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Aligning IS and Business Strategy

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As will be a tradition this week, I present an introductory rant about the topic at hand, and since today is Tuesday it’s IT Strategy day it’s time to talk about strategy.Â

It’s a given that IT strategy ‘must align with business strategy’.  Yet it is quite difficult to get this right – not least because it is hard to align an IT strategy with a business strategy when there isn’t a business strategy.  There is another article on this site (‘Getting IT Right!‘) that talked about those things that need to be done to ‘Get IT Right!’.  There was a follow-up presentation to that, which I will post in due course, that used the COBIT framework to identify 20 core business goals, prioritise those goals, the best  accounting tools for business and then map those goals to fundamental IT activities – which of course should provide direction to IT strategy that is aligned with the business.

These business goals, as outlined by COBIT, are:

Financial Perspective
1. Expand market share
2. Increase revenue
3. Return on investment
4. Optimise asset utilisation
5. Manage business risks
Customer Perspective
6. Improve customer orientation and service
7. Offer competitive products and services
8. Service availability
9. Agility in responding to changing business requirements (time to market)
10. Cost optimisation of service delivery
Internal Perspective
11. Automate & integrate the enterprise value chain
12. Improve & maintain business process functionality
13. Lower process costs
14. Compliance with external laws/regulations
15. Transparency
16. Compliance with internal policies
17. Improve & maintain operational & staff productivity
Learning and Growth
18. Product/business innovation
19. Obtain reliable and useful information for strategic decision making
20. Acquire and maintain skilled and motivated personnel

COBIT is a very useful approach to use in IT consulting, and although it was originally developed as an IT Audit tool, it makes a lot of sense to adapt COBIT to a ‘doing’ framework as opposed to an ‘assurance’ framework.  BDO Kendalls uses COBIT as its framework in all consulting services to our SME clients, and it is a very valuable tool for that purpose.Â

Those in the know will recognise these business goals as driven by a balanced scorecard philosophy.  Using COBIT, it is possible to rank these goals, and then identify the IT activities and focus that align with the business goals.  I will be posting more around this approach in this area of strategy, but essentially if a business cannot identify its business strategy in a cohesive form – which, alas and alack, is often the realpolitik IS professionals must deal with – a process to rank these business goals can be very useful in identifying what IT activities are needed to align IT with the business.

Next week:  how to go about ranking the business goals.Â

Business on the move

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The following is an article that was written for BDO Kendalls’ March business briefing on how to implement innovation in business using mobile technologies and how to turn your passion into a business and get something very successful.

Building your business while out and about

Introduction

Business is booming. Queensland has 4% unemployment. Finding new staff is almost impossible (a ‘chokepoint’ for many businesses); the key to success in business is now using the staff you have as effectively and efficiently as possible.

This article explores how to go about adopting some of the hot mobile technologies right now to small and medium-sized businesses, without exorbitant expenditure, to make staff more effective in their roles.
Build a bottom line

The first step in achieving this is to understand the ‘chokepoints’ for your mobile workers in your business and then seek a business solution to resolve it.

Circle of InnovationAs outlined in the diagram, this requires a review of the business, identifying chokepoints (e.g. the need to wait until returning to the office to submit orders), the areas with key impact on the business, and devising and implementing the business solution.

Once the business solution is implemented, review the solution for its effectiveness and look for the next chokepoint in the business.

If you’re selling stuff

Key Impact: Salespeople lose two hours each day through being in the office; orders are also submitted at the end of the day.

Devise Solution: It’s called salesforce automation, and it’s about being able to access real-time customer information, write orders and check inventory on the road and when you’re sitting across from your customer.

Key Impact: Filing and authorisations are inaccurate, out-of-date, and require manual re-processing.

Devise Solution: Electronic Mobile Workflow solutions can result in replacing clipboards and paper forms with electronic devices that immediately capture signatures and information. This removes the need for manual re-processing of the information.

If you’re doing stuff

Key Impact: Customer emergencies are not dealt with in a timely fashion.

Devise Solution: Location-based services allow the business to track their people ‘in-the-field’ so that if a customer emergency crops up, the nearest person can be dispatched to deal with the issue.

Key Impact: Orders are held up until the next available field agent can be on-site and look at the issue.

Devise Solution: Digital evidence-gathering can be used to submit photographs or video/audio recordings in the field to experts who can use that photograph to diagnose a problem before travelling onsite or ordering parts to fix it.

If you’re administering stuff

Key Impact: Telephony costs are increasing and staff miss calls because they are not in the office.

