The CIO’s Role in Enabling Organizational Agility

The CIO’s Role in Enabling Organizational Agility
Highlights of SIM’s Advanced Practices Council Research Findings 11/17/2018 SIM Advanced Practice Council

Capturing Merger Benefits at CVS
"Instead of taking until mid-year 2005 to get all these stores converted and to start realizing benefits from our merchandising schemes and plans, we started doing it in mid-November. That's huge; that's what IS enables. It enables the business to step in. The next phase is introducing our merchandising mix, layout and strategy. It can be done because the infrastructure is complete." 11/17/2018 SIM Advanced Practice Council

Disruptive Innovation at Cemex
Transition from product selling (cement) to solution selling (ready-to-pour-concrete) Global Digital enables tracking of orders and payments Cement trucks can deliver orders in a 20 minute window Dynamic Synchronization of operations controls plant production, tracks vehicle movements, and automatically optimizes order fulfillment Customer Customers have the flexibility to change orders 11/17/2018 SIM Advanced Practice Council

SIM Advanced Practice Council
Researchers Assessing Enterprise Architecture Outcomes (Jeanne Ross, Center for Information Systems Research at MIT) Building Knowledge Assets from Light Knowledge with Wikis (Ann Majchrzak, University of Southern California, Christian Wagner, City University of Hong Kong) Deploying Far-Flung Teams: A Guidebook for Managers (Ann Majchrzak, University of Southern California, Arvind Malhotra, University of North Carolina) Driving Value from I/T: Investigating Senior Executives’ Perspectives (William Kettinger, University of South Carolina, Donald Marchand, IMD International) Strategic Agility (Anandhi Bharadwaj, Emory University, V. Sambamurthy, Michigan State University) 11/17/2018 SIM Advanced Practice Council

Thought Leaders How Top Performing Firms Govern IT (Peter Weill, Center for Information Systems Research at MIT) Riding the Waves: Emerging Technologies (John Henderson and N. Venkatraman, Boston University) 11/17/2018 SIM Advanced Practice Council

Strategic Agility 11/17/2018 SIM Advanced Practice Council

What is Agility? Anticipate or sense opportunities and threats Assemble needed assets and capabilities Judge risks and benefits of initiating action Initiate action rapidly Capture learning from experience and apply it to future actions 11/17/2018 SIM Advanced Practice Council

What is Agility? Action Strategy Formulation Respond Lead Anticipate
Range of strategic behaviors Action Respond Lead Anticipate Resiliency Disruption Adaptive Agility Strategy Formulation Entrepreneurial Agility Flexibility Opportunism Sense 11/17/2018 SIM Advanced Practice Council

Portfolio Approach to Agility
Entrepreneurial agility Strategic experiments Shaping business options Adaptive agility Operational innovation Offensive and defensive competitive moves STOP here and solicit comments – use as a slide for generating audience discussion Different parts of the organization can be at different stages/capabilities Henderson’s “strategic experimentation” is something that should always be done Ask “How does this fit in w/ your organization?” Alignment Leverage current business model World class execution 11/17/2018 SIM Advanced Practice Council

First, Get the Basics of Alignment Right
World-class IT execution –a trusted service that functions well; delivering projects on time and within budget The right people – good problem solvers, listeners, learners, communicators, empathizers, leaders and managers; grounded in the business Excellent working relationships - with business partners across the enterprise Enterprise IT architecture and governance - that support the business model 11/17/2018 SIM Advanced Practice Council

Enhance Agility By Evolving enterprise IT architecture to a new stage Increasing use of collaboration tools and practices Enhancing culture of experimentation and learning 11/17/2018 SIM Advanced Practice Council

Evolving Architecture
11/17/2018 SIM Advanced Practice Council

Enterprise Architecture
The organizing logic for a firm’s core business processes and IT capabilities captured in a set of principles, policies and technical choices to achieve the business standardization and integration requirements of the firm’s operating model. 11/17/2018 SIM Advanced Practice Council

Digital Relationships
Delta’s View of Enterprise Architecture Business Reflexes Employee Relationship Management Delta Nervous System Electronic Events Nine core databases Location Maint. Schedule Flight Equip. Employee Aircraft Customer Ticket Clean/ Service Unload Arrival and Closeout Monitor Departure and Closeout Load Prepare for Flight Allocate Resources Baggage Inflight Boarding Crown Room Counter Skycap Travel Agent Reservations Skymiles Skylinks Personalization Digital Relationships Loyalty Programs Customer Experience Operational Pipeline Reservation Systems PDAs Scanners Laptops E V E N T S P R O F I L E Desktops Cell Phones Video Voice Pagers Gate Readers Kiosks Hand Helds Delta Air Lines created a DNS architecture for its key customer-facing processes. Key elements are: data, middleware, channels, process. Source: Adapted from Delta Air Lines documents – used with permission 11/17/2018 SIM Advanced Practice Council

