The Nuts and Bolts of Alignment
- 06 September, 2002 11:00
When Arnott's Biscuits had to integrate with a third-party logistics provider to support the outsourcing of its warehousing and distribution activities in Victoria, ensuring IT alignment was right at the top of its to-do list. To secure that alignment, e-commerce manager Paul Williams kicked off with a series of workshops with business stakeholders to scrutinise current business processes and examine how the business rules would have to change under the various B2B scenarios it had under consideration.
No such luxury for the Country Fire Authority (CFA) of Victoria when developing its Information Strategy last year. Consulting with the stakeholders was considerably more difficult for the CFA than Arnott's and remains problematic as it implements SAP finance under a resource-sharing arrangement with its metropolitan fire fighting cousins. The set of stakeholders across the CFA organisation is so broad, and includes such a large volunteer workforce, that getting stakeholder buy-in is a huge, albeit still necessary task.
The difficulties have forced a somewhat different approach to alignment at the CFA. Certainly the CFA works hard to get feedback from the field in terms of the system being implemented, but it also emphasises the role of its newly-defined information management strategy and a program charter to help ensure IT is always aligned to key business objectives.
Slightly different again was the approach when the City of Canada Bay - forged from the merger of two inner-Sydney councils - had to come up with a new suite of business systems applications for the new entity. There a new business systems committee began with an examination of all processes from both councils to see where they could be done differently and better, and then as part of the tender evaluation process got user input into every aspect of the proposed new systems. With implementation now under way, so-called "module champions" scattered around the organisation are charged with ensuring the implementation process is both thorough and smooth.
And when the stakeholders started to show signs of wanting to defend their turf rather than moving forward with business change, the council brought in an outside consultant who understood the business to reinforce messages the stakeholders were unwilling to accept from one of their own. "I thought that we were floundering a bit, with people becoming too parochial in terms of their particular views and not necessarily seeing outside the square," says director, information services, Nic Pasternatski. "They take more recognition from someone independent telling them so than from someone internal."
Since the age of vacuum tubes, business-IT alignment - how closely an organisation's IT strategy reflects and drives its overall business strategy - has been an obsession with IT managers chastened by criticism of projects for failing to reflect the organisation's business imperatives. Recent research from Cutter Consortium shows that while most companies regard their business-IT alignment as good, business-IT alignment remains a problem for these same companies. There is no one-size-fits-all approach to IT alignment. How the issue of alignment is approached depends on whether IT or business is driving the project; the nature of that project and the numbers and types of stakeholders involved. CIO recently looked at some of those approaches.
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Aurora Energy
Nature of Project: Implementation of document and records management software from Hummingbird.
Business Users: Finance.
Project Leader: Andrea Sund, project manager.
Aurora Energy, a Tasmanian company whose core business is the distribution and retailing of electricity, recently purchased documents and record management software to provide employees and agents with the information they need, when they need it.
Sund says the process of achieving alignment was helped by the fact that the information management (IM) team works out of the finance and business group, which in turn has stewardship of company information. IT is responsible for IT infrastructure and ensuring systems work properly, and the finance and business group is responsible for content. The IM team and the business users worked together from the beginning on identifying business needs and the impact on users.
"As part of the evaluation process, we involved the end users together with representatives from the business and technology sectors in the selection committee," Sund says. "We have a current information management system in the business that we knew wasn't working. It was identified that we needed to change, the whole business was then not informed but rather workshopped to keep them informed so that the whole change management process started then, right at the beginning."
Since a new information management system would likely transform Aurora's entire method of managing information, including the way it was saved, identified and stored for retrieval, consultation began with an examination of existing methods and how they would change. Business representatives were also involved in vendor software demonstrations and had some input into the selection process. Aurora's IT service providers and a member of the IT group have also been involved from the beginning.
"We're at prototype stage at the moment," Sund says, "but [we're] confident IT has an excellent understanding at this stage of exactly what's required from a solution."
City of Canada Bay
Nature of Project: Suite of new business applications.
Business Users: Across the spectrum.
