Fit Analysis- Is it Business ‘Fit’ or Technical ‘Fit’?

Enterprise Architects/IT Teams along with their business counterparts struggle with the idea of how to effectively engage the senior leadership regarding an application system that clearly does not fall in architectural/technology standard or simply the business standard. Recently talking to senior leader in our company his suggestion was – IT seems to have too much time on its hands to do a “What If” analysis. The comment didn’t catch me by surprise as the individual has hard time understanding not just technical but the business side of things too. A simple technique called FIT analysis can help in preparing a presentation for the senior leadership. The objectives mainly revolve around convincing the management about validating the IT road map for an application, make a strategic decision for better IT alignment and better maintenance of your application portfolios.

In Fit Analysis the first step is to always answer the question what is the business requirement or need that is trying to be met or in other words what is the problem we are trying to solve if its initiation of a project. Answering this question is an iterative task and covers more than one point on the vertical axis. The next step is to answer the question how the relevant business requirement fits or meets the technology standards in place, or if the organization is in transition towards a IT alignment roadmap the iterative process is carried out in asking the questions how “technical fit” is the application going to be. The result can be mapped out in a matrix quadrant with x-y axis.The result is four quadrants which are identified as “A” through “D.”

Quadrant A: High Business Fit but Low Technical Fit.

Projects or applications that fall into high business fit and low technical fit Quadrant A have a strong case from the business front but weak support or problerms in implementing on the technical front a good example here is at work we have a mission critical membership application piece written seven years ago, time to update it has long gone past but the lethargy of the management to change it or put substantial effort to revamp it lacks. On the other hand the code base is hard to maintain, is older technology and don’t meet upgrading or current IT standards. Sometimes an application or project may have a high business fit because the application owner or the project initiator has power of say or decision making but in reality the application may have a low business fit with other corporate strategies or a low technology fit that hinders standards alignment.

Quadrant B: Low Business Fit and Low Technical Fit.

Sometimes applications and projects fall into a category where it is a low business fit and a low technical fit. At work we have an application that does not have a monetary value or even a perceived benefit value, yet time and resources are spend sometimes behind these small applications. Support of replacing such systems in an organization is strong but again it hinges on who the application or program owner is. Traditionally the application remains without any measurement of the perceived benefit.

Quadrant C: Low Business Fit and High Technical Fit.

Applications and projects that fall into this quadrant do not have a strong business support but have a strong IT support because of its meeting the IT alignment standards. When this happens it becomes imperative for IT to do more detailed  "what if" analysis of how it affects the business ROI and find substantial reasons as to how it plays into the strategic positioning of the benefits matrix in the organization. The important thing here for enterprise architects is also to show how other functional requirements can be added or scaled to make it more relevant or congruent with being business fit.

Quadrant D: High Business Fit and High Technical Fit.

Applications and projects that are mapped into this quadrant typically have strong support from both the business and technology. This quadrant is the most comfortable quadrant for the EA. The EA does not have to worry convincing the stakeholders for undertaking such projects as most of the times they are mission critical.

Effectiveness of the Tool

This tool is most effective when this exercise is carried out in partnership with stakeholders or application owners most of the time senior leadership. The management is asked to plot or give their take on Business Fit and Technical Fit and rationale or reports they want to generate. The IT architect takes this rationale and along with the CIO  story boards the technical side and comes up with a model of how optimally can this application move towards being business fit and technical fit keeping IT alignment in mind. The plotted data will give how close the points fall to Quadrant D and then decisions are to be made are we going to go for it or not. Or go for it keeping strategic advantage in mind.

Thoughts,

Sam Kurien

Business Analysis Cost Matrix

I have long maintained the view that cost accounting is art and science. You can master the mechanics and science for a given industry or domain but the art is a debatable matter. Part of every cost accounting is the function of budgeting and it usually falls under two spectrum one is accounting for every cost possible and fix the costs and spend strictly around the allocated costs, but in real world we know this is sometimes not accurately possible so we operate within margins, this is my favorite method, the other is what is practiced in the industry most of the times that is to take estimated costs of the items and take an educated guess about things that you cannot account for or allocate x amount of resources add all of it and spend what you can afford as operations pan out.  The first approach when integrating technology as a strategic component becomes inflexible because in three or five year cycles corresponding maintenance and service cycles do not match with your cost accounting schedules. Also new initiatives and new projects cannot be thought of to react to market conditions. The companies that enforce the first method strictly are like elephants strapped under the weight of inflexibility and unable to innovate because of the fiscal straps from the CFO and the CFO wonders why IT solutions are not up to date. The other spectrum is where top dog has the final say what can be spend and what cannot be spend which also can stall innovation or it’s a hit and miss game. 

