Delivering Maximum Business Value from Information Systems Part 1

Delivering Maximum Business Value
from
Information Systems
Part 1
David P Jacobs
Copyright  Profit From Information Limited 2001. All rights reserved.
1
“Each Succeeding
Generation of Computers
Seems to Teach
Businesses to Operate
Slower Faster.”
2
Information Systems
“Only 15% of IT departments were able to
meet strategic business goals.”
“There is no link between IT spend and
corporate profitability.”
“We need a fundamentally new approach.”
3
Context
of the problem and
the start of a solution
4
The Business  Log and Phys Design  Code
Users 
Analysis 
Software
10%
effort
90%
effort
90%
10% !?
Use of
Information
Processing
of Information
The Ten-Ninety Diagram
5
The Information Systems Activity/Role Spectrum
Advertising, Marketing
Market
Customers
Sales
Profit
Image
Loyalty
Suppliers
V
A
Business
L
Sector
U
Operation
E
Strategy
Mission
£
Process
£
Creativity
£
Traditional domain of ‘IT’
B
I
Requirements
Conceptual
Information
System
Information
Usage & Type
Marketing
Operational
Financial
Functional
Physical
Information Information
System
System
Logical
Design
Operational
Strategic
External
Internal
Physical
Design
Application
Software
Foundation
N
A
R
Infrastructure
Y
Operating
Systems
V
Networks
O
Data
L
T
A
G
E
Market Research
s
The Profit Business Value Approach
People, Culture, Creativity, Objectivity,
Information
6
The Exponential Iceberg
of Resource
A given business requirement
An exponential, multidimensional,
unpredictable and
volatile resource
requirement
7
‘Information Technology’
Expectations and Reality
Hardware
Maximum
Obtainable
Level
of
Expectation
Software
Usage and
Business Value
Start of
Computing
Time
The 1934 Model
2001
8
+
2
Benefit Profiles
Growth, business creativity
Information Systems
Business Value (ISBV)
1
Conceptual
Units of
Benefit
0
Users ‘satisfied’
IT Effectiveness
Cost ‘containment’
Traditional Automation
‘Generation’
Euro !
upgrades
Technical ‘upgrades’
-1
Year 2000 Millennium Bug
What
we’re
aiming at
Worth
doing,
some
benefit
Running
to stand
still,
negligible
positive
benefit
9
Business and Information
X
Y
Information
Value
£’s
People, Activity
Business
Information
Z
‘IT’
10
The Core of a Solution
The Layers
11
Horizontal Layers of Focus (Major)
£s Value £s
Pro-active Support
Deployment
V
A
L
U
E
Physical Design
Semi-physical design sub layers
Functional / Logical Design
Requirements and Options
Conceptual Information System
Information support for Business Goals
Business Goals and Objectives
12
Vertical Correspondence
To ensure that business value cascades
through the process
Value
Identification
Increase detail
Verify
Requirements
Propagate
Functional Design
13
Profit Principles
and IT Effectiveness Guidelines
• Functional Concepts
Creativity, Objectivity, Intent
• Principles of Automation
Crunch, In-touch, Value Targeted Subsets
Data and Information
• Business Practice and Contingency
Human and Machine
• Multi-skilled Role Development
• Physical Practicalities
• CultureDesign
Change
Pragmatic
andGuidelines
Diagnostics
• Strategy and
Decision Making
• Documentation
Issues
‘What you need', Parallelism
• Etcetera …
14
The Profit Business Value Approach
Is based on extensive, multifaceted business/IT
‘hybridism’ and gap bridging.
It is therefore
• a Skill
• a (Unified) Set of Roles
• an Attitude & Ethos
• an Approach
Why and how does this kind of Approach differ
from more traditional IT approaches…?
15
The Business
The Profit Business Value Approach
Profit Principles and IT Effectiveness Guidelines
Functional Concepts
I.T.
Quality measured
on business
benefit
Reconciliation of
Business & IT
views
Use of
multifaceted
skills





