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MBA/MIS 513 September 15, 2008

MBA/MIS 513 September 15, 2008. Tonight. Case Learning: Investing in IT that makes a Competitive Advantage Discussion of IT project expectations Case Learning: Outsourcing Launching a Business Value Program ( Chapter 6 – Book B) – Key Chapter!!!!. Due. Tonight – IT Project Proposal

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MBA/MIS 513 September 15, 2008

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  1. MBA/MIS 513September 15, 2008

  2. Tonight • Case Learning: • Investing in IT that makes a Competitive Advantage • Discussion of IT project expectations • Case Learning: • Outsourcing • Launching a Business Value Program • (Chapter 6 – Book B) – Key Chapter!!!!

  3. Due • Tonight – • IT Project Proposal • Thursday- • Just read cases, yeah! • Will give time for discussion of project proposal

  4. Case:Investing in IT that makes a competitive advantage

  5. IT project proposal expectations The project must have an IT component on how the organization could use IT to improve their bottom line or help achieve their mission. Plan your project (and report) around on one or more of the following means IT assists organizations: Assist in achieving a corporate strategy Increase Revenues Decrease Costs Increase Customer/User satisfaction (thus impacting above)

  6. Means to satisfy: • One approach would be to follow the process described on page 47 (Chapter 2 Figure 2.3) of the Sward book (Steps 1 to 5) • Executive Summary (1 page) • Understand Customer Needs (what problem) • Define Requirements • Propose Solution (what is needed to complete this project) • Estimate ROI & other financials • Assess Merit (Benefits to organization – what part of IT strategies does this project meet)

  7. Approach -2, discuss these items: • Executive Summary (1 page) • Which one(s) of the legs of IT project does the project attempt to assist the organization (strategy, revenues, costs, satisfaction • What business problem will your recommendation solve, what are the user needs? (what are the requirements ) • What will the project really do ? • What are your anticipated benefits (tangible and intangible) • How would you justify the investments

  8. Approach 3 – Redo the sample justification templates for your project • Select either: • BV Spreadsheet (on web page) • Microsoft Justification (on web page) • Your firms (or sample from Dr. Cloud) • Modify to be your project • Must start with Executive Summary

  9. Other items to consider and potentially include • Overview of the current situation • Who would be need to involved in the approval, design and implementation • What equipment (if appropriate would be necessary) • What are the alternatives?

  10. Questions? • Due Monday 9/29 by 5PM Change!!

  11. Case:Outsourcing

  12. Launching a Business Value Program Book B – Chapter 6

  13. Keys to success • Clearly defined management support following an approved IT Governance Policy • Finance department buy in • Dedicated ITBV business team

  14. IT Governance Policies (suggestions) • All results (proposals) must be documented by both IT and the business units • Results must be customer (business unit focus) • Revenues, cost, satisfaction • Results that improve internal IT productivity (not counted)

  15. IT Governance Policies (suggestions) • Projects must deploy new or incrementally improved IT solutions (measurements imposed pre and post) • Count results only once (segment projects)

  16. Building an ITBV Team • Corporate strategy professionals • IT Strategy professionals • Productivity measurement experts • Finance/Accounting • Missing is business units, why?

  17. Building an individual project team • Customer! • IT Project Manager • Business Value Manager • IT Finance • Customer Finance

  18. Comparison of Governance Approval / Establishing Standards Individual Project Business Value Team • Corporate strategy professionals • IT Strategy professionals • Productivity measurement experts • Finance/Accounting • Customer! • IT Project Manager • Business Value Manager • IT Finance • Customer Finance

  19. Business Value Index(build factors for you firm) • Strategic Fit • Revenue (cost) potential • Customer Need • Risks (either of doing or not doing) • Include tangible and intangible factors

  20. SampleBVI

  21. Business Value Flow Diagram

  22. Qualifying a project • Is this a new IT-designed solution intended to meet specific customer needs? If so, describe. • Explanation: New solutions designed by IT that solve existing customer problems or improve productivity are likely to qualify for the ITBV Program. • Did the customer fully define the problem or opportunity and the solution before engaging with IT? If not, what value-add was IT to this project? • Explanation: If a customer comes to IT with a fully defined solution to their problem and has simply selected IT as the supplier, the solution will likely not qualify for the program. However, if the customer has come to IT with a solution and IT adds value by enhancing the solution, designing it differently than the customer had specified to create a better design, it would likely qualify for the ITBV program.

  23. Qualifying a project • Is this an existing IT solution? If so, how does the new customer differ from the existing customer? How will the new customer benefit? • Explanation: If the solution already exists in the environment, the only way this might qualify for the program is if the solution is for a totally new customer. For example, an organization responsible for reuse of surplus capital equipment could count new business value if the process and supporting tools are deployed to a business unit that is not currently engaged in this activity. • Is this a replacement of or an upgrade to an existing IT solution? If so, describe the incremental benefit the customer will realize. • Explanation: If an existing IT solution is being replaced, it must offer additional functionality or productivity to the end user in order to count for the program. Solutions that are replaced and have no beneficial effect on the end users or that are simply business as usual, do not qualify for the ITBV program.

  24. Qualifying a project • Is the target of this solution internal to IT? If not, be sure at least one of the questions above has a full description. • Explanation: Projects that reduce IT costs to the customer or benefit IT and not the customer do not qualify for the program; they may be worthwhile projects, but they don't meet the spirit of the program.

  25. Once project passes first phase (fits initial criteria) • Develop CSI (Critical Success Indicators) What should be measured? Customer sets specific targets Agreement on quantification and measurement of intangibles

  26. IT Governance Process

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