The CIO

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The CIOs Role in Enabling Organizational Agility

• Highlights of SIMs Advanced Practices Council
  Research Findings

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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."
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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
Customer
Dynamic Synchronization of operations controls
plant production, tracks vehicle movements, and
automatically optimizes order fulfillment
Customers have the flexibility to change orders
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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)

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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)

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Strategic Agility
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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

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What is Agility?
Range of strategic behaviors
Action
Lead
Respond
Anticipate
Resiliency
Disruption
Adaptive Agility
Strategy Formulation
Entrepreneurial Agility
Opportunism
Flexibility
Sense
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Portfolio Approach to Agility

• Entrepreneurial agility
• Strategic experiments
• Shaping business options

• Adaptive agility
• Operational innovation
• Offensive and defensive competitive moves

• Alignment
• Leverage current business model
• World class execution

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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

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Enhance Agility By

• Evolving enterprise IT architecture to a new
  stage
• Increasing use of collaboration tools and
  practices
• Enhancing culture of experimentation and learning
  

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Enhance Agility By

• Evolving enterprise IT architecture to a new
  stage
• Increasing use of collaboration tools and
  practices
• Enhancing culture of experimentation and learning
  

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Evolving Architecture
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Enterprise Architecture

• The organizing logic for a firms 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 firms
  operating model.

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Deltas View of Enterprise Architecture
Source Adapted from Delta Air Lines documents
used with permission
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ING Directs View of Enterprise Architecture
External Services
Reports Local/HQ/Tax
Prospect Fulfillment
Statement Fulfillment
Payments
Checks
Customer Relationship Services
Core Banking Services
CRM
Mutual Funds
Brokerage
CIF
Contact History
Product Info
Banking Engine
Credit Score
Common Business Services
Services
Transactions
Customers
Products
Channel Services
Gateway server
IVR/CTI server
Imaging server
E-mail server
Web server
Customer Contact Call Center, IVR, E-mail,
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-3-1345. Used with
permission
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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 Local Standardized core processes Customized or reusable modules
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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
Enterprise architecture graphic Post-implementati
on assessment Technology research and adoption
process
Architecture Maturity
Asterisked items are statistically significantly
related to architecture maturitythey are
associated with greater value in later stages.
Adapted from Ross, J.W., Creating a Strategic
IT Architecture Competency Learning in Stages,
MISQ Executive (21), March 2003, pp 31-43.
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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

• IT Funding
• Business cases for IT investment
• Centralized funding of enterprise apps
• Annual infrastructure renewal
• IT steering Committee

• Project Management
• Standardized project methodology
• Post-implementation assessment
• IT program managers
• Business leadership of project teams

• 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.
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Management Practices Support Desired Outcomes
Management Practices 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 2Developme
nt time and percentage of projects on-time,
on-budget 5 Strategic effectivenessmeasured 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.
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Key Findings on Enterprise Architecture

• Enterprise architecture enables and constrains
  business strategyEA defines the essence of a
  firms operating model by clarifying integration
  and standardization requirements. This creates a
  stable platform for responding to market changes.
• Maturity mattersDifferent stages support
  different operating models. Greater maturity is
  related to greater strategic value and
  profitability.
• It does not pay to skip stagesGenerating 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
  practicesManagement requirements are more
  complex in later stages.
• There is no substitute for strong senior
  management leadershipFirms getting strategic
  business benefits from architecture have senior
  business leaders who are actively involved in
  architecture design, management, and
  implementation.

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Enhance Agility by

• Evolving enterprise IT architecture to a new
  stage
• Increasing use of collaboration tools and
  practices
• Enhancing culture of experimentation and learning

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Far-Flung Teams
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Far-Flung Teams

• Teams spread across the globe, working
  collaboratively to innovate, with minimal or no
  face-to-face interaction.

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Far-Flung Teams

• Communications challenged
• Culturally challenged
• Time zone challenged
• Task challenged

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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 email infrastructure on first
  day of merged company operations
• Integrating processes and procedures during
  merger
• Integrating information infrastructures during
  merger

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Deploying Far-Flung Teams Guidebook

• Creating Supportive Business Environment
• Supporting Knowledge Exchange
• Integrating Technology into the Way Work is Done

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Deploying Far-Flung Teams Guidebook

• Creating Supportive Business Environment
• Deploy full-time team leaders
• Appraise team members on contributions to the FFT
• Reward team member contribution to enterprises
  intellectual capital equal to task accomplishment
• Discourage travel
• Encourage use of collaborative technologies

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Deploying Far-Flung Teams Guidebook

• 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

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Deploying Far-Flung Teams Guidebook

• 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

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Wikis An Emerging Collaborative Technology
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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

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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 dont duplicate content, but point
  to shared content instead.

Multi-user, evolutionary, error-correcting,
knowledge integrating
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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

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Enhance Agility By

• Evolving enterprise IT architecture to a new
  stage
• Increasing use of collaboration tools and
  practices
• Enhancing culture of experimentation and learning
  

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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)

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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

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Enhance Agility By

• Evolving enterprise IT architecture
• Increasing use of collaboration tools and
  practices
• Enhancing culture of experimentation and learning
  
• ???

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• SIM
• Advanced Practices Council
• Pushing the Frontiers of IT Management
• CIO Driven Research
• Relevant Thought Leadership
• Member Sharing
• Networking
• Madeline Weiss, Program Director
  (madeline.weiss_at_verizon.net)
• Blake Ives, Research Director (bives_at_mac.com)

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www.simnet.org
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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