Challenges Facing Business Leaders in the New Millennium Zia Qureshi, Chief Executive & Chairman Business Catalyst International Zia Qureshi, Chief Executive

Challenges Facing Business Leaders

in the New Millennium

Challenges Facing Business Leaders

in the New MillenniumZia Qureshi, Chief Executive

& Chairman Business Catalyst

International

Zia Qureshi, Chief Executive & Chairman

Business Catalyst International

Business Practices for Business Practices for IT Strategy IT Strategy

and Management and Management Frameworks to Frameworks to

MaximiseMaximise

Business Practices for Business Practices for IT Strategy IT Strategy

and Management and Management Frameworks to Frameworks to

MaximiseMaximise

This presentation is based on unique insights gained through our extensive practical work with Blue Chip clients, research and innovative ideas. IT focuses on four key topics.

This presentation is based on unique insights gained through our extensive practical work with Blue Chip clients, research and innovative ideas. IT focuses on four key topics.

IntroductionIntroduction

1. Business IT Strategy and Management Framework for sustainable business performance

2. IT Benefit realisation - Are we doing enough?

3. Impact of Technology on organisational success - the hidden risks

4. Challenges facing Organisational Leaders/ Chief Executive Officers

We see many different approaches to IT strategy and management framework across our client base

They all claim to achieve business and IT alignment, management involvement and achievement of the usual benefits

Achievement of true business alignment, optimisation of IT benefits and avoiding major disasters are still rare events.

We see many different approaches to IT strategy and management framework across our client base

They all claim to achieve business and IT alignment, management involvement and achievement of the usual benefits

Achievement of true business alignment, optimisation of IT benefits and avoiding major disasters are still rare events.



Three main approaches to IT strategy and management frameworks:Three main approaches to IT strategy and management frameworks:

1. IT leads and drives the strategy, structure and management framework

2. Business takes over responsibility for driving its IT strategy

3. Integrated business and IT planning, strategy, and management framework


Buzz words and jargon, make it difficult for CEO’s and Directors to identify which approach their organisation has taken.

It is not so difficult for us (Business Catalyst) to determine which category a

particular organisation is in.

Buzz words and jargon, make it difficult for CEO’s and Directors to identify which approach their organisation has taken.

It is not so difficult for us (Business Catalyst) to determine which category a

particular organisation is in.

1. IT Leads1. IT Leads

But the business doesn’t follow

IT people cannot be expected to understand business operations

IT people love to develop technically advanced systems Commercial reality

High IT costs

But the business doesn’t follow

IT people cannot be expected to understand business operations

IT people love to develop technically advanced systems Commercial reality

High IT costs

1. IT Leads (cont)1. IT Leads (cont)

“Us and them” approach confusion in relation to accountability

Business management have an easy way out … blame the IT department

End result: IT strategy and service delivery not aligned

with business

Business management do not try hard enough to realise the benefits of IT

“Us and them” approach confusion in relation to accountability

Business management have an easy way out … blame the IT department

End result: IT strategy and service delivery not aligned

with business

Business management do not try hard enough to realise the benefits of IT

2. Business takes over IT (cont)


Knowledge gap in relation to IT can lead to two main problems: unrealistic IT delivery expectations

fail to comprehend the emerging IT trends/options - strategy based on old technology paradigm

IT personnel lose interest - retention becomes a problem

Knowledge gap in relation to IT can lead to two main problems: unrealistic IT delivery expectations

fail to comprehend the emerging IT trends/options - strategy based on old technology paradigm

IT personnel lose interest - retention becomes a problem

Business management tends to rely too heavily on external advisors who may have vested interests in pushing a particular solution

(eg. You need $120m SAP implementation to sort out all your problems and to get competitive advantage)

Usually leads to strategic misalignment, service delivery problems and project failures

Business management tends to rely too heavily on external advisors who may have vested interests in pushing a particular solution

(eg. You need $120m SAP implementation to sort out all your problems and to get competitive advantage)

