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1© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm
has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Document Classification: KPMG Confidential
TBM Conference 2018
Making Agile
Transformation Real:
How TBM Enables
Modern IT Delivery
2© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 790273
Outside the enterprise
New technologies are entering the world at a
dizzying speed. And, they are enabling new
marketplaces and operating models never seen
before. Which, in turn, creates new competitors.
Who then propel new customer expectations
into the market.
2© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 790273
3© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 3© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Technology demand & complexity are increasing…
8 Billion internet
connected devices
69%Using IA within IT
40 Zettabytes of data in
the cloud by 2020
Business-led technology investment threatens
centralized IT
Customers and revenue dominate technology focus
and differentiate the digital leaders from the rest
As talent is scarce, sourcing is shifting away from
cost savings to filling skills gaps and increasing pace
Cost optimization remains a high priority as budgets
must shift from traditional IT operations to digital
transformation and innovation priorities
and disruption is forcing a shift in
traditional IT:
IT as a cost function is dead. The role of the CIO
needs to evolve to reflect this reality if they want to
remain a strategic partner to the business.
– Denis Berry,
Partner, KPMG in the U.S.
4© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm
has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Document Classification: KPMG Confidential
4
Document Classification: KPMG Confidential
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG
International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have
any such authority to obligate or bind any member firm. All rights reserved.
The top five board priorities in the next three years
86%
of CEOs consider their
companies to be active
disruptors1
81%
believe in placing greater
importance on trust,
values, and culture2
Greater speed to market
Digitization of the
business
Becoming more
data-driven
Building public trust
Implementing disruptive
technology2
To disrupt is to exist
A view of disruption
from the top
4
Document Classification: KPMG Confidential
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG
International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have
any such authority to obligate or bind any member firm. All rights reserved.
5© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 5
Document Classification: KPMG Confidential
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm
has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
How Is IT responding?
6© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm
has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Document Classification: KPMG Confidential
6
Document Classification: KPMG Confidential
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm
has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
AgileDemand
Supply
The evolution of the IT operating model
Support
IT as technical
support, reactive
order taker
IT as bridge
between business
and technology
IT working together
with business as
strategic enabler
7© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm
has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Document Classification: KPMG Confidential
7
Document Classification: KPMG Confidential
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm
has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
The evolution of the IT operating model
Support
IT as technical
support, reactive
order taker
Demand
Supply
IT as bridge between
business and
technology
Agile
IT working together
with business
as strategic
enablerLeading
organizations
• Scaling agile beyond IT - integrating front, middle,
and back office to deliver a truly connected enterprise
• Scaling technology efficiently
• Embedding an innovation culture into the value chain
Challenges for leading organizations
• Business / IT alignment
• Managing multiple delivery speeds and maintaining
legacy systems while adopting Agile
• Speed of change and agility vs business expectations
• Plugging the technology skills gap
Challenges with today’s models
Most IT
organizations today
8© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm
has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Document Classification: KPMG Confidential
8
Document Classification: KPMG Confidential
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm
has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Agile: No longer the destination, just a pit stop
Market
Speed
SupportDemand
SupplyAgile
Market SpeedTechnology integrated in business with no separate IT function
9
Document Classification: KPMG Confidential
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG
International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have
any such authority to obligate or bind any member firm. All rights reserved.
Market speed organization
The market speed
organization is the flexible
IT operating model that
enables the enterprise to
break down siloes between
functions, empower
employees, build holistic
customer experiences that
transcend touch points, and
create a connected
enterprise.