So Is there a middle approach that can marry cost accounting effectively with IT integration, alignment and new project initiatives.  The idea is to avoid shooting from the hip or avoid extreme control. My proposition is to develop the business analysis function in such detailed way that an organization can have a matrix system of decision making where all the details and outputs of a business analysis research plan can be plugged in and decision for  “yay” or “nay”. The CFO and the CIO are strategic members of this team along with the business analysts where infrastructure, cause/cost for project, market needs, market analysis, expected outcomes, expected returns and requirements strength are all producing outputs that determine significance for the pre-determined ratio of acceptability.  This ratio of acceptability is something the senior management decides in terms of overall profitability and direction they want the organization to move towards. I personally think this can be game changer but the catch is development of such an business analysis matrix that aligns with cost accounting takes time to develop along with the thorough process of a fine tuned business analysis machinery where we have expert BA’s collecting the requirements keeping the cost matrix system in mind. I would even go to the extreme of having a team of analysts that work on every strategic plan or project initiative the organization wants to embark upon.

Thoughts for today.

Sam Kurien

 

Design Ideas!!!

I am a fan of industrial design and architectural design...hey heck actually the design process in general fascinates me. Here are some pics of designs that have lately that caught my eye.

A touch surface designed by Hyundai based on the Microsoft Surface coffee tables. I like this one better as it brings the overall bulkiness and weight down. The form factor allows at least some leg space while playing the touch surface games or flicking info from your home server to your phone or vice versa. 

Ireland's new Convention Centre Dublin uses ingenius engineering and an omniscient mother brain to monitor and adjust itself. The result? Zero carbon footprint. Cool Design and is magical with different colored lighting. 

A skyscraper designed and that grows underground. I wonder where the parking lot is on this one. 

This bridge is coming up in Seoul, Korea. The design includes to have shops, museums, and small art shops. Looks cools from the outside but how do you stop and park midway? The side bulges are the answer where parking time is limited. So you got to buy fast and get moving. 

Six Important Steps For Data Governance

Data is the most valuabe corporate asset and protecting that asset is primarily a management responsibility. Data has become the raw material or information taht ensures the continuation of a buisness and hence data governance is a strategic function. Another reason for protecting that data is also profits as well as non-profits have found that it helps also in the competitive advantage to add value to all the services and product offerings in their stable. Without going into advantages of mining that data for strategic business value additions I want to delve on the steps that a profit or a non-profit may want undertake in protecting this important resource.

1. Get a Governnace department going or identifying the individual that will be responsible for all data governance functions. A strong leadership in this area makes sure that value of data is conveyed to all quarters of the organization from top down. This person is reponsible not only about conveying that value but implementing stewardship policies that govern this important asset.

2. Identifying the redundancies and cutting the cost. The second step may be identifying the redundancies of data that comes in and flow through and churns out into information for decision making or value addition. If redundancies can be identified and eliminated that will bring costs down in maintaining that data. Focus areas will be resulting in more ease of accessing and storing of information and operational efficiency among staff.

3. Calculate the value of data in terms of its relation to your P&L. This is a metric function that the governance guy is responsible for. The value of data just like any other corporate asset changes over time based upon internal and external (market) conditions. This value is calculated based on the cost of IT services internal users pay for and value generated by revenues in terms of support or valu-addition.

4. Calculating Risk is next important step because it is an indicator how data may be compromised, loses it value in the future or losing its relevance. The strategies in this step involved combing the previous two steps in knowing what are internal operational inefficiences as well as exteranl operational threats that may be a risk for the data you are governning. This step involves also in calcualting the probability of risk and management of risk in terms of using tools of business intelligence, analyzing trends, past envents forecasting and overall policy management.

5. Implementation of Controls. This step involves the operational controls that you put in place for the stewardship of data. No one is excluded every corporate citizen internally is responsible and answerable to these policies. Practice often states that policy making at the top level tend to break their own rules of data governance controls and hence set themselves up for a fall. Controls should be routinely evaluaed in processes, process flows, information gathring and dissemination and if creating a bottleneck review and change over.

