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Archives for May 2009

McKinsey Quarterly- CTO to CEO: Why we need an annual report for technology

May 7, 2009 By brenda michelson

The McKinsey Quarterly just published a good article on how to communicate the business value of IT to the business community.  The article is a “memo” from the CTO to the CEO articulating the “lack of shared understanding” between business and IT, and then proposes a solution, a co-authored annual report for technology:

“The idea is quite simple: you and I would jointly issue an annual report for technology—something analogous to the annual report for investors and the broader market. This document would not only provide a candid overview of our ability to extract business value from technology but also substantiate that analysis with hard metrics. We would share perspectives on the challenges of technology, convey our ideas about its role in our company, celebrate achievements, and articulate our plans and visions for the future.

To show that we are serious about bridging the gap between technology and the business units and to discourage people from seeing the report as an attempt by IT to plead its own case, it’s important that you and I issue the report jointly.”

The report contains several sections, including an executive letter explaining the premise of the report, with summaries of the technology portfolio’s performance, contribution, financial value and future plans.

The article continues with examples of report sections, exhibits and metrics.  Respecting the premium nature of the article, I’m not clipping the text or exhibits, but the key points I gleaned are:

1. make the connections between business areas and technology visible

2. demonstrate how IT contributes to operational and strategic results (not just goals, but results!)

3. identify and quantify IT & technology portfolio capabilities

4. communicate the above in business terms, using clear graphics, metrics and real-world anecdotes.

If you struggle in communicating the value of IT to the business, I recommend reading the article. [Subscription required.]

And yes, I’m fine with paying for good content, namely The Economist, HBR, MIT Sloan, WSJ and (obviously) The McKinsey Quarterly.  Recession or not, budget line items for “brain food” are essential.

Filed Under: business, business-technology

Business Architecture and Nick Malik’s Enterprise Business Motivation Model

May 6, 2009 By brenda michelson

For the last two weeks, I’ve had a tab open to Nick Malik’s Toward an Enterprise Business Motivation Model article in The Architecture Journal, and finally, this afternoon I had time to give the work the attention it deserves.  Read: I’m quite impressed.  Too often, people confuse business architecture with business process modeling.  While process modeling is a facet of business architecture, it is far from the whole picture. 

Your business architecture needs to include aspects to plan (strategy, operating model), execute (business units, business capabilities, business information, resources, processes & chains, products & services), interact (suppliers, channels, markets, customers, shareholders, financiers), manage (measurement systems, policies, rules) and change (assess, design, implement) in the context of expected outcomes and outcome disrupters (internal and external change forces).  And of course, the business architecture must account for the relationships between the various aspects in the context of the scenario being addressed (designed, implemented, measured).

When I speak to business architecture, I often share a version of the following, continuously evolving Business Architecture Domain (simplified) picture.  [Click on picture to enlarge]

And while I still like my Business Architecture Domain picture, it’s just that, a picture.  Nick’s work is a set of seven core models that comprise an Enterprise Business Motivation Model.  The key concepts included in the model are Influencer, Driver, Business Unit, Business Unit Capability, Business Model, Directive, Business Process and Assessment. 

If you are interested in Business Architecture, Business Analysis and/or evolving your Enterprise Architecture practice to be business-driven, I highly recommend (a) reading Nick’s article and (b) considering how you can utilize the proposed Enterprise Business Motivation Model in your work. 

Me, I’ll be testing my “business architecture domain picture” against the Enterprise Business Motivation Model and evolving as appropriate.  Thanks to Nick for sharing this excellent work!

Filed Under: business architecture, business-driven architecture, enterprise architecture Tagged With: archive_0

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Brenda M. Michelson

Brenda Michelson

Technology Architect.

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