Information Technology Strategies in Software Development Projects

The goal of software projects is to complete them on time and on budget. There can somewhat be an added challenge, when part of the project is also to create specifications for hardware and software acquisitions that are needed to deploy a solution.  In the myriad of possible configurations and architectures that advances in Information Technology have created, there can sometime be no clear path as to what should be budgeted, and if the budget is even adequate.

Licensing can a large obstacle to having a successful software project.  How third-party software can be used and deployed (for example: the number of connections or users allowed by license cost) is just one example of the difficulty in obtaining proper budget projections.  Add to this the complexity of the type of hardware needed and the specifications of that hardware.  Not only do companies have to spec hardware for their own internal development practices (if they do not have the resources beforehand), clients will also put into a statement-of-work (SOW), that the vendor create the correct specifications to deploy the software on site or in the cloud or both.

Information technology needs to become a project planning process rather than an line item on a project Gantt chart.  Creating a road map where IT can become a process that has a business component at every step, will create significant predictability in software projects with less risk.  Strategies such as IT Governance, Unified Modeling, hardware sizing, use-case analysis and economic cost analysis are essentially putting pen and paper together to plan all aspects of IT prior to planning any budget or acquiring any product.

If you’d like more information or to ask questions on how create IT Business Strategies, please feel free to contact me.

 

Information Technology Management Strategies in Industry Series

Use cases for Information Technology in the energy and manufacturing industry continue to expand beyond typical financials, asset management and plant management applications. Now IT is being use more often in driving goals such as resourcefulness and efficiency in current business processes and products.

Starting next month until May, I will be releasing a series of blogs addressing IT Strategies in areas of business and Industry in manufacturing and energy.  The series will include:

  • Information Technology Management Strategies for Energy Management
  • Information Technology Management Strategies for Customer Service 
  • Information Technology Management Strategies for the Internet of Things and Smart Cities Initiatives 
  • Information Technology Management Strategies for Data Analysis in Manufacturing

The main objective of this series is to apply IT management knowledge to experiences in energy, manufacturing and customer service.  With the advent of new innovative solutions in areas such as data science and machine learning, there are more opportunities than ever to make these industries more resourceful, efficient and effective in its business processes and beyond.

I will post links to the blogs from this page for easy reference in the future.

What Companies Need to Know About Big Data and Social Computing in Information Technology Management

Internet statistics estimate that 500 million tweets are produced per day. That translates to millions of conversations about a vast array of topics.  “Big data” is a term that has become more prominent as social media sites such as Twitter, Facebook, Instagram, etc. continue to generate large data streams.  Consumers produce click stream data and complete transactions visiting corporate websites to make purchases, schedule appointments for services or typing reviews on Yelp, Amazon and Uber about an experience that they’ve had.  With a well-planned IS strategy, this data  can be analyzed to gain insight into their customers and make critical strategic decisions necessary to compete.  Here are a few things companies should know about “Big Data” and social media computing as a business strategy.

Understand that social media and social networking is more a concept than a platform.

One of the  biggest problems with companies adopting social media as part of their IT business strategy is that the concept of social media for many IT managers does not extend beyond Twitter and Facebook.  There are many platforms for which social media is beneficial to business.  Slack and Github build on crowd-sourcing by emulating project management, software development and agile methodologies; even though those platforms are not primarily used for social media.

As more engineering firms adopt open source solutions, agile and DevOps development companies are deciding to use code development repositories such as GitHub.  Microsoft has already adopted GitHub as part of its Visual Studio Team Foundation options for source control.  The power of GitHub is very evident as global communities of developers use it to make some of the most innovative software products in languages such as Python, Java, C#, Ruby, etc.  It’s has also become a viable social media platform for software engineers who frequently collaborate on sprints.  Companies are also turning to solutions such as Slack to build entire global teams of developers to collaborate of on projects and sprints.

Social media as an IT business strategy is about understanding its contextual design and how the user interacts with it.  Part of understanding the contextual design of social media includes identifying the actors (primary and secondary) for which the platform are based and how those users interact with it to build relationships and communities.

Context also extends to how a user interfaces with social media.  Take, for example, the device many currently have in their pockets.  Apply classifications of contextual scope to this device and determine all the ways users interact through a platform (tablet, smartphone, computer, etc).  