• Breaking down siloes
• Cross-functional agile teams
• Technology leaders working together
• Business managed tech supports incubation of new products and services
• Delivering complex products at scale requires the high-skilled capabilities of IT
• End-to-end product-aligned delivery capabilities
• Shifting enabling functions higher up the delivery cycle
• Scalable architectures built on ecosystems designed for change
• Reinforced by leadership at all levels
• Shared power and control
• Empowering teams to make rapid decisions
• Shift from project to product-mindset
10© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm
has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Document Classification: KPMG Confidential
What will the IT function look like in the future IT in the futureIT today
Control driven and risk averse
Deliberate, methodical, rigid practices
Project focus
Data rich, insight poor
Rigid organizational structure
Internally focused
Manual processes
Rules
Authoritarian
Technical skills above all
Collaborative with open sharing
Agile, iterative, scalable principles
Product focus
Data fuels the value chain, AI will power it
Connected community
Customer obsessed
Extreme automation
Influence
Forward-thinking servant leader
Empathetic, and decidedly human
10
Document Classification: KPMG Confidential
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any
authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
11© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 11
Document Classification: KPMG Confidential
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm
has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
How can TBM help?
12© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 12© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Our definition supported by our TBM capability framework
TBM
TBM enables the IT organization to gain
Transparency into the Cost, Quality,
Performance, and VALUE of their services.
TBM translates the cost of IT into a
language that everyone can understand,
allowing IT to move from a technology
order taker to a value creator.
Ideation, strategy,
& planning
Technology portfolio
management
IT financial
management (ITFM)
Advanced IT analytics
& data management
13© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 13© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Our TBM capability framework helps IT meet the challenge
TBM
Ideation, strategy,
& planning
What technologies will meet the business objectives, and how do I plan and measure
that they do?
Technology ideationTechnology planning
and forecasting
Value management
& realization
Technology portfolio
management
How do I manage the technology portfolio for where to invest, divest, tolerate and why?
Project portfolio
management (PPM)
Service portfolio
management (SPM)
Application portfolio
management (APM)
IT financial
management (ITFM)
What is the true, transparent, and fully-burdened cost of technology?
Technology funding
framework & core
accounting
Total cost transparency
modeling (TCO)
Financial variance
management
Advanced IT analytics
& data managementHow do I integrate, rationalize and manage IT data? What insights can be drawn?
“IT4IT” MDM
& governance
Balanced &
integrated scorecards
Predictive
analytics
14© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 14© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
TBM capabilities across operating modelsIdeation, Strategy, and Planning
• Demand process consolidated under
the PMO, MBA-style business cases
• Business demand is captured
periodically throughout the year as
part of annual planning cycles
• Contained within IT, application
and/or tech specific
• Demand (project) and Request
(operational) processes connected
• Increased focus on efficient
architecture function helps
consolidate demand and drive to one
system/platform
• Lean business cases, leading
indicators
• Architecture function focus shifts
from systems/platforms to value
streams & SOA
• Product-oriented business cases
• Collaborative effort, especially with
customer-facing products
IT for IT
Support
IT as technical
support, reactive
order taker
IT for the Business
Demand
Supply
IT as bridge between
business and
technology
Agile
IT working together
with business
as strategic
enabler
IT for the Customer
Market
Speed Technology
integrated in
business
IT for the Product
Market Speed Example: A leading energy company, IT groups are given a small “innovation” budget each year to
be used at the discretion of the functional leader to invest in new ideas for their business. These small investments
consistently deliver the highest ROI of any investment made year after year.
15© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 15© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
TBM capabilities across operating modelsIT Financial Management (ITFM)
• Minimal visibility. Managed using
traditional accounting structures
• Cost centers aligned to business
units
• Resource-based views
• Full TCO transparency enabled with
purpose built tools
• Services aligned to business units
• Lean funding model (for dev)
• e.g. Finance funds resources and
vendors, then IT and business
determine what they build
• Product funding model (for ops)
• Accountability across the
organization, product owners carry
the accountability of managing
technology COGS
Market Speed Example: A leading insurance company re-aligned resources to specific products, and shifted to
funding resources rather than projects. This allows product owners manage the backlog and determine where IT
resources invest time.