Usually leads to strategic misalignment, service delivery problems and project failures



3. Integrated Business & IT planning, strategy & management framework

3. Integrated Business & IT planning, strategy & management framework

Organisations that are maximising the benefits of IT use this approach

This is the only approach that will work in the new millennium

Organisations that are maximising the benefits of IT use this approach

This is the only approach that will work in the new millennium

Commonwealth Bank provides an excellent case study. CBA has been transforming its approach:

from: “IT Leads and Drives”

to: “Integrated Business and IT”

Commonwealth Bank provides an excellent case study. CBA has been transforming its approach:

from: “IT Leads and Drives”

to: “Integrated Business and IT”

3. Integrated Business & IT planning, strategy & management framework (cont)

3. Integrated Business & IT planning, strategy & management framework (cont)

Integrated Business & ITIntegrated Business & IT

Business and IT alignment is achieved

Good potential to achieve optimised e-business model

Accountability rests with both business management and IT management There should be no option to blame each

other - failure must impact the performance evaluation of both parties in the same manner

Business and IT alignment is achieved

Good potential to achieve optimised e-business model

Accountability rests with both business management and IT management There should be no option to blame each

other - failure must impact the performance evaluation of both parties in the same manner

Integrated Business & ITIntegrated Business & IT

Learning organisation model can be achieved Learning organisation model can be achieved

Business Principles for IT Strategy & Management Framework


IT Strategy reacts to Business Planning

Three to Five Year Planning Horizon

Preference for internal competence and knowledge predominantly in-house

Hierarchical

Discrete organisational functions

Knowledge-orientated

TraditionalTraditional New Approach New Approach Business Leadership drives IT

Strategy jointly with IT Managment

Transitional Strategy - shorter term horizon - flexibility

Significant outsourcing and external service providers

Networked

Integrated business & IT Teams

Learning-orientated

moving from traditional approach to e-business environment

TraditionalTraditional New Approach New Approach 1. Business Leadership drives

IT Strategy

2. Transitional Strategy - shorter term horizon - flexibility

3. Significant outsourcing and external service providers

4. Networked

5. Integrated Business and IS Teams

6. Learning-orientated

1. IT Strategy reacts to Business Planning

2. Three to Five Year Planning Horizon

3. Preference for internal competence and knowledge predominantly in-house

4. Hierarchical

5. Discrete organisationalfunctions

6. Knowledge-orientated





Business IT ModelBusiness IT ModelOrganisational

frameworks need a significant change to implement the new Business IT

model

Organisational frameworks need a significant change to implement the new Business IT

model

Business Leadership

& Governanc

e for IT

Competency

Business

Architecture

Competency

Sourcing

Compete

ncy

Inte

gratio

n &

Progra

m M

gmt

Compete

ncy

Comm

ercial

Relationship

Managem

ent

Key Technology Programs

Business DevelopedIT Imperatives

Strategic Business Goals

IT Investment Portfolio Management

Business Systems Framework (Map)

Business Direction & Transformation Goals (Integrated Business/ Technology Planning)

(EXECS)

Information Strategic

Transactional

Infrastructure

REQUIRES

FUNDS

DETERMINES GUIDES

IT Benefit RealisationIT Benefit Realisation

Our experience shows that not enough effort is made to realise the benefits of IT

Our experience shows that not enough effort is made to realise the benefits of IT

Strategy Aligned

Strategy Aligned

Successful development

& implementation

Successful development

& implementation

Human capability

development to effectively use

available technology

Human capability

development to effectively use

available technology

ManagementOwnership,

buy in &accountability

ManagementOwnership,

buy in &accountability

Each of the following Key Areas is vital to benefit realisation & achieving valueEach of the following Key Areas is vital to benefit realisation & achieving value

ITBenefits

Realised/ Value

delivery

ITBenefits

Realised/ Value

delivery

IT Benefit RealisationIT Benefit Realisation

The problem is often compounded by:

