Leverage the execution of your IT Strategy to set business objectives! http://pscommunicate.com/blog Official .COMMUNICATE PoV on Governance, Risk and Compliance contact@pscommunicate.com Tue, 03 Jan 2012 15:31:26 +0000 en hourly 1 http://wordpress.org/?v=3.0.5 On innovation http://pscommunicate.com/blog/2011/10/28/on-innovation/ http://pscommunicate.com/blog/2011/10/28/on-innovation/#comments Fri, 28 Oct 2011 14:12:02 +0000 Martin Palmgren http://pscommunicate.com/blog/?p=367 As we aboard the subject of innovation you would traditionally find 2 groups of innovation: progressive and disruptive. Disruptive innovation is not standalone, it is shaped by a number of progressive innovations that at a point in time have a significant impact on a technology or a market. This is also valid for corporate IT.

]]> http://pscommunicate.com/blog/2011/10/28/on-innovation/feed/ 0 Does the unlike of customers require social media to move beyond face book interactions to build an effective Marketing, CRM and Knowledge Management strategy? http://pscommunicate.com/blog/2011/10/03/does-the-unlike-of-customers-require-social-media-to-move-beyond-face-book-interactions-to-build-an-effective-marketing-crm-and-knowledge-management-strategy/ http://pscommunicate.com/blog/2011/10/03/does-the-unlike-of-customers-require-social-media-to-move-beyond-face-book-interactions-to-build-an-effective-marketing-crm-and-knowledge-management-strategy/#comments Mon, 03 Oct 2011 09:38:13 +0000 Martin Palmgren http://pscommunicate.com/blog/?p=365 In his recent HBR online Article “Social Media’s Impending Flood of Customer Unlikes” (  http://blogs.hbr.org/cs/2011/09/social_medias_impending_flood.html?cm_mmc=email-_-newsletter-_-marketing-_-marketing092211&referral=00212&utm_source=newsletter_marketing&utm_medium=email&utm_campaign=marketing092211 ) BRIAN SOLIS points out that “Brands are furiously creating profiles in social networks such as Facebook and Twitter in the hopes of building engaging communities with customers and giving people what the brands think they want.” “But are these companies developing effective campaigns to build engagement and give the people what they want?” “If businesses are unable to change course, a very real — and likely very painful — lesson lies ahead. Once-willing consumers will soon become reluctant to connect with brands or will completely sever social ties to brands once they deem the connection fruitless”.

Social Media has been able to generate much buzz over the last 16 months. The upper part of the CIO’s that I speak with have a spoken out strategy for Social Media would they be required to spell one out if needed.

In order to address to the subject of Social Media effectively we need to define the scope, that is to build a conversation with customers or clients as well as to some extent facilitate the exchange of information / knowledge within the enterprise.

Now that we have a demystified scope that includes Marketing, CRM and Knowledge Management, we can address the “how to”. Applications that support the identified activities can be 1) owned and hosted on an external server (data outsourcing) Facebook, Salesforce and box.net would be among a few examples, 2) owned / leased but hosted on an external cloud (bundle of servers outside the firewall), 3) owned / leased on an internal cloud (bundle of servers inside the firewall).

Return on investment (ROI) and Total Cost of Ownership (TCO). Where most advocates of Social Media refute the idea of ROI, models exist for ROI for the identified activities. Marketing and CRM are revenue generating activities and models would include increase in market share, idea generation pipe, increase in sales, visibility etc. Knowledge Management is both revenue generating (the speed to answer to a proposition and win due to shorter time to market) and promotes organisational effectiveness as the workflow is improved and time to market hence shortened.

TCO, it is imperative for the CIO and the IT deparment to understand total cost of ownership for Social Media as there will be an impact on the IT budget, that could be charged back to the department that have commanded the service (or not). The business case to validate ROI would also require a clear cost model. The following article by Fastcompany ( http://www.fastcompany.com/1804649/key-marketing-challenge-for-2012-measuring-the-roi-of-digital-media-channels?partner=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+fastcompany%2Fheadlines+%28Fast+Company+Headlines%29 )will provide you with ROI towards which you can compared occured cost for services deliver related to Social Media.

