How BTM Meets These Challenges

These five challenges ”identify opportunities for business innovation, speak the same language as the business, unify services across multiple business units, mitigate the risk of change, and do more with less ”combine to make the IT function more focused on the business than ever before. Not surprisingly, then, the approaches, tools, and techniques that IT has relied on in the past ”development environments, project management, and object modeling, for example ”aren't perfectly suited to today's increasing business responsibilities.

To give the office of the CIO and the IT department the ammunition they need to tackle these five challenges, we need a new approach: the principles, activities, and governance that make up BTM. By mapping each of these back to today's challenges, we can see how BTM represents the missing piece of the puzzle that finally helps to close the business/technology disconnect (see Table 2.1).

Table 2.1. Five challenges for IT point to a new approach: the combination of principles, activities, and governance that makes up BTM

From Challenges to the Principles of BTM

The principles of BTM represent underlying capabilities that need to be in place before companies can tackle BTM. By themselves , the principles of BTM aren't sufficient to align business and technology. But in order to do business model definition, process optimization, and technology automation ”the activities of BTM that do the lion's share of aligning business and technology ”companies first need to be able to put three principles to work.

The first principle of BTM, Utilize Predictive Modeling, helps companies to construct a blueprint during IT projects so that they can preview change before implementation begins. This, of course, is a powerful mechanism for reducing risk, since potential problems can be identified and avoided up-front, rather than later on, when putting out fires results in costly recoding and abandoned projects. At the same time, models can be powerful props for storytelling ”a skill that the IT department needs in order to communicate opportunities for business innovation to a non-technical audience of executives.

The second principle of BTM is to Instill Collaborative Decision-Making. Recall that matching technology opportunities with business strategy is an important aspect of the CIO's role. This requires coming to a consensus between the strategy team and the CIO. Without promoting a dialogue to help IT professionals speak the language of the business, companies maintain by default the distinct business and technology strategies that caused such catastrophic harm during the New Economy bubble. Collaborative decision-making is also a crucial skill for coordinating between business units to determine which IT services to centralize and which to delegate to individual units.

Make Knowledge and Assets Reusable is the final principle of BTM. Companies can help to mitigate risks during IT projects by recycling designs and strategies that have worked in the past. Also, reuse can help to promote common enterprise standards for IT, and also to drive otherwise disparate divisions to make use of existing resources (such as applications and hardware) rather than building their own from scratch. Finally, IT managers recognize that reuse enables them to wring the maximum amount of productivity out of their existing resources, allowing them to do more with less in periods of both boom and bust.

From Challenges to the Activities of BTM

The activities of BTM ”including Business Model Definition, Process Optimization, and Technology Automation ”represent the formal design mechanism for developing a blueprint that aligns business, process, and technology. These tasks help to construct models and create cross-links to check for alignment between the three. During business model definition, teams capture a snapshot of the enterprise in order to capture and communicate strategy. Process optimization, the second activity, identifies and diagrams the processes that are required to support the business model. Finally, during technology automation, the team identifies the applications and systems that will support their business processes. Together, the business, process, and technology models make up an end-to-end enterprise model, or a blueprint for enterprise architecture.

To complete these activities, employees have to make important design decisions, evaluate multiple scenarios, and choose between imperfect solutions. By previewing these decisions in the form of models for business, process, and technology, the team can anticipate problems and reduce the risk of change. At the same time, modeling helps business and IT professionals to discover new uses for technology that can result in business innovation.

From Challenges to the Governance of BTM

Finally, BTM helps to govern both the Strategic Direction of and Tactical Control over IT. The mechanism that BTM uses to set strategic direction is the IT portfolio, which views projects as a portfolio of investments to be optimized according to both financial and non-financial metrics. By forcing teams to attach metrics to projects, portfolio management helps IT professionals to speak the language of business. And since enterprise models are crucial tools for identifying business opportunities, BTM can also help to synchronize developments in IT with ideas for innovating business strategy.

Governance also helps the CIO to maