Managing IT as a Business Managing Organizations in the 21 st Century Organizations must become more agile, transparent, and innovative. There is great pressure to increase efficiencies and productivity to reduce cost while improving customer value. Organizational visibility and governance is more important than ever. Business as usual won’t cut it! The dramatic economic and global pressures have placed extreme pressure on organizations to accelerate these changes.

Managing IT as a Business Managing Organizations in the 21 st Century Common Organizational Challenges Do More with Less – Productivity, Cost Reduction Need for Innovation Revenue and Expense Pressures Transparency Be Smarter Increase Service Value Collaboration – Internally & Externally Variable Cost Structure

Managing IT as Business Managing Organizations in the 21 st Century Common Organizational Requirements Visibility into the Organization Control – Metrics & Process to Manage Optimization – Continuous Improvement Transformational Change Leverage the Power of IT to Enable the Change

Managing IT as a Business The Importance of IT / Business Alignment Why is it so difficult? Most IT plans do not indicate the business value and what strategic or tactical organizational benefit that the organization is trying to achieve. The CIO must report the IT value and guide other executives on achieving and reporting the contribution of the investment on the other executives goals. The CIO must have the ability to relate IT investments into business value. Art Jahnke

Managing IT as a Business The Importance of IT / Business Alignment Software Project Disasters The 1995 Chaos Report was a landmark survey made by the Standish Group. This report is the study of IT project failure and is widely cited when IT project failures are being discussed The respondents to the Standish Group survey were IT executive managers. The total sample size was 365 respondents representing 8,380 applications.

Managing IT as Business The Importance of IT / Business Alignment Findings - The Standish Group research showed: a staggering 31.1% of projects would be cancelled before they ever get completed. 52.7% of projects will cost over 189% of their original estimates. The Standish Group estimated that in 1995 American companies would spend $81 billion for cancelled software projects and an additional $59 billion for software projects that would be completed, but exceeded their original time estimates and projects, with only 42% of the originally- proposed features and functions.

Managing IT as a Business 2009 Chaos Report -- “This year's results … highest failure rate in over a decade” CHAOS Summary Standish Group

Managing IT as a Business A Review of the IT Environment The Challenge : How to Leverage New Technology to be more Innovative? Financial Pressures to cut spending Legacy Computer Systems 78% of IT Dollars spent to “Run the Trains” Human Capital Challenges Non Alignment between IT & Stakeholder Requirements

Managing IT as a Business A Review of the IT Environment Legacy Systems Run on Mainframe Technologies Senior Programmers Close to Retirement Work not Generally Documented Operating Systems Expensive Not Agile or Client Centric Difficult to Integrate with Newer Technology

Managing IT as a Business A Review of the IT Environment Legacy Systems Recent research reports indicate that integration is increasingly becoming the focus for many businesses. Top IT experts conclude that 78 percent of an IT budget is spent just managing existing system and software infrastructures

Managing IT as a Business A Review of the IT Environment Legacy Systems This is bad news for any organization looking to reduce IT costs. 78 percent of your IT budget is spent maintaining existing systems, withless money for IT innovation and for alignment with business processes. Psychologically, IT managers have more of a stake in keeping current systems running, rather than looking for better ways to manage technology.

IT Strategy Corporate Direction and Strategy Core K K K K = Knowledge Workers “Plan”“Build” “Do the right thing” Strategic Vision - Effectiveness “Do it right” Assets of the Company - Efficiency Business Enable Change Information Technology “Run” K IT Consulting Services Construction Management Services Application Services Tracer Desktop Services Managing IT as a Business Increase levels of productivity – Run/Build Migrate the IT investment $ and/or resources to the high pay-off areas to the business.

Managing IT as a Business Why Metrics are Important Business Goals - Define and Track Progress View Support Costs by Application/Program Enables Capacity Planning Conduct Periodic Customer Reviews Based on Facts S t a m p o u t A n e c d o t a l M a n a g e m e n t