Optimizing business value through

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Optimizing business value through IT
Governance Run IT Like a Business
August 24,25 2005 Sonu Rathore, Birlasoft Nasscom
International Quality Summit
CMM and Capability Maturity Model are registered
in the U.S. Patent and Trademark Office. CMM
Integration, CMMI are service marks of Carnegie
Mellon University.
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Agenda

• Todays Scenario

• Why IT Governance?

• What is IT Governance ?

• Steps for Implementation of ITG

• Benefits

• Case Study

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Todays Scenario
CIOs Getting Squeezed

• Regulatory Issues
• Increasing Demand
• Tightening Budgets

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(No Transcript)
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Why IT Governance?

• Strategic Alignment offers a way to
• - Justify IT investments
• - Get customer satisfaction
• IT involves huge capital and if not aligned
  results into
• Business losses, Deadlines not met, costs higher
  than expected and quality lower than anticipated
• Enterprise efficiency and core processes
  impacted by poor quality of IT deliverables
• Failures of IT initiatives to bring innovation
  or deliver the promised benefits.

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What Is IT Governance ?
A focus on the leadership, organizational
structures and processes to ensure that IT
sustains and extends an entitys strategies and
objectives in the creation and preservation of
values and wealth IT Governance Institute (a unit
of ISACA IS Audit and Control Association)
What this really means is Optimize IT to maximize
value to an Organization to achieve business
goals
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Top Ten ITG Value Propositions
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Key process areas for IT-Governance

• Strategic alignment of IT with the business
• Value delivery of IT
• Management of IT risks
• IT resource management
• Performance measurement of IT

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IT Governance Framework
IT Governance is primarily concerned with two
things
ITs Delivery of Value to business - Strategic
Alignment with business

-

Mitigation of IT Risks - Accountability into the
enterprise
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IT Value Delivery Measurement

Views of IT Value

• Without measures, IT organizations are forced to
  cut costs
• Balancing business management with IT management
  begins by being effective and then identifying
  efficiencies
• Lack of linkage measurement fosters a commodity
  mentality

Sample Measures
Business Value delivered

• Revenue on Growth
• Revenue per employee
• Return on Asset

Business Unit Financial
Business


Management

• Time to bring new product to market
• Sales from new product or service quality

Business Unit Operational

• Implementation time and cost
• Transaction cost

Business Unit IT Applications
IT



Management




Org wide IT Infrastructure

• Cost per transaction
• Cost per work station

Time for business impact
Degree of influence
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Risk Management
Addressing the safeguarding of IT Assets
Disaster Recovery

• Technology and information security risks are the
  biggest issues for the
• Stakeholders.
• The organization need to ensure
• transparency about the significant risks (risk
  taking, risk avoidance)
• responsibility of control to be clearly defined
• generate cost-efficiency through internal
  controll
• create competitive advantage through risk
  control
• MitigateImplement controls
• TransferShare risk with partners or transfer to
  insurance coverage
• AcceptAcknowledge risk exists, monitoring
  analyzing through measurements

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Resource Management

• Ensuring responsibilities are defined for
• IT systems
• service procurement
• Optimal investment, use and allocation of IT
  resources
• Improved workforce planning and retention of
  skilled IT staff
• Competency development
• Measures around Utilization and Productivity
• Align and prioritize IT services based on
  service definitions

Optimizing Knowledge and Infrastructure
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Performance Measurement

• (Measurement tracking project delivery and
  monitoring
• IT services through Balance Scorecards)

• Financial perspectiveTo satisfy our
  stakeholders, what financial objectives must we
  accomplish?
• Customer perspectiveTo achieve our financial
  objectives, what customer needs must we serve?
• Internal process perspectiveTo satisfy our
  customers and stakeholders, in which internal
• business processes must we excel?
• Learning perspectiveTo achieve our goals, how
  must our organization learn and innovate?

Balanced Scoreboard Dimension
BSCs take into account - Short term financial
measures - Creation of internal efficiencies -
Improving skills - Customer satisfaction
Financial
Goals
Measures
Customers
Process
Information
Goals
Measures
Goals
Measures
Learning
Linking of short term objectives with long term
business goals
Measures
Goals
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Performance Measurement

• IT BSC template can be developed by considering
  the following questions
• Enterprise contributionHow do business
  executives view the IT department?
• User orientationHow do users view the IT
  department?
• Operational excellenceHow effective and
  efficient are the IT processes?
• Future orientationHow well is IT positioned to
  meet future needs?

Cause and effect relationships between scoreboard
dimensions
Ensuring effective IT Governance
Future Orientation
Corporate Contributions
Vision Strategy
Measuring up to business expectation
Building the foundation of future delivery and
continuous learning growth
Customer Orientation
Operational excellence
Performing the IT functions with increasing
creditability impact
Effect
Cause
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Automating IT Governance
Strategic IT Planning and Budgeting
Project Visibility and Control

• Real-time visibility of projects,
• Resource management,
• Financials (NPV, ROI, EVA), risks
• Scope changes.

• Portfolio Management-
• proposals, assets
• Includes Dashboards, Proposals,
• What-If scenarios, prioritization

Change Management
IT Services

• Digitized processes, online approvals,
• Complete audit trails, automated
• change deployments,
• Lockdown on production systems.