Project Leader: Nic Pasternatski, director, information services.
City of Canada Bay was born from the merger of two inner-west Sydney metropolitan councils - Concord and Drummoyne - both of which had existing legacy information systems and their own set of business processes. Defining requirements for a new set of business systems applications for the new council entailed looking at all processes to see how they could be improved. "We didn't want to carry over what the individual councils did in the past: we would re-examine the position of the former two councils and see if we could do it better," Pasternatski says.
"As a result, we came up with a new business systems tender where we in fact tendered for all the different applications that councils required. That meant that we had to get a new financial management system; we had to get a new Land Information System; we had to get a new HR payroll system; we had to get a new electronic document management system; we had to look at our customer request management system; we had to, in fact, look at our business papers system - how we produced our agendas for council meetings, committee meetings and the like.
"A new business systems committee went through and came up with all the specifications for all these applications that the new council required," Pasternatski says. The committee comprised key users from every aspect of the business, key managers, key directors and the then general manager, as well as IT.
The committee made presentations of the various applications to staff as part of the tender evaluation process, involving other key users and getting input on how every function of the new application would affect users. "We looked at business change right from the start, because we would do things very differently," Pasternatski says.
The council has adopted a big bang approach to implementation, squeezing a six-month implementation into just three months. To manage the massive change the project team appointed "module champions" from wherever the appropriate expertise could be found in the business to ensure all the tasks the team had committed to do were actually done during implementation.
"In terms of all the applications, you need people to drive the process," Pasternatski says. "Once you agree on something that has to be done as a group, you need champions in various areas so the application doesn't drive you, you drive the application - the application has to work to the benefit of the organisation."
It also appointed project managers for every application, and - as mentioned above - relied on outside consultants to press unpalatable messages on users.
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Arnott's
Nature of Project: Supply chain automation using Tibco.
Business Users: Warehousing and distribution.
Project Leader: Paul Williams, e-commerce manager.
Williams says the need for the project came out of the business, which was outsourcing warehouse and distribution in Victoria to a third party. The business told IT its requirements for sending orders, confirmations, invoices, receipts and so on to the third-party provider. The IT group then decided that to provide a fully-functional, secure solution it needed a really good, loosely coupled, B2B message-based integration and, as a direct-to-store supplier (DSD) to Woolworths, a good messaging system to send and receive EDI and to be able to process those messages. Middleware was the obvious solution.
The project team began the process of building a B2B infrastructure by identifying an "as is" map, a "to be" process, and a range of business rules that needed to be put in place for a number of electronic ordering and invoicing scenarios, along with some vendor-managed inventory scenarios.
"We began the process by doing a lot of workshops with the business on our current Â'as is' business processes. We drove it all from what the business rules were today and what they'd need to be under the various B2B scenarios that we were hoping to support with Tibco," Williams says. "For instance, we did a workshop all about the scenario of outsourcing to a third party.
"We got agreement from all the vice-presidents of the different functions that we would do these workshops under an accelerated timetable - we did them all over a period of three weeks - and that they would sign off on the outcomes of these workshops.
"Then we got nominated people from each department - finance, the customer service group, various supply chain logistics people, obviously IT, and sales and so on - into a room and workshopped what we do today: the step-by-step processes, for instance, from order through to dispatch of a product or from order through to invoice. This is at a business process level.
"We mapped out those processes - usually graphically - and then we asked: Â'What's it going to look like when we've got part of the process happening here and part happening over at a third party? What are the business rules that start coming in here? What do we need to know when it's not all in our system? How do we reconcile stock from a financial point of view? How do we make sure we still have a good view of the stock that we still own in a third party warehouse so that we can manage our deployment and our supply chain planning issues properly?'"The workshops, run by Williams in conjunction with Cap Gemini Ernst & Young, were held every morning. In the afternoons the team wrote up all of the results of the workshops for distribution by the next morning. All the involved parties then had 48 hours to review the material, sign it and get back with any changes. The results were consolidated at the end of the first two weeks, then during the third week all participants signed off and added comments and the team did a presentation back to the vice-presidents of the business.
