Last week I had a recruitment interview and it started somewhat unusual for me. The person asked me if I was the guy from the blogs and he told me how he became interested in our work after reading the blogs. That triggered me that you out there might be interested in reading a bit more about our group, who we are, what we do and also what type of people we are looking for…next to that our SITE group is rapidly growing and we continue to be very successful in what we do. Client demand is on such level that we are still looking for the brightest in the market…so you out there!
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Last week we held our European SITE meeting called ONsite. During this event all our European SITE colleagues came together in wonderful Berlin and we shared some top of the bill insides in IT, CIO issues, research and not to forget some drinks at night.

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A friend recommended an interesting television program on the English channel BBC2: Dragon’s Den. Starting entrepreneurs have the opportunity to pitch their business, product or service to a group of equity investors: the Dragons. The goal is simple: convince them to invest in your company by selling them a stake. lees verder…

In our daily practice within Accenture in general and especially within SITE, we often are confronted with the mismatch between agreed IT Service Levels and actual IT Customer Satisfaction. IT Service Levels alone are not enough, understanding IT customer satisfaction is particularly important in situations where IT supply and demand are structurally separated or outsourced. So in our experience, measuring and improving high customer satisfaction comes down to answering a few questions: lees verder…

In addition to Maarten Kardux blog on “Forecasting business value key to investment decisions” I would like to take a look at the other side of the spectrum. In his blog Maarten supports the statement that IT investments should be supported by a sound business value projection. My point of view for this blog is a bit different then his: It depends completely on the project, managers, company and industry:
 

I have been in quite some meetings over the years to support project business cases. What I have seen is that board members do look at the financials but see the CFO as the one who should comment on the financial specifics (mostly on the budget side). Board members do look at what the “project” adds to their business from a quantitative point of view but have more connection with the qualitative point of view and how it would fit in their scope of stakeholders and strategy. Therefore it is important as IT manager or CIO to team with board members on their specific topics for a qualitative perspective and in-line with their strategy before presenting a “projects” business case.
 

As example: Quite some years ago (around 10) a chemical industry client asked us to help them replacing two old BI systems by a new one. Working on developing the business case for this client, it was hard to develop the financial side of the business case. Stating the implementation cost was easy, but defining what the company would save or add value by renewed industry and company insides was very difficult. This since it completely depended on how the new system would be used, if the management would support the output of renewed insides (and act on it) and more. We ended up in calculating the amount of business hours that could be saved and a calculated market share improvement of about 2,5 % (because of first mover advantage).
 

The qualitative side of the business case was much easier. A better user interface would help people giving them much more inside and understanding of what they could do with BI tool. Next to that we could easily link the project to the strategy of the business (consolidating figures from acquired companies) from a qualitative perspective.
 

Presenting the whole business case to the board, the whole discussion was around the qualitative side and not on the quantitative side.  Asking the board members what they thought about the financial gains the company could get when implementing the new BI systems reacted in smiling faces and answers like “we believe that the financial gains are there, but are not sure if this is the way to go. The reason that we have two BI systems is because of political choices and how hard the financials might be, it is not worth the political hassle we will create. The companies which we have taken over are simply not ready and willing to do this. You should have spoken to those companies, creating a team together with them for implementing this”.
 

Of course the above example is just one of many. It does not state that IT investments should not be supported by a sound business value projection but there is more then only the business value projection. In many cases these other sides are seen as much more important.
Therefore I would suggest to present business cases with quantitative and qualitative insides but do also not forget to link them to the various stake holders and internal power maps. As a help in this you can for instance use Porters Five Forces model. Spending too much time on the quantitative elements might even kill the whole financial side of the business case…
 

Next to that I have to admit that our knowledge on BI systems and business cases have grown tremendously over the last 10 years, which makes it much easier as well to develop such business cases nowadays.
 

Hope you enjoyed reading this blog. Do not hesitate to comment or react. Maarten and I are more then happy to see your emails and comments based on our blogs.
 

Have a nice holiday season!
 

A couple of weeks ago in the AutomatiseringsGids two Gartner analysts claimed that effort put into a financial validation of project propositions is a waste of time.  For the last 5 years ‘proving the business value of IT’ has been top of the list of CIO concerns. According to the authors IT departments spend too much valuable time in trying to come up with sound financial models to support investment decisions and forecast the business benefits. So far all have failed.  The difficulty is the emphasis on financial return, whereas large IT investments typically involve a whole range of operational changes to an organization. These are hard to quantify and usually out of reach for IT. In addition the authors claim board room decisions to be often irrational or at least disconnected from the revenue projections. The CIO should therefore focus on building trust through accurate project cost estimations and not waste time on financial calculus of perceived business benefits.

I fully agree with the difficulty in quantifying these benefits, however do not agree with the call to let the business ‘fly in the blind’ on expected benefits. Accenture research clearly indicates CIO’s are suffering from a credibility gap with the Board Room, precisely for their inability to sell IT as a business enabler.

A recent Accenture study among business and IT executives of over 100 medium to large sized companies in Germany, Austria and Switzerland showed that two of the key IT productivity success factors are business-IT alignment and business-oriented IT strategy. Alignment between business & IT is still a challenging, strategic task, though.