Flawed business cases

Capital expenditure justification is not rigorous enough

Post implementation reviews with a focus on benefit realisation are not conducted seriously/objectively

Realisation of benefits not monitored for management performance assessment

Learning does not take place

The problem is often compounded by:

Flawed business cases

Capital expenditure justification is not rigorous enough

Post implementation reviews with a focus on benefit realisation are not conducted seriously/objectively

Realisation of benefits not monitored for management performance assessment

Learning does not take place

Organisational Success - the hidden risksOrganisational Success - the hidden risks Impact of Technology on the

Organisation’s Talent Pool When Technology changes in major ways -

organisations can’t afford not to change:

Negative impact on organisational talent pool - both existing and potential

Can’t attract the best and brightest people - recruitment difficulties

Existing people get concerned about their personal career development and marketability - move on in search of more “switched on/ progressive” organisations.

Impact of Technology on the Organisation’s Talent Pool When Technology changes in major ways -

organisations can’t afford not to change:

Negative impact on organisational talent pool - both existing and potential

Can’t attract the best and brightest people - recruitment difficulties

Existing people get concerned about their personal career development and marketability - move on in search of more “switched on/ progressive” organisations.

IT outsourcing - a great opportunity that can become life threatening for organisations: IT outsourcing can’t be managed through

traditional methods - it’s a lot more than a contract management exercise.

Need to develop and implement new framework, processes, and skill sets for effectively managing service provider relationships.

IT outsourcing - a great opportunity that can become life threatening for organisations: IT outsourcing can’t be managed through

traditional methods - it’s a lot more than a contract management exercise.

Need to develop and implement new framework, processes, and skill sets for effectively managing service provider relationships.

Organisational Success - the hidden risksOrganisational Success - the hidden risks

Organisational Success - the hidden risks (cont)


Medium/ long term contracts become irrelevant within months of implementation.

Outsourced service provider and management need to work as one team.

Sharing risks and rewards The outsourced deal must be based on

sound commercial footing rather than unrealistic promises/ expectations

Medium/ long term contracts become irrelevant within months of implementation.

Outsourced service provider and management need to work as one team.

Sharing risks and rewards The outsourced deal must be based on

sound commercial footing rather than unrealistic promises/ expectations



The costs of IT disasters can be enormous both in $ terms and the organisational set back.

Ensure adequate risk management practices, and effective auditing approach is in place.

The costs of IT disasters can be enormous both in $ terms and the organisational set back.

Ensure adequate risk management practices, and effective auditing approach is in place.

Challenges Facing the Business Leaders - You!Challenges Facing the Business Leaders - You! Learn learn learn… IT in a

conceptual sense - it’s not too hard Invest personal development time

Don’t get caught up in technical stuff

Demonstrate understanding of new technology and commitment through actions

Ensure appropriate level of IT knowledge becomes a core competency for all managers.

Learn learn learn… IT in a conceptual sense - it’s not too hard Invest personal development time

Don’t get caught up in technical stuff

Demonstrate understanding of new technology and commitment through actions

Ensure appropriate level of IT knowledge becomes a core competency for all managers.

If not already done so, commence a project to review and organise IT operations based on the key principles discussed today Change management must be well handled -

will be critical in the rapidly changing face of technology

Develop a culture in the organisation that focuses on benefit realisation through the effective utilisation of what we have at a particular point in time… as well as new developments - A Huge Challenge

If not already done so, commence a project to review and organise IT operations based on the key principles discussed today Change management must be well handled -

will be critical in the rapidly changing face of technology

Develop a culture in the organisation that focuses on benefit realisation through the effective utilisation of what we have at a particular point in time… as well as new developments - A Huge Challenge

Implement the concept of common business management and IT teams… as a mandatory requirement.

Implement the concept of common business management and IT teams… as a mandatory requirement.

Documents

Challenges Facing Business Leaders in the New Millennium Zia Qureshi, Chief Executive & Chairman Business Catalyst International Zia Qureshi, Chief Executive