"You always, always have to get top-level management sign-off for it, and that is not always easy," Williams says. "In this case it was such a business-critical thing that everyone understood the gravity of the situation and the importance of doing it right. That enabled us to drive the urgency and really drive the agenda."
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Country Fire Authority of Victoria
Nature of Project: Development of information management strategy.
Business Users: Across the spectrum.
Project Leader: Hunter Smith, business manager, IT strategy.
In the past the CFA had numbers of systems developments and information management strategies. Smith says his role is to address management's desire to bring "the various wishes and dreams of people and projects" together into a single framework with a strong information management and business objectives focus to ensure systems are there to support the authority, rather than technology driving the business.
Late last year the board approved an information management strategy supported by a future systems framework, thus ensuring agreement at a fairly high level about the CFA's information management objectives. Smith says the three words that encapsulate the strategy are spatial, integrated and acceptable.
The strategy, comprising seven major projects plus some infrastructure development, is supported by a future systems framework and has been developed into a program for progressive implementation over the next four years.
"We are currently implementing the SAP finance system, and we're doing that via a resource-sharing arrangement with our metropolitan fire fighting cousins, but we're also committed to implementing a Victorian state government bureau service for a new asset management system which is provided by Mincom," Smith says. "That is a bureau service arrangement through the Department of Justice and we're looking to go live with that system in April or May next year."
The framework is a powerful force working to ensure alignment. Smith says he cannot get a project up unless he can put a proper business case to management clearly spelling out how it aligns to the strategy and the progressive program plan for implementation over the next four years.
"The business case is very much business driven. I have to be clear on how it aligns to our annual plan objectives, as well as all of the usual things you have in a proposal about the resource, cost, technological implementation etc. It all comes from a business objectives perspective," he says.
A program charter aligns the business benefits and the objectives of the CFA business plan to the technology projects that are required, with project governance driven through the program. A program director drives the program and has a fairly senior role within the organisation. The charter is being driven by Smith, who has a business rather than an IT orientation.
The charter will provide a scope and the boundaries for each project and will define a series of stages of development of the program against business objectives, prioritising the delivery of those business objectives over the life of the program.
"It will also ensure that there's business benefits defined at each stage of the program, so that you can clearly align the outcomes from the projects and the technology implementation back to the realisation of business benefits," Smith says. "So therefore the progress of the program can be measured and monitored by the executive at the CFA and by making sure that the projects are delivering the business outcomes as opposed to just the technology."
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Country Energy
Nature of Project: Implementation of Siebel eEnergy Call Centre.
Business Users: Customer service representatives.
Project Leader: John Adams, group general manager, retail.
Energy suppliers have traditionally equated the concept of customer contact in the energy sector with billing. Contestability has put the spotlight onto the value of customer relationships for energy providers. As a result, Adams says the business had a very closely defined need before selecting their system: the ability for customer service representatives to provide a quote or an indication to a customer while they were on the phone as to if it could, or could not, offer a better price than they were currently enjoying.
"It was very much driven by business, and certainly from my perspective, that's the key element of the story: that we wanted - with full retail competition starting on January 1 - a key point of differentiation at market start," Adams says.
"We put a lot of effort into defining the scope, and negotiating that with Siebel and the PwC people who were assisting with the implementation, to make sure that we were asking for something that could be delivered in the time frame. There was an iterative process and quite a degree of discussion to lock down the functional specification before the actual implementation started."
Adams says the iterative debate, begun early in the process, and his determination to be upfront about what the project was going to deliver and what the business needed to do in terms of business processes or support, were both major factors in ensuring alignment.
"The tight deadlines worked in our favour in that sense because it forced people to come to the view that unless we get this right at the definition stage, it was not going to meet the deadline," Adams says. "I'd say it's not too strong from my point of view to say it was a case study in the way to make sure that the functional specification is right before you start."
GrainCorp
Nature of Project: Putting business services online using Microsoft .NET architecture.
Business Users: Grain growers.