6. Finally Moniotring the efficiency of your controls .The last step is overlapped by step 5 in the sense so much of data governance is more a organizatioal response behavior that boils down to individual following the policies of data stewarship. Monitoring the control in place is thus more than just reviewing of the controls, it revewing of the people and expressing corrective measures in behavioral changes. This is where data governance becomes more that about data security, compliance and managing or assessing or risk. It is a compsoite discipline that bridges organizational functions and starategic management to ensure organizations own continuity in the marketplace.

Thoughts on important steps for successful data governance.

Sam Kurien

IT as a Innovation Partner in Business

Usually in Business organizations and especially in organizations where R&D is a separate department itself a tension persists on keeping the IT department away from any decision when it comes to innovation or process improvement. In short the IT department is generally seen as less of a help and more of a hindrance to innovation efforts. One of the main reasons is traditionally information systems are designed to impose structure on process, achieve pre-defined goals, produce metrics and minimize need for human interaction (in some case over maximize human interaction leading to nothing but "meetings").

While Innovation activities are highly unstructured and emergent, IT cannot be ignored or kept in isolation because IT can help in visualization tools, data mining efforts, uncover hidden relationships between data and create tools of knowledge management/information repository that so desperately is needed cross functionally but especially by the innovators within a organization. An organization that integrates IT and the innovation department to make Innovation 'IT enabled' brings a different level of empowerment to the organization.

Components of a IT enabled innovation department for a business organization consists of three components.

1) IT-enabled organization capabilities: This relates to combining IT assets (data, infrastructure and expertise) with non IT-assets (such as creativity of innovators, technological sophistication of top management,  ote enable the across-the-board business processes essential to developing and applying innovations.

2) Secondly organizations need a strong set of IT-based tools to effectively sustain the central activities required for innovation and to support the analytical & statistical work that scientists, business innovators, engineers and designers need to transform ideas into products, processes or services.

3) Finally organizations need a system of "Control" that allows innovation workers to access and use the IT resources effectively and follow a framework that is standardized as well as in some cases is flexible.

Historically research has documented that innovation can come through diverse quarters of an organization if encouraged appropriately consisting of individuals or teams drawn from geographically diverse pool of knowledge. This can be facilitated by bringinh IT in cross business linkage for input, recommendation and metric measurements against the standards of a implemented framework and also at the same time be flexible with variances coming from the innovation quarters. In practice however IT departments are usually seen as one lacking creativity and favoring standardization. I understand this as it helps in maintenance, reduce costs and improving the operational flow of IT support processes. So how then can we achieve a balance. Here are some suggestions:

Some ways to bridge this gap is bringing IT specialists on board the R&D or process improvement  teams and innovation meetings, another way is make IT specialists responsible for innovation-success metrics. For example firms like Du Pont and Archers & Daniels have their R&D department regularly interface with IT on tools they want to procure with a variance report from the organizational standard of Tools pool. IT then takes the requirement, analyzes the variance but is ever careful not to step on R&D effort to contribution and makes the approval process a collaborative effort. Interestingly these organizations have a VP of Innovation and on the organizational chart VP of innovation has a dotted-line reporting from the CIO.

My observations after reading lots and lots of case studies in varied industries in most cases - is an absence of innovation-facilitating IT governance practices a reason at the root of the problem. In practice some organizations put significant IT resources in the hands of business innovators or R&D, in some there is no IT resources allocated, in some it is shared resource working in isolation. It is here that IT Governance becomes of paramount importance in getting technology to be partnering innovator in the innovation process. The idea here is the specific mode of control (Governance) is not as important as its capability to facilitate routines and policies for addressing innovator's requirements and meeting those requirements for the overall benefit of the organization and its customers.

Thoughts on IT-enabled innovation.

Sam Kurien.

Critical Success Factors of CRM Technological Initiatives

Devising a CRM business strategy is unrealistic without a proper understanding of the benefits and opportunities of enabling technology and vice versa. In a recent survey Gartner group reports that CRM project have the highest failure rates in implementation but have the highest potential in terms of return on investment rates.

I want to talk about a study done by Peter Lin and Anne-Marie Corteau & myself which I find very relevant to find what are the critical success factors that are significant of CRM Technology initiatives. The study surprisingly revealed what should be apparently significant CRM impact for an organization is not that significant as perceived by many. The direct CRM impact as perceived by many are operational and strategic benefits arising out of CRM technological initiatives. Operational perceived benefits such as front-office efficiency and productivity in sales, marketing and customer support and service functional units to shorten sales cycle, marketing cycle, and customer support due to better employee productivity. Furthermore improved operational productivity means decrease in costs. On the other hand the perceived strategic benefits would be defined as the the tactical, opportunistic and competitive advantage a CRM implementation can bring in terms of churning of information into useful strategic knowledge base.