Devise Solution: Internet and Voice-Over-IP technologies mean that the phone line on your desk can be the phone you take with you when you’re out and about. This can improve your business’ ability to support growth as well as making a tidy saving on call costs and hardware costs. In the jargon, it’s called fixed-mobile convergence.

Key Impact: Staff are complaining of work/life balance and issues and requiring more flexibility in working hours.

Devise Solution: With the need for a flexible workforce, it may be possible to use teleworking technologies to allow some staff flexibility in their working hours – for example, working two days a week from home, or from home every second afternoon.

Conclusion

This article has set out only a few of the mobile technologies that are now available to the business to deliver innovation and practical benefits to the bottom line.

Your business has the opportunity to use staff more efficiently and effectively by eliminating the key chokepoints within the business.

These technologies are becoming more affordable every day, and deliver robust solutions that have the potential to transform your approach to business. You need to watch for these technologies and their benefits to your business, because you can be absolutely certain that that is what your competitors are doing.

Getting IT Right!

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This is an article that was written for the February issue of the Queensland Business Review.  It is partly promoting an upcoming ‘Getting IT Right!’ seminar to be held at BDO Kendalls on 21 February 2007.  More information is available on the BDO website www.bdo.com.au.

Introduction

Stories of failing information technology (IT) projects, IT teams that just ‘don’t understand’, lost spreadsheets that contain critical business data, and critical applications that seem to crash for no apparent reason are all too common scenarios. Information technology promises a great deal to all businesses, but often fails to live up to expectations.

These problems cause frustration for all concerned. Unfortunately ‘getting IT right’ cannot be achieved with a simple wave of a magic wand. The current skills shortage shows no signs of abating, and it is important for a business to use its staff effectively. Good business support from information technology is one of the keys to unlocking this effectiveness. Four essential business tactics exist that can assist:

  1. Understand the business strategy
  2. Have the right people
  3. Use standard processes
  4. Use the right technology

These tactics will have a positive impact on the success of your business in the context of the support received from information technology.

Understand the business strategy

An understanding of the business strategy, and the involvement of business in IT decisions, is necessary to avoid an IT team working on the unnecessary projects.

This common problem usually stems from a lack of understanding of the goals and vision of the business when it is tempting to implement technologies that seem to be the correct decisions at the time. Sometimes these decisions are right; frequently, they are not.

A business’s main strategy can be focussed upon product innovation, customer relationships, or operating excellence. Identifying the predominant strategy removes trivial distractions for the IT team. There is little point to significant investment in a customer relationship system where the main focus of the business is upon delivering the best products at the best price. Conversely, for a business focussed upon customer relationships, the priority will be to deliver and operate a customer relationship system.

The business strategy must be clearly communicated to the IT team. A written statement of the business IT strategy is useful (vision, mission, and objectives, together with supporting initiatives and milestones. Even more useful is a cultural emphasis on the importance of the role of IT in achieving the
business vision. Such a cultural emphasis can be achieved through concrete actions (e.g. declining projects that do not support the business strategy) and regular adherence to and acknowledgement of the IT strategic plan.

Aligning information technology to the business strategy will reduce distractions that arise through not having a clear direction of the role and purpose of IT in supporting business goals.

Have the right people

A common problem facing IT teams is that the staffing ratio is all wrong. The wrong staff are doing the wrong jobs for the wrong reasons. For example, a business that employs four network administrators and only one help desk person will likely have a network that works very well at a technical level. Unfortunately, there will be many frustrated end users not receiving the desktop support they require. The result can be business chaos.

IT roles that do not directly support the business strategy should be considered for removal or outsourcing. IT teams regularly have ‘legacy’ roles from the past that are no longer needed or appropriate. A regular review of the roles in the IT area and their alignment to business strategy is a potentially valuable approach.

In addition, end users need the training and skills to use the technology that is provided. Frequently no training is received by IT teams, or end users in the software on their computers, and – especially in the case of upgrades – continue to use the software as it has always been used, without using new features. Adopting a formalised and documented approach to training can be beneficial, but even recognition of the need for training through ad hoc opportunities will bring benefits to the business.

Use standard processes

Often IT teams have only one person who can resolve a problem. Or worse, each team member will resolve the problem in their own way. When the staff member leaves, no-one else can fix the piece of equipment. The end result is chaos and delays for the valuable staff member.

If the same task must be done more than once, the potential for developing a standard process exists. No IT team should be without good help desk software, and ensuring a discipline around managing problems and documenting resolutions will pay dividends. There are free help desk management tools available (e.g. open source solutions) and new social networking tools (e.g. ‘wikis’) for documenting and storing processes and procedures that are inexpensive, simple to use, and easily maintained.

Reviewing the use of help desk management software, and writing procedures for standard tasks (starting with the most common tasks) will repay the business handsomely.

