The Era Of BT Changes How IT Assures

The Era Of BT Changes How IT Assures Business Alignment Bobby Cameron Vice President And Principal Analyst Forrester Research September 9, 2008

Agenda • What is BT - and why doesn't IT's current approach work? • How does BT change the business' expectations of IT? • How are IT shops changing their organizations, technologies, and alignment processes to enable BT success? 3 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

Agenda • What is BT - and why doesn't IT's current approach work? • How does BT change the business' expectations of IT? • How are IT shops changing their organizations, technologies, and alignment processes to enable BT success? 4 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

Business alignment is about matching resources ► Adjusting IT resources to match business demand for both existing and new technology services. 5 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

Today’s best IT executives manage IT-business alignment through a practice of “matching”. . . • IT organizational structure -to- business units • IT initiatives -to- business strategy • IT budgets -with- business units • IT initiatives -with- business processes • The CIO -with- business peers • . . . 6 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

But alignment presents constant challenges as CIOs strive to balance across three dimensions Demand • What business requests • Funds for new investments • Individual business units’ needs • Business plant, equipment, people Focus • Delivering new value • Outsource • Delivering business process change • Current business plans • Deliver new value the old way Change • Emerging technologies • Agility • Business-value sourcing • New business models 7 Entire contents © 2008 Forrester Research, Inc. All rights reserved. < to > • What IT needs to improve • Legacy maintenance • Enterprise-wide processes • Technology investments < to > • Re-architecting for future development • In-house staff • Reducing ongoing ops costs • External market forces • Upgrade staff skills < to > • Existing IT architecture • Stability • Internal sourcing • Traditional business models

And business organizations are frustrated with IT • Businesses are impatient with IT’s speed • IT’s efforts to govern technology populism fail • Technology is allowing users on their own to out -pace IT’s projects Alignment becomes tough as IT’s design-build-maintain approach isn’t working! 8 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

New technologies enable business users — without IT • Tech populism — blogs, wikis, IM, handheld devices • Assembling, composing, and configuring — business process management (BPM), information workplace (IW) • Contracting — Software as a service (Saa. S), business process outsourcing (BPO) • All based on increasingly robust IT infrastructure and operations 9 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

We call this a shift to Business Technology (BT) ► Pervasive technology use that drives business results — increasingly under the control of business organizations 10 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

BT will bring a fundamental change. . . not just another swing of the

Non-IT staff drive the use of technology through roles previously found only in IT Defining or designing the 3% 10% solution Directly selecting vendor-offered solutions 28% 7% 16% Directly managing the technology 3% solutions once in production 5% 10% 12% 25% 34% Directly negotiating with and/or 6% 19% directly managing solutions vendors Directly configuring solutions to 3% 5% 28% deliver what you need Directly managing projects with substantial technology involved 31% 25% 26% 27% 36% 30% 21% 15% 19% 24% 32% 38% 21% 24% 3% 3% 4% 3% 2% 3% Base: 186 global business executives Completely other business areas’ (not IT’s) responsibility Source: July 2007 US The Business View Of IT Online Survey Equal mix of other business areas and IT More other business areas’ responsibility More IT’s responsibility Completely IT organization’s responsibility 12 Don’t know Entire contents © 2008 Forrester Research, Inc. All rights reserved.

CIOs have to balance two competing aspects of increased business control of technology Risky business control. . . vs. business-control- driven opportunity • Information integrity and consistency • Assuring compliance, security, policy, and privacy • User-driven speed • Business agility • Quality assurance • Execution performance 13 • Networked business models • Founded on IT excellence Entire contents © 2008 Forrester Research, Inc. All rights reserved.

Agenda • What is BT - and why doesn't IT's current approach work? • How does BT change the business' expectations of IT? • How are IT shops changing their organizations, technologies, and alignment processes to enable BT success? 14 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

Traditionally, IT handled the entire technology stack Dynamic and differentiated technologies Stable foundation and commodity technologies 15 X Internet, multichannel, mobile, SOA Transaction systems, data warehouses — RDBMS, BI platform — storage, servers — data center ops, desktop maintenance Entire contents © 2008 Forrester Research, Inc. All rights reserved.

