Innovation And It Alignment 121510 Abbreviated

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ALYNDe LLC

By:Glenn A. Bunker

Partner

“Managing The Pace of Change and Complexity of Innovation by Aligning Your Business Strategy and IT Factory to Achieve Results”

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© 2009 ALYNDe, LLC 2Transforming Innovation

Agenda

Review Marketplace Dynamics

Leadership Challenges: Understanding Your Strategic Direction

The Value Proposition for Innovation Lifecycle Management

Solution Management Approach and Common Challenges

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Review Marketplace Dynamics

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Introduction

Key contributors see Innovation Lifecycle Management (ILM) activities a little differently:

The Strategist sees ILM solutions as a way to improve the allocation of resources across the enterprise and to develop a strategically correct portfolio to support the corporate vision.

Finance looks to ILM solutions to improve the allocation of scarce financial resources more effectively while optimally achieving maximum shareholder value.

IT views ILM solutions as a means to prioritize and select the right projects to support business strategy, foster accountability and deliver results with a highly skilled but constrained workforce.

Business Units (LOB’s) see ILM solutions as the framework within which to manage the processes, collaboration and work needed to deliver products to customers faster -improving time to market performance, operational effectiveness and ROI.

CEO’s, CIO’s, COO’s, CFO’s and LOB Executives should look to ILM frameworks to deliver big wins with positive financial impacts within a climate of rapid change.

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Internal Pressures

External Pressures

Margin ZonePace of TechnologyChange

Mergers & Acquisitions

New Competitors Regulatory

Business Climate(New Markets,Innovation Complexity)

Resource Issues(Supply and DemandConstraints for SkilledWorkers)

Performance Pressures

Reduced Budgets

Constrained Workforce

There Are Pressures For Change…

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Causing Operational Concerns...

Including:

Disruptions to launch schedules and budgets for new business solutions, regulatory changes and demand complexity (managing dynamic demand)

Poor project planning, management and communications regarding issues that affect timely delivery of programs, products and services (time to market)

Shortages of critical resource skills, especially for emerging technologies, methodologies and business processes; Lack of tools for human resource capacity planning and optimization (workforce management)

Inefficient, “silo’ed” and redundant program and project management tools and procedures (program and project management)

Ineffective knowledge capture, search and distribution capability to improve problem solving and team performance (knowledge management)

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Forcing Consideration Of Solutions That...

Enable partners, employees, managers and executives to perform everyday activities themselves, anytime and anywhere in order to:

Create a culture that is comfortable with collaboration

Establish the concept of an integrated/virtual community

Manage the impact and complexity of innovation on your competitive posture

Streamline decision-making processes for new development opportunities

Allow management to focus on executing the company’s overall business strategy with the support of an agile IT operation

… Support “proactive” vs. “reactive” decision-making

The ultimate goal is to combine Process, People, Portfolio and Project Management best practices to help people improve the way they do their jobs.

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Leadership Challenges: Understanding Your Strategic Direction

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Executive Leadership is facing increasing pressure to control costs and improve operational performance for future business growth and profitability

Create an ILM Framework for

Managing Organizational Performance Improvement Measuring & Reporting

Calculate the return on investment for proposed IT investments by determining the expected business and technology costs and benefits.

Establish an Innovation Management Office to monitor status and manage risks.

Develop an effective Governance program that involves business and technology leaders.

Controlling & Managing Operations

Manage Product/Service portfolios and IT investments needed for effective support.

Identify strategic cost savings.

Define and monitor performance metrics and service level agreements.

Planning, Building & Integrating Business Solutions

Define effective strategic planning and governance processes.

Meet capital planning requirements for effective innovation.

Break down business unit silos and identify common applications and IT services needed to eliminate NVA work.

External Forces – Customers, Competitors & Technology

Trends

Capitalize on emerging technologies to achieve a competitive advantage.

Provide IT-enabled products and services before competitors.

Adapt to changing business models and partnerships.

Leadership Challenges

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Can You Identify With This Manager?

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“Managing is Harder Than it Looks…”

Integrating and over-customizing systems/processes to fit current stove pipes

Managing simultaneous rollout of multiple initiatives & scope creep beyond organizational capability to execute

Managing investment portfolio costs, benefits & capacity

Manage the entire investment portfolio & relevant information

Lack of critical skills at the right time due to poor resource planning

Managing demand & performing ‘real time’ what if analysis and simulations

Improve quality of decisions & reduce decision lead times

Identify losing project and product candidates (go/kill gating criteria)

Consolidating data from disparate systems and different sources

Automating methodology, workflows & processes

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To meet these business challenges while exceeding performance goals, an Innovation Lifecycle Management Framework is needed to

enable Operational Excellence, Customer Intimacy and Product Innovation strategies to levels consistent with your business

objectives.

Let your portfolio metrics reflect your emphasis…

Given These Challenges, What Is Your Strategic Direction?

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Given These Challenges, What Is Your Strategic Direction?