]]> http://pscommunicate.com/blog/2011/10/03/does-the-unlike-of-customers-require-social-media-to-move-beyond-face-book-interactions-to-build-an-effective-marketing-crm-and-knowledge-management-strategy/feed/ 0 Is the cloud business model the solution to effective IT innovation? http://pscommunicate.com/blog/2011/09/30/is-the-cloud-business-model-the-solution-to-effective-it-innovation/ http://pscommunicate.com/blog/2011/09/30/is-the-cloud-business-model-the-solution-to-effective-it-innovation/#comments Fri, 30 Sep 2011 16:01:15 +0000 Martin Palmgren http://pscommunicate.com/blog/?p=362 Within the current Cloud Business Model we would find 1) hosted applications to which we outsource data (salesforce.com is one example), 2) the external cloud (servers provided by a cloud provider outside the firewall) and 3) the internal cloud (servers provided inside the firewall).

We have over the last 12 months seen 2 trends for cloud deployment 1) cost (optimisation) confirmed with Total Cost of Ownership (TCO), 2) demand (to deliver to new business needs to which we are not able to cater within the existing perimeter).

To meet the emerging business needs, we can identify a hosted application provider to cater to the identified demand where salesforce.com, box.net among others would be examples that could rapidly enhance the IT Value Proposition or the creation of an external cloud (applications bundled in to services with an underlying architecture) where the needs of the client can be modelled and stabilised rapidly to meet “go to market” constraints. These can then be brought to an internal cloud if desired (NASA first started to use the external cloud to model emerging demand, that was later brought on to an internal cloud).

In “The cost of innovation and outsourcing” (http://www.enterprisecioforum.com/en/blogs/goddardd/cost-innovation-and-outsourcing) Doug Goddard points out the lack of innovation within the outsourcing sector.  The reason from my point of view is the lack of incentive as none of the outsourcer that I have talked to are able to brake down their cost model TCO (total cost of ownership), and even if they could clients are not prepared to pay for improvement. With an external cloud business model, innovation* as new service models that would reply to emerging business needs can be tested and validated / discarded with a minimum amount of investment.

* Innovation can be disruptive (significant) or continuous. My research shows that innovative business models demonstrate continuous innovation on a constant basis. Most innovation that is seen as “disruptive” is in fact a significant impact on a business model that is generated by the sum of a number of continuous improvements.

]]> http://pscommunicate.com/blog/2011/09/30/is-the-cloud-business-model-the-solution-to-effective-it-innovation/feed/ 0 Is there a peer se competitive advantage in the adaptation of the cloud? http://pscommunicate.com/blog/2011/09/29/is-there-a-peer-see-competitive-advantage-in-the-adaptation-of-the-cloud/ http://pscommunicate.com/blog/2011/09/29/is-there-a-peer-see-competitive-advantage-in-the-adaptation-of-the-cloud/#comments Thu, 29 Sep 2011 11:34:09 +0000 Martin Palmgren http://pscommunicate.com/blog/?p=356 In a recent conversation with a CIO the obvious question of the peer se competitive advantage in the adaptation of the cloud was raised. As aboarded earlier the adaptation of the cloud (external cloud defined as owned/ leased (SAAS) applications, bundled in to services with an underlying architecture, that run on a server provided by an external provider that run outside the firewall) are either driven by cost effectiveness (cost) or the need to set up services rapidly (demand) and cost effectively that can then run on the external cloud or be brought inside the firewall to an internal cloud.

The competitive advantage of the external cloud lays above all with 1) the corporate teams ability to negotiate effective contracts (volume, peak, exit) where total cost of ownership (TCO) should be clearly visible with the possibility to renegotiate contracts as prices fall over time, 2) the IT departments ability to provide effective IT services to their internal clients.

In order to back up the investment we need to provide a business case with TCO of the current run as well as future build and run. This would also be valid for outsourcing and shared service centre initiatives.

If the decision to move to the external cloud is not backed by a clear business case (BC) with TCO for the existing run future cloud solution that would include cost of exit you might want to ask a few more questions before you move ahead.

]]> http://pscommunicate.com/blog/2011/09/29/is-there-a-peer-see-competitive-advantage-in-the-adaptation-of-the-cloud/feed/ 0 The IT department as effective broker of services? http://pscommunicate.com/blog/2011/09/23/the-it-department-as-effective-broker-of-services/ http://pscommunicate.com/blog/2011/09/23/the-it-department-as-effective-broker-of-services/#comments Fri, 23 Sep 2011 12:01:39 +0000 Martin Palmgren http://pscommunicate.com/blog/?p=350 I have previously introduced “non traditional IT” notions such as ”Time to Market”, “Cloudsource”, ”Make or Buy”, “Cost and Demand drivers”, “An IT Business Model and Value Proposition” and ”An IT service Strategy”.