ING Direct’s View of Enterprise Architecture
External Services Prospect Fulfillment Statement Fulfillment Payments Checks Reports Local/HQ/Tax Customer Relationship Services Core Banking Services CIF CRM Mutual Funds Brokerage Contact History Product Info Banking Engine Credit Score Common Business Services Transactions Customers Products Services Channel Services IVR/CTI server Imaging server server Web server Gateway server Customer Contact: Call Center, IVR, , Direct mail Self-Service: Internet, MinTel, ATM, WAP, (WebTV) Services not implemented In all countries Source: Robertson, D. “ING Direct: The IT Challenge (B)”, 2003, IMD Used with permission 11/17/2018 SIM Advanced Practice Council

Architecture Maturity Stages
1- Application Silo 2- Standardized Technology 3- Rationalized Data 4- Modular Strategic Objective Local/ functional Optimization IT efficiency Process optimization Strategic choices Platform and Technology Multiple technologies and platforms Technology standardization, fewer platforms Data Transaction data in individual. applications Data warehouses Standardized data Processes Local Standardized core processes Customized or reusable modules 11/17/2018 SIM Advanced Practice Council

Evolving Management Practices Application Silo Standardized Technology Rationalized Data Modular Business cases Project methodology Program managers Architects on project teams IT Steering committee* Architecture exception process* Formal compliance process* Infrastructure renewal process* Centralized funding of enterprise applications* Mechanisms for Designing & Protecting Architecture Process owners* Enterprise architecture guiding principles* Business leadership of project teams* Senior executive oversight* We need to rearrange a bunch of the practices. Do you still have my notes on that? Enterprise architecture graphic* Post-implementation assessment* Technology research and adoption process* Architecture Maturity Asterisked items are statistically significantly related to architecture maturity—they are associated with greater value in later stages. Adapted from: Ross, J.W., “Creating a Strategic IT Architecture Competency: Learning in Stages,” MISQ Executive (2:1), March 2003, pp 11/17/2018 SIM Advanced Practice Council

Architecture Management Practices
Architecture Planning and Design Senior business executive oversight Enterprise architecture guiding principles One-page high-level graphic Enterprise level process owners Enterprise architecture team Project Management Standardized project methodology Post-implementation assessment IT program managers Business leadership of project teams IT Funding Business cases for IT investment Centralized funding of enterprise apps Annual infrastructure renewal IT steering Committee Standard Technology Environment Architects on project teams Centralized standards team Formal research and adoption process Architecture exception process Compliance process Management practices within each practice set are statistically significantly correlated with each other. 11/17/2018 SIM Advanced Practice Council

Management Practices Support Desired Outcomes
Benefits of Architecture Initiatives Architecture planning and design practices Implementation of standard technology environment IT funding practices Project management practices Cut IT costs1 * Reduce development time2 Reduce IT-related risks3 Increase business discipline4 Enhance strategic effectiveness5 ALL management practices are significantly correlated with ALL benefits. Asterisks identify the management practices best predicting the benefit. 1Unit operating costs and application maintenance costs 4Data and process standardization 2Development time and percentage of projects on-time, on-budget 5 Strategic effectiveness—measured as strategic outcomes 3Business risk, security breaches, disaster tolerance and (operational excellence, customer intimacy, product innovation, and regulatory compliance strategic agility) weighted by their relative importance to each firm. 11/17/2018 SIM Advanced Practice Council

Key Findings on Enterprise Architecture
Enterprise architecture enables and constrains business strategy EA defines the essence of a firm’s operating model by clarifying integration and standardization requirements. This creates a stable platform for responding to market changes. Maturity matters Different stages support different operating models. Greater maturity is related to greater strategic value and profitability. It does not pay to skip stages Generating value from architecture investments is a learning process. Aggressive investment in IT architecture can be slow to generate a return. Learning is captured in management and governance practices Management requirements are more complex in later stages. There is no substitute for strong senior management leadership Firms getting strategic business benefits from architecture have senior business leaders who are actively involved in architecture design, management, and implementation. 11/17/2018 SIM Advanced Practice Council

Enhance Agility by Evolving enterprise IT architecture to a new stage Increasing use of collaboration tools and practices Enhancing culture of experimentation and learning 11/17/2018 SIM Advanced Practice Council

Far-Flung Teams 11/17/2018 SIM Advanced Practice Council

Far-Flung Teams “Teams spread across the globe, working collaboratively to innovate, with minimal or no face-to-face interaction.” 11/17/2018 SIM Advanced Practice Council