Focus on invention, creativity and experimentation

Willing to make one’s own products obsolete

Loosely-knit organization based on teams

Management systems that are results driven

A culture that encourages innovation

Focus on invention, creativity and experimentation

Willing to make one’s own products obsolete

Loosely-knit organization based on teams

Management systems that are results driven

A culture that encourages innovation

Organization built around the customer rather than the market

Emphasis on flexibility and responsiveness

Business structure that delegates decision making to the field

Culture that embraces specific rather than general solutions

Organization built around the customer rather than the market

Emphasis on flexibility and responsiveness

Business structure that delegates decision making to the field

Culture that embraces specific rather than general solutions

Low (total) price

Emphasis on efficiency and reliability

Hassle-free service

Standardized processes and operations

Management systems that measure and monitor transactions

Low (total) price

Emphasis on efficiency and reliability

Hassle-free service

Standardized processes and operations

Management systems that measure and monitor transactions

Operational Excellence

Customer Intimacy Product Innovation

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Questions Regarding Your Strategic Direction…

Lost in the process of reacting to market forces and organizational challenges is the need to extend your strategic

plans to a level of measurable operational effectiveness.

First and foremost, what existing processes, methods and/or tools give you confidence in your ability to meet or exceed performance objectives?

What do you find to be the greatest challenges regarding your ability to meet and/or exceed performance objectives? Are there innovation management, product development, resource planning & utilization, cross-departmental strategy coordination, process/workflow enablement and/or program management concerns?

What are your experiences to date with organizational Portfolio, Program, Project and Resource Management solutions? Positive? Beneficial? Ineffective?

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How would you grade your ability to link your organization’s strategic goals to the various work initiatives (product development programs, IT projects, application development, service management) that are planned? ...in process?

Do you have a well-defined IT Governance model that highlights the status of cost take-out or revenue-generating initiatives and the subsequent actions that deliver differentiated products and services to your customers?

Do your project teams have the ability to collaborate? …Inform Management? …Measure Performance?




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How would you grade your position as a “1st-Mover” within the markets/segments you serve?

Are consistent valuation methods and measures being used to determine such things as: 1. earned-value performance, 2. stage-gate performance, 3. financial impacts to on-going programs, and 4. post-delivery results for each program, project or service initiative?

Can your organization “load balance” the workforce for an optimal mix of internal (employee) and external (contractor, supplier, partner) personnel based upon cost and demand requirements?




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What are your goals

and aspirations?

Wherewill

you compete?

How will you winin your chosen

markets?

What capabilitiesmust be in

place to win?

What managementsystems are

required?

You will confront a set of cascading strategic choices...

Answers to These Questions Force Strategic Choices…

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Understanding these choices means:

Your Strategy will become the pattern or plan that integrates your major goals, policies and action sequences into a cohesive measurement-enabled Framework …and positions your business within your competitive markets …in order to create a sustainable competitive advantage.

Where do you play?- Industry Segment(s)- Narrow vs. Broad Focus

How will you win?- Value Proposition- Sources of Competitive Advantage (Operational Effectiveness, Product Innovation, Customer Intimacy?)

How best to configure your portfolio management framework to measure business performance against strategy to deliver value to targeted customers as efficiently and effectively as possible?



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You should confront these choices to develop actionable strategies supported by:

Enterprise and IT Governance Frameworks (CoBIT, ITIL, etc),

Effective Innovation Management, Application and Product Development best practices (Stage-Gate, RUP, etc),

Workforce Optimization (Capacity Planning, Resource Leveling, etc), and

Project and Product Portfolio Management Best Practices



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Strategy: “The pattern or plan that integrates an organization’s major goals, policies and action sequences into a cohesive whole. A well-formulated strategy helps to marshal and allocate an organization’s resources into a unique and viable posture based on its relative internal competencies, shortcomings, anticipated changes in the environment and contingent moves by intelligent opponents.” *

Relative cost positionhigh low

OperationalEffectiveness

Str

ateg

ic A

dva

nta

ge

high

low

Val

ue

Operational Effectiveness

Strategic Advantage: Attained when action sequences fit the organization and when business processes support and enforce objectives within a measurable Governance Framework. This framework must support all roles with information that is needed to make decisions based upon relevant and timely metrics.

*J.B. (James) Quinn – (Quinn, J. (1980) “Strategies for change: Logical Incrementalism”, Irwin, Homewood)

Business Unit 5

Business Unit 2

Business Unit 4

Business Unit 1

Business Unit 3

These Choices Impact Your Strategy

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Because…

Strategy is affected by choosing which activities to perform and how to measure them

Strategic advantage occurs from the fit and alignment of those activities to your business strategy

Operational Effectiveness is achieved by performing the right activities at the right time with the right people to achieve desired performance results

Effective solutions impact both Strategic Advantage and Operational Effectiveness.“It’s hard to manage what you can’t measure”



Str

ateg

ic A

dva

nta

ge

high

low

Val

ue


Business Unit 5

Business Unit 2

Business Unit 4

Business Unit 1

Business Unit 3

So, Why is Portfolio Management Important?