Within this context I believe that a new notion and function will have to be instored, the IT department as effective broker of services (cost effective and that meet demand drivers). Where most IT department perform well, some decisions are still based on “gut feeling” or external pressure from executive management influenced by vendors / management consultants “as a strategy of survival” rather than on fact based logics.

“Time to Market” – The notion of time to market is critical within the context of a business. The delayed launch of a product might erase up to 70% of potential earning (the rest is gummed by the cost of the resources absorbed to solve the problems that delayed the launch). “Time to market” can be applied to the context of the IT department 1) in the frame of how well do we set up a new service (bundle of application with a coherent architecture) 2) How well do we support the business to launch a new service / execute the business strategy supported with IT (when needed).

“To Cloudsource” – Cloudcomputing is the result of 2 trends. 1) The survival of salesforce.com (that is to outsource data in an application that we have decided not to buy / run on an internal server) 2) the decision of amazon, google and other cloud (external storage space) providers to leverage their capability to buy and run server parks more effectively then an IT department would / could (external cloud). A decision to run applications on a server outside the firewall can be motivated by cost or demand (time to market) where an architecture and applications are set up to rapidly respond to the needs of the business. The “service bundle” can then either be brought inside the firewall and run on an internal cloud or continue to run on the cloud provider’s server (outside the fire wall). Social media and cloudsourcing. Social media applications can either be run as in example 1) by an external provider to whom you outsource the data (Facebook* would be one example) or as in example 2) where an application / a bundle of applications that respond to the needs of the business “for example to interact with our customers” would run on an external or internal cloud. To cloudsource, Bottom line: 1. The new concept of delivering IT services to support business agility, 2. Alternative solution to acquire to support business agility compare with the IT department (internal). These 2 are the driver of the business/mission, however, the complexities and the maturity of the the application to support business mission critical is not ready.  I think the ROI is still questionable of the cloud supporting complex business solution.

“Make or buy” – To outsource / cloudsource (external cloud) is a traditional “make or buy decisions”, that is “do we perform this well internally at benchmarked cost or do we outsource for success”. One of the critical decisions in apple’s current success was to outsource a manufacturing that was defunct (cost / quality) and did not meet the expectations of the final customers. But to outsource / cloudsource effectively as well as to validate the successful set up of a shared service centre, we need to understand the cost of the service delivered before and after the set up function (the cost to change provider should be taken in to account in the business case).

“Cost and Demand drivers” – With “to keep the lights on”, to optimise the cost of the services delivered is among the critical functions of the IT Department. Demand drivers are linked to the business emerging needs to support the execution of the business strategy with IT when needed.

“An IT Business Model and Value Proposition” – To obtain funds in the business world an investor would require a good business case with a clear “Business Model” and “Value Proposition”. Our experience is that an IT department that does not have a clear “business model” defined as “This is how we deliver IT services to the business” and “Value Proposition” defined as “This is how we support business objectives with services in a time to market perspective” will continuously find it difficult to obtain sufficient funds from executive management and the board for the above mentioned reasons.

“An IT service Strategy” – In order to effectively communicate with the business the IT department need to adopt the notion of services a bundle of applications to be run cost effectively and set up in a time to market logics in accordance to cost and demand drivers where demand drivers are linked to the business emerging needs to support the execution of the business strategy with IT when needed.

Feed forward appreciated!

* http://blogs.hbr.org/cs/2011/09/social_medias_impending_flood.html?cm_mmc=email-_-newsletter-_-marketing-_-marketing092211&referral=00212&utm_source=newsletter_marketing&utm_medium=email&utm_campaign=marketing092211

]]> http://pscommunicate.com/blog/2011/09/23/the-it-department-as-effective-broker-of-services/feed/ 0 How the flap of the wings of a butterfly turns in to a perfect storm and an image of the « perfect » cloud. http://pscommunicate.com/blog/2011/09/08/how-the-flap-of-the-wings-of-a-butterfly-turns-in-to-a-perfect-storm-and-an-image-of-the-%c2%ab-perfect-%c2%bb-cloud/ http://pscommunicate.com/blog/2011/09/08/how-the-flap-of-the-wings-of-a-butterfly-turns-in-to-a-perfect-storm-and-an-image-of-the-%c2%ab-perfect-%c2%bb-cloud/#comments Thu, 08 Sep 2011 14:02:48 +0000 Martin Palmgren http://pscommunicate.com/blog/?p=342 I assume that most of you have heard the theory of the butterfly effect related to chaos theory (http://en.wikipedia.org/wiki/Butterfly_effect), not the film. In chaos theory, the butterfly effect is the sensitive dependence on initial conditions; where a small change at one place in a nonlinear system can result in large differences to a later state. The effect derives its name from the theoretical example of a hurricane’s formation being contingent on whether or not a distant butterfly had flapped its wings several weeks before.

