The Era Of BT Changes How IT Assures Business Alignment Bobby Cameron Vice President And Principal Analyst Forrester Research September 9, 2008

3 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Agenda What is BT - and why doesn't IT's current approach work? How does BT change the business' expectations of IT? How are IT shops changing their organizations, technologies, and alignment processes to enable BT success?

4 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Agenda What is BT - and why doesn't IT's current approach work? How does BT change the business' expectations of IT? How are IT shops changing their organizations, technologies, and alignment processes to enable BT success?

5 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Business alignment is about matching resources ►Adjusting IT resources to match business demand for both existing and new technology services.

6 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Today’s best IT executives manage IT-business alignment through a practice of “matching”... IT organizational structure -to- business units IT initiatives -to- business strategy IT budgets -with- business units IT initiatives -with- business processes The CIO -with- business peers...

7 Entire contents © 2008 Forrester Research, Inc. All rights reserved. But alignment presents constant challenges as CIOs strive to balance across three dimensions Demand What business requests Funds for new investments Individual business units’ needs Business plant, equipment, people What IT needs to improve Legacy maintenance Enterprise-wide processes Technology investments Focus Delivering new value Outsource Delivering business process change Current business plans Deliver new value the old way Re-architecting for future development In-house staff Reducing ongoing ops costs External market forces Upgrade staff skills Change Emerging technologies Agility Business-value sourcing New business models Existing IT architecture Stability Internal sourcing Traditional business models

8 Entire contents © 2008 Forrester Research, Inc. All rights reserved. And business organizations are frustrated with IT Businesses are impatient with IT’s speed IT’s efforts to govern technology populism fail Technology is allowing users on their own to out-pace IT’s projects Alignment becomes tough as IT’s design-build-maintain approach isn’t working!

9 Entire contents © 2008 Forrester Research, Inc. All rights reserved. New technologies enable business users — without IT Tech populism — blogs, wikis, IM, handheld devices Assembling, composing, and configuring — business process management (BPM), information workplace (IW) Contracting — Software as a service (SaaS), business process outsourcing (BPO) All based on increasingly robust IT infrastructure and operations

10 Entire contents © 2008 Forrester Research, Inc. All rights reserved. We call this a shift to Business Technology (BT) ►Pervasive technology use that drives business results — increasingly under the control of business organizations

11 Entire contents © 2008 Forrester Research, Inc. All rights reserved. BT will bring a fundamental change not just another swing of the IT pendulum

12 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Non-IT staff drive the use of technology through roles previously found only in IT Base: 186 global business executives 28% 34% 26% 28% 21% 30% 3% 4% 3% 2% 31%25% 15% 27%19% 36%24% 38%24% 32%21% 3% 10% 7%16% 6%19% 5% 12% 10% 5% Defining or designing the solution Directly selecting vendor-offered solutions Directly negotiating with and/or directly managing solutions vendors Directly configuring solutions to deliver what you need Directly managing the technology solutions once in production Directly managing projects with substantial technology involved Completely other business areas’ (not IT’s) responsibility More other business areas’ responsibility Equal mix of other business areas and IT More IT’s responsibility Completely IT organization’s responsibility Don’t know Source: July 2007 US The Business View Of IT Online Survey

13 Entire contents © 2008 Forrester Research, Inc. All rights reserved. CIOs have to balance two competing aspects of increased business control of technology Risky business control... Information integrity and consistency Assuring compliance, security, policy, and privacy Quality assurance Execution performance... vs. business-control- driven opportunity User-driven speed Business agility Networked business models Founded on IT excellence

14 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Agenda What is BT - and why doesn't IT's current approach work? How does BT change the business' expectations of IT? How are IT shops changing their organizations, technologies, and alignment processes to enable BT success?

15 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Traditionally, IT handled the entire technology stack Stable foundation and commodity technologies Transaction systems, data warehouses — RDBMS, BI platform — storage, servers — data center ops, desktop maintenance Dynamic and differentiated technologies X Internet, multichannel, mobile, SOA

16 Entire contents © 2008 Forrester Research, Inc. All rights reserved. But with BT, business people deliver solutions Historically, it’s all been IT but with BT, business people deliver dynamic, differentiated solutions

17 Entire contents © 2008 Forrester Research, Inc. All rights reserved. BT alignment requires that CIOs recognize fundamental changes in users’ needs Traditional IT provides:BT users also need from IT: Solution analysis, design, delivery, and operations Solid business app platforms SOA services for data, transactions, policy, security, etc. Deep technical skills on call Support for BT tools Operational support for BT solutions Project management Project support services Help with skills development IT-centric technology Open minds, support, & culture New technology R&D Joint business innovation

18 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Agenda What is BT - and why doesn't IT's current approach work? How does BT change the business' expectations of IT? How are IT shops changing their organizations, technologies, and alignment processes to enable BT success?

19 Entire contents © 2008 Forrester Research, Inc. All rights reserved. IT leaders face a fork in the road — Take it! Focus mostly on traditional IT Letting business areas run ahead without you Getting stuck in the technology engine room Focus heavily on enabling BT Empowering business success with managed risk Becoming a partner player

20 Entire contents © 2008 Forrester Research, Inc. All rights reserved. CIOs enable BT by enabling flexibility From:To: IT/business alignmentBT synchronization Business results from large IT-led projects Business results mostly from small BT efforts Investments that cover much of the technology stack User investments in thin layers at the top tech stack Data and transaction investments deep in the stack Crisp lines between IT and business roles Fluid lines of responsibility between IT and the business IT-does-it-allBusiness-user-enabling IT has open minds and culture IT assures risk and policyIT enables users to manage risk and policy

21 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Today’s IT organization manages all technology... IT Architecture IT Strategy & Planning CIO DevelopmentIT Operations IT Demand Management

22 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Technology Exec Today’s IT organization manages all technology... IT Architecture IT Strategy & Planning CIO DevelopmentIT Operations IT Demand Management

23 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Technology Exec... but CIOs must become chief BT officers, restructuring IT... BT Architecture BT Strategy & Planning CIO BT Synchronization Business Organizations... as business orgs take on roles previously in IT Business analysis Project management Application configuration Information management Analytics delivery Security, compliance, risk, and policy assurance DevelopmentIT Operations

24 Entire contents © 2008 Forrester Research, Inc. All rights reserved. And IT-business alignment becomes BT synchronization

25 Entire contents © 2008 Forrester Research, Inc. All rights reserved. All top executives must help steer

26 Entire contents © 2008 Forrester Research, Inc. All rights reserved. The CIO will change to support BT enablement Source: December 2008 “Next Up: The 21 st Century CIO”

27 Entire contents © 2008 Forrester Research, Inc. All rights reserved. CIOs will focus more on partnerships — internal businesses, suppliers, customers, & competitors Source: December 2008 “Next Up: The 21 st Century CIO”

28 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Checklist for successful 21-st century CIO Source: December 6, 2007 “Next Up: The 21 st Century CIO:

29 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Bobby Cameron Thank you

30 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Related Forrester research reports February 22, 2008 “New IT-Business Partnership Enables BT Success — Centralized IT Control Fails As BT Moves Beyond IT’s Direct Control” by Bobby Cameron — December 6, 2007 “Next Up: The 21st Century CIO” by Bobby Cameron — June 18, 2007 “Debunking Alignment Nirvana” by Laurie M. Orlov — May 7, 2007 “Business Technology Defined — Technology Management Is Changing To Deliver Business Results” by Laurie M. Orlov and Bobby Cameron —