EYADEMA SIMPLISSE IYANOS(presenter)
This slides can help the students already in MBA and other managers who had little knowledge in ITVR and other people who want to expand their knowledge in value realization of technologies as competitive weapon today to the dot com marketplace.
2. Agenda
Introduction
What is IT Value Management?
Understand Strategy Alignment
What is IT Governance in the context strategy?
IT governance = IT Value Realization
What is benefit approach of IT value?
Financial based parameters to assess IT investment benefits
Non - financial Benefits value realization in public sector
Components of strategy alignment and IT value management
IT Strategy in public sector
The council’s strategic priorities in e-government
Quality of IT value realization management in local
government
What are Factors that reduce alignment in public sector?
Core benefits of public sector in IT value realization
How to measure public value IT frameworks PVIT“BENEFITS
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3. Introduction
1. “Public value as public sector equivalent to shareholders value”
Public value benefits can be defined social benefits of corporate
activity which are hard to value in monetary terms such public
policy, service improvements and effectiveness/ efficiencies.
E-procurement and e-governance are typical approach used in
public sector
Government using e-procurement to satisfying requirements for
goods, works, systems, and services in timely manner while by e-
governance has to met transparency, accountability, and
integrity of the social/community
E-procurement in public sector consists and focus in three areas
such as
1. Organisation and Management
2. Practices and process
3. systems and technology
9.
4. What is value management?
Managing the IT budget to deliver better
performance and value
Managing the IT capability in core process
areas
Managing IT for business value by tying IT
investments to business benefits
Managing IT like a business by focusing on
end users and services versus technology
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5. IT strategy
Corporate Activities framework
ITPM framework Assessment Model
Project Management Book of Knowledge (PMBOK) and PRINCE 2
IT
governance framework for management of IT
activities:
Prioritizing IT investments
Monitoring and measuring results
Aligning IT and business
Creating & maintaining open communications
Examples: IT governance is not a “technology” issue – it is a business issue for
everyone
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6. What is IT Governance in context
of strategy ?
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7. IT governance = IT Value Realization
IT governance (COBIT,ITIL,CMMI,SIX SIGMA)
IT governance addresses issues like:
Identifying technology needs
Prioritizing technology investments
Assigning accountability for results
Aligning IT and business
Creating and maintaining open communications
TQM improvement of the organizations as whole
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9. Financial based parameters to assess IT investment benefits
Payback Period
Net Present Value(NPV)
Internal Rate of Return(IRR)
Economy Value Added(EVA)
Return On Investment (ROI)
Real Option Valuation(ROV)
Return On Assets(ROA)
Return On Infrastructure Employed(ROIE)
Total Cost Ownership(TCO)
Total Value Ownership(TVO)
10. Non - financial Benefits value
realization in public sector
MEASURED IN VALUE OF ACTIVITIES IN THE
CONTEXT OF THE BUSINESS STRATEGY
§ Public value of IT (PVIT) realization
o Constituent service level
o Operation service level
o Political return
§ Multidimensional criteria approach Value
o Information Economics (IE)
o Applied Information Economics(AIE)
o Total Economy Impact(TEI)
o Total Value of Opportunity (TVO)
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11. Measurement in the context business strategy
”if you can’t measure it you can’t manage it”
Balance scorecard
customer, Finance, business processes and learning and growth)
IT scorecard
User orientation (efficiency), Operation excellence (efficiency in dvpt &
operational) , Business contribution (Finance), Future orientation(approach to
skill set development and innovation)
Portfolio Management Techniques
GIGA information portfolio framework, Ross and Beath investment quadrants,
MIT center for system information system research portfolio pyramid, Business
investment analysis
Business Value measures for IT:
Categories of IT investment, Business value characteristics, Typical business
value outcomes, Key business value measure
IT value benchmarking and realization:
performance measurement, Investment tracking financial of organization,
Benefit targeting
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12. Components of strategy alignment and IT
value management
IT strategy
Corporate of activities framework
IT governance Framework for management of
IT activity
IT project framework for management of IT
Activities
IT Project Management Framework
Assessment Model
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13. IT Strategy in public sector
q THE
MAIN FOCUS AREAS IN COUNCIL’S
MUNICIPALITY:
Enterprise Architecture and ICT governance
IT governance
Information management
best value IT service delivery
Enabling innovation and ICT Risk
management
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14. The council’s strategic priorities in e-government
Safe community
Customer service
External communication
Diversity and Strengthen the economy
Leadership and Governance
Information services and internal services
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15. Quality of IT value realization
management in local government
Enablers: factors that Promote alignment
Sharing Decision Making within IT portfolio
Management
Alignment between ICT strategy and
corporate plan
Linking high level of technical integration
with customer services
Linking between IT projects with a value and
Alignment measurement tool
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16. What are Factors that reduce alignment in public sector?