PRINCE
LBMS/Platinum
SSADM, YOURDON, IE
DSDM, RAD/JAD, LSDM
OO, UML …




Project Manager
Business Analyst
Systems Analyst
Developer
Holistic and
business focused
Understand how
information
increases
Business Value
Manage culture
transformation
Identify and Monitor Business Value
Apply Principles of ‘Automation’
Data and Information Issues
Business Practice and Contingency
Etcetera …
16
Working with a BISS or an ISBVS
Stakeholders/Steering Group, IS/IT Director/CIO
Project Management
Business
Project Management
I.S./I.T.
Defines business goals,
Provides IS/IT resources,
functional requirements,
schedules, monitors
ISBVS (BISS)
provides business
physical quality, technical
Translates, analysis,
mediates,software design,
resources, business
identifies
value,
‘process’ definition
and business
delivery
and support
monitors layers of focus,
deployment
assesses benefits,
reviews use of information
Project Team
Business and IS/IT Personnel
17
Enhancing Existing Methods
What can the Profit B. V. Approach add?
For example, to DSDM
• MoSCoW
• Extensions
• Value Tagging/Projection
• Timeboxing
18
‘Information Technology’
A set of steps for mankind
Hardware
Maximum
Obtainable
Level
of
Expectation
Start of
Computing
Software
Usage and
Business Value
Time
The Step Diagram
2001
19
Future Value Strategy
For Improved Business Value and Benefits we could
do well to …
aim at generating business value rather than
‘getting the software in’
calculate step heights and lengths based on
practicality and maximum Business Gain
try to target value at a lower level of detail
improve understanding of the use of information
promote generic, business-IT ‘hybrid’ and gap
bridging skills, play as one team - and make better
use the skills we have got!
“It’s the broader skills that bring the value out from
the narrower ones.”
20
We Should Remember That
• User Community requirements may change every
day - often justifiably!
• Information System Business Value cannot be
manifested before implementation day and therefore
requires Pro-active ‘Support’ thereafter.
• We are all ‘stupid’ together in this. Let’s work
together - which makes us all clever!
• Producing high value information systems is like
competing in a series of grand prix’s, it’s highly
marginal, you have to keep tuning and the car only
performs as well as its driver drives!
• Gain takes Pain and Strain, like going to the gym!
21
21st Century Information Systems
We could also do well to …
Consider the aim to be ‘to create a new way of
working that may use information systems at
strategic points to engender business value’
Avoid playing politics with business ‘IS/IT’ projects –
it kills value (and usually the project!)
Scope realistically, smaller steps rather than
slippery leaps!
Profit’s objective is ‘to refine its Business Value Approach
so that more businesses can be helped to help their
customers and create value along the chain’
“Don’t try to beat this recession, plan to avoid
the next!”
22
For further details please refer to Profit
product literature
Email : [email protected]
Wishing you Success!
23
Appendix 1
Additional Slides
Part 1
24
Aims of The Approach
To maximise Gain
To minimise Pain
By improving the effectiveness of an
organisation or business unit’s BICEPS
That is the combined strength of its
Business Information Creativity, Effort,
People .. and Software
25
Style and Derivation
of
the Approach
26
Style of the Approach
• Business value and benefits focused
• Pragmatic, what you can do ‘on Monday’
• Holistic, takes account of the bigger picture
• A multifaceted view of business, IS and IT
• Shifts the focus to the Why/What from the What/How
• Sees information as the link between business and IT
• Combines evolution with revolution
• Out of the box coupled with inside!
• Enhances existing methods, does not replace
27
Inputs to the Approach
• Empirical Synthesis
• Practice
• Observation
• Research
• Hypothesis and Trial
• Comparison
• Socratic Reasoning
• Discussion
• Prototyping
28
The Business Value Approach’s Availability
This presentation
Published material
Professional Services
and associated
Documentation
Informally documented material
and development of The B. V.
Approach
29
Appendix 2
Selections from Part 2
Part 2 includes …
Definitions of Information Systems Business
Value and IT Effectiveness
Maximising the Business Gain Equation
Assessment, Analysis, Planning and
Monitoring with The IT Effectiveness
Improvement Programme and The IT
Effectiveness Spectrum
Value Projection at a Lower Level of
Granularity
The Business Value Approach in Action
30
Definitions
Information Systems Business Value
(ISBV)
The degree to which the Information
System potentially helps the business
to achieve its objectives, i.e the
business principle that yields the value
(the quality of the ‘BICEP’)
IT Effectiveness
The degree to which the physical IT
system supports the ISBV (the quality
of the ‘S’)
31
Information Systems Business Gain
The aim is to Maximise Gain and Minimise Pain
That is Business Gain = ISBV * IT Effectiveness
• ISBV ranges from approx –1 through 0 to +N
• IT Effectiveness cannot exceed +1 (or 100%)
• ISBV can be more than +1 !
IT Effectiveness cannot increase ISBV, it can only detract
from ISBV or fulfil it at best
Therefore ISBV has to be as large as possible in order
to maximise BG and survive the Value Reduction
Process (referred to in the Activity/Role Spectrum)
32
The IT Effectiveness Improvement
Programme
A systematic approach to the
improvement of Information Systems
Business Value
33
The IT Effectiveness Improvement Programme
Typical assessment and improvement cycle
0
Select
Business
Scope
e.g. Sales and
Marketing
1
Assessment
using the IT
Effectiveness
Spectrum
E.g. ISBV = 37/100
5
Implement Improvements
2
Analysis
of ISBV by Criterion
i.e. decompose score
into constituents
and optionally go to reassessment of new ISBV or
choose new scope
4
Plan Improvements
on selected criteria
i.e. how to achieve
required ISBV by criterion
3
Assess Propensity
to improve by criterion
e.g. BAP ‘reconstructivity’
to be increased from
25/100 to 43/100
34
The IT Effectiveness Spectrum
First devised by Profit in 1996 as an Information
Systems Business Value assessment and improvement
‘mechanism’
Helps to assess the quality of the process as well as
the value and quality of the output
Consists of a range of indicative criteria measured and
weighted
Designed specifically for the purpose of improving
Information Systems Business Value and Gain
Is being continually improved
35
IT Effectiveness Spectrum
Example Criteria
• Business Objectives, degree of address
• The degree of business ‘Reconstructivity’
• Adherence to the Layers of Focus
• The Business / IT relationship and its quality
• Degree of User Community involvement
• Information Usage ability of the business
• Etcetera
36
‘Automating’ with the Crossword Diagram
Computer
Assisted
Business
Activity
+
Business
Activity
Pattern
+
0
0
0
0
0
-
0
Benefit ‘Score’
37
The Approach in Action
Some early wins with the approach
1981
birth of ‘hybridism’
1986/7
proof of the pudding
1987/8
a great idea but ouch!
Some recent achievements as the
approach becomes The Approach
1997 No bugs? – unheard of!
1999 Functional objectivity triumphs
2000/1 MoSCoW extensions in test
38