In the past most IT departments I worked with were not very reliable and good at presenting the right business value forecasts for investment decisions. Effective procedures are generally not in place. However by distinguishing between core and commodity capabilities alignment between business and IT can be structured. High performance businesses apply a two-pronged strategy for their IT investments based on a set of commodity and value rules. Interestingly these leading companies not only spend significantly less than the global industry average on IT, but also manage to dedicate a higher percentage to innovation.

For the coming years IT spending is expected to increase and will be more tightly linked to business value, especially in industries where business priorities change from cost reductions to value creation. For IT to take up its responsibility in driving business value, the ability to quantify value creation will be key. Because of historic inability, the CIO first needs to demonstrate a solid business understanding before claiming his seat at the board table. It’s time the IT function becomes an integral and mature part of business operations. A sound business value projection of IT investments is an essential prerequisite!

I welcome your reactions, Maarten

Who is Maarten Kardux?

I am a manager within the Strategic IT Effectiveness consulting practice of Accenture. I joined Accenture early 2006 with 9 years of experience within IT as a project-, program and line manager. I have worked with a variety of organizations in different industries. In this blog I will regularly post my field experiences and personal views on topics of IT Value, IT Strategy and IT Transformation. I look forward to having many meaningful discussions!

Hi,
I am Willem Meijer, a member of the energetic SITE NL group. SITE, the Strategic IT Effectiveness group of Accenture exists of people with a very divers background.  My own background goes from a bachelor degree in dredging (a real Dutch practice, digging out channels and developing beaches and harbors) to a masters & MBA degree in general management. Quite some years ago I started as a SAP consultant in the IT industry and developed myself into an IT management consultant. I feel myself praised with the fact that I am working with some of the best people in the industry, solving IT (management) issues and challenges for some of the most attracting clients. We have very divers projects over a range of different industries within SITE NL.
On my blog I will try to write about these issues and challenges we see at our clients, market and industry developments, my live within Accenture and other related items. I hope you will enjoy reading my blog. Feedback is always welcome!
Hope you will enjoy reading my SITE-blog!

Hi all,

Well, we’re all witnessing my very first post to my space on the SITE blog! Let’s take some time to introduce myself.

I am Sven Hazejager and have been a consultant for four years at Accenture Netherlands. Having started on a somewhat technological path within our Products operating group, I decided to move to SITE at the start of 2006.

At SITE, I have done an IT Strategy assignment for a Dutch international rail carrier and I am now at a large Dutch-Belgian bank and insurance company, located in Brussels. There, I am leading a team as part of a big company-wide roll-out of new project management processes (based on Prince2) and supporting tools.

This blog will be a random mix of personal and business stuff. Do check often. If there is no business news, I will keep you up to date on rowing, photography, learning to play the piano and all kinds of other stuff that keeps me going!

Thanks for reading!

Sven

Binnen SITE zijn we natuurlijk continu op zoek naar de feiten achter en tussen de fabels. Dit doen we vrijwel altijd aan de hand van een gefundeerd onderzoeksmodel met de noodzakelijke ervaring. Ik wil jullie bij deze dan ook uitdagen om het vernieuwde blogpodium af te meten aan de door Forrester opgestelde criteria voor het evalueren van blogs. lees verder…

This is the reopening of the SITE blog. SITE NL is now over one year old, as part of the Accenture global service line. As I’ve had to experience, it was extremely hard to maintain a blog and grow a new Accenture service line at the same time. And admitted, I failed in the first. That’s why I’m glad we’ll have more SITE bloggers than last year. Maarten, Willem, Sven and Robbert will post their ideas and experiences regularly.

So maybe a time for re-introduction. SITE means Strategic IT Effectiveness, and has a simple goal:

“increase the value companies get from their IT investments and organization.”

But although the goal seems remarkably simple, the underlying content is still amazingly complex. To begin with: What exactly ís value from IT? Is it low cost? Time to market of new business functionalities? Hassle free infrastructure? Business to Business connections? Cool webcommunities around your brand?
One way to look at this is to see what keeps executives awake at night. Accenture continuously surveys executive  management on the Business side and on the IT side within large companies around the globe on their issues. The resulting issues are classified into Strategy, CRM, Outsourcing, HR, IT, Supply Chain Managent and Financial &Performance Management.

While the survey results were pretty steady from 2002 until 2004, things have really changed recently:

• where in 2002, 2003 and 2004 HR issues were in consistently in the top 3, they have now dropped in the list to make room for strategic issues.
• “Managing Risk” has hit the number one spot on the top ten list of business issues.
• When observed closely, the top 4 issues are heavily information technology dependent.  

So how can IT effectively support risk management, growth and profitability, preferably at the same time? Our recent research shows that the answer lies in a concept called the “Commoditization boundary”.

Basically, this means not only having really clear objectives about what your Information Technology is supposed to do - and being able to execute them - but it also means having split objectives: there is a part within IT which is about commodity and low cost, and there is a part that isn’t. And the successful companies of our survey managed them differently. 

In this blog, I’ll share my experiences bringing these insights into the Netherlands market, and am really interested to hear yours. To be continued,
Marc