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IT Process OrganizationTechnology IssuesSlide 3Taking a Process View Has Helped Several Organizations Improve the Value Received from the I/T CapabilityCapturing Information Technology Opportunities Requires the Implementation of Best Practices on a Global BasisSlide 6I/T Transformation is a Long-Term Program for ChangeLost Economies of Scale in Help Desks (FTE’s Versus Call Volume)Root Cause Analysis Highlights Common Themes That Erode ValueOnce the Opportunities are Understood, Objectives are Set to Guide the Design:Benchmark Studies on Growth Companies and Leading Edge Practices are Useful to Guide DesignFundamental Reengineering Starting With a Service Mission and Definition Allows the Organization to Redesign Itself Based on PrioritiesThe Analysis Starts by Prioritizing the Key Services and Processes to RedesignSee Overhead SlideThe New Processes Address All Key Management Issues Identified in Phase I and Drive the Organization DesignA Key Aspect of the Change is to Separate Demand and Supply ManagementSeparate Demand and Supply Organizations are Needed to Maximize Sharing While Maintaining Strong Business FocusAn Implementation Guide Defines the New Organization and How It OperatesSlide 19Regular Benchmark Analysis Ensures That the Organization Remains Market Competitive and Focused on Supporting the Business StrategyThe Organization Must Implement Best Practices for Continuous ImprovementIT Process Organization(Provided by Booz-Allen & Hamilton)Technology IssuesDRI VER I / T CHALLENGE I / T Staf- Turnover Rates > 14%- Wages increasing at a rate of 4x averageRenewal Ef orts- Major ERP implementations (SAP, Peoplesoft, Oracle)Emerging Technologies- Requires dif erent management model than maturetechnologiesOutsourcing- Must determine where and how to use service providersDemand Management- What level of service, which development projects?Costs- Costs perceived to be too high with too little controlfrom the business- How should businesses be charged for these services?Growth- How can I / T support and enable corporate growth?Organization- What organization model should I / T adopt (Centralized,Decentralized, Shared Service)?- How can duplicate services (“shadow” I / T shops) bemanaged?Extended Enterprise- What I / T services can enable supplier/ customer processimprovements?Business Imperatives are Putting Challenges on the I/T CapabilityBusiness I mperatives I / T I mplicationsScaleability- Mergers, acquisitions and entry into new markets require thecapacity to deploy increased levels and coverage of services quickly- Divestitures, J V’s and outsourced business processes drive loss ofscale and loss of cost eff ectiveness in existing services- I mplementing new technologies and accommodating business changecreate large peak demands f or servicesFlexibility- Flexibility is essential to introduce new technologies andaccommodate business change- Freedom to select the technologies best suited f or businessobj ectives is important (i.e., technology choice is not dictated byinternal skill base)Responsiveness andManageability- Quick access to productive, external resources is needed torespond to business opportunitiesReliability- Service levels must be reliable in an unpredictable, changingenvironmentSustainability- Need skills that will ef ectively transfer technology into theorganization- Viable career paths are needed to eff ectively manage and leverageI / T f or business benefi tsCost- Ef ectiveness- Variable costs must be kept variable- Must maintain our cost competitiveness while changing scaleRisk Minimization- Need to make the right choice on technologies and partners- Need to manage the overall risk in our technology portf olioTaking a Process View Has Helped Several Organizations Improve the Value Received from the I/T Capability•Improving the value and return on I/T assets by focusing resources on critical market driving capabilities (e.g., “Advantaged Systems”)•Positioning the I/T Organization to support growth•Improving service management disciplines using process based organization concepts•Capturing cost reduction opportunities of up to 40%Capturing Information Technology Opportunities Requires the Implementation of Best Practices on a Global Basis•Simplifying I/T Operational Processes—Separate supply and demand, fixed and variable—Eliminate low value added work and redundant support systems accumulated over years of growth, acquisitions, etc.—Optimize I/T processes for low cost delivery…benchmark to best practices—Develop processes to share expertise and internal best practices•Restructuring I/T Delivery Model to Achieve Operational Effectiveness—Centralize operations where strong economies exist—Develop service level agreements to create accountability to the line—Balance sourcing of I/T capabilities (insourcing vs outsourcing)Capturing Information Technology Opportunities Requires the Implementation of Best Practices on a Global Basis (Cont.)•Leveraging Information Systems Investment—Enforce common technical architecture standards (hardware, software, network)—Implement rigorous cost/benefit standards for new application software investments—Optimize application software maintenance requirements•Reducing Headcount Costs—Strip out redundant support systems and staff accumulated over years of growth, acquisitions, etc.—Staff to “base case” I/T delivery model and streamlined I/T processesI/T Transformation is a Long-Term Program for ChangeIdentify/Validate/PrioritizeDetailedDesignImplementProcessScopingtheOpportunityContinuousImprovementSegment/Roles/ResponsibilitiesTransitionPlanningImplementOrganizationStructureDecisionGoIterate/Streamline/StructureAccountability/AlignmentActionPolicyDecisionGoBusinessProcess RedesignPhase I Phase IIPhase IIICorporation Staf Design ApproachEach Phase is Based on Facts and Analysis to Drive the Business ChangeLost Economies of Scale in Help Desks(FTE’s Versus Call Volume)Client’sHelp Desks Were TooSmall and Did Not LeverageEconomies of ScaleSufficientlyHelpDesk(FTE’s)Help Desk Call Volume(Calls Per Month)Root Cause Analysis Highlights Common Themes That Erode ValueCOMMON THEMES I MPACT EXAMPLESDecentralized anddiversified corporatestructure- Limited sharing among divisionsand/ or geographic areas- Duplicate groups and assets- Loss of economies of scale- Small and subscale Help Desks- Small and subscale Data Centers- Multiple applications supportingthe same processI


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SMU CSE 7360 - IT Process Organization

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