina Nusantara University

Critical Enterprise Results Chains Strategic IT Linkages Bina Nusantara University

Strategic IT Linkages The critical results lingkages on the strategy map need to be identified so the results at these points can be monitored. The identification of the critical results linkages is best determined by a high-level integrated project team that is formed to study each component or process leading to the creation of the strategy map. The team generally cosist of specialists in the functional area encompassed by the map : Human resources experts IT professionals Other specialists Bina Nusantara University

Strategic IT Linkages Result of Integrated project team Identification of the critical results and their lingkages for each strategy path on the strategy map Performance measures for monitoring critical results Identification of the strategic IT within each business process that enables critical results Bina Nusantara University

Relationship to Balanced Scorecard Strategy map concept is based on the Balance Scorecard approach to corporate management. This approach calls for looking at performance from four related perspectives : Financial Customer Internal Operational Learning & Growth Bina Nusantara University

Value Chains and Results Chains consists of a set of interrelated primary and support activities that an enterprise performs to turn inputs into value-added outputs (results). One activity’s results may be an input to the next linked activity or activities or it may be the final result in a chain of activity results that produces a product or service for external customers Bina Nusantara University

Value Chains and Results Chains The term “results chain” refers to the measurable results of each interrelated value-producing activity in a value chain. It is based on the notion that the value of an activity is determined by its measurable results, not by results that are not measured or not measurable. Bina Nusantara University

Result Chain Results chain make it possible to anlyze performance problems. Provide the “drill down” analysis capability required to isolate the source of a problem so it can be corrected. A result chain is at a more detailed level than a strategy map because it is intended to support detailed analysis. The strategy map provides a high-level view intended to communicate the overall strategies and the major business processes that implement them Bina Nusantara University

Results Chain Involving Two Business Processes Act 1 Act 1 Act 1 Act 1 Act 1 Act 1 Act 1 Act 1 Act 1 Act 1 Act 1 Act 1 Act 1 Bina Nusantara University

Selectivity in Capturing Results Depends : Results chain “size” of the activities – the amount and complexity of the work encompassed by an activity. Measurement Objectives Decision Bina Nusantara University

Gap Analysis and Problem Resolution Performance gap Analysis Performance measures Bina Nusantara University

Result Chains and Gap Analysis A number of results chains will follow this path from the Learning and Growth activities through other activities to the productivity strategy results and long therm shareholder value Bina Nusantara University

Importance of Results Chain Analysis Valuable for lines of business that have complex, interdependent chains of activities The segment performance measures can often be designed to identify the specific activity causing it Bina Nusantara University

Significance of Performance Measures The effective use of performance measures is key to results chain analysis. A basic requirement is that the performance measures accurately measure the performance results of key acitivities in critical strategy paths. Bina Nusantara University

Monitoring Critical Performance Prototyping Displays and Report Portfolio Views Dashboards and Scorecard Automated Performance Monitoring Bina Nusantara University

Prototyping Displays and Reports To ensure that these individuals and groups understand which results are critical to the performance of the organization, especially those in areas for which they are responsible The objective is: To confirm the information that they need and want How and when the information is to be delivered to them The form the information should take How fressh the information must be Bina Nusantara University

Prototyping Displays and Reports Approach is to provide individuals and groups with prototype portfolio views, analyses, displays and reports for their opportunity to participate in the planning of the reporting mechanisms, which increases the likelihood that they will feel ownership and be more committed to the system’s success. Bina Nusantara University

Portfolio Views An advantage of ITPM is that there is only one version of the information provided, so people do not receive conflicting figures or other information that must be reconciled. Bina Nusantara University

Dashboards and Scorecards “Dasboards” are especially valuable for displaying integrated enterprise performance information. - refers to a visual display of information that helps managers monitor various measures of performance. “Scorecards” are also used, sometimes separately and sometimes in conjucntion with dashboard displays. - tends to be used more with certain types of methodologies, such as the Balanced Scorecard or the “investment assessment scorecard.” Bina Nusantara University

Automated Performance Monitoring Automated Gap Analysis Meeting New Challenges The IT resources that now support the performance objectives involves and the capacity of these resources for meeting greater demands The ongoing projects or newly selected projects that could, perhaps with some modification, help to meet the expected future performance demands. Monitoring at the activity, process, and enterprise levels Bina Nusantara University