Showing posts with label IT Investment Management. Show all posts
Showing posts with label IT Investment Management. Show all posts

June 11, 2012

Technology Forecasting Made Easy

Here is a really nice technology forecast visualization from Envisioning Technology.

It covers almost three decades from 2012 through 2040.

And includes an exhaustive list of technology categories for the following:

- Artificial Intelligence
- Internet
- Interfaces
- Sensors
- Ubiquitous Computing
- Robotics
- Biotechnology
- Materials
- Energy
- Space
- Geoengineering

Further, specific technologies are informed by their:

- Relative Importance--by bubble size
- Consumer Impact--by size of the node's outline
- Related Clusters--by a jagged edge

Additionally, what I really like about their online version is that when you hover a technology, you get a decent description of what it is.

Looking in the out-years, it was great to see cool innovations such as machine-augmented cognition, retinal screens, space-based solar power, programmable matter, and anti-aging drugs--so we'll be overall smarter, more connected, exist in a more energized and malleable society, and live long-enough to appreciate it all. ;-)
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May 6, 2011

Avoiding The Ultimate In Surprise


Everyone remember the I Love Lucy show? Well, that show really epidemized what it meant to surprise and be surprised by all the antics that the main character, Lucy, got into--show after show.

One thing that's very clear is that no one really likes surprises (except maybe for some comic relief and that's one reason I believe the show was the most popular season after season).

So what's the problem with surprises? They are not inherently bad--there can be good surprise and bad ones.

The issue is really that people want to be prepared for whatever is coming there way.

Even surprise parties or gifts somehow seem sweeter when the recipient isn't completely "taken by surprise."

One of my bosses used to often repeat to the team, "I don't like surprises!"

Hence, the importance of what we all got in the habit of saying--communicate, communicate, communicate--early and often.

With the tragic tornados that struck last week across the south killing some 329 people, we are reminded how important early warning to surprises in life can be.

The Wall Street Journal reports today that new technologies are being developed for early warning of these tornados such as:

- Visual cues--Antennas that can track cloud-to-loud lighting, which is often invisible from the ground, but it "drops sharply in a storm just before a tornado develops" and can therefore provide early detection for those that can see it.

- Sound waves--Using "infrasonic microphones" we can pick up storm sounds from as far as 500 miles away at frequencies too low to be detected by the human ear and can filter out the noise to track the storm's severity and speed, and therefore hear in advance if it is turning dangerous.

Early warning saves lives...even a few extra minutes can provide the much needed time for a person to get to a shelter.

After the 2004 Indian Ocean earthquake and tsunami which killed more than 230,000 people, an early warning system was put in place there and again with the the recent Japanese earthquake and tsunami of 2011, we see the ongoing need for these efforts to advance globally.

These efforts for early detection and alerts have always been around.

Already thousands of years ago, settlers built lookout towers and fire signals to get and give early notice of an advancing army, marauders, dangerous beasts, or other pending dangers.

Nowadays, we have satellites and drones providing "eyes in the sky" and other technologies (like the proverbial trip wires and so on) are being developed, refined, and deployed to protect us.

Advance warning and preparation is important for risk management and life preservation and leveraging technology to the max for these purposes is an investment that is timeless and priceless.

The challenge is in identifying the greatest risks (i.e. those with the most probability of happening and the biggest impact if they do) so that we can make our investments in the technologies to deal with them wisely.

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April 7, 2011

TechStat For Managing IT Investments


TechStat is a governance model to "turn around or terminate" underperforming projects in the IT portfolio.

This is one of the key tenets in the 25-Point Implementation Plan to Reform Federal IT.

The training video (above) is an introduction to the TechStat model.

The goal is improved IT investment management and accountability for IT programs.

More information on TechStat, and in particular the toolkit for implementation, is available at the Federal CIO website.

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April 2, 2011

The Cost of Underestimating Technology


While research is important and I respect the people who devote themselves to doing this, sometimes they risk being disconnected from reality and the consequences associated with it.

From the Wall Street Journal, 2 April 2011--two economists calculated that "$1,700 is the benefit the average American derives from personal computers each year."

They call this the "benefit we get from computers above and beyond what we pay for them."

To me, this figure seems inconsistent with common sense and the realities on the ground.

In an information age, where we are connected virtually 24 x 7 and can download hundreds of thousands of apps for free, endlessly surf the internet, shop and bank online, get much of our entertainment, news, and gaming on the the web, and communicate around the globe by voice, video, and text for the cost on a monthly high speed connection, I say hogwash.

Moreover, we need to factor in that most of us are now information workers (about 20%) or depend on technology in performing our jobs everyday and earning our living.

