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Webinar Build An Investment Road Map To Accelerate Your BT Agenda Bobby Cameron, Vice Webinar Build An Investment Road Map To Accelerate Your BT Agenda Bobby Cameron, Vice President, Principal Analyst January 13, 2015. Call in at 10: 55 a. m. Eastern time

We’ve been maturing IT for 50 years. . . Excelling at maturing IT 1960 We’ve been maturing IT for 50 years. . . Excelling at maturing IT 1960 s 1970 s © 2015 Forrester Research, Inc. Reproduction Prohibited 1980 s 1990 s 2000 s 2010 s 2020 s 2

Forrester has been offering a tech management leadership maturity model (TM-LMM) › TM-LMM is Forrester has been offering a tech management leadership maturity model (TM-LMM) › TM-LMM is a leadership view on Forrester’s current thinking on tech management best practices. • Derived from the ongoing research • Updated annually › There are four levels of detail (the TM-LMM includes Nos. 1 to 3): 1. Capability domains — leadership, strategy, service design, and service delivery. 2. Capability categories — uniquely roll up into capability domains. 3. Leadership capabilities — uniquely roll up into capability categories. 4. Detailed capability assessment tools — governance, strategy, innovation, I&O, architecture, and security and risk. Source: May 23, 2014, “Introducing Forrester’s Technology Management Leadership Maturity Model” Forrester report © 2015 Forrester Research, Inc. Reproduction Prohibited 3

Forrester’s TM-LMM uses a CMMi-like coding 0 — nonexistent Not understood, not formalized, and Forrester’s TM-LMM uses a CMMi-like coding 0 — nonexistent Not understood, not formalized, and need is not recognized. 1 — ad hoc Occasional, not consistent, not planned, and disorganized 2 — repeatable Intuitive, not documented, and occurs only when necessary 3 — defined Documented, predictable, evaluated occasionally, and understood 4 — measured Well-managed, formal, often automated, and evaluated frequently 5 — optimized Continuous and effective, integrated, proactive, and usually automated Source: May 23, 2014, “Introducing Forrester’s Technology Management Leadership Maturity Model” Forrester report © 2015 Forrester Research, Inc. Reproduction Prohibited 4

A sample of Forrester’s TM-LMM Source: May 23, 2014, “Introducing Forrester’s Technology Management Leadership A sample of Forrester’s TM-LMM Source: May 23, 2014, “Introducing Forrester’s Technology Management Leadership Maturity Model” Forrester report © 2015 Forrester Research, Inc. Reproduction Prohibited 5

But technology is transforming business — and IT is no longer enough Technology is But technology is transforming business — and IT is no longer enough Technology is dramatically transforming companies, redefining how business is won and how work gets done. › Digitally empowered customers expect targeted value delivery. › Digital businesses disrupt markets and industries. © 2015 Forrester Research, Inc. Reproduction Prohibited 6

You now have two technology management agendas to deliver Technology management = Information technology You now have two technology management agendas to deliver Technology management = Information technology — the systems, technologies, and processes to support and automate business operations. © 2015 Forrester Research, Inc. Reproduction Prohibited IT + BT Business technology — the systems, technologies, and processes to win, serve, and retain customers. 7

The IT and BT agendas deliver different values External BT Externalized focus: › › The IT and BT agendas deliver different values External BT Externalized focus: › › Brand focus: Externalized e. Commerce Branded Partners and customers User impact Operational focus: › › Customer experience Omnichannel Mobile Empowered focus: Operational Infrastructure modernization Flexible sourcing › › › Empowered › Enabling user-driven workforce experience IT Internal Operational Transformative Business impact Source: April 1, 2014, “The Age Of The Customer Redefines Technology Management Archetypes” Forrester report © 2015 Forrester Research, Inc. Reproduction Prohibited 8