A method known as the 4-I’s framework¹ is a good model to understand the user interaction in the context of social media.  The method is typically utilized in classifying interactions with information systems as described above.  The 4-I’s include:

  • Inscriptive (inputs)
  • Informative (outputs)
  • Interactive (processing)
  • Isolated (stored data)

This framework is useful for looking at ways to interact as a user that can perform as well as the information exchanged within that platform.  Another method that is popular is the MVC model or Model-View-Controller model which is used in software analysis and engineering as an architectural platform for implementing user interfaces on computers through separation of layers of those systems.

Do not dismiss “Big Data” as a gimmick.

The term “Big Data” itself may seem oversold through marketing, but the production of large data sets is very real, very fast and very large – with new data set being produced every day through public and private portals.

Big data is described as data that has variety (video, text, images, unstructured and structured), volume (over a terabyte, scale of brand), velocity (constant production of data streams), and veracity (the data needs to be cleaned and managed) .

 Information has become more fluid and available to more people faster and easier. Although no company should drive business decisions by what happens on Twitter or Facebook (or on the Dow), the power of “Big Data” as a tool can help in  trending analysis, customer segmentation and insight into short to long term business decisions.  

With “Big Data” companies will be able to:

  • Respond more quickly to market by making faster decisions.
  • Make patterns more evident to make changes to processes and products.
  • Better realize innovations and products and services and bring those to market faster.
  • Build and manage new and current data streams.
  • Create a data analytics ecosystem.  Make analyzing and aggregating data a business process all employees to utilize.

For a “Big Data” strategy to be successful, companies must:

  • Create data lakes and systems where raw data can live prior to being transformed for the business intelligence and reporting.
  • Remove data silos where data exists but is only accessible to a few internal stakeholders.  
  • Create a data analytics ecosystem
  • Create hybrid cloud solutions and begin moving applications to the cloud.

Know what association and segmentation analysis are and how to use them to learn about your customers.

With data streams, most coming online every day, new analytical methods can be used to gain insight into what consumers need in products and services.  Two popular analytical methods include association analysis and segmentation analysis.  In my next blog, I will discuss how these methods give insights into customers to better predict how they shop and what campaign ads are more likely to be successful with consumers.

With the popularity of Map Reduce and Hadoop, the business world is seeing an increase in “Big Data” analytics based on click stream and social media data.  Large data sets which would have taken days to analyze can now be done in minutes.

Conclusion

As data has become more prominent within an organization, and the means of collecting because easier and more ubiquitous, new skills will be necessary in certain roles to take full advantage of this data to drive value.  The corporate culture will need to adhere more to a data culture, where there is a value quotient to it collecting, cleansing, aggregating and analyzing data sources and data repositories.  Business leaders must establish new models that take advantage of social media and big data assets.

Works Cited

  1. Pitt, Leyland; Berthon, Pierre; Robson, Karen.  Deciding When to Use Tablets for Business Applications.  MIS Quarterly Executive Volume 10 Number 3 September 2011.

IT Strategies: Applying Data Analytics to Information Technology Management

In this third and final blog on IT Strategies, I look at some examples and techniques of using data analytics in Information Technology Management.  In previous postings, I wrote “information technology is the interaction between people, information and technology”. When planning IT investments, it’s important that business value be the main driver for delivering solutions. When evaluating IT value, a business must look beyond a particular product or service and identify value using the following criteria:

Identification

  • Understand what value is to the business.
  • Have a process to assess and define potential value.

Conversion

  • Find opportunities for IT to build success.
  • Don’t be afraid to revisit business models and business processes.
  • Have a plan to train and hire qualified people (IT and Business).

Realization

  • Create proactive and long-term processes.
  • Create a sustainable knowledge management process.
  • Continuously measure outcomes against expected results.
  • Access value.

As a practitioner and researcher of information technology management, I am constantly looking for new approaches to bring IT value to my company. Information is mostly about making decisions.  The first blogs discussed creating value from IT assets. Data analytics can provide a way to properly quantify that value by analyzing performance, sizing and monitor data.

Data analytics provides the ability to drive the decision-making process. However, no decision should be made by data analytics alone. When deciding on how analytics can impact decisions to be made there are two specific categories: qualitative and quantitative analytics. Qualitative requires in-depth understanding of business processes and functions to determine reasons in certain conditions and events. Quantitative analysis requires statistical, mathematical and computational methods.

In information technology management, data can be generated by multiple systems as well as business workflows, the amount of which can easily be within the domain of Big Data. Analyzing large and potentially unstructured data sets “Big Data” can give crucial insight into data-intensive environments.