Just yesterday in fact, the Wall Street Journal reported that more people work for the government (22.5 million--forget the private sector information workers for the moment) than in construction, farming, fishing, forestry, manufacturing, mining, and utilities combined!

Additionally, at work, we are using computers more and more not only for transaction processing, but also for content management, business intelligence, collaboration, mobility (and robotics and artificial intelligence is coming up fast).

Finally, technology enables breakthroughs--in medicine, energy, environment, education, materials sciences, and more--the impact of technology to us is not just now, but in the potential it brings us for further innovations down the road.

So is the benefit that you get from computers less than $5 day?

I know for me that's the understatement of a lifetime.

Apparently by some, technology continues to be misunderstood, be undervalued and therefore potentially risks being underinvested in, which harms our nations competitiveness and our collective future.

As much respect as I have for economics, it doesn't take an economist to think with common business sense.

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December 10, 2010

Federal IT Management Reform

New IT management reform from the White House.

Very exciting development.

The plan is published at this link.

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August 15, 2010

Engineering An Integrated IT Solution

Traditionally, the IT market has been deeply fragmented with numerous vendors offering countless of products and IT leaders have been left holding the proverbial bag of varied and mixed technologies to interoperate, integrate, optimize, and solve complex organizational problems with.

While competition is a great thing in driving innovation, service, and cost efficiencies, the results of the current fragmented IT market has been that organizations buy value or best of breed technologies from across the vendor universe, only to find that they cannot make them work with their other IT investments and infrastructure.

The result has been a contribution to IT execution that has become notorious for delivering an 82% project failure rate as reported by the Standish group.

Typically, what follows numerous attempts to resuscitate a code blue IT project is the eventual abandonment of the investment, only to be followed, by the purchase of a new one, with hopes of doing it “right” the next time. However, based on historical trends, there is a 4 out of 5 chance, we run into the same project integration issues again and again.

Oracle and other IT vendors are promoting an integration strategy to address this.

Overall, Oracle’s integration strategy is that organizations are envisioned to “buy the complete IT stack” and standup “engineered systems” more quickly and save money than if they have to purchase individual components and start trying to integrate them themselves. Some examples of this are their Exadata Storage Servers and Fusion Applications.

Oracle is not the first company to try this integration/bundling approach and in fact, many companies have succeeded by simplifying the consumers experience such as Apple bringing together iTunes software with the iPod/iPad/Mac hardware or more generally the creation of the smartphone with the integration of phone, web, email, business productivity apps, GPS, games, and more. Similarly, Google is working on its own integration strategy of business and personal application utilities from Google Docs to Google Me.

Of course, the key is to provide a sophisticated-level of integration, simplifying and enhancing the end-user experience, without becoming more generally anticompetitive.

On the other hand, not all companies with integration strategies and product offerings are successful. Some are more hype than reality and are used to drive sales rather than actually deliver on the integration promise. In other words, just having an integration strategy does not integration make.

For the IT leader, choosing best of breed or best of suite is not an easy choice. We want to increase capabilities to our organizations, and we need a solutions strategy that will deliver for our end users now.

While an integration strategy by individual companies can be attractive to simplify our execution of the projects, in the longer-term, cloud computing offers an alternative model, whereby we attach to infrastructure and services outside of our own domains on a flexible, as needed basis and where in theory at least, we do not need to make traditional IT investment on this scale at all anymore.

In the end, a lot of this discussion comes down to security and trust in the solution/vendor and the ability to meet our mission needs cost-effectively without a lot of tinkering to try to put the disparate pieces together.


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January 23, 2010

Strategic Decision Making Trumps The Alternative

A strategist frequently has to temper the desire for structured planning and strategic decision making with the reality of organizational life, which includes:

· Organizational politics (who has the power today to get their way).

· Subjective management whims (I think, I believe, I feel, but mainly I want—regardless of objective facts).

· Situational knee-jerk reactions (due to something that broke, a mandate that came down, an audit that was failed, and so on)

· People with some cash to throw around (they have $ and “its burning a hole in their pockets” or can anyone say “spend-down”?).

The result though of abandoning strategic decision-making is that IT investment decisions will be sub-optimal and maybe even big losers—some examples includes:

· Investment “shelfware” (the seals on the packages of the software or hardware may never even get broken)

· Redundant technologies (that drain limited resources to operate and maintain them)

· Systems that are obsolete by the time they make it into production (because they were a bad idea to begin with)

· Failed IT projects galore (because they never had true organizational commitment and for the right reasons)

Why does strategic decision-making help avoid bad organizational investments?

1) Having a vision, a plan, and an enterprise architecture trumps ping-pong balling around in the firefight of the day, because the first is goal-oriented—linear and directed, and the second is issue-oriented—dictated by the problem du-jour, and generally leads to nowhere in particular.