q Misalignment in public sector
q Miscommunication in IT activities
q The lack of well defined IT plan
q The lack of value realization
q
q
q
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17. Core benefits of public sector in IT
value management realization
§ Costs reduction and efficiency gain
§ Quality of service delivery to businesses
and customer
§ Transparency, anticorruption, &
accountability
§ Increase the capacity of government
§ Network and community creation
§ Improve the quality of decision making
§ Promote use of ICT in other sectors of
society
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18. How to measure public value IT
frameworks PVIT“BENEFITS”
q DIFFERENT COUNTRIES HAVE DIFFERENT METHODS TO MEASURE
PVIT FRAMEWORK BENEFITS FROM INVESTMENTS
§ France: MAREVA “Methode d’Analyse et de REmontee de la Valeur”
(Measure profitability for the state, internal aspects, external aspects, necessity)
§ European Union: e-Government Economics Project
(Measure quantitative and qualitative components for each dimension of PVIT).
§ Australia: Demand and Value Assessment
(Assess the benefits of its e-Government initiatives. The study highlighted the need for
a comprehensive tangible and intangible benefits as well as the probable risks associated)
§ India: E-Governance Assessment Framework
(Measure service orientation technology, sustainability, cost effectiveness, and feasibility of replication.
The methodology consists of assessments for G2G, G2B, and G2C services.)
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19. E-GEP Framework public value benefits
EFFECIENCY DEMOCRACY EFFECTIVENESS
Cashable financial gains Openness Reduced administrative burden
Empowered employees Transparency and Increased user value and satisfaction
Better organizational and
accountability More inclusive public services
IT architecture
Participation
Financial and
Political value Constituent value
organizational value
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20. Conclusions
In public sector the IT value management can be
measured quantitative and qualitative with one
or more IT methodology framework in order to
achieve desired outcome by the stakeholders such
methodologies are , TQM 14 point by Deming ,
balanced scorecard, benchmarking, IT governance
(COBIT,ITIL,CMMI,SIX SIGMA)
which are helping board of directors and
managers to control and assess the business
strategy and IT strategy if are aligning in
adequate manner if not so can government take
early corrective action.
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21. REFERENCES
§ Stenning & Associates pty ltd(S&A) (2003). Final Repport:
Evaluation and Review of the e-procurement pilot project,
version 1.2, Hobart, Australia
§
§ Al-Hatami &Hales European and Mediterranean Conference on
information System 2010, April 12-13 2009, Abu Dhabi, UAE
§
§ Weerakkody, V., Janssen, J., & Hjort-Msdsen, K. (2007)
integration and enterprise architecture challenges in e-
government : A European perspective. International Journal of
cases on electronic commerce, 2(3),13-35.
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Use a couple of examples to illustrate using technology to create public value, e.g., on-line services save both citizens and government time and money by reducing their need to visit government offices in person People need to change their behaviors to make the best use of new technology, while processes must change to integrate new technology into the business IT governance addresses how technologies will be used, what technologies will be invested in, and who is responsible for realizing value from those investments is required. 3A. It governance is in wide use in the private sector for these purposes
At the foundation of IT governance is joint decision-making between IT and operating departments; targeted, focused involvement of key participants; and an IT department that is focused on the success of its customers. A number of supporting disciplines rest upon this foundation, including: IT strategic planning to align community goals with IT activities; business cases to specify the highest priority projects; a transparent process for identifying technology funding and determining which projects to fund; and, finally, understanding the expected value from IT and assigning accountability for realizing that value, including establishing measures of success.