Business Analysis Process

I also find it helpful to form a business analysis process as part of the overall strategy of IT systems. The business analysis process includes

  • Problem recognition
  • Review previous problems and findings
  • Modeling
  • Data collection
  • Data analysis
  • Communicating and acting on results
  • Business decisions

DataAnalytics

Data Analytics Ecosystem

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When coordinating data analytics into action that involves operation and business optimization, one imperative is to develop policies and processes that adhere to data analytic standards and practices. Applying data analytics to only one a project or process, but leaving out other areas in project or steps tends to weaken the impact or create biases in the end result or deliverable.

The evolution of business is to create data governance, new business models, policy and procedures that adhere to analytical practices. This is know as the data analytics ecosystem.

In this blog, I use examples from SAS Enterprise Miner® a data mining and predictive analytics tool.  Part of the SAS Enterprise Miner paradigm for data analysis is identified by the SEMMA™ method, which includes

  1. Sample: Create a sample set of data either through random sampling or top tier sampling.  Create a test, training and validation set of data.
  2. Explore: Use exploratory methods on the data.  This includes descriptive statistics, scatter plots, histograms, etc.
  3. Modify:  Create imputation or filter data.  Perform cluster analysis, association and segmentation.
  4. Model:  Model the data using Logistic or Linear regression, Neural Networking, and Decision Trees.
  5. Assess:  Access the model by comparing it to other model types and again real data. Determine how close your model is to reality.  Test the data using hypothesis testing.

Information Technology Management

IT strategy involves aligning overall business goals and technology investment.  The first priority is for IT resources, people and functions to be planned around the overall business organization goals.  In order for such alignment to take place, IT managers need to communicate their strategy in business terms.   What makes such efforts inefficient is not making communication and transparency a top priority.

In many companies, funding for strategic initiatives is allocated in stages so their potential value can be reassessed between those stages.  When executives introduce a new business plan to increase market share by 15 percent with a new technology, IT managers must also meet those goals by assessing the quality of the IT infrastructure.

Executives must have confidence that the IT assets that they purchase are sound.  There must be mutual trust, visible business support, and IT staff who are part of the business problem-solving team.   All of these factors are needed to properly determine the business value of IT.

When creating an IT Strategy that can align to business objectives, five themes should be addressed.  These include business improvement, business enabling, business opportunities, opportunity leverage and infrastructure.  Research has shown that companies who have a framework for making targeted investments in IT infrastructure will further their overall strategic development and direction.  When companies fail to make IT infrastructure investment strategic, they struggle on how to justify or fund for it.

Communication is critical to executives and business decision makers.  IT staff typically work across many organizational units and must be effective at translating technical requirements into business requirements and vice versa.  Communication has become mission critical in the IT business value proposition.  When deciding how to apply data analytics across the organizations, IT should work with business leaders by looking at the IT function areas that produce the most data for their organization.  These areas include:

  • business analysis
  • system analysis
  • data management
  • project management
  • architecture
  • application development
  • quality assurance and testing
  • infrastructure
  • application and system support
  • data center operations

IT strategies require full business integration.  When IT managers are proposing new strategies, an executive summary should be the most important part of the proposal, prototype, roadmap, technical architecture document, etc.

Along with IT system metrics, IT managers must also keep in mind business operational metrics which are metrics based more on labor and time.  IT managers need to factor both IT and operational metrics in reports to business stakeholders.  There are several ways of reporting IT strategies to the business. Key Performance Indicators (KPIs) are fundamental to business decisions and are used to correlate business performance such as the how often a transaction results in a customer satisfaction.  KPIs examples include:

  • Efficiency rates.
  • Customer satisfaction scores
  • Capacity rates
  • Incident reporting rate
  • Total penalties paid per incident

Balanced Scorecards are strategic initiatives that align business strategy to corporate vision and goals.  It’s typically not the responsibility of IT managers to build scorecards, but rather understand the corporate balanced scorecards when building IT strategies.

Dashboards are visual representations of success, risk, status and failure of business operations.  In a very high paced organization, they allow information to be quickly disseminated and assessed by stakeholders for business decision making.  Dashboards tend to have more quantitative analysis than other types of reporting styles.