But with BT, business people deliver solutions Historically, it’s all been IT. . . 16 Entire contents © 2008 Forrester Research, Inc. All rights reserved. . . . but with BT, business people deliver dynamic, differentiated solutions

BT alignment requires that CIOs recognize fundamental changes in users’ needs Traditional IT provides: BT users also need from IT: • Solution analysis, design, delivery, and operations • IT-centric technology • Solid business app platforms • SOA services for data, transactions, policy, security, etc. • Deep technical skills on call • Support for BT tools • Operational support for BT solutions • Project support services • Help with skills development • Open minds, support, & culture • New technology R&D • Joint business innovation • Project management 17 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

Agenda • What is BT - and why doesn't IT's current approach work? • How does BT change the business' expectations of IT? • How are IT shops changing their organizations, technologies, and alignment processes to enable BT success? 18 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

IT leaders face a fork in the road — Take it! Focus mostly on traditional IT • Letting business areas run ahead without you • Getting stuck in the technology engine room 19 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Focus heavily on enabling BT • Empowering business success with managed risk • Becoming a partner player

CIOs enable BT by enabling flexibility From: To: • IT/business alignment • Business results from large IT-led projects • Investments that cover much of the technology stack • BT synchronization • Business results mostly from small BT efforts • User investments in thin layers at the top tech stack • Data and transaction investments deep in the stack • Fluid lines of responsibility between IT and the business • Business-user-enabling • IT has open minds and culture • IT enables users to manage risk and policy • Crisp lines between IT and business roles • IT-does-it-all • IT assures risk and policy 20 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

Today’s IT organization manages all technology. . . CIO IT Architecture IT Demand Management IT Strategy & Planning 21 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Development IT Operations

Today’s IT organization manages all technology. . . CIO IT Architecture IT Demand Management IT Strategy & Planning Technology Exec Development 22 IT Operations Entire contents © 2008 Forrester Research, Inc. All rights reserved.

. . . but CIOs must become chief BT officers, restructuring IT. . . Business Organizations CIO BT Architecture BT Synchronization . . . as business orgs take on roles previously in IT • Business analysis BT Strategy & Planning • Project management Technology Exec • Application configuration • Information management • Analytics delivery Development 23 IT Operations Entire contents © 2008 Forrester Research, Inc. All rights reserved. • Security, compliance, risk, and policy assurance

And IT-business alignment becomes BT synchronization 24 Entire contents © 2008 Forrester Research, Inc.

All top executives must help steer 25 Entire contents © 2008 Forrester Research, Inc.

The CIO will change to support BT enablement Source: December 2008 “Next Up: The

CIOs will focus more on partnerships — internal businesses, suppliers, customers, & competitors Source: December 2008 “Next Up: The 21 st Century CIO” 27 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

Checklist for successful 21 -st century CIO 28 Entire contents © 2008 Forrester Research,

Thank you Bobby Cameron +1 617. 613. 5708 bcameron@forrester. com www. forrester. com 29

Related Forrester research reports • February 22, 2008 “New IT-Business Partnership Enables BT Success — Centralized IT Control Fails As BT Moves Beyond IT’s Direct Control” by Bobby Cameron — http: //www. forrester. com/Research/Document/0, 7211, 44019, 00. html • December 6, 2007 “Next Up: The 21 st Century CIO” by Bobby Cameron — http: //www. forrester. com/Research/Document/0, 7211, 43784, 00. html • June 18, 2007 “Debunking Alignment Nirvana” by Laurie M. Orlov — http: //www. forrester. com/Research/Document/0, 7211, 42167, 00. html • May 7, 2007 “Business Technology Defined — Technology Management Is Changing To Deliver Business Results” by Laurie M. Orlov and Bobby Cameron — http: //www. forrester. com/Research/Document/0, 7211, 42338, 00. html 30 Entire contents © 2008 Forrester Research, Inc. All rights reserved.