2) Having a structured governance process with analysis of alternatives and well-thought out and transparent criteria, weightings, and rankings trumps throwing an investment dart into the dark and hoping that it hits a project with a real payoff.

3) Taking a strategic view driven by positive long-term outcomes for the organization trumps an operational view driven by short-term results for the individual.

4) Taking an enterprise solutions view that seeks sharing and economies of scale trumps an instance-by-instance approach, which results in gaps, redundancies, inefficiencies, and systems that can’t talk with each other.

5) Taking an organization view where information sharing and horizontal collaboration result in people working together for the greater organizational good, trumps functional views (vertical silos) where information is hoarded and the “us versus them attitude,” results in continuous power struggles over scare resources and decisions that benefits individuals or groups at the expense of the organization as a whole.

Certainly, we cannot expect that all decisions will be made under optimal conditions and follow “all the rules.” However, as leaders we must create the organizational structures, policies, processes, and clear roles and responsibilities to foster strategic decision-making versus a continued firefighting approach.

Understanding that organizations and people are imperfect and that we need to balance many competing interests from many stakeholders does not obviate the need to create the conditions for sounder decision-making and better organizational results. This is an IT leader's mandate for driving organizational excellence.

While we will never completely get rid of the politics and other sideline influences on how we make our investments, we can mitigate them through a process-driven organization approach that is based on a healthy dose of planning and governance. The pressure to give in to the daily crisis and catfight can be great that is why we need organizational structures to hold the line.

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September 23, 2009

Realistic Optimism and Enterprise Architecture

Optimism can be a key to success in your personal and professional life!

The Wall Street Journal reported in Nov. 2007 that optimism leads to action and that “if even half the time our actions work out well, our life is going to turn out for the better…if you are a pessimist, you are unlikely to even try,” says Dr. Phelps an NYU neuroscientist. Similarly, Dr. Martin Seligman of the University of Pennsylvania observes that “optimists tend to do better in life than their talents alone may suggest.”

So while optimism is often “derided as a na├»ve, soft-soap disposition that distorts the realities of life,” Duke University researchers found that optimists actually lead more productive and by some measures, successful lives. For example, they found that optimists “worked longer hours every week, expected to retire later in life, were less likely to smoke and, when they divorced, were more likely to remarry. They also saved more, had more of their wealth in liquid assets, invested more in individual stocks, and paid credit-card debt bills more frequently.”

At the same time, overly optimistic people behaved in a counter-productive or destructive fashion. “They overestimated their own likely lifespan by 20 years or more…they squandered, they postponed bill paying. Instead of taking the long view, they barely looked past tomorrow.”

Overall though, “the influence of optimism on human behavior is so pervasive that it must have survival value, researchers speculate, and may give us the ability to act in the face of uncertain odds.”

Optimism coupled with a healthy dose of realism is the best way to develop and maintain the organization’s enterprise architecture plans and governance. Optimism leads the organization to “march on” and take prudent action. At the same time, realism keeps the enterprise from making stupid mistakes. An EA that is grounded in “realistic optimism” provides for better, sounder IT investments. Those investments proactively meet business requirements, but are not reliant on bleeding-edge technologies that are overly risky, potentially harmful to mission execution, and wasteful of valuable corporate resources.


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May 1, 2009

Customer Service Will Always Be Goal #1

Too many organizations espouse good service, but very few actually excel and deliver on the promise.

However, one company is so good at it that it serves as the role model for just about all others--that company is The Four Seasons.

The Wall Street Journal, 29 April 2009 reviewed the book “Four Seasons” by Isadore Sharp, the luxury hotel’s founder.

Here are some things that I learned about customer service from this:

- Customer Service means reliability—“a policy of consistently high standards.” At Four Seasons, anyone who has visited the chain around the world [83 hotels in 35 countries]…can attest to its reliability. To be reliable, customer service is not just raising and holding the bar high-- having high standards for quality service--but this must be institutionalized through policy and delivered consistently—over and over again. You can’t have a bad day when executing on customer service. Fantastic customer service has to always be there, period!

For The Total CIO, this type of reliability means that we don’t focus on technology per se, but rather on the customer’s mission requirements and how we can consistently deliver on those in a sound, secure, and cost-effective manner. CIO leaders establish high standards for customer service through regular performance plans, measures and service level agreements. Reliable customer service is more than a concept; it’s a way of relating to the customer in every interaction to consistently exceed expectations.

- Customer Service means innovation—“The things we take for granted now during our hotel stays-comfortable beds, fluffy towels, lighted make-up mirrors, fancy toiletries, and hair dryers-made their first appearances at the Four Seasons…likewise for European-style concierge and Japanese-style breakfast menus, in-hotel spas, and the possibility of residence and time-share units.”