Far-Flung Teams Communications challenged Culturally challenged Time zone challenged Task challenged 11/17/2018 SIM Advanced Practice Council

Far-Flung Teams Supporting Agility
Testing new products in local markets and then formulating global marketing plan for products Designing thrust chamber for new rocket engine Ensuring flawless infrastructure on first day of merged company operations Integrating processes and procedures during merger Integrating information infrastructures during merger 11/17/2018 SIM Advanced Practice Council

Deploying Far-Flung Teams Guidebook
Creating Supportive Business Environment Supporting Knowledge Exchange Integrating Technology into the Way Work is Done 11/17/2018 SIM Advanced Practice Council

Creating Supportive Business Environment Deploy full-time team leaders Appraise team members on contributions to the FFT Reward team member contribution to enterprise’s intellectual capital equal to task accomplishment Discourage travel Encourage use of collaborative technologies 11/17/2018 SIM Advanced Practice Council

Supporting Knowledge Exchange Pick the right people Motivate members for intellectual growth Foster understanding of differences to leverage them Establish collaboration norms and procedures Hold regular audio conferences Hold periodic face-to-face team tuning meetings 11/17/2018 SIM Advanced Practice Council

Integrating Technology into the Way Work is Done Less than 30% of teams used any form of video conferencing Instead, FFTs used a combination of Instant messaging Audio conferencing Repository for content capture and display 11/17/2018 SIM Advanced Practice Council

Wikis An Emerging Collaborative Technology

Wiki Technology to write and maintain web pages collaboratively Knowledge can be added or corrected by anyone “Virtual water coolers” to capture thinking in progress Features: Search Auto-indexing Ability to see changes Notification of changes RSS feeds Statistics to monitor usage 11/17/2018 SIM Advanced Practice Council

Wikipedia Norms Open – anyone can modify content and structure. Incremental – can cite even non-existing pages. Organic – structure and content can change and grow. Observable – all content is open to review. Ease of Use – simple mark-up language, so everyone can write and edit. Convergent – don’t duplicate content, but point to shared content instead. Multi-user, evolutionary, error-correcting, knowledge integrating 11/17/2018 SIM Advanced Practice Council

Wikis Supporting Agility
Two business groups from separate product lines combined to integrate the product lines Competition tracking Project management on fast-track project Community of customers and staff Collaboration with software vendor and another user Ethnic marketers collaborating across consumer goods product lines 11/17/2018 SIM Advanced Practice Council

Enhance Agility By Evolving enterprise IT architecture to a new stage Increasing use of collaboration tools and practices Enhancing culture of experimentation and learning 11/17/2018 SIM Advanced Practice Council

Enhancing Culture of Experimentation and Learning
“The ability to learn faster than your competitors may be the only sustainable competitive advantage.” Arie de Geus (Royal Dutch/Shell Group) 11/17/2018 SIM Advanced Practice Council

Enhance Your Culture of Experimentation and Learning
Invite forecasters and futurists to speak at meetings Set up strategic experiments and learn from them Hold before and after action reviews Encourage IT staff to take business positions and vice versa Give significant monetary awards for outstanding ideas that are implemented; make the awards public Ask provocative questions (e.g., What have you learned about your customers since we last met? What trends have you detected?) Use wikis to encourage knowledge capture and a culture of commenting on others’ work 11/17/2018 SIM Advanced Practice Council

Enhance Agility By Evolving enterprise IT architecture Increasing use of collaboration tools and practices Enhancing culture of experimentation and learning ??? 11/17/2018 SIM Advanced Practice Council

Advanced Practices Council Pushing the Frontiers of IT Management CIO Driven Research Relevant Thought Leadership Member Sharing Networking Madeline Weiss, Program Director Blake Ives, Research Director 11/17/2018 SIM Advanced Practice Council

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3 4 11/17/2018 SIM Advanced Practice Council

5 11/17/2018 SIM Advanced Practice Council

Recent APC Research Projects
Unleashing the Power of Enterprise Value Nets Network and Industry Transformation Assessing IT Architecture Outcomes How to Drive Value from IT – Senior Executives’ Perspectives Identity Management for Business Value Advanced Practices in IT Structure and Governance Deploying Far-Flung Teams: A Guidebook for Managers Transformation of the Enterprise through eBusiness Future Architectures Strategic Agility Disruptive Technologies Inter-organizational IT Change Management Benefits and Risks of Open Source Creating Knowledge Assets Using the “Wiki Way” 11/17/2018 SIM Advanced Practice Council

The CIO’s Role in Enabling Organizational Agility

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The CIO’s Role in Enabling Organizational Agility

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