System Monitoring

Maintaining system health can be an arduous and time consuming task for system administrators. System administration include areas such as databases, network, hardware and software. Aggregating the large volumes of raw data can save time and help administrators respond more quickly to issues. Creating analytical methods around such aggregated data can help determine the present and future value of such systems, predict possible failures and security risks, planning budgets for new IT, maintaining existing assets or help plan for the migration to new platforms such as cloud.  For example, data that tracks the amount of storage area network (SAN) usage over a period of time can help create sizing requirements for new systems that will grow at similar rates.

Below are examples of the type of system performance data that can be used when creating data analytics for sizing and performance analysis.

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CPU utilization based on user, system, waits and idle times.

Disks
Disk read kilobytes per second versus disk write kilobytes per second.

Data Analytics

In the past year, I’ve learned various methods to predict trends and detect anomalies of the data I’ve received through the operation of IT systems. IT systems are constantly collecting sensing and monitoring data on CPU, networking, applications, etc. that can been used to build strategies for planning IT budgets. The types of methods I used include

Data Exploration, Cleansing and Sampling

  • Scatter Plots
  • Imputation
  • Filtering
  • Classification
  • Hypothesis Testing
  • Statistics Analysis (descriptive, process control)

Predictive Analysis

  • Logistic/Linear regression
  • Neural Network
  • Probability Distribution

Segmentation Analysis

  • Clustering
  • Association

Model Assessment, Testing and Scoring

  • ROC Charts
  • Lift Charts
  • Model Comparison
  • Data Partitioning (separating data into testing, training and validation sets)

Below are visualizations of based on analytical methods I’ve deployed for information technology management.  I recommend researching these methods to get a better understanding of how they work.  Much of this work was performed in Microsoft Excel, SAS Enterprise Miner® and Python.

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Above, liner regression based on input and output (I/O) waits and the number of disk reads

Image3

Segmentation analysis based on number of processes to CPU utilization rates for various UNIX systems.

2014-11-13_16-38-27

Statistical process control (SPC) Shewart analysis of process elapsed time in seconds.

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Above, a receiver operating character curve or ROC curve, plots true positive rate against a false positive rate for points in a diagnostic test.  A ROC curve can diagnose the performance of a model.  The baseline is linear  where each model curve demonstrates the trade-off between sensitivity and specificity. More accurate models have curves that follow the left side of the chart to the upper border.  As in the model assessment tool, the data is partitioned into training and validation sets and then the models for each set are assessed for predictability.

Image6

Model scoring for logistic regression

Model_comp_Cum_lift2

Model comparison using cumulative life (training and validation data).  Lift measures the effectiveness of a predictive model using using results of that model when it is applied and when it’s not.

Again, I strongly recommend researching these techniques since there are many super intelligent people out there that I consult.  Also, If there is anything I’ve mentioned that is incorrect, please comment.

Recommendations

Below are guidelines and recommendations on how IT departments and IT managers can leverage business and data analytics to drive IT value proposition.

Determine important business metrics and create a metric measurement plan.

IT managers must understand which metrics are most important for their business.  Start by having a strong understanding of business scorecards and key performance indicators.  This goes beyond just understanding an organization’s goals and objectives. IT System metrics are principally designed only for IT managers and IT Staff; The business understands operational metrics.  When deciding which metrics to collect, focus specifically on business level KPIs and balanced scorecards.  Getting an understanding of what the business wants will drive all further actions in creating IT value for the business.   Create a metric measurement plan that formalizes the process and nomenclature of measuring IT metrics including creating a process to applying them to business functions.

Create categories for metrics.

Specify categories of metrics to communicate including operational, KPIs, dashboards, tolerances and analytical metrics.

Operational metrics include basic observations in the IT management of specific business functional areas.  It is typically revised to include operational metrics with analytical metrics.  Types of operational metrics include measurements of function area incidents, including labor and time allocation for those incidents.  These types of metrics tend to be non-technical in nature but have a definite impact on IT management.

Analytical metrics include metrics that are used for statistical analysis, forecasting, prediction and segmentation.  The data collected for these metrics are typically produced by IT systems.

Tolerance threshold metrics measure tolerances of KPIs values.  Tolerance is very similar to the control chart example in the preceding section, except it is used more for business level control limits.

Key Performance Indicators are perhaps the most important way of communicating metrics to business stakeholders.

Build a management report.