And the IT and BT agendas present different challenges IT challenges are complicated. BT And the IT and BT agendas present different challenges IT challenges are complicated. BT challenges are complex. Internal operations’ systems of record have complicated problems to solve. Customer-focused systems of engagement have complex problems. The rules are known and can be modeled and planned — even if they are difficult and require discipline. Rules are incomplete and contingent, so they can’t be understood completely and accurately; they have to be discovered and validated. They work well with a waterfall SDLC. They work best with continuous delivery (Agile + dev. Ops). They have lots of moving parts but don’t change frequently or rapidly and are predictable. They have lots of independently moving parts that are unpredictable. © 2015 Forrester Research, Inc. Reproduction Prohibited 9

We’ve been maturing IT for 50 years. . . Accelerating the maturing of BT We’ve been maturing IT for 50 years. . . Accelerating the maturing of BT Excelling at maturing IT 1960 s 1970 s 1980 s 1990 s 2000 s 2010 s 2020 s We have to mature BT in a third of the time! © 2015 Forrester Research, Inc. Reproduction Prohibited 10

Agenda › Understand the target mix of BT and IT. › Identify capabilities to Agenda › Understand the target mix of BT and IT. › Identify capabilities to invest in. › Build a leadership investment road map. © 2015 Forrester Research, Inc. Reproduction Prohibited 11

Agenda › Understand the target mix of BT and IT. › Identify capabilities to Agenda › Understand the target mix of BT and IT. › Identify capabilities to invest in. › Build a leadership investment road map. © 2015 Forrester Research, Inc. Reproduction Prohibited 12

Answer 10 business questions to determine your firm’s target BT/IT mix with Forrester’s BT/IT Answer 10 business questions to determine your firm’s target BT/IT mix with Forrester’s BT/IT agenda index. Source: August 28, 2014, “Focus Your Dual Tech Management Agenda Using Forrester’s BT/IT Agenda Index” Forrester report

Example: a retail firm that manufactures what it sells Source: August 28, 2014, “Focus Example: a retail firm that manufactures what it sells Source: August 28, 2014, “Focus Your Dual Tech Management Agenda Using Forrester’s BT/IT Agenda Index” Forrester report © 2015 Forrester Research, Inc. Reproduction Prohibited 14

Agenda › Understand the target mix of BT and IT. › Identify capabilities to Agenda › Understand the target mix of BT and IT. › Identify capabilities to invest in. › Build a leadership investment road map. © 2015 Forrester Research, Inc. Reproduction Prohibited 15

BT/IT priorities indicate the relative importance of a capability to BT and IT Source: BT/IT priorities indicate the relative importance of a capability to BT and IT Source: May 23, 2014, “Introducing Forrester’s Technology Management Leadership Maturity Model” Forrester report © 2015 Forrester Research, Inc. Reproduction Prohibited 16

So that the sample of Forrester’s TMLMM now looks like this: Source: May 23, So that the sample of Forrester’s TMLMM now looks like this: Source: May 23, 2014, “Introducing Forrester’s Technology Management Leadership Maturity Model” Forrester report © 2015 Forrester Research, Inc. Reproduction Prohibited 17

Agenda › Understand the target mix of BT and IT. › Identify capabilities to Agenda › Understand the target mix of BT and IT. › Identify capabilities to invest in. › Build a leadership investment road map. © 2015 Forrester Research, Inc. Reproduction Prohibited 18

Turning self-assessment into an investment plan › Tag the categories and capabilities that require Turning self-assessment into an investment plan › Tag the categories and capabilities that require attention. › Drive prioritization at the level of the 19 categories. • While prioritizing categories for investment, keep reviewing the individual capability assessments. › Inform prioritization with other important input — like level of effort, strategic fit, likelihood of success, etc. © 2015 Forrester Research, Inc. Reproduction Prohibited 19

Where “should” your scores be? › The overall average of Forrester’s CIO group is Where “should” your scores be? › The overall average of Forrester’s CIO group is 2. 6! › Level 3 is an “OK” place to be. • Level 3 provides enough consistency and transparency of key BT processes to enable better decision-making. › Level 4 is a “very good” place to be. • Level 4 means that there’s a lot of work being managed based on consistent IT processes and transparent metrics to guide decisions. › Level 5 is an “ideal” place to be. • Level 5 indicates consistent and effective IT processes. But recognize that each person, team, company, country, etc. , will have its own concept of what the scores mean. © 2015 Forrester Research, Inc. Reproduction Prohibited 20

Example: summary conclusions • HQ IT rates are consistently higher — aspirational. • Business Example: summary conclusions • HQ IT rates are consistently higher — aspirational. • Business rates are consistently lower — pent-up frustrations. • The desired state is reasonable — about 2 points.

