BUILDING SUCCESSFUL IT INVESTMENT PROGRAMS FOR YOUR ORGANIZATION
Successful programs articulate the processes that an organization needs to establish in order to be able to systematically find, select and implement new information technology solutions permitting an improvement in business performance.
ITIM FRAMEWORK
(IT Investment Management) framework promoted by GAO uses a 5-stages maturity model in which critical processes can be implemented for the organization to operate a program with refined investment processes that are systematically leveraged for organizational strategic gain. The ITIM framework relies significantly on the Enterprise Architecture target architecture considered as the ‘modernization blueprint’.
ITIM LEVELS
Stage 1: at this lowest level the organization program can not predict nor guarantee a successful outcome regarding an IT investment. Processes are non-existing.
Stage 2: the organization creates awareness and documents its technology needs and priorities using the EA as a basis for change. An IT investment board begins to take shape. Concrete IT investment selection criteria emerge while risk strategies are investigated.
Stage 3: an organization operating at this level is in decent shape: IT investments are grouped into portfolios of investments. Alternative portfolio are also investigated. Post implementations reviews are conducted. This ascertains to the likely that candidate investments support the mission, strategies and goals of the organization.
Stage 4: processes to assess and actualize the performance of IT investments measure success or deviation form the EA target architecture.
Stage 5: the organization has well understood processes for selecting, controlling and evaluating IT investments. Attention is turned to the actual leveraging of technology investments for strategic gains:
-are the new investments are aligned to the EA target architecture?
-can the organization achieve excellence in this field?
-are there ways to improvement the organization use of its IT to further its strategic gains?
-has the organization transformed to become more agile, recognizing IT investments for innovating?
THE BUSINESS CASE
Developing a thorough business case document is critical to implementing successful IT investment programs. Throughout the economic life cycle of an investment the Business Case constantly assesses the validity of various assumptions and constraints while attempting to measure overall value at a given point in time. Introducing new technologies can significantly impact and alter the way an organization does business. The impact on business processes, people, skills and competencies add to the risk environment. The business case develops measures that can mitigate the risk as changes are propagated throughout the organ.
-Describe how a new technology/service will lead to a gain in operational capability (integration to the existing technology infrastructure)
-Describe how a new technology/service delivers new business capability (initiatives impacting the nature of the business, processes, people, competencies..)
-Identify what strategic gains are derived form new technology/service: directly to the balance sheet or market recognition (listing key business outcomes).
DOCUMENTING THE BUSINESS CASE
1. The fact sheet
Covering the building, implementation, operation and retirement of the IT investment the fact sheet produces data that are most likely to support best case scenario for implementing the investment. Data can be derived from investment with similar characteristics from previous programs or from the public domain.
2. Alignment analysis describes
-the likelihood that the new investment will conform and align with the target architecture.
-how the investment will be optimized for organizational efficiency
-how to align with business processes, operations and peoples
-how to contribute to strategic objectives
3. Cost benefit analysis
-cost of the project
-estimate the expected future cash flow from the investment
-non-financial gains (brand, knowledge, relationship)
4. Risk analysis
The risk management plan explains how negative events will have limited impact on the project while opportunities will be taken advantage of.
-risks of not delivering the operational capabilities due to:
unproven technology
excessive project duration and cost
inexperienced staff for the project
lacking operational support and maintenance
-risks that the strategic benefits will not be obtained:
non-alignment with EA
poor change management
no awareness to prepare personnel
inability manage quality
security has not been factored in during design
poor senior management buy-in
Good IT management extracts maximum operational value from IT investment (high quality services). Where does strategic value get derived from IT investment?
realizing real return from IT investment;has real value been created, cost-effectively, with risk managed in a sustainable manner of the enterprise?
MANAGING STRATEGIC RISKS
(business environment, innovation & opportunity to deliver value to stakeholders which is also that of transforming the business itself), managerial (service delivery infrastructure and processes), operational (change management), technological (architecture). Establishing process that will enable repeatable selection of key value-enabling technology. Implementing sound management principles that implements enterprise-wide processes and activities leading to a successful outcome for technology investment programs. As in every risk-managed program disseminating cost-visible data allows better informed decision.
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