# Aligning Organizational Performance to IT Development and Integration

# Agenda 1. Short business card 2. Practical Issues between software developers and clients 4. Public sector – Riga e-city project 3. Business – Performance systems 5. Opportunities for SW development and IT services sector

# Ernst & Young in figures One of the “Big 4” in professional services business First/second in market position in 7 of the top 10 world markets 106,000 people in over 700 cities in 140 countries FY 2002 revenues – 10,1 billion USD FY 2003 revenues are projected to be USD 13 billion - up 25% In Baltics offices in Vilnius, Riga and Tallinn One of the “Big 4” in professional services business First/second in market position in 7 of the top 10 world markets 106,000 people in over 700 cities in 140 countries FY 2002 revenues – 10,1 billion USD FY 2003 revenues are projected to be USD 13 billion - up 25% In Baltics offices in Vilnius, Riga and Tallinn

# Ernst & Young Baltics: 270 FT personnel Audit services TAX consulting Legal services Corporate Advisory Services: –Strategic planning and improvement of business processes –IT planning and implementation –IT security management –Corporate finance consulting –Business risk assessment –Human capital solutions –Customer relationships solutions Audit services TAX consulting Legal services Corporate Advisory Services: –Strategic planning and improvement of business processes –IT planning and implementation –IT security management –Corporate finance consulting –Business risk assessment –Human capital solutions –Customer relationships solutions

# Practical issues and trends observed Difficult to get investment approvals for larger IT development / integration projects Fast changing and inconsitent requirements Budget and time “Overruns” becoming a normal practice Legal disputes and litigation cases Increasing number of failed projects, frustration from business people

# Example from business side

# How tasks are assigned to this manager, how hes performance is being evaluated?

# Role of performance measuring Technology Process Strategy People Sales Marketing Service BO specialists Performance Measurement

# POLICY, MISSION, Performace indicators Action How do we contribute progress to this aim daily? CRITERIAS Goal What should we do? Most popular methods – Balanced Scorecard (BSC) STRATEGY Strategy map How are we going to get there? VISION Vision Where are we going?

# Balance Scorecard (example)  Business perception  Creativity  Planning and systems approach  Promotion of level of efficiency Profit  Orientation to clients needs  Forming and maintaining of relationaships  Orientation to changes  Flexibility Clients  Project management  Professional/ technical competences  Delegation of obligations  Quality control Operational excellency  Improvement of team work  Promotion of group work results  Development and motivation of emloyees  Self-development Human

# Insight for SW development Most of middle level managers have defined perfomance indicators, that should be achieved within current financial year and/or medium term Indicators contain both financial and non-financial measurments Most indicators are industry specific and will not be directly addressed through SW development and integration In case predefined performance is not met they feel it in theyr pockets ! Most of middle level managers have defined perfomance indicators, that should be achieved within current financial year and/or medium term Indicators contain both financial and non-financial measurments Most indicators are industry specific and will not be directly addressed through SW development and integration In case predefined performance is not met they feel it in theyr pockets ! Managers are not happy with projects that are putting at risk their personal scorecards ! Managers are not happy with projects that are putting at risk their personal scorecards !

# Example from public sector

# Modernization of Riga city using IT and modern organizational practices 1.Improving quality and accessibility of municipal services 2.Enhancing the transparency and public participation 3.Increasing efficiency of municipality operations 1.Improving quality and accessibility of municipal services 2.Enhancing the transparency and public participation 3.Increasing efficiency of municipality operations Project mission: Riga e-city project

# Project organization City council IT council Project council Project board City major Deputy major Executive director City major Deputy major Executive director Project director RC project managers SP representatives Project director RC project managers SP representatives Subproject/ work package group Subproject/ work package group RD project manager SP/ Supplier project manager User representatives SP/ Supplier RD project manager SP/ Supplier project manager User representatives SP/ Supplier Project supervision Project management

# Project approach Business functions Business Capability (Architecture) Strategy Process HR & Organization Applications IT infrastructure Solution development Operations

# Target functional model of customer services Traditional organization Product push Hard selling Superposition of channels (mainly outbound) Basic segmentation Limited and unstructured feedback Touchpoints Front office Back office Structured FO-BO communication Enhanced customer information Integration of channels Outbound and inbound Single point of contact Increased and structured feedback One-to-one approach (products - service - relationships) Channels dynamics One stop shop Multi-product Multi-platforms Flexible organization Customers & Partners Touchpoints Contact Team Networked Organization Customer Centric Organization (focus on Information& Interactivity) Corporate Centric Organization (focus on production and sales) Transition Tomorrow Today

# Lessons and project issues E-city project from very beginning has to be positioned as an integrated organization modernization project Sponsorship and practical involvement of higher political management is crucial IT department is not best candidate for e-city project manager role Overlapping of legislative and executive power, fragmentation of municipal administration – serious obstacle to implement municipality-wide modernization initiatives Sponsorship and practical involvement of higher political management is crucial IT department is not best candidate for e-city project manager role Overlapping of legislative and executive power, fragmentation of municipal administration – serious obstacle to implement municipality-wide modernization initiatives Sponsorship and practical involvement of higher political management is crucial Sponsorship and practical involvement of higher political management is crucial

# How to get such sponsorship and involvement ? Produce tangible, measurable results from the project on regular basis –Outputs vs. Outcomes Be ready to adopt changing and sometimes conflicting business architecture and development scenarios Adopt your project development lifecycles to annual budgetary procedures Produce tangible, measurable results from the project on regular basis –Outputs vs. Outcomes Be ready to adopt changing and sometimes conflicting business architecture and development scenarios Adopt your project development lifecycles to annual budgetary procedures

# Opportunities for SW development world

# Is current SW development approach aligned with reality ? Traditional “waterfall” based development methods –Strict definition phases wiyth emphasis on fixing requirements –Insufficient interaction with customer during development phases –Heavy change management procedures –Testing against “old” requirments ISO certification ? Capability Maturity Model (CMM) certification ? Traditional “waterfall” based development methods –Strict definition phases wiyth emphasis on fixing requirements –Insufficient interaction with customer during development phases –Heavy change management procedures –Testing against “old” requirments ISO certification ? Capability Maturity Model (CMM) certification ?

# What would help to work it out ? Industry specialisation –Better understanding, predicting customer needs –Possibility to use prefabricated industry specific objects –Less time spent on requiremements Training and investments in agile development methods making them (RAD, Reusable components) –industry acceptable –customer acceptable –procurement process acceptable Industry specialisation –Better understanding, predicting customer needs –Possibility to use prefabricated industry specific objects –Less time spent on requiremements Training and investments in agile development methods making them (RAD, Reusable components) –industry acceptable –customer acceptable –procurement process acceptable