Incident management tracks specific events that deviate from business and operational efficiency of an organization.  It can be clearly stated that server values can have a huge business and operational impact.  Less empirical incidents such as server performance issues and application response time can play a role in adverse events.  Incident management can include operational metrics and KPIs.   For example, the following list describes the type of incidents reported:

  • Total number of incidents.
  • Average time to resolve severity 1 and severity 2 incidents.
  • Number of incidents with customer impact.
  • Incident management labor hours.
  • Total available hours to work on incidents
  • Total labor hours to resolve incidents.

Data analytics can provide supportive evidence of how an incident occurred. Data analytics more importantly can help reduce major incidents by lowering incident costs and time and help improve KPI values.  Typically data analytics is not appropriate in an incident report, however, it allows IT managers the ability to report mitigation and risk factors by rating the level of risks these incidents have to business. Analytics can provide more insight into risk management and mitigation.

As mentioned earlier, data analytics can provide supportive evidence of how an incident occurred, but it can also be used to build a risk management plan and scoring system.  Since analytics provides huge benefits to IT managers about the health of systems and operations, having such information can help lower risks from incidents by allowing IT personnel to respond to problems faster and even predict problems before they occur.  This in turn helps improve the KPIs in incident management reporting.  Since KPI work on a scoring system, the IT staff can produce calculations based in part on values produced from example analytics.  For example, for metrics A, B, and C, operational KPI scores can be established through the use of proportionality.  The table below demonstrates the use of IT metrics in establishing KPI scores.

Reference Number KPI Calculation
1 Number of system incidents B/A
2 Number of network incidents C/A
3 Incident resolution rate (B/A + C/A)

Example of how KPIs are critical to managing and controlling Incident Management.

Incident management just one type of management system that can be built for metric categories where communication on metrics with the business should occur. Other management systems include:

  • Event management
  • Access management
  • Service desk management
  • Change management.
  • Release management
  • Configuration management
  • Service level management
  • Availability management
  • Capacity management
  • Continuity management
  • IT financial management

Build an IT governance program for IT business communication.

Having a data and IT governance program will ensure that data is verified and accurate before being sent to the executives.  Establishing such a program will give some formal assurance that information provided by IT comes from validated sources, has been approved, and has accountability.

Communicate effectively with executives with an executive summary and report.

As mentioned earlier, effective and regular communication will help ensure that IT managers will receive proper feedback, align with the business and prevent unexpected surprises when budget time arrives.

Give executives something to be excited about.

Business executives do not respond well to complex technical details.  Contrary to popular belief, very few people, especially in executive and mid-level positions are impressed by wordy technical details about system architecture and applications.  They need high level examples that show how the business will grow and achieve a project goals using IT management for a business function.  This can include bar charts or diagrams, but they must be business related and clearly indicate how they would achieve business objectives.

Propose a well-planned budget.

A well plan budget consist of replacement costs, unplanned purchases, reoccurring costs and tracking expenses year round.  It’s important to have a complete budget that builds out the solution for current and new architecture with an evaluation of the cost differences.

Executives will always ask for more clarity and more relevance.

An IT team may have worked many hours to produce a clean, bound and lamented report delivered with precious care and a bow to business executives, and still it can be rejected, scrutinized or sent back for clarification.  This is normal and is to be expected.  It is important for IT managers to keep in mind that the goal is always to provide the most factual and relevant information to business decision-makers.

Blog includes excerpts from Analytical Properties of Data-Driven Systems and its uses in Information Technology Management. University of North Carolina at Greensboro Bryan School of Business and Economics, Department of Information System and Supply Chain Management ISM 698-01D 2016.

IT Strategies and Data Analytics

In an extension to my first blog, I research quantitative analysis of enterprise IT functions to demonstrate how to create IT business value.  It has to be established that, with so much data being collected from IT systems, IT managers can use this type of pervasive data to their advantage.  Functionality such as maintaining health,  securing systems,  and properly sizing new systems all have an impact to IT budgets.

Data analytics promotes value in IT.  Strategies using data analytics aim to create incremental value that can build on itself.  One of the keys of strategic IT value is to adopt a holistic approach to technology value, ignoring gimmicks, gadgets and marketing and instead looking at innovation as a combination of people, information and technology.  This balanced business strategy involves taking ownership of IT assets. In order for businesses to understand the value of those assets, it is crucial for IT managers to communicate that value.  Data analysis is a part of that communication.  Although data analytics can provide great insight into business technology, it will not always be successful in that goal.  The mission of data analytics as an IT strategy is to experiment often and to not be fearful of failure.