For The Total CIO, technology changes so fast, that innovation is basically our middle name. We never rest on our laurels. We are always on the lookout for the next great thing to deliver on the mission, to achieve strategic competitive, to perform more cost effectively and efficiently.  Advantage. Moreover, we reward and recognize customer service excellence and innovation.

- Customer Service means valuing people—“Follow the golden rule. Workers are vital assets who should be treated accordingly…at the Four Seasons, those who might otherwise be considered the most expendable ‘had to come first,’ because they were the ones who could make or break a five-star service reputation.”

For The Total CIO, people are at the center of technology delivery. We plan, design, develop, and deploy technologies with people always in mind—front and center. If a technology is not “user-centric”, we can’t employ it and don’t want it—it’s a waste of time and money and generally speaking a bad IT investment. Moreover, we deliver technology through a highly trained, motivated, empowered and accountable workforce. We establish a culture of customer service and we reward and recognize people for excellence.

- Customer Service means solving problems—“Turning the top-down management philosophy on its head, Mr. Sharp authorized every Four Seasons employee to solve service problems as they arose to remedy failures on the spot.”

For The Total CIO, leadership is fundamental, management is important, and staff execution is vital. It is the frontline staff that knows the customer pain points and can often come up with the best suggestions to solve them. Even more importantly, the IT customer service representatives (help desk, desktop support, application developers, project managers, and so on) need to “own the customer” and see every customer problem through to resolution. Yes, it’s nice to empathize with the customer, but the customers need to have their problems fixed, their issues resolved and their requirements met.

The Total CIO will make these customer service definitions his and his organization’s modus operandi.


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April 24, 2009

To Invest or Not to Invest, That is the Question

There are scarce dollars for investment purposes and many competing alternatives to invest in. Therefore, organizations must make wise investment decisions.

Common sense dictates that we invest in those technologies that will bring us the greatest return on investment. However, investing in IT is not only about seeking to maximize profitability or superior mission execution, but also about mitigating risk.

MIT Sloan Management Review, Spring 2009, discusses the need to balance between two types of investment risks.

The first, and obvious one is financial risk—“the failure to achieve satisfactory returns from an investment;” those organizations that load up on too much financial risk, can actually put themselves in danger of not being able to stay financially solvent i.e. too many poor investments and the company can be sunk!

The second risk is competitive risk—“the failure to retain a satisfactory competitive position for lack of investment.” Organizations that are too conservative and don’t invest in the future put themselves at risk of falling behind the competition, and may be even out of the race altogether.

So how do we balance these two risks?

On one hand, we need to make critical new IT investments to stay competitive and become more effective and efficient over time, but on the other hand, we need to manage our money prudently to stay on solid financial footing.

Managing financial risk is a short-term view—similar to looking at the daily stock market prices or quarterly financial returns; if we can’t meet our financial obligations today or tomorrow, game over. While managing competitive risk is a long term perspective on investing—we need to remain agile amidst our marketplace competitors and outmaneuver them over time picking up additional customers and market share and building brand and satisfaction.

In information technology management, we must manage both the short-term financial risk and the long-term competitive risks.

What tools are in the CIO’s arsenal to manage these risks effectively?

Enterprise architecture planning is a strategic function that takes a primarily top-down view and assesses organizational requirements (including competitive needs) and drives IT investments plans to meet those needs. In this way, EA manages competitive risk.

IT governance or capital planning and investment control is a bottom-up view that helps us manage shorter-term financial risks by providing a structure and process for vetting IT investments and prioritizing those. Sound IT governance helps us limit financial risk.

So we attack the risks from both ends—from the top and from the bottom.

While we cannot entirely eliminate the risks of failed IT investments or of missing opportunities to knock the competition off its feet, we can manage these by architecting our enterprise for long-term success and by appropriately scrutinizing the selection, control and evaluation of our investments so that we safeguard our financial resources.

So the CIO can err by going too far in either direction:

So a balance needs to be maintained.

“More specifically, a balance should be maintained between errors of omission and commission.” Fail to invest and modernize the organization’s technology and you commit the error of omission. Invest overly aggressively and you commit the error of commission. “A balance must be struck between the error of pursuing too many unprofitable investment opportunities as opposed to the error of passing up too many potentially profitable ones.”


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February 27, 2009

Lessons from Space for CIOs



There are no CIOs in space. At least not yet. Someday, as we colonize space, there will be. And information technology will be more important then ever as communications, information sharing, collaboration, and new ways of doing things enable people to live and work in distances that are now just the realm of science fiction.


As I read about space tourism in MIT Technology Review, January/February 2009, I realized there are already lessons for CIOs from space travel even in its nascent stages.

