This chapter is from the book
This chapter is from the book
This chapter is from the book
BTM has four critical dimensions
As illustrated in Figure 1.4, the first dimension for institutionalizing BTM principles is a set of robust, flexible, and repeatable processes. Simply defining these processes is insufficient, however. To effectively implement BTM requires that processes be evaluated to ensure the following:
- General quality of business practice—Doing the right things
- Efficiency—Doing things quickly with little redundancy
- Effectiveness—Doing things well
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Figure 1.4 Critical Dimensions of BTM
The four critical dimensions of BTM are processes, organization, information, and technology.
Management processes are more likely to succeed when they are supported by appropriate organizational structures based on clear understanding of roles, responsibilities, and decision rights. Such organizational structures generally include the following:
- Participative bodies, which involve senior-level business and technology participants on a part-time but routine basis
- Centralized bodies, which require specialized, dedicated technology staff
- Needs-based bodies, which involve rotational assignments, created to deal with particular efforts
The right set of structures will vary according to an enterprise’s value discipline, its primary organizational structure, and its relative BTM maturity. Centralized bodies, such as an Enterprise Program Management Office (EPMO), tend to require specialized, dedicated staff. Participative bodies, such as a Business Technology Investment Board, are ongoing, part-time assignments for their participants—the key stakeholders. Needs-based bodies—functionally specialized groups such as project teams—tend to be rotational assignments created in response to particular needs. These bodies set direction, guide specific business technology activities, and systemically execute against approved plans.
Valid, timely information is a prerequisite for effective decision making. This information must be delivered in a way that is comprehensible to non specialists and, at the same time, actionable in terms of informing choices that matter. Useful information does not just happen. It depends on the interaction of two related elements: data and metrics.
Data must be available, relevant, accurate, and reliable. Metrics distill raw data into useful information. Thus, metrics need to be appropriate and valid for strategic and operational objectives. Internally, they should be comparable across the enterprise and across time; and externally across industries, functions, and extended-enterprise partners.
Management processes based on flawed information will fail when confronted with conditions that exploit the flaws. As an illustration, consider a major retailer of auto parts that spends millions acquiring and analyzing customer data to determine where their customers live. The retailer then sites new stores in strip malls near these neighborhoods only to be disappointed to discover the new stores’ sales lag the older stores. As it turns out, "where the cars live" is a poor predictor of success compared to "where the cars work." Locating stores along major routes to and from primary employers would produce much better results. As this example illustrates, flawed information need not be incorrect—just inappropriate for the intended use.
Effective technology (that is, management automation tools) can help connect all the other dimensions. Appropriate technology helps make processes easier to execute, facilitates timely information sharing, and enables consistent coordination between elements and layers of the organization. It does this through the following:
- Automation of manual tasks
- Reporting
- Analytics for decision making
- Integration between management systems
The simple addition of technology to automate existing processes leaves most of its potential value untapped. The largest gains result from the optimization of processes, organizational structures, and information flows. The complexity of managing the business technology function and increasing demands of an ever-evolving business climate require more information transparency and operational synchronization than basic computing tasks can provide. The appropriate use of technology should not only ease the development and reporting of information needed to fuel management processes across the organization, but also to achieve consistent horizontal and vertical management integration.
A BTM capability is therefore defined as a competency achieved by applying well-defined processes, appropriate organizational structures, information, and supporting technologies in one or more functional areas. Successfully implementing any of these capabilities will move an organization closer to the goal of business and technology unification. This progress accelerates as each additional capability is realized and continuously improved.
The 17 capabilities are interrelated and interdependent or "networked." All of them should be implemented to maximize the business value of technology investments. But doing so requires a carefully orchestrated approach with top-down and bottom-up support. It also involves business and technology groups in equal measure—plus hard work and time, of course.
These 17 capabilities are grouped into the functional areas described in more detail next: Governance & Organization, Managing Technology Investments, Strategy & Planning, and Strategic Enterprise Architecture (see Figure 1.3).