It is not enough for the modern finance officer to simply control costs and collect revenues. The finance officer must play an active role in helping government create public value with limited resources. -Business case and shared project evaluation helps identify most valuable projects -IT governance used to measure and monitor value received from IT. The business case should use performance measures or other tangible indicators of success to describe the results the project will achieve and to provide a firm basis for evaluation. -Especially important with enterprise systems because enterprise systems are shared, so accountability can be too diffuse in the absence of IT governance -The need for value realization extends not just to new technologies, but also to existing technologies. This speaks to the need to invest adequately in upgrades and training. IT governance can be used to allocate resources across the IT portfolio adequately to do this. 2. IT projects have inherent risk and risk increases as IT becomes more pervasive. -Business cases identify specific sources of risk and mitigating strategies -Improved communication occurs through mechanisms like Project Management Offices (PMOs), IT liaisons, and the more frequent informal communications that the trust created through IT governance breeds.
As technology becomes more pervasive, it becomes a larger cost item. Therefore important to get a handle on both short and long-term costs, including new projects and replacement of existing assets. The modern finance officer must produce information to support decision-making – not just costs and revenues, but value received for the dollar spent. IT governance can be used to define what data is important, who is responsible for collecting and maintaining that data, and how that data will be turned into useful information and be made accessible. Example is an IT architecture plan. Public sector has a duty to provide transparency. IT governance provides transparency on how IT assets are managed, especially as it relates to what is invested in, amount spent and value received.
NOTE: THIS SLIDE CAN BE SUBSTITUTED WITH OTHER EXAMPLES OR TAKEN OUT IF THE PRESENTER CAN EXTEMPORANEOUSLY WORK ILLUSTRATIVE EXAMPLES INTO THE OTHER SLIDES Oakland County is recognized as a top-ten digital county by the center for digital government and has won a GFOA award for excellence for its collaborative use of technology with other jurisdictions The Public Health Department received a homeland security bio-terrorism grant to implement interactive voice response (IVR) to put in place the ability to rapidly contact first responders in an emergency event. In some governments, this grant may have simply been accepted and the system implemented within the department. However, in Nevada County the grant was used as a springboard to create much greater public value. Through its IT governance mechanisms, there was a shared recognition through IT Governance of the potential value of IVR for a host of County functions. Hence, by directing a little extra funding towards this project (20% over the baseline project cost) the County was able to make what would have otherwise been an isolated project in a single functional area into an enterprise strength platform. To illustrate, the library was able to use the IVR system to discontinue $.35 postcard late notices in favor of an $.08 automated phone call. In the community development function, County inspectors can now phone-in inspection results, including the remedial actions required of the holder of the permit. Construction contractors can access the results immediately and then use the system to schedule a re-inspection.
This slide shows symptoms of poor governance Confusion on how IT decisions are made; Lack of info on performance of IT investments Important symptom in government is maverick purchasing or harmful decentralization Signals frustration with IT. Will not work because poor decision-making structures remain, but now operate with a private vendor. If 90% of projects are either over budget or not on schedule, IT governance is a problem.
Resource allocation ties IT governance to the budget process – making its important immediately apparent to everyone. Formality levels can change over time – there is no “correct” level of formality. Using existing structures decreases the amount of change/adaptation and new time commitments participants will be subject to. Ideally the owner should be a business savvy CIO. If there is no CIO, a CFO my have to be the sponsor in order to confer the appropriate level of importance, guidance, and institutional momentum to IT governance IT governance is not going to be the most pressing item on the agenda of participants, so effective communication is critical. Here are some of the most important mechanisms Senior official communications demonstrate the importance of governance and the decisions made through it Formal committees provide an official forum for decision-making and communication IT relationship managers serve to bridge the divide that can arise between business and IT departments. Web portals provide an easily accessible and flexible medium for disseminating information and for gathering input. For example, Miami-Dade County uses a portal to send out and gather its forms for business case development. Informal communications keep participants apprised of major issues, making formal communications more effective because participants aren’t surprised by the message. Informal communications also builds trust, which is critical for inter-departmental cooperation.
If you don’t have a CIO you can engage your organization’s technology professional. However, if that person is very focused on technology and not as focused on the business-benefit technology provides, the finance officer may have to take a more active role in establishing governance.
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