  • Modernize, as needed—as technologists, some erroneously think that everything has to be swapped out and modernized every few years (for example, many organizations are on na 3 year refresh cycle—whether they need it or not!), but the Russian space program teaches us differently. They modernize, not on a fixed time, but rather as needed. They work by the principle “if it’s not broken don’t fix it.” Here’s an excerpt: “You can look at the original Soyuz, and the same physical design—same molds, even—appear to have been used throughout its history…But anything that has ever gone wrong or failed, they fix. Or if there is some new technology that comes along that would be of significant benefit, they change it also. Isn’t this a novel principle that we can adapt for sound IT investment management?

  • Functional minimalism--for many organizations and individuals, there is a great desire to have the latest and greatest technology gadgets and tools. Some call these folks technology enthusiasts or cutting-edge. And while, IT is incredibly exciting and some missions really need to be cutting-edge to safeguard lives for example. Many others don’t need to have a closet with one of every software package, hardware gadget, or new tool out there. I’ve seen mid-size organizations that literally have thousands of software products—almost as many as people in the entire company! However, on the Russian Soyuz space vehicle, we see a different way. One space tourist noted: “It’s sort of a functional minimalism.” You don’t need tons of gadgets, just what is operationally necessary. CIO’s, as IT strategists and gatekeepers for sound IT investing, should keep this principle in mind and spend corporate investment dollars wisely, strategically, and with careful selection criteria. We don’t need one of everything, especially when half of the investments are sitting in a closet somewhere collecting organizational dust!

  • Technology is 3-D—Our IT environment is still mostly stuck in a two-dimensional paradigm. Our user-interfaces, controls, and displays are still primarily flat. Of course, many have conceived of IT in a more real three-dimensional portrayal for example using 3-D graphics, modeling and simulation, holograms, virtual controls, and even virtual world’s in gaming and online. As CIO’s, we need to encourage the IT industry to continue rapid transformation from a 2-D to 3-D technology paradigm. As a corollary, in space where there is little to no gravity such as on the International Space Station, “It is cluttered, but then after a while you realize, well that’s true if you’re thinking in 2-D, but once your brain shift to 3-D, you realize that it isn’t.”

  • Think strategic and global—The CIO and his/her staff gets lot of calls everyday based on operational issues. From simple password resets to the dreaded “the network is down.” When firefighting, it is easy to fall into a purely operational way of thinking. How am I going to get this or that user back up. But getting all consumed by operational issues is counterproductive to long-term planning, strategy, and monumental shifts and leaps in technology and productivity. One space tourist looking out the window in space summed it up nicely for CIOs (and others) to get perspective: “You’re out there in space looking back at Earth, and in a way, you’re also looking back at your life, yourself, your accomplishments. Thinking about everything you own, love, or care for, and everything else that happens in the world. Thinking bigger picture. Thinking in a more global fashion.” Maybe every CIO need a picture window view from the Internation Space Station to keep perspective?

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October 24, 2008

The ABC Strategy and The Total CIO

CIOs have a number of options with respect to upgrading their enterprise’s information technology.

Military Technology Magazine, Volume 12, Issue 8 has an interview with David Mihelcic, the CTO and Principal Director, Global Information Grid, Enterprise Services Engineering, at the Defense Information Systems Agency (DISA).

In the interview, Mr. Mihelcic describes the Adopt, Buy, and Create (ABC) strategy of General Croom:

Adopt—“we want to focus on using technologies that are mature to meet our needs. Our first is to adopt something that’s already in existence” in the enterprise.

Buy—the second choice is to “buy services and products that are readily available in the commercial space.”

Create—“only as a last resort do we create capabilities from scratch.”

The ABC strategy is valuable to CIOs in that is provides a continuum of options for obtaining technologies to meet requirements that starts with adopting existing platforms, which is the most conservative, trusted, and often economical. If we can’t adopt what we already have, then we proceed to buy the technologies we need—this is potentially more risky and expensive in the short term. And finally, if we can’t readily buy what we need, then we create or develop them (usually starting with research and development)—this is the most risky and immediately expensive option.

However, I would suggest that we need not follow this continuum in sequence (A, B, then C) in all cases.

While creating new capabilities is generally expensive in the short term, it can lead to innovation and breakthroughs that are potentially extremely cost effective and strategically important in the longer term. The development of new capabilities often yields competitive advantages through performance improvements. Also, innovations can provide for new revenue sources, market growth, and cost savings. Often the enterprises that are the strongest in their industries or segments are those with a capability that others just can’t match. In fact, I would argue that our nation’s own technological advances are a critical component to maintaining our military’s worldwide superiority.

