IT Success!: Towards a New Model for Information Technology

Introduction ix

Acknowledgements xiii

Abbreviations xvii

PART I BLINDED BY SPECS 1

1 In Search of the Fundamentals 3

The more things change, the more they stay the same 3

A worldwide phenomenon 4

How the traditional IT model started 5

The construction industry trap 6

The free lunch trap 7

Houses of ill repute 8

A business problem rather than an IT problem 10

IT and original sin 12

No sacred cows 12

2 IT 101 – The Basics for Non-Specialists 15

The process breakdown for traditional IT activities 15

The process breakdown for business (i.e. non-IT) activities 16

The fundamental difference between IT and non-IT activities 18

'That's not my problem!' – process ownership and behaviour 19

3 The Flaws of the Traditional Model 21

The unintended consequences of the waterfall method 21

In search of a pizza parlour manager 22

Who provides process expertise – client or vendor? 22

When standard client–vendor relationships are possible 24

When standard client–vendor relationships pose problems 25

Is a standard client–vendor relationship possible for IT? 26

The 'Statement of Requirements' (SoR) trap 26

A poor to non-existent pricing model 28

Should IT be run like a business (i.e. an ESP)? 30

The limits of outsourcing 31

Current IT organizational trends 32

The ultimate litmus test to determine one's business model 33

What model would be appropriate for IT? 34

PART II BUILDING A NEW BUSINESS MODEL FOR IT 35

4 Managing Demand 37

Managing demand – traditional model 37

Managing demand – new model 39

Capturing demand and identifying opportunities 41

Prioritizing and approving demand 43

Planning approved demand 49

Linking demand to resource capability 49

Approving demand based on portfolios 50

The missing component in Project Portfolio Management 53

Business cases are in the eye of the beholder 54

Building the IT plan and budget 55

Demand from a customer perspective 56

Shaking off the chains of the construction industry 56

Funding approved demand 58

Roles and responsibilities 59

5 Managing Supply 61

Managing supply - traditional model 61

Managing supply - new model 63

Iterative development in practice 65

Why prototyping has never become mainstream 74

Is prototyping the answer to everything? 78

Project critical success factors 79

Maintenance - letting go of the M-word 79

Delivery and implementation 81

Service and support 81

6 Monitoring Costs and Benefits 83

Monitoring costs and benefits for traditional IT activities 83

Monitoring costs and benefits for business (non-IT) activities 84

Monitoring costs and benefits – new model 85

Ownership and accountability for costs and benefits 86

Cost–benefit analysis during the life of a project 87

It is normal for costs and benefits to change! 88

Portfolio performance monitoring 88

Cost–benefit analysis after project delivery 89

7 Financials 91

The main categories of IT costs 91

Ownership of IT costs for the regulation of supply and demand 92

Who has the final say for IT investments? 92

Allocations vs cross-charging 93

Capturing costs for allocations and cross-charging 94

Benefits as part of the P&L and annual planning 95

Ongoing cost–benefit analysis for applications 96

Reducing application lifetime costs 100

The limits of financial ROI when applied to IT 102

PART III THE NEW MODEL IN PRACTICE 105

8 Players, Roles and Responsibilities 107

Players, roles and responsibilities – the business 107

Players, roles and responsibilities – IT 111

The new business–IT relationship 112

The changing role of the business analyst 113

The changing role of the developer 113

Towards the merging of the developer and analyst roles? 114

The changing role of the project manager 115

The changing role of the operations department 116

What role for PMOs? 117

The role of External Service Providers (ESPs) 119

9 Getting Started 121

The business challenge 121

The IT challenge 122

Where to start 123

How to start – from checklist to action plan 124

From the status quo to first results 128

From first results to asset management 133

The role of best-practice methodologies 136

How consulting companies can help 138

How tools can help 139

The costs of moving to the new model 140

In closing – addressing the three fundamental questions 142

Further reading 143

10 Case Study 145

The company 145

The business problem 146

The project context 146

Building an IT–business partnership 147

Kicking off the project 148

Feasibility study and defining a solution 149

Building the business case 150

Project approach 151

Product evaluation – buy or build decision 151

Building a prototype 152

Results 154

Timescales 155

Three months later 155

One year later 156

Two years later 156

Main lessons learnt (on the plus side) 156

Main lessons learnt (on the minus side) 157

Comments with respect to the new model 157

Reader feedback 158

Index 159