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Effective Business and IT alignment impacts both Strategic Advantage and Operational Effectiveness.

“Allows you to plan today rather than respond tomorrow...” Processes, technology and people

across business units are aligned in a coordinated environment to deliver high value at a low cost

Deliberate strategy to achieve improvement is sustainable

Operating Systems in place to avert potential threats to competitive position and financial performance

A Portfolio Management Framework transforms operating data into Insight



Str

ateg

ic A

dva

nta

ge

high

low

Val

ue


Business Unit 5

Business Unit 2

Business Unit 4

Business Unit 1

Business Unit 3All Business Units

An Ideal Desired-State Situation

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The Value Proposition for Comprehensive Innovation Lifecycle Management

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Quality & Process Innovation: Portfolio Management, Six Sigma, Product Lifecycle Management Capability Maturity Indexing, Innovation Lifecycle Management, Stage-Gate.™

Solution Framework

PortfolioManagement

Capabilities Framework: Competence Development & Process Excellence, PMI & OPMI®, Lean Six Sigma (LSS)

Technology Enablers & Alliance Partners: Product Evaluation, Delivery Support & Development.

Industry Standards: IEEE, ISO, DoD, SEI CMM and CMMI ®, GAAP (SOP 98-1)

Integration Services

Project and Program

Management

NPDLifecycle

Management

Innovation Governance

Built on a foundation of fully integrated solutions designed to drive the creation of measurable business value through the timely and efficient deployment of

enabling methods, process, and technologies.

Comprehensive Innovation ManagementFramework Structure

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Innovation Lifecycle Management (ILM) is based upon a framework of fully integrated Application Components designed to drive the creation of measurable business value.

This is accomplished through the timely and cost effective deployment of enabling processes, technologies and resources.

Value from PPM

Portfo

lio M

anag

emen

t

Execution ManagementPerform

ance-based

BudgetingValueFromILM

Comprehensive Innovation ManagementILM solutions are “Frameworks”

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Measure investment results

Improve visibility of all proposed and active

investments

Objectively prioritize and select investments

Align investments with strategy

Improve portfolio balance

Establish linkages between results and resources

Improve alignment of strategy, targets and budgets

Improve collaborationamong planning, budgeting, financial, and program staff

Capture full costs of all resources identified with achieving goals and objectives

Efficiently allocate critical resourcesImprove quality and predictability through standard processes and leading practicesManage program schedules and costs & Identify and mitigate risks and issues

What you need to do… What you are able to do…

What you really can do…

Portfo

lio M

anag

emen

t

Execution Management

Performance-based

BudgetingValueFromILM

Comprehensive Innovation ManagementILM Framework - Value Proposition

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Solution Management Approach and Common Challenges

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Solution Management Approach

4 fundamental principles:

1. Structure change in manageable steps

Each implementation phase should deliver measurable benefits and build toward your overall objectives

2. Implement each step-change quickly

Faster user adoption, reduced risk and quicker business benefits

3. Transfer knowledge with collaborative workshops

Each phase is delivered through workshops with clearly defined objectives, scope and deliverables to ensure effective knowledge transfer to your user teams

4. Address all aspects of business change

Successful change programs address organizational, cultural, and technical aspects. Effective workshops ensure that each area is aligned to specific business objectives of the change program

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Common Challenges for IT Organizations

Running IT as a business demonstrates that IT can provide value-add in customer facing, internal facing and shareholder facing functions reliably and at competitive prices (compared to external providers)

Effective portfolio management helps to maximize the financial return on new Innovation investments and actively manages the “tail” of Innovation—the replacement/retirement of legacy products and services that have reached the end of their useful lives

Alignment of business and IT so that IT delivers the right services to the business at the highest quality and most competitive cost to support “differentiation through innovation”

Providing complete, accurate, meaningful and consistent reporting to customer, internal (corporate, business units, project teams), and shareholder constituents

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Common Challenges for IT Organizations

Shortening cycle times and reducing costs of key innovation processes through automation, self-service and elimination of manual, paper-based business transactions – creating a lean operational infrastructure that strives to eliminate non value-added work.

Diffusion and adoption of common information systems which increase common business processes across the company, reduce information latency, increase information flow and allow for an “apples-to-apples” comparison of disparate businesses in a complete, accurate and timely manner without manual intervention or “one-off” reconciliation processes and reports

Managing regulatory adherence and compliance transparently so that performance audits are “non-events”

Providing “one version of the truth“ by supporting key business performance drivers, business intelligence maturity, information architecture and stewardship of information standards

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Thank You!

This presentation was prepared by:

1978 Stafford PlaceMarietta, GA 30062

Glenn A. BunkerPartner

Tel: 770.565.4366Fax: 770.565.4366

Mobile: 770.377.7061E-mail: [email protected]

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Innovation And It Alignment 121510 Abbreviated