Therefore, while the ABC Strategy is a good continuum for understanding our technology refresh options, I would advocate that we use the A, B, C’s with agility to meet our needs for innovation and global competitiveness.


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June 4, 2008

Good to Great and Enterprise Architecture

What makes a good organization become great in terms of technology?

In the book, Good to Great by Jim Collins, the author describes a five year study conducted in organizational greatness and what makes a good enterprise become great. Here are some finding in terms of achieving technology success:
  • Align technology with your mission—the key question that drives the enterprise’s technology is whether it fits directly with “what you are deeply passionate about…what you can be the best in the world at…[and] what drives your economic engine.”Through the User-centric EA target architecture, transition plan, and IT governance, EA moderates new investments in IT so they align with mission requirements and priorities.
  • Technology enables mission execution—“Good-to-great companies used technology as an accelerator of momentum, not a creator of it…a company can’t remain a laggard and hope to be great, but technology by itself is never a primary cause of either of greatness or decline." User-centric EA synthesizes business and technology information to enhance decision-making. EA ensures that the organization’s technology direction and investments enable mission.
  • Culture of discipline—Good-to-great companies have disciplined thought and action. They “respond with thoughtfulness and creativity, driven by a compulsion to turn unrealized potential into results; mediocre companies react and lurch, motivated by fear of being left behind." User-centric EA is a structured approach to managing and integrating business and technology. EA ensures that the organization follows an adaptable plan and does not get lurched around by the changing market, competition, or technology tides.
  • Change incrementally—“‘crawl, walk, run’ can be a very effective approach, even during times of rapid and radical technological change.” User-centric EA develops the target and transition plan for the organization, which ensures an approach of incremental change. New IT investments and business process improvements are done in a phased approach, rather than trying to “eat the elephant in one bite.”
In short, User-centric EA is a perfect fit with the conclusions of Jim Collins research into good-to-great companies.
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May 19, 2008

ITIL and Enterprise Architecture

Both EA and ITIL are emerging disciplines that are growing in importance and impact.
Here are their basic definitions:
EA synthesizes business and technical information and develops information products and governance services to enable better decision making.
ITIL (Information Technology Infrastructure Library) “provides a comprehensive, consistent set of best practices focused on the management of IT services processes. It promotes a quality approach to achieving business effectiveness and efficiency in the use of information systems. ITIL is focused on IT Service Management, which is “concerned with delivering and supporting IT services that are appropriate to the business requirements of the organization.” (ITIL IT Service Management Essentials, Pink Elephant)
To me, EA and ITIL are mutually supportive. Here’s how:
  • EA is a decision framework that provides for planning and governance. EA answers the question, what IT investment will we make?
  • ITIL is a service framework that provides for execution of IT services. IT answers the question, how will we support and deliver on the IT investments?
In short, EA is the discipline that handles the decision processes up to the IT Investment and ITIL handles the service management once the decision to invest in IT is made.
What are the considerations for EA and ITIL:
  • EA considers such things as return on investment, risk mitigation, business alignment, and technical compliance. EA focuses on business process improvement and new introduction of new technologies.
  • ITIL practices areas include such services as incident management, problem resolution, change management, release management, configuration management, capacity, availability, service continuity, service level management and more.
How are EA and ITIL similar in terms of requirements management and their goals?
Each seeks to understand the business requirements and satisfy their customers: EA for the requirements for proposed new IT investments and ITIL for the service required to support those.
Both disciplines are goal-oriented in terms of wanting to improve effectiveness and efficiency:
  • EA prescribes in planning, what are the right things we should we be doing (effectiveness) and in governance, how should we be doing them (efficiency) relative to IT investments.
  • ITIL prescribes in service delivery, what are the right service deliverables (effectiveness) and in service support, how we should be providing service support (efficiency).
While EA and ITIL are complementary, ITIL picks up where EA leaves off—after the IT investment decision, but before the service execution.
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March 7, 2008

Why IT Governance and Enterprise Architecture

I came across an excellent white paper by the National Association of the State CIOs (NASCIO) on IT governance that goes through the fundamentals.

What is IT governance?

IT governance is “specifying the decision rights and accountability framework to encourage desirable behavior in the use of IT.”

Sound IT governance helps to ensure effective use of IT resources, “avoid unnecessary or redundant investments,” more successfully deliver IT solutions, and “enhance appropriate cross-boundary interoperability.”

Why is IT governance ever more important?

According to Gartner, the net average ROI for IT projects is only 1% and as of 2002, “20% of all expenditures on IT were wasted.”

“Information management approaches used during previous eras are no longer sufficient.”

“Information technology is no longer restricted to simply automating procedures, or even managing information, rather, information technology now enables and even outstrips an enterprise organizational capabilities for transformation.”