The public cloud (the perfect storm)

Salesforce.com is one of the few survivors of the first internet wave where one of the major ideas targetted towards the B to B market was to facilitate the ERP court for enterprises where independent providers would run ERP blocs such as CRM for the client where the data would reside outside the firewall in the providers application. This solution is excellent for enterprises that do not wish to invest in an application that would provide a similar service internally.

Google has over the years enhanced their portfolio of application that run on their servers where individuals can use an email function (Gmail) to drive trafic to their search engine. This function was later made available to enterprises.

As Amazon (and Google) have become highly effective over time to negotiate storage space they at one point decided to leverage this ability to procure and run storage space less expensively available to individuals and entreprises. The principle is to provide storage space outside the firewall on which the enterprise can run applications (in an architecture as a budle of services).

The public cloud can be used to either leverage cost or to rapidly develop new application architectures that can then continue to run on a public cloud or be brought in house to a server or a bundle of servers (private cloud) see  Get your cloud strategy right! ( http://www.brighttalk.com/webcast/29211 ) .

The needs of the business should drive the IT Service Strategy (the perfect cloud)

Where the needs of the business and the business strategy should drive the IT Strategy, the IT Department can leverage the business strategy with an effective IT Service Strategy that would spell out how the roadmap for how the IT Department will cost effectively run the  IT Function but also how to support the business function. In a recent interview Vic Bhagat, Chief Information Officer Global Growth & Operations of General Electric clearly spells out the need for the IT Department to deliver flawless services but also to help the business build effective process industrialisation ( http://www.metisstrategy.com/forum-on-world-class-it/#jump ) where the IT Department should help the business functions to simplify processes that can then be industrialised (automatised) when needed and on the cloud (external or internal) for speed / cost effectiveness when applicable.

]]> http://pscommunicate.com/blog/2011/09/08/how-the-flap-of-the-wings-of-a-butterfly-turns-in-to-a-perfect-storm-and-an-image-of-the-%c2%ab-perfect-%c2%bb-cloud/feed/ 0 CIO’s needs to envision IT as a “service business” in order to escape the commoditisation trap! http://pscommunicate.com/blog/2011/08/19/cios-needs-to-envision-it-as-a-service-business-in-order-to-escape-the-commoditisation-trap/ http://pscommunicate.com/blog/2011/08/19/cios-needs-to-envision-it-as-a-service-business-in-order-to-escape-the-commoditisation-trap/#comments Fri, 19 Aug 2011 15:01:20 +0000 Martin Palmgren http://pscommunicate.com/blog/?p=339 A focus on Service Management and cloud computing would be a first logical step. But for these initiative to succeed the CIO needs to understand, how do we as Internal service provider:

- Deliver services to the needs of the business on target in a “Time to Market” perspective (Business (IT) Value Proposition),

- Conduct a constructive budget dialogue with the business: Total Cost of Ownership (TCO) with Cost Consumption and Chargeback,

- Build and run an effective IT Business Model to Best Practice Frameworks.

