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BC Architect’s Fellowship

BC Architect’s Fellowship. Agenda. Introductions Explore Alignment Discuss Intangibles Highlight Example of One Approach. Setting the Stage. Have you struggled with investment prioritization? Why is it so hard to create a business case for IT projects?

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BC Architect’s Fellowship

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  1. BC Architect’s Fellowship

  2. Agenda • Introductions • Explore Alignment • Discuss Intangibles • Highlight Example of One Approach

  3. Setting the Stage • Have you struggled with investment prioritization? • Why is it so hard to create a business case for IT projects? • Do you struggle aligning your IT efforts to the business strategy? • How do you communicate with Executives and obtain their sponsorship?

  4. Short Term Objectives Long Term Objectives 1-3years e.g. Project A 4+ years e.g. Project B Foundation e.g. Project C Capability Developing Objectives

  5. ExampleStudy: Ken, VP Operations Julie, CIO • Situation: Economic hardship. Extreme capital project scrutiny. • Challenge: Architecture initiative would not give a positive return on investment. Initiative is important – future initiatives dependant upon it. • Standing on its own, the collaboration architecture project appeared to be a poor investment. • She needed to take a different approach.

  6. Valuing the intangible - Why is this hard? Because… • Value creation is indirect. • Value is contextual. • Value is potential. • Assets are bundled.

  7. Short Term Objectives Long Term Objectives 1-3years e.g. Project A 4+ years e.g. Project B Foundation e.g. Project C Collaborative Capabilities

  8. CBA Concepts • Balanced Scorecard • Strategy Map • Capability Identification • Capability Maturity • Alignment Connected Business Framework

  9. CBA Concepts – BSC & Strategy Map Ken, VP Operations - Julie, CIO Balanced Scorecard

  10. CBA Concepts – Capability Identification Ken, VP Operations - Julie, CIO Julie’s Collaboration Architecture Initiative will develop the following capabilities: Workers ability to ‘labor together’ for the purposes of creating business value through aggregated ideas, information and expertise. Ability for information to be communicated effectively between workers, across workgroups and beyond organisational boundaries. Ability to capture and access expertise, knowledge and intellectual assets produced through any business activity. Ability to innovate on and transform work patterns within the organisation as a means to develop increased business value. The ability to engage workers and align operational activity to achieve strategic outcomes.

  11. CBA Concepts – Capability Maturity

  12. CBA Concepts – Alignment Calculating Alignment… Step 1: Identify Objectives Step 3: Determine Contribution Level for each capability to objectives. (First Pass then Calibrated) Step 2: Prioritize Objectives Step 4: Calculate Correlation = sum(weighting x contribution)

  13. CBA Concepts – Alignment Correlation Guidelines Correlation is calculated as a series a cause-and-effect relationships 10+ steps required to reach objective 7 - 10 linkages required to reach objective 5 -7 linkages required to reach objective 3 -5 linkages required to reach objective 1 -2 linkages required to reach objective Example of a Substantially Correlated Capability Capability Developed Scorecard Objective

  14. Calculating Relative Benefit Determine the benefit of the corporate objective, not the capability.

  15. Ken, VP Operations - Julie, CIO

  16. Assessed Maturity Level by Capability

  17. Future-State vs. Current State Maturity by Capability

  18. Agenda • Introductions • Discuss Alignment • Explore Intangibles • Share One Approach

  19. CBA Concepts – Capability Identification Capability Identification

  20. CBA

  21. Disclaimer: Efficacy before Alignment • Alignment trap – having an effective IT environment is a pre-requisite to seeking alignment. Three key principles are useful in moving organizations to high effectiveness: Simplify. "Rightsource" capabilities. Focus on value delivery. complete projects on time, on budget, and with IT functionality that delivers what was requested by the business. - Bain

  22. Project Types Each cash inflow/outflow is discounted back to its present value (PV). Then they are summed. Therefore NPV is the sum of all terms , where t - the time of the cash flow i - the discount rate (the rate of return that could be earned on an investment in the financial markets with similar risk.) Rt - the net cash flow (the amount of cash, inflow minus outflow) at time t .

  23. Other Types of Measures • Internal Rate of Return (IRR)

  24. Other types of Measures

  25. References The Balanced Scorecard: Translating Strategy into Action / Robert S. Kaplan and David P. Norton Strategy Maps: Converting Intangible Assets into Tangible Outcomes /  Robert S. Kaplan and David P. Norton  Connecting the dots : aligning projects with objectives in unpredictable times / Cathleen Benko, F. Warren McFarlan.

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