We “continue to depend more and more on information technology to achieve efficiencies, collaborative information sharing, business intelligence, and information socialization.”

Who should be involved in IT governance?

“Proper IT governance requires a highly participative collaboration between…CIOs and executive leadership on the business side.”

“Pure technology decisions will be primarily made by leadership with information technology with consulting input from the business. Pure business decision making will be primarily made by business leadership with consulting input from the…CIO. However, in most cases, determination of where and when to employ technology will be a shared responsibility.”

This is the piece that I liked the best—the convergence of the necessity for sound IT governance with robust enterprise architecture is what it takes to truly yield results. As the paper states: “In fact, information technology properly managed and deployed within the umbrella of enterprise architecture will provide the path to transformation.”


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March 3, 2008

IT Portfolio Management and Enterprise Architecture

IT portfolio management (ITPfM) is the application of systematic management to large classes of items managed by enterprise Information Technology (IT) capabilities. Examples of IT portfolios would be planned initiatives, projects, and ongoing IT services (such as application support). The promise of IT portfolio management is the quantification of previously mysterious IT efforts, enabling measurement and objective evaluation of investment scenarios.

Debates exist on the best way to measure value of IT investment. As pointed out by Jeffery and Leliveld (2004), companies have spent billions of dollars into IT investment and yet the headlines of misspent money are not uncommon…IT portfolio management started with a project-centric bias, but is evolving to include steady-state portfolio entries such as application maintenance and support, which consume the bulk of IT spending. (Wikipedia)

  • ITPfM is related to the federal requirement for capital planning and investment control (CPIC), especially the select phase in which investments are authorized and funded.

The IT Management Reform Act of 1996 (Clinger-Cohen Act) specifies that executive agencies “establish effective and efficient capital planning processes for selecting, managing [controlling], and evaluating the results of all its major investments in information systems.

The Architecture Alignment and Assessment Guide by the Federal CIO Council, November 2000 defines capital planning and investment control (CPIC) as—“a management process for ongoing identification, selection, control, and evaluation of investments in information resources.”

  • CPIC/ITPfM and EA are closely linked processes. Enterprise architecture conducts technical reviews of proposed new IT projects, products, and standards and provides findings and recommendations to the IT Investment Review Board for decision-making on authorizing, prioritizing, and funding IT.

The Architecture and Assessment Guide states that “CPIC and enterprise architecture functions are closely linked…both have a common focus: the effective and efficient management of IT investments.

Further, the Office of Management and Budget (OMB) Circular A-130 requires that agencies establish and maintain a CPIC process and that they “must build from the agency’s current enterprise architecture.”

According to the Architecture Alignment and Assessment Guide, the three phases of CPIC align to EA as follows: CPIC’s select, control, and evaluate align to EA business alignment, technical alignment, and architecture assessment.

The Journal of Enterprise Architecture, February 2008, has an article by George Makiya that discusses “Integrating EA and IT Portfolio Management Processes”.

Makiya states “at the strategic level, the EA has to agree with the business side, what objectives the IT portfolio will be designed to achieve. It is imperative that the EA negotiate with the business side what constitutes value-add. The EA must then use ITPfM to engage the business to document or articulate its strategy and business objectives.”

Further, “at the operational level, the EA using ITPfM employs prioritization and selection processes to ensure that IT investment reflects the objectives and priorities of the business…through proactive management EAs can help the CIO align the IT budget with the demands of the portfolio.”

According to the Federal Enterprise Architecture Practice Guidance, November 2007, the performance improvement lifecycle starts with the agency’s strategy, and then has the three phases of architect (“develop and maintain EA”), invest (select investments and “define the implementation and funding strategy”, and implement (“execute projects”), which in turn yields strategic results.

  • Generally speaking, ITPfM decisions are made on the basis of return on investment, risk mitigation, strategic alignment, and technical alignment to the EA.

There are many touch points and linkages between EA and CPIC.

  • EA’s target architecture and transition plans drives the investments and portfolio make-up in the CPIC process.
  • CPIC investments are used to provide updates on systems, technologies, and standards to the EA.

EA and CPIC/ITPfM are truly mutually dependent and create synergy and value for the organization through enhanced decision making and IT resource control.


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February 11, 2008

IT Governance –Value Creation and Accountability

IT governance is something people tend to have a love/hate relationship with. They love it because they know they need it and will benefit from it; but they hate it because they don’t want to do it and be bound by it.

It sort of reminds me of the old TV show, The Little Rascals, when the mother “makes” her kid take the spoonful of awful tasting castor oil because it was good for him. And what a face the kid would make as that spoon glided into his mouth, and then a big smile would emerge.