Project Leader: Brian Dickinson, information services manager.
GrainCorp is busy putting all business services online - from online reporting to drill-down on reports - via internal development employing Microsoft's .Net architecture. The project was driven by the business.
"Because of competition we're saying we need to actually differentiate ourselves from what everyone else is doing, and we see the online market as one way to do that," Dickinson says. "We've done that. We've set the pace among the industry to show growers really are interested in this sort of service. What we need is to make sure that next year, when everyone comes out with a similar functionality to what we've had for the last couple of years, we come out with something different again."
The project - which sprang from research showing grain growers have very high uptake rates for online services - was strategically aligned with the e-commerce strategy incorporated in GrainCorp's corporate strategic plan. "Alignment to the business at a strategic level is certainly there," Dickinson says, "because what we are doing is bringing us closer to the grower; it is lowering our costs. It is doing all those things that 'aligning strategically to benefit the business' is trying to achieve."
Ensuring technology alignment was a different matter, and could have been handled better had GrainCorp secured closer involvement of its vendor partner earlier in the piece. Dickinson says GrainCorp's early application developments seemed to work quite nicely until Microsoft started issuing upgrades.
"The other thing is make sure from the senior management point of view you've got their support. If you look at what we've done, if you didn't have senior management support, you would be hearing a lot of the cries from the operational staff. The advantage I've got is I've got an MD and corporate services manager who are really switched on to what we're trying to do. They believe in what we're trying to do, and they actually see it as something that differentiates our business. Having that support helps a lot," he says.
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AAPT
Nature of Project: Implementation of Telcordia billing system.
Business Users: Finance.
Project Leader: Ian Buchanan, group director of operations.
AAPT is deploying a next-generation billing system to consolidate its customer management data with its billing and service delivery. The new billing system consolidates AAPT's existing data platforms to provide a single view of information for all its data, Internet and value-added products and services, thus improving the capacity and performance of AAPT's data resources.
Buchanan says as the service arm for AAPT, the operations group engaged closely with the business and supplier Telecordia to understand business requirements. It also implemented training to ensure users thoroughly understood what was being delivered. The project had a project manager, a project owner and a business owner.
"Since I've only been in the company since November and the project was kicking off the day I joined the company, I can't really say how it kicked off," Buchanan says, "but we have engaged with the business on an ongoing basis so they've had good feedback as to progress.
"This particular project is considered to be one of the top projects of the company," he says.
Change management was driven within a project management methodology. "There's a project management change process but it's part of a project management tool, and we've put normal traceability in place there," Buchanan says.
"I think there could always be better alignment between the business and IT and it's up to both groups to ensure that is maintained," Buchanan says. "It all goes back to communication and using the appropriate descriptors and language to ensure each person understands the other person's position.
Hospitals Contribution Fund of Australia (HCF)
Nature of Project: Pegasystems' Software CRM implementation for enhanced operational efficiency and improved customer service.
Business Users: Sales, marketing, customer service.
Project Leader: Steve Nugent, general manager, retail.
When the retail side of HCF wanted to build service improvements into the business by adopting a CRM solution, it initiated a project team that incorporated MIS resources as a structural part of the project. In an increasingly competitive marketplace, the organisation was looking for ways to differentiate itself and retain customers through improved service and by creating better value for members.
Nugent says in the interests of alignment the project team spent considerable time up front deciding what they wanted any new system to do for the business, and looking at the match between those requirements, HCF's legacy systems, and its plans for that space. It also determined what work processes needed improvement before talking with vendors.
"I think the greatest thing was that we worked together as a team looking at things like how the interface was going to work with the legacy system; how easy it was going to be for us to upgrade in the future; how MIS could maintain it; how MIS could link it through to our core systems to enable ease of workflow; and process improvements we could do," Nugent says.
"That was the team's guiding light throughout: how this particular project would interface with other projects we were developing, and electronic commerce - how that could all integrate all together."
Nugent says the process worked very well, with meetings held to consider how the new application would fit with the HCF's overall IT architecture bearing rich fruit.