The authors put around 1000 questionnaires out to senior management and middle level managers across various industries. They used Iacovu et. al' research model (1995) with various constructs and frameworks that they borrowed to make the testing of 6 hypothesis involving 5 key critical success factors. CRM impact was the dependent variable and the 5 CSF's and their relational to CRM Imapct are depicted in the following figures:

The hypothesis were to calucate the significance (postiviely or -vely linked) of each factor contributing the CRM impact of technology on overall organizational effectiveness. Internal and external focus of the CRM impact were summed to see the overall effectiveness.

Of the 1000 questionnaires an intial 14.3% response rate gave us about 103 organizations that adopted some sort of CRM implememntation, 44 were non-adopters, 28 chose to concentrate only sales force automation and 31 preferred on the Enterrpise marketing application.  Without going into the details of all hypothesis, constructs, instrument and methodology used here is the brief summarization:

A component based software package developed by Chin and Fee (1995) was used to assess the measurment model and the structural model with confirmatory factor analysis technique. The PLS (partial least squares) statistical method was used for the analysis of latent vairable structural models involing multiple constructs with multiple indicators. PLS is a second generation multivariate statistical technique that allows the test of pschometric properties of scales us to measure different variables. With the structural equation modeling technique, the construct reliablity is mot most commonly calculated using rho (ρ) coefficient, a coefficient of reliabiltiy that measures how well a set of items measures a single latent construct.  The results were surprising H1 was not supported as there was a -ve and non-signification relationship between operational perceived benefits and cRM impact (path coefficient =-0.123, p>0.05), H2 is not supported as the strategice benefits perceived and CRM impact though positive was not yet significant as (path coefficient  = 0.065, p>0.05), H3 is supported since the relationship between top management endorsing and supporting CRM impact resulted positive and significant (path coefficient 0.255, p<0.05. H4 is not supported since the link between technological readiness and CRM impact is positive but yet nonsignificatn (path coefficent = 0.062, P>0.05). H5 is supported since the relationship between technological readiness and knowledge management capabitilities is positive and significant (path coefficient = 0.0631, p<0.001). H6 is also supported since the relationship between knowledge management capabilities and CRM impact is positive and significant (path coefficent = 0.486, p<0.01).  The proposed research model appeared to provide good power to explain 43.0% of the variance in CRM impact.

Interestingly the organizations surveyed were from a diverse spectrum (pharmacy, healthcare, technology, etc), and it was surprising to see that what perceived to be prime motivators for spending in CRM implementation did not turn out to have significant CRM impact whereas CSF's turned out to be technology readingess, knowledge management and top-tier support.

I wonder what would happen if each industry were to be studied separately in its own space. Would it reveal a different statistical result on the effectiness of organizations that spend tons of money in CRM technology implementations. The questions are open for research...

Sam Kurien

References:
Chin, W.W & Fee, T. (1995). PLS Graph Software v 2910208

Iacovou, C., Benbasat, I., & Dexter, A.S (1995) Electronic data interchange and small organizations: Adoption and impact of technology. MIS Quarterly, 19 (4), 465-485

Break From Governance Posts...the iPAD cases that I like!

iWell I decided to take a break from the Governance posts but not for long, just to put interesting stuff up here, I want to share two iPAD cases that I love...sorry like...like and so far the only two that have impressed me are Twelvesouth's BookBook & Dodocase. There are thousands out there but these two give a good old book feel.

Check out first:
http://twelvesouth.com/products/bookbook_ipad/

This one really looks like you are helping the cause of antique or collector books but you are secretly hiding a iPAD. This is the same company that makes the well known BookArc for the macbook pro and the iPad.

The other one is the well known San Francisco maker: 

http://www.dodocase.com/ 

If you want a good leather folio moleskin look that is sturdy and good looking even when it stands this one's for you.

Both cases are leather and look really cool. They are priced at $69.99 and $59.95. The price though little steep is worth it for its very clean and classic looks. The one advantage with the dodocase is the wood casing inside. Makes it a little bit sturdier when it stands, just a point I thought that made it a better choice between the two but all five stars for both in looks.

Tweet which one you like of the top two? Let me know.

Thoughts @ssnautilus...posted by Sam Kurien