Have the right technology

Technology that is simply wrong for the task at hand, or obsolete, costs businesses a great deal. Excel spreadsheets will frequently be used for tasks that really require a database. Or many technologies will be used where a single technology product would suffice. It is crucial that the right technologies are used for the task at hand. This does not mean that the ‘latest and greatest’ gadgets and gizmos should be adopted, but for a business that is reliant upon IT, it is necessary to have all technology covered by parts replacement warranties.

Technologies that are still supported by the original developers or manufacturers are fundamental to ensuring that the IT team is effective. Limiting the number of technologies to support will also help. Approaches to ensure that the right technologies are used include a statement of the preferred technologies to be used (e.g. identifying a single preferred database technology such as Oracle compared to SQL Server), maintaining warranties on all important business technology equipment, and limiting the use of customised and in-house developed software.

Conclusion

Effective information technology requires that the IT team be provided with the skills and equipment necessary to deliver upon the business strategy. Likewise, the business needs to provide strategic direction and input into decision-making for business information technology.

There are many more tactics that can be adopted by businesses to ensure that IT can deliver upon its promises. This article has highlighted those tactics that are common to most businesses and will have the most positive results. Nevertheless, there are many other tactics that can be adopted that are unique to individual businesses, and must be considered in light of the specific circumstances of the business.

Horwath and BDO Merger

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No, it isn’t just another merger.  As predicted in my earlier post, there are real problems for accounting firms seeking to merge in Australia.  Most of the national associations have to ‘battle’ the federated system, which makes it difficult to get consensus and a merger of more than one or two offices over the line.  And mergers with big four, although I am sure professionally rewarding for the individuals involved, don’t really help with the lack of diversity in the profession.

According to the PR fact sheets that have been released, the new firm is in the vicinity of $180 million in fees, 140 partners, and 1200 staff.  Those kind of numbers make you think that as a combined entity we can do just about anything we want, and knowing to a certain extent at least the depths of talent in the gene pool of both Horwath and BDO, I think that’s an accurate assessment.

Like all mergers, no doubt there will be fun times ahead for all, but I have to say that it is probably professionally worth it.  I know the outcome from the Brisbane merger four years ago was really positive in the end, and means we can provide services to a whole range of clients that we never had access to before.

For me it will be good in that some of the people I used to work with at Horwath – like Craig Stephens, Peter Moltoni, David Stevens, Michael Delaney, Margaret Maunsell, Peter Sander, Nick Burne, Bruce McMenamin, and Mark Tomsic – are still there, so I hope to renew old friendships at some stage (Cairns, even though it’s 2000 kilometres away, is I am sure quite close to us and has lots of growth clients – hint hint hint!).  In some ways though it’s obtuse to me that the current Brisbane office isn’t joining us since I know three of the directors there already – Naresh, Ron (served on a CPA education committee with me once) and Ken – but that’s professional life and I think I can

I have been casually observing the media and have noticed what is to me a complete lack of interest in the whole accountancy profession thing – maybe journalists think ‘numbers, pah’ – but in anyway I thought I could indulge my obsessions and put some links in here:

I know there was a brief article in AFR by Mark Fenton-Jones, but since the AFR doesn’t freely give away its content, I can’t link it.  Anyhoo I think it’s all positive and I hope that the final merger can proceed as currently mooted (current press releases seem to imply it ain’t all over yet).  Kudos and congratulations to those that managed to pull the merger together – from the little I know a lot of work would have been needed.

More travesties of blogging

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MIS magazine has a good article from Monday (November 6th) with the title of ‘Building Blogs‘ written by Mark Jones of the Fairfax stable. It charts some of the issues around the fabled Telstra ‘Now We Are Talking’ blogsite, and in particular the trials and tribulations of one Tom Reynolds, who wrote a blog-piece that was, it seems, about how bloggers should be ‘transparent and clear’ it would seem. This is of course in the finest blogging tradition, and highlights the tension between an open and transparent corporation and the perceived ‘need’ for corporate secrecy.

Soon after that blog-piece, and completely unrelated, Mr Reynolds was pink-slipped due to a ‘cultural clash’. The Corporate Blogger – perhaps if you are asked by your business to actively promote and blog about your company, you should run screaming in the other direction. Or update your resume. It’s all good.

As a side issue, I note though that the piece quotes Frank Arrigo of Microsoft (he was a presenter at the RSS, Blogs and Wikis conference) – who has apparently had urgent health problems requiring surgery, so it was bye-bye to the appendix and, for Frank, what was no doubt a harrowing blog-withdrawal experience – there isn’t an entry for almost three whole days.