The Strategy to Bottom Line Value Chain

 

Getting to Action

The following is an excerpt from "From Business Strategy to IT Action"

"The five NIE Practices,  together with the three supporting areas of IT Impact, Portfolio, and Culture Management,  work in concert with the company’s management processes that deal with IT’s plans and budgets.  By embedding the NIE Practices into company processes,  business and process outcomes are produced,  all of which are part of successfully getting from strategy to the right IT Action and the right Business Results, thereby controlling IT spending and improving IT’s bottom-line impact.

These practice outcomes are in two categories  as shown in the next two figures.  Process – Desired Outcomes are those that change, and strengthen, the existing company processes that deal with IT plans and budgets.  These process outcomes affect how the company management teams conduct the management processes, and changes the roles management plays. The Business – Desired Outcomes directly affect profitability and, for government and non-profit, impact on mission performance. 

NIE Practices and Support Practices

Management Process -
Desired Outcomes

Business -
Desired Outcomes

Strategic Demand / Supply Planning

IT and business planning are fully connected and integrated.

The company improves strategic and bottom-line impact from its IT investments.

Innovation

IT-enabled innovations impact business planning and offer new strategies

The company continually improves products, processes, and bottom-line performance through IT innovations

Prioritization

IT investments are prioritized against business strategy

The company improves bottom-line impact and return on its IT investments

Alignment

The entire IT spend is aligned with business strategy

The company improves returns from its IT activities in terms of bottom-line impact.  The total IT spend is effectively controlled

Performance Measurement

IT business and technical performance is tracked

Performance measures lead to improved IT and business performance

IT Impact Management

Business and IT management teams execute the processes that improve IT’s contribution to business performance

The total IT spend is effectively controlled. IT’s contribution to bottom-line impact is improved. 

Portfolio Management

Planning and management processes focus on the entire IT investment

All IT investments and resources – development and lights-on --contribute to bottom-line impact

Culture Management and Business Value Maturity Model

IT and business managers participate effectively in all NIE-enabled processes

IT’s contribution to bottom-line impact is improved through effective business and IT manager participation in NIE processes

 

Summing up Chapter Six:  Adopt Effective Process to Produce Action

At the outset of this chapter we made three recommendations. 

  • A company should formally adopt a connected set of management processes to produce the twelve elements of the Strategy-to-Bottom-Line Value Chain. 

  • Management should employ five New Information Economics practices to be embedded in this connected set of management processes.  These five practices will strengthen the deliverables and strengthen the connections between them.

  •  The management team should focus on producing action through the Value Chain and the NIE practices.

We have described the Value Chain and the NIE Practices, along with an implementation management program we call IT Impact Management."

Excerpt from "From Business Strategy to IT Action"