IT for IT
Support
IT as technical
support, reactive
order taker
IT for the Business
Demand
Supply
IT as bridge between
business and
technology
Agile
IT working together
with business
as strategic
enabler
IT for the Customer
Market
Speed Technology
integrated in
business
IT for the Product
16© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 16© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
TBM capabilities across operating modelsTechnology Portfolio Management
• Annual portfolio management
process
• Resources are typically aligned to
the business via cost center
• Portfolios managed in silos, e.g.
tech, application, and platform, ITIL
service focused (i.e. tech catalog)
• Project and operational portfolios are
connected
• Costs and activities mapped to
business services
• Agile portfolio
• Value stream portfolio (IT for the end
consumer)
• COGS vs SG&A portfolios
• Much of the traditional technology
portfolio now sits in the business
P&Ls and is managed there through
an iterative process
Market Speed Example: A leading insurance company activity manages their portfolio of applications and projects
by continuously reviewing their value to the company
IT for IT
Support
IT as technical
support, reactive
order taker
IT for the Business
Demand
Supply
IT as bridge between
business and
technology
Agile
IT working together
with business
as strategic
enabler
IT for the Customer
Market
Speed Technology
integrated in
business
IT for the Product
17© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 17© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
TBM capabilities across operating modelsAnalytics and Data
• Disconnected metrics
• Data is application specific, not
leveraged across the enterprise,
metrics are function specific, not tied
to business strategy
• Balanced scorecard by service
• Use of performance scorecards tied
to clear objectives and some
business strategies. IT data becomes
integrated and balanced
• Velocity (speed), Epics (new
projects), Value Streams (variance
reporting)
• New data sources to support the
agile portfolio and value streams
• Data becomes predictive and
automated to support DevOps
• Supply vs Demand, price variance,
SLAs, customer experience
• IT metrics are tied to product
profitability, customer experience
and trust (e.g. Trust.salesforce.com)
Market Speed Example: A leading pharmaceutical company leveraged their BI capabilities with their TBM data to
highlight improvement opportunities
IT for IT
Support
IT as technical
support, reactive
order taker
IT for the Business
Demand
Supply
IT as bridge between
business and
technology
Agile
IT working together
with business
as strategic
enabler
IT for the Customer
Market
Speed Technology
integrated in
business
IT for the Product
18© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm
has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Document Classification: KPMG Confidential
TBM will accelerate your journey to the future IT in the futureIT today
Control driven and risk averse
Deliberate, methodical, rigid practices
Project focus
Data rich, insight poor
Rigid organizational structure
Internally focused
Manual processes
Rules
Authoritarian
Technical skills above all
Collaborative with open sharing
Agile, iterative, scalable principles
Product focus
Data fuels the value chain, AI will power it
Connected community
Customer obsessed
Extreme automation
Influence
Forward-thinking servant leader
Empathetic, and decidedly human
18
Document Classification: KPMG Confidential
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any
authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
19© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 19© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Key actions your TBM organization can take to reduce friction and support change
Start small and pay attention to the entire operating
model. Think about piloting in small areas first. Fund
a small innovation budget or fund a product owner.
Learn, adjust, iterate, and expand.$
Get your TBM office involved. Bring transparency to
all. Start thinking about your organization value
chains and products, and how to align your models
and process.
Find and develop partner champions across the
organization, not just within IT. Help IT leaders
articulate value that IT is bringing to the enterprise.
Thank you
© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name and logo are registered trademarks or trademarks of KPMG International.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular
individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such
information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon
such information without appropriate professional advice after a thorough examination of the particular situation.
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for KPMG audit clients and their affiliates or related entities.
22
Document Classification: KPMG Confidential
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG
International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have
any such authority to obligate or bind any member firm. All rights reserved.
Dynamic investment
Think like a VC and dynamically reinvest resources and capital for winning ideas.
In the future, the IT portfolio will have business investors inside the organization, who will act like venture capitalists, being brought many ideas, making many small bets, having transparency to performance against value objectives, and dynamically reinvesting resources and capital for winning ideas.
Fund products
before details
are defined
Catch bad ideas
faster with
leading indicators
and practicing
fail-fast methods
Delegate trust
to business
and technology
leaders by
enabling new
tools, data,
and analytics to
make smarter
and faster
decisions
Report velocity and
value to the board
23© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
24© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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