]]> http://pscommunicate.com/blog/2011/08/19/cios-needs-to-envision-it-as-a-service-business-in-order-to-escape-the-commoditisation-trap/feed/ 0 What’s the most effecitve strategic tools for CIO? IT Roadmap or EA (Enterprise Architecture)? (question asked on Forbes CIO Network) http://pscommunicate.com/blog/2011/05/15/whats-the-most-effecitve-strategic-tools-for-cio-it-roadmap-or-ea-enterprise-architecture-question-asked-on-forbes-cio-network/ http://pscommunicate.com/blog/2011/05/15/whats-the-most-effecitve-strategic-tools-for-cio-it-roadmap-or-ea-enterprise-architecture-question-asked-on-forbes-cio-network/#comments Sun, 15 May 2011 13:42:02 +0000 Martin Palmgren http://pscommunicate.com/blog/?p=333 The IT Roadmap is critical as a communication tool (you do not want to present your IT Strategy as an activity diagram…) but needs to be “rolled out” with an effective IT Service Strategy supported by a coherent EA.
The IT Roadmap spells out how do we support the execution of the business strategy with IT: As Is (Point A) To Be (Point B) & How to go there.
The IT Service Strategy the IT Services the IT Department delivers to the business (ITIL V3 + V2) to get there.
EA commonly covers the  Business Architecure (which are the business processes that support our business model (IT included) and the IT Architechture (which information is critical and how do we ensure the provision, with applications and infrastructure).
Pearl thank you for asking the question
]]> http://pscommunicate.com/blog/2011/05/15/whats-the-most-effecitve-strategic-tools-for-cio-it-roadmap-or-ea-enterprise-architecture-question-asked-on-forbes-cio-network/feed/ 0 CIO best practice 101 http://pscommunicate.com/blog/2011/05/14/cio-best-practice-101/ http://pscommunicate.com/blog/2011/05/14/cio-best-practice-101/#comments Sat, 14 May 2011 17:19:40 +0000 Martin Palmgren http://pscommunicate.com/blog/?p=330 http://www.enterprisecioforum.com/en/video/jacobs-engineering-let-end-users-have-any-device-they-want#comment-586

http://www.enterprisecioforum.com/en/video/integration-extends-all-systems-jacobs-engineering

http://www.enterprisecioforum.com/en/video/challenge-your-cios-fear-not-always-bad

]]> http://pscommunicate.com/blog/2011/05/14/cio-best-practice-101/feed/ 0 Why Business IT Alignment (this is how we support business objectives and strategy execution with IT) should never be confounded with to align the business to the IT Department http://pscommunicate.com/blog/2011/05/14/why-business-it-alignment-this-is-how-we-support-business-objectives-and-strategy-execution-with-it-should-never-be-confounded-with-to-align-the-business-to-the-it-department/ http://pscommunicate.com/blog/2011/05/14/why-business-it-alignment-this-is-how-we-support-business-objectives-and-strategy-execution-with-it-should-never-be-confounded-with-to-align-the-business-to-the-it-department/#comments Sat, 14 May 2011 12:10:36 +0000 Martin Palmgren http://pscommunicate.com/blog/?p=327

The authority of the IT Department can only be confirmed as it delivers cost effective services in a time to market perspective to the business lines in order to deliver to the set business objectives and strategy, to authoritively impose non adapted technology soltions on the business will not.

The fact that we often find up to 4/5ths of the IT Spend hidden in the budgets of the Business Lines might give a hint.

The international COO of a multi B€ business that I recently spoke to put it bluntly “if the internal IT Department can not deliver to our need, they should at least get out of the way”. Or as one of my aqaintances who is now one of the strategic directors at DHL would put it (the dutch are as always straight forward, and this is probably the reson the why he is in the position he is today) lets just F***** do it!

Now to the how to:

In order to deliver effective Business (IT) Alignment you need to leverage best in class technology (on paper compliance is not enough).

The frameworks should be a point of references and only the bits and pieces applicable and useful for the business should be rolled out (but you need to understand which framework represent which perspective and how to leverage the perspective).

And above all focus on stakeholder expectations ( see Get service oriented or outsourced! http://www.brighttalk.com/webcast/21389 )

For an overall perspective/ worldview see http://www.box.net/shared/d9iib36kt8

Step 1) Define the services that the IT department deliver to the business with total cost of ownership (TCO) with cost, consumption, chargeback.

Cost – This is often where you would get the WOW, we did not know that we spend this much on IT from the executive management (the hidden cost of can represent up to 4/5 of the official IT budget).

Consumption – most IT departments suffer from the overconsumption of users that are not willing to pay for what they consume hence the importance of coherent chargeback based on factual cost of the delivered services.

TCO is also the base to qualified selection of cloudsourcing / outsourcing partners

Step 2) Capture the “IT Business Model” that is “This is how we deliver IT services to the business” in the IT Service Catalogue,

Step 3) and the “Business (IT) Value Proposition”“This is how we support business objectives with services in a time to market perspective” in the Business Service Catalogue,

As you get the IT Service catalogue set you will “consolidate” the ERP landscape as you will connect (pull and push) to the different existing ERP blocks/ applications that contain the data.

]]> http://pscommunicate.com/blog/2011/05/14/why-business-it-alignment-this-is-how-we-support-business-objectives-and-strategy-execution-with-it-should-never-be-confounded-with-to-align-the-business-to-the-it-department/feed/ 0