STRATEGIC INTENT – Where are you now? Where are you going? How will you get there? How can this be stated and measured in financial terms?
TARGETED CUSTOMERS & SERVICES – Achieving financial goals depends on deploying resources and efforts where they can achieve the greatest return. This means selling high-margin products to high-value customers, while minimizing selling low-margin products to high-maintenance customers
ALIGNED PROCESSES – Delivering products and services that meet customer requirements at the least cost depends on the efficiency & effectiveness of business processes
REPORTING & MEASUREMENT – Process performance is hinged on an environment of visibility, accountability, and fact-based decisions, which can only be achieved through effective controls and active review of relevant reporting
TECHNOLOGY – Reporting and measurement reflects the financial, marketing and operational views of the business. Because information must be captured, stored, manipulated and delivered, your measurement and reporting tells you a great deal about your IT requirements
1) Implement Performance Measurement & Management – Create an environment of visibility and accountability using Activity Based Costing, the Balanced Scorecard or a similar performance discipline. Define immediate pain points that might be used as pilot programs to develop the organizational skills for continuous improvement.
2) Make analysis, governance & execution a core competency – The “learning organization” evolves, getting smarter over time. You will require a formal approach and dedicated staff for managing change.
Establish a track record of success by addressing performance issues, identifying pilot programs, placing key people in key roles, harvesting low-hanging fruit, re-thinking the organizational design if necessary, benchmarking progress, and defining business requirements for technology. It is wise choices here that will fund your IT investment.
3) Use Pain Points as pilots to build skills, “fix stuff,” and pre-fund IT – IT does not fix broken processes, etc. A prerequisite to new systems implementation is that significant process and organizational work will need to be done on critical pain points and deliver measurable financial returns. This defines business requirements for new systems, develops cultural acceptance, and builds execution skills.
4) Link the full IT deployment to a “rule-changing” business win – With new capabilities, insights, work flow, savings and momentum, identify a compelling win that:
Has large financial payback
Creates competitive advantage
Will earn the buy-in of the organization by solving a large problem
Make that the driving force for technology and related initiatives. Use the skills gained to break the larger initiatives into milestones and implement those too in a self-funding way.
Using Balanced Scorecard theory to dissect failed projects, it was apparent that a sustainable company:
1) Required a viable business model
2) Long-term success depended upon acquiring and retaining the right customers
3) Serving those customers profitably requires appropriate, aligned, and efficient processes
If one puts relevant metrics around strategy, customers, and process, and automated the reporting, they could not only manage the business, but had a window to their information requirements. The interactions above dictated the business requirements for technology.
Using this logic and the right governance, a company can continually optimize. The intelligence can be used to drive out costs and improve margins as well as successfully deploy IT solutions.
Establish formal governance to provide the structure and leadership to continuously implement high-value, team-based solutions across organizational lines
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