DM Review, 8 February 2008, reports that enterprises are “Getting Serious about IT Governance.”

Here’s why IT governance is growing in importance:

  1. Growing IT expenditures—“Worldwide IT spending has grown 5 percent to 8 percent in recent years and will approach $3 trillion for 2007”
  2. IT project troubles—“IT project failures, security breaches, and compliance snafus are still abundant. Gartner estimated that more than $600 billion has been squandered on ill-conceived or poorly executed projects. And according to Standish Group, only 30 percent of projects are considered successful.”
  3. Money won’t solve the problem—“Simply pouring more money into IT won’t necessarily fix a company’s problems or mitigate its risks.”

IT governance is a two-fold endeavor:

  1. Value creation—“IT governance is about balancing the interests of investors and stakeholders by focusing resources on the creation of value…if the mission of IT is to provide systems the business wants, it is equally important to provide systems the business actually needs.”
  2. Accountability—“IT governance is the system by which IT is directed and controlled. It should address the roles and responsibilities of groups and individuals…articulate the rules and procedures for making IT decisions, and provide a structure through which IT objectives are set, attained, and monitored.”

In the Federal IT Investment Management (ITIM) process for Capital Planning and Investment Control, value creation and accountability align well with the phases of Select-Control-Evaluate for IT investments.

  • The Select phase supports value creation. It involves the selection of projects based on a combination of the following factors: alignment with mission/business strategy, highest return on investment, lowest risk, and alignment to and compliance with the enterprise architecture.
  • The Control phase supports accountability. It involves monitoring and managing IT projects for cost, schedule, and performance parameters. Projects that deviate from their targets risk being reorganized, downsized, or entirely phased out.
  • The Evaluate phase supports both value creation and accountability. It is the evaluation of whether IT projects meet their intended performance goals. This provides lessons learned for future IT project selections and for controlling their steady progress, as well as holding accountable the project sponsor and team for their IT project.

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January 22, 2008

Portfolio Management and Enterprise Architecture

Enterprise architecture and portfolio management are closely linked activities. EA drives IT investment management (including the IT portfolio select, control, and evaluate phases) by conducting technical reviews of proposed new IT projects, products, and standards, and IT investment management provides important information updates to the EA (baseline, target, and transition plan).

In Architecture and Governance Magazine, Issue 3 Volume 2, Nuttall and Houghton provide an overall framework that goes “Beyond Portfolio Management to Comprehensive Application Governance.”

The framework includes three main areas and one supporting process area, as follows:

  1. Application and License Management (tactical)—“It manages the demand side and user requests, the contract and compliance aspects of determining the number of licenses that are contractually allowed, along with the projects that bring new products into the portfolio while retiring older products that have been removed. In many ITIL organizations, a help desk/service desk would handle the demand for applications, while the license management aspects are often assigned to the procurement and/or configuration management functions.”
  2. Application Portfolio Management (strategic)—“determines the appropriate mix of applications in the portfolio. It s highly dependent on the strategic business drivers for the corporation and includes: portfolio strategy development, optimization, and planning.” Portfolio strategy development determines the drivers and priority of those. Portfolio optimization determines the right mix of applications to support those goals. And portfolio planning determines the risks and constraints in implementing the portfolio, such as architecture, infrastructure, and resource constraints.
  3. Financial Management—“budget and forecasting, account management, and allocations management;” these enable the planning of what money is available for the portfolio and what money is spent for applications.
  4. Supporting Processes—other process areas that impact portfolio management include: “knowledge management, communications management, management reporting, architecture strategy, risk management, operational delivery, and support management.”

“One thing is certain, though, as technology continues to drive productivity, comprehension of application governance will become an even more essential step for companies wishing to manage their risks and costs while continuing to gain strategic value from their portfolios.”

I think this model is very helpful in decomposing the traditional definition of governance from the strategic functions of portfolio selection, control, and evaluation to the additional tactical, strategic, and financial aspects involved in managing it. Particularly, I believe it is useful to separate out the business demand (licenses, new systems and technologies) from the portfolio development and optimization (“the right mix” to satisfy user needs). Additionally, the breakout of financial management from the portfolio development is important in making the distinction between the roles of the Investment Review Board/Enterprise Architecture Board and the financial or resources group that actually budget and accounts for the funding aspect of IT spend.

Nuttall and Houghton do not go into any depth with the supporting processes, so these are presented as high level touch points or supporting processes without any particular explanation of how they support portfolio management and governance.

One critical item, the authors did not include, but should have included is the Systems Development Life Cycle, which take the IT portfolio and governs it from planning through analysis, design, development, testing, deployment, operations and maintenance, and ultimately to disposition. The success of moving systems projects through the SDLC will impact the make-up of future portfolio decisions.


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