• Consolidated view of IT demand,
• task automation,
• Visibility , collaboration, enforced
• best practices,
• Services catalogue, SLAs

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Benefits

• Alignment of business initiatives with IT
• Real time visibility
• Focus on Real Problems and RCA
• Establish standard workflows for similar IT
  activities
• Process Compliance
• Reduce Duplication and Redundancy
• Digitized process, online approvals, managing
  audit trails,automated change deployments
• Consolidated view of IT demands

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Birlasoft - A Case Study on IT Governance
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Background

• Deliver superior services to customers
• Ensure consistent, effective processes globally
• Diverse customer base, by industry and geography
• More than 500 projects a year
• More than 2500 people across globe
• 5 development centers across different countries
• Facilitate efficient cross-continent coordination
• Maintain SLAs in customer-centric manner
• Achieve transparency to facilitate continuous
  improvement
• Give management complete visibility for better
  oversight

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Challenges Why ITG suite

• Productivity
• Monitoring projects
• Compliance to org. standards
• Delays from missed SLAs

• Customer Impact
• Visibility
• Issues/ Risks/ Defects not tracked to closure
• Variation

Reporting

• No real time visibility
• Inconsistent data
• Alignment of data bizgoals
• Complex Audit process
• People dependency

Business Case for IT Governance Implementation

• Org-wide digitized project mgt.
• Productivity gain for PMs
• Digitized Organizational Capability Metrics
• Visibility to Senior Management and Customers
• Increased knowledge sharing

• Adherence to standards
• User friendly processes
• Web access
• Central repository
• Real time data
• Alerts on SLA slippages

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Scope of Implementation

• Digitization Scope
• SDLC
• QA projects
• Production support / maintenance
• Defect Tracking
• Timesheet System
• Risk mgmt
• Issue mgmt
• Change mgmt
• SLA Tracking

• Team Members
• CMMi Quality team
• Six Sigma team
• Cross section of PMs, PLs, TMs
• Digitization team
• Birlasofts internal Mercury ITG engineers
• Reviews by PMO

• Salient Points
• 3 Iterations
• Mockups at various stages
• 8 Month timeline
• Customer cross-section
• Client access from different locations

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How we selected Mercury

• Need to meet two big objectives with different
  challenges

• Selection Process
• Baseline functionality with existing third-party
  product
• Conducted pilot with cross-functional groups to
  test the product
• Worked with a major customer in detailed
  evaluation

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Strategic Alignment Portfolio Management
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Strategic Alignment Portfolio Management
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Project Visibility at Various Levels - CXO
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Visibility at Various Levels LOB
Application Development
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Visibility at Various Levels Account
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Visibility at Various Levels - Account
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Visibility at Various Levels Project Manager
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Visibility at Various Levels Project Manager
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Visibility at Various Levels Team Member
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Visibility at Various Levels Customer
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Change Management
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IT Service Levels
Interface to graphs of eSLA tool
Monthly trend of work packet count
Monthly trend of planned roster and actual
utilization coming from timesheets
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IT Service Levels
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ITG brings CMMI Six Sigma to Life
Tracking of SLAs on ITG
Process Management And Process Improvement
CMMI
SIX Sigma
Data-driven reviews and actions
Improved Service
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What We Gained ?

• Employee productivity
• Management visibility
• Customer satisfaction
• gt 1 million in initial savings
• ____________
• Mature process framework
• CMMI Level 5 on a Continuous Representation
• Analysis/decision support
• Control change and variance
• IT Governance in line with business vision and
  strategy
• Balance Scorecards measure on real time, more
  accurate data

Reduction in project management efforts from 18
to 5 Productivity gains by 15 over previous
year Reduced defects in delivery by 10 20 more
projects delivered on time Resource utilization
is up by 14
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Lessons Learnt

• Formulate strategy for success
• Focus on executive buy-in from the start
• Core Team with wide representation
• Create pool of trained resources basic knowledge
  of product capabilities
• Identify simple workflows to establish quick
  success and increase buy-in
• Maintenance and support projects
• Also helps to move fast on the learning curve
• Establish standard workflows for similar IT
  activities
• Bug fixes, SDLC, enhancements, maintenance,
  general inquiry, QA
• Greatly reduces risk of going out of control
  eliminates need for huge support team
• Helps rollup performance metrics across the
  organization
• Roll out simple dashboards first
• Dashboards for teams
• Customized Dashboards for management teams to
  monitor performance

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Summary

• Sponsorship from the top - VISION
• Strategic Alignment with IT Alignment
• Risk Management through integrated approach
• Resource Management through Workforce planning
• Project Management Visibility Control digitized
  process
• Digitized process, online approvals, managing
  audit
• Change Management across different cross
  sections of IT
• Consolidated view of IT demands
• Performance Measurements using Balance Scorecard
  for IT

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Discussions! Please Write or Call Sonu
Rathore Birlasoft D 13, Sector 59 Noida, UP
201307 INDIA Phone [phone] Fax
91-120-2586121 E-mail sonu.rathore_at_india.birlaso
ft.com