Example: category-level summary review • Business rates less than 2. 0 • Business rates Example: category-level summary review • Business rates less than 2. 0 • Business rates 2. 0 or better but others rate lower than biz • Business and others rate 2. 0 or better

Drill down into capabilities within the BT service design category • Business rates less Drill down into capabilities within the BT service design category • Business rates less than 2. 0 • Business rates 2. 0 or better but others rate lower than biz • Business and others rate 2. 0 or better • Capabilities driving category rating

Tech management (TM) capability to invest in Priority based on drivers TM’s maturity gap Tech management (TM) capability to invest in Priority based on drivers TM’s maturity gap TM’s ability to change Level of effort Overall I-A Organization M H M I-B Relationship management M H L I-C Culture and orientation H H H I-D Skills and competencies H H M H I-E IT Performance management H H M H II-A Planning process M H L II-B BT governance M H L II-C Innovation H L H II-D Business enablement H L H II-E Sourcing strategy M H L II-F Products and services H L H III-A Portfolio management H H M H III-B Service orchestration H M H H III-C Security and risk M M H III-D Enterprise architecture H M M III-E Data H L H IV-A Application development M L H IV-B Infrastructure and operations M M H IV-C Sourcing and vendor management M H L I. Leadership II. Strategy and planning III BT service design IV BT service delivery H

Layout capability investments on a timeline Investment timeline for III-A Portfolio management Q 1’ Layout capability investments on a timeline Investment timeline for III-A Portfolio management Q 1’ 15 Q 2’ 15 Q 3’ 15 Q 4’ 15 Q 1’ 16 Q 2’ 16 Q 3’ 16 Q 4’ 16 Q 1’ 17 Q 2’ 17 III A-3 Application portfolio management Define target state and project phases. Estimate effort and get buy-in. Select and acquire tools. Put team in place. Analyze initial target apps, and define an action plan. Estimate 2016 staff and budget. Identify initial target apps. Estimate 2017 staff and budget. Install tools. Take action on initial target apps. › Staff the investments as part of the overall tech management resource planning. › › Set goals, and establish metrics. Review progress regularly. © 2015 Forrester Research, Inc. Reproduction Prohibited 25

Next steps 1. Begin by setting a target BT/IT mix. • Use Forrester’s BT/IT Next steps 1. Begin by setting a target BT/IT mix. • Use Forrester’s BT/IT agenda index. • Review the results with other business leaders. 2. Execute your leadership maturity assessment. • Include multiple people from multiple teams. • Including nontech management teams can help. 3. Prioritize capability investments. • Include more than just the assessment. 4. Set up a timeline for capability investments. • Run these investments as projects. © 2015 Forrester Research, Inc. Reproduction Prohibited 26

Thank you Bobby Cameron +1 617. 613. 5708 bcameron@forrester. com Thank you Bobby Cameron +1 617. 613. 5708 [email protected] com

Selected Forrester Research › August 28, 2014, “Focus Your Dual Tech Management Agenda Using Selected Forrester Research › August 28, 2014, “Focus Your Dual Tech Management Agenda Using Forrester’s BT/IT Agenda Index” › June 4, 2014, “Develop Broad Tech Management Capabilities In Order To Accelerate Your BT Agenda” › May 23, 2014, “Forrester’s Technology Management Leadership Maturity Model” › May 23, 2014, “Introducing Forrester’s Technology Management Leadership Maturity Model” › April 1, 2014, “The Age Of The Customer Redefines Technology Management Archetypes © 2015 Forrester Research, Inc. Reproduction Prohibited 28