IT strategy involves aligning overall business goals and technology investment.  The first priority is for IT resources, people and functions to be planned around the overall business organization goals.  In order for such alignment to take place, IT managers need to communicate their strategy in business terms.

In many companies, funding for strategic initiatives is allocated in stages so their potential value can be reassessed between those stages.  When executives introduce a new business plan to increase market share by 15 percent with a new technology, IT managers must also meet those goals by assessing the quality of the IT infrastructure.

Executives also must have confidence that the IT assets that they purchase are sound.  There must be mutual trust, visible business support, and IT staff who are part of the business problem-solving team.   All of these factors are needed to properly determine the business value of IT.

One of the principals of business technology innovation is to aim for joint ownership of technology initiatives.  The quality of the IT-business relationship is central to delivering quality IT solutions that scale and meet production requirements.  Imagine a scenario where IT wasn’t aware that a utility would bring 1,000,000 new meters online that read electrical data every hour within two years, but instead, only sized for the initial 5,000 meter deployment.  This type of scenario would directly result in an utility customer having to upgrade all of their hardware only a year after the full deployment.

Innovations have created new ways of automating analysis to give more visibility into IT infrastructure.  This data can be analyzed using trending and predictive analytics to determine how much growth is needed based on specific targets and parameters.

Ideally, business and IT strategies should complement and support each other.  In order to improve the IT “Value Proposition”, IT projects must stop being considered the responsibility of only IT.  The definition of value must be clearly designed and presented by IT, but there must be a greater understanding that business executives have to take leadership in making technology investments shape and align the business strategy.  IT strategy must always be closely linked with sound business strategy.

Not only should IT and business be aligned, they must also complement each other strongly in order to build the type of relationship essential to achieve business goals.  It is a mistake to consider technology projects solely the responsibility of IT or to make IT solely accountable.  Business and IT must be accountable to each other when implementing and executing IT projects.

When creating an IT Strategy that can align to business objectives, five themes should be addressed.  These include:

  • business improvement
  • business enabling
  • business opportunities
  • opportunity leverage
  • infrastructure.

Research has shown that companies that have a framework for making targeted investments in IT infrastructure will further their overall strategic development and direction.  When companies fail to make IT infrastructure investment strategic, struggle on how to justify or fund for it.  In order for IT expenditures to be justified, many companies have concentrated on determining the business value of specific IT project deliverables, because it allows projects that focus on specific business goals to be properly scoped to include IT expenditures.

How a company measures business performance can be an accumulation of metrics both on the business side and the IT side.  Undelivered IT investment remains a big problem for organizations.  Many CEOs and CIOs believe that their Return on Investment (ROI) expectations for IT investments have not been properly met.   Although IT measures can be qualitative, meaning that expertise and knowledge from IT managers and staff contribute to understanding current and future IT growth and capacity, there are also ways to measure value quantitatively to help in the decisions making.

Non-technical communication is critical to executives.  IT staff typically work across many organizational units and must be effective at translating technical requirements into business requirements and vice versa.  Communication has become mission critical in the IT business value proposition.  When deciding how to apply data analytics across the organizations, IT should work with business leaders by looking at the IT function areas that produce the most data for their organization.  These areas include:

  • business analysis
  • system analysis
  • data management
  • project management
  • architecture
  • application development
  • quality assurance and testing
  • infrastructure
  • application and system support
  • data center operations

IT strategies require full business integration.  When IT managers are proposing new strategies, an executive summary should be the most important part of the proposal, prototype, roadmap, technical architecture document, etc.

Along with IT system metrics, IT managers must also keep in mind business operational metrics which are metrics based more on labor and time.  IT managers need to factor both IT and operational metrics in reports to business stakeholders.  There are several ways of reporting IT strategies to the business. Key Performance Indicators (KPIs) are fundamental to business decisions and are used to correlate business performance such as the how often a transaction results in a customer satisfaction.  KPIs examples include:

  • Efficiency rates.
  • Customer satisfaction scores
  • Capacity rates
  • Incident reporting rate
  • Total penalties paid per incident

Balanced Scorecards are strategic initiatives that align business strategy to corporate vision and goals.  It’s typically not the responsibility of IT managers to build scorecards, but rather understand the corporate balanced scorecards when building IT strategies.

Dashboards are visual representations of success, risk, status and failure of business operations.  In a very high paced organization, they allow information to be quickly disseminated and assessed by stakeholders for business decision making.  Dashboards tend to have more quantitative analysis than other types of reporting styles.

IT Governance

In the area of governance, the International Standards Organization (ISO) certification 27002 addresses monitoring and information security incidents.  Many of the methods used in the collection of data about system health can complement the adherence to information system security. Monitors log user access and security events such as unauthorized access to information systems.  Keeping security audit logs synchronized with specific system activity logs can indicate coordinated attacks on the system or denial of service (DOS) attacks that are popular for web applications and application service provides.  Using data analytics can help determine if deviations in system performance are related to security events such as unauthorized access, security threats such as malware, or other security issues; or if there is an issue with a functional issue within the system itself.  The boundaries between security and system health are consistently breached with networking, services and databases where the integrity and size of user traffic can be impacted.  Any unauthorized access can impact the availability and integrity of an information systems.

DevOps and Agile Software Development

DevOps is a corporate culture that emphasizes collaboration between developers (typically software developers) and operational business units.  DevOps provide tools and automation that can create a better customer experience by addressing issues and product changes faster.  Information systems can assist this functional area by providing analytical techniques about the readiness of release product code in the software development life cycle.

The principles of DevOps is to develop and test against production-like systems, deploy reliable processes, monitoring and validate operational quality and to improve the customer feedback loop to turn issues around faster.  Part of the power of data analysis is the ability to assist in agile, continuous delivery of software.  Automated testing and feedback with data analytical methods can provide the most qualitative information for business.  Providing data analysis on performance analysis, error logging and customer feedback as dashboards and visualizations can help make software development life cycle visible to all business stakeholders. As a rule of thumb business leaders are not interested in code or complex spreadsheets.  They are much more interested in quality scores, key performance indicators (KPIs) and business metrics.

IT Budgets

IT budgets are addressed in two categories: operational costs and strategic investments.  Operation are “keep the lights on” cost that involve running IT like a utility. Operation cost include maintenance, computing, storage, network and support, to name a few examples.  Strategic investments is a balance of initiative spending and coordination with organizational strategic objectives.  Strategic investment becomes more efficient from the corporate to department level.

IT budgets are also about reducing costs.  Many organizations have legacy systems that are not used efficiently and have requirements that create problems for strategic investments in new innovations.  Having an application portfolio is a good way of understanding the risks versus benefits of maintaining legacy systems.  Creating a data integration strategy as part of a data analysis ecosystem allows businesses to fully utilize all of their assets.  Most of these systems contain metadata that has long since been de-supported.  Part of the power of data analysis services such as online analytical processing (OLAP), business intelligence (BI) and master data management (MDM) is the ability to integrate with legacy systems.

Budgets are a key components of corporate performance management.  The most important thing to understand about IT budgets are that they assist in the establishment of strategic goals.  Systems provide data about the various level of utilization of resources.  An example question that a business client would pose to an IT manager would include:

What are the annual storage requirements of our Enterprise Billing System?

This question could be answered by tracking the amount storage consumed throughout the year based on the number of data sets stored in megabytes and looking at the interval of time that those data sets are stored.  From there an IT manager can translate that requirement in yearly terms, which in turn gives the budgeting team a metric of how much storage they need to purchase or maintain each year.

For large corporate firms in utilities, energy and manufacturing where literally, there could be hundreds of servers, there needs to be a more centralized structure for IT operations budgets.  The mandate given to IT managers in centralized IT Budget structures is to standardize and streamline multiple processes on hardware and software services.  The introduction of both private and public cloud architectures, and virtual architectures has made this possible.  Another question likely to be posed to IT managers:

Can our physical servers be migrated to a cloud or virtual infrastructure with higher performance and availability?

Having the right kind of analysis on current systems helps to ensure that dollars are spent appropriately when systems are consolidated or provisioned, and that they perform ideally according to business requirements.  IT managers are receiving pressure from executives to do more with less.  Data analysis has been a catalyst for innovation in cross delivery business development through the integration of systems and data.  Operational questions regarding IT include:

How much operational labor is expended providing IT services to an organization?

How much of the IT budget expended implementing changes to infrastructure?

Other budget concerns includes transitioning from a physical architecture to a cloud service based model.  Typically, with public cloud architecture, the resources are provisioned and managed by a hosting team.  Most cloud services will propose “elastic” solutions such as Amazon’s EC2 solution or Microsoft Azure which allows companies to use only what they need.  Therefore, the methodologies of sizing may not be as appropriate in such architecture.  However, in very data intensive industries where there are large scale architectures and multiple interaction of business and server processes, placing everything in a cloud domain is not only impractical, but very expensive and potentially illegal.  For example, in the utilities industry, state regulations may prohibit customer data from being off site.  An energy company’s proprietary information stored in an international data center that does not recognize the source country’s regulatory body could represent a public trust violation.

If migrating from a multi-tier architecture to a complete cloud-base services, it’s important to understand the type of cost involved.  Cloud based services typically have subscription model, where all the management, configuration and provisioning (unless self-provisioned) is handled by the hosting company.  There is a contract that specifies a level of service and support and that cost reflects how many resources the company is utilizing and the level of service for which to service its customers.  Payment terms can be yearly and quarterly, and there is usually a renewal date when payment is due [20].

The IT Values Proposition

IT value measures the worth and effectiveness of business technology solutions.  It is mostly a subjective assessment of how a business measures its assets when it pertains to business goals.  Value in information technology is typically defined in Return on Investment (ROI) and Key Performance Indicators (KPI) and other economic terms.   IT is most valuable when tied to business goals and objectives.  Adding value to IT also includes ensuring that IT assets are part of a data analytics ecosystem.  A data analytics ecosystem is where IT assets generate insight into how businesses produce, collect, store and learn from data and data analytics.  Data analytics is an important part of the IT value proposition, because of the tremendous treasure trove of knowledge and insight that can be gained from it.  A data analytics ecosystem helps to create processes to turn data into actionable business decisions.

Other best practices in IT value includes:

  • Evaluating the corporate business model in order to promote innovation.
  • Have strategic themes around data collection, dissemination and analysis.
  • Get the right people involved. This can include data scientist, engineers, business analysis, and many others.

IT Strategy Success

Information Technology (IT) Management has evolved to become more aligned with business processes. Every industry that can be thought of uses some type of information system and process automation as part of its business requirements planning. IT will continue to grow and evolve as businesses seek to build on technology investments and innovations while modern IT strategy becomes more of a business imperative. This introductory blog discusses initial strategies for building an IT business value proposition.

IT is the Interaction Between Technology, People and Business

Decades ago, simply implementing information systems and office automation for businesses was viewed as a competitive advantage, while a few programmers and analysts were the irreplaceable gatekeepers for the applications and systems that were implemented. That model is much less likely, as more stakeholders become involved in IT strategy. Today program managers, project managers, business analyst, and business executives take ownership of the solution. Business and operational resources have much more involvement and visibility at all levels of the product design. Developers and Engineers have more accountability in product testing, revisions and releases. Today, there is an expectation that operational resources (Admins and Engineers) are critical to product quality, while the business leaders own the end to end solution.  An adherence to this strategy validates the crucial role IT plays in business success.

Designing systems analysis includes user stories, business functions,  business requirements, user acceptance testing (UAT), conducting user interviews, creating functional design, building use case analysis and designing for object oriented languages using uniform modeling language (UML). Today’s IT strategies fit very nicely into more agile software development methodologies. Without these methods, businesses risk placing their IT investments into a box or worse, creating a product that is not flexible or adaptable.

Automate Functionality Where it Makes Sense

One of the keys to DevOps is the ability to automate many of the operational and functional requirements in agile software development. If you are not familiar with DevOps, I recommend the following book The DevOps Handbook: World-Class Reliability, and Security in Technology Organizations by Gene Kim. Automation is a standard part of building reliable, available and adaptable services, and is an essential part of Cloud Services using Azure and Amazon Web Services (AWS) platforms. In most cases it’s become a mandatory part of platform and infrastructure services.

Create an IT Value Proposition

The components of IT value include:

  1. Identifying potential value.
  2. Creating an effective plan for converting opportunity into reality.
  3. Realizing when value has been accomplished.
  4. Constantly tracking IT Value and demonstrating that value to stakeholders and business leaders.

Create an IT Business Strategy

Having a sound business strategy for IT can increase the likelihood of a viable investment return for IT and helps ensure that IT investments adhere to current and future business goals. One of the biggest obstacles or challenges to creating IT Strategy consists of mastering enterprise architecture and enterprise models, as well as, understanding how budgets and funding aligns with that enterprise. Building sound relationships with business leaders and program sponsors is crucial to strategy, because no matter how sound your strategy is, without sponsorship it’s likely to go nowhere.

Works Cited: McKeen, James D., Smith, Heather A. IT Strategy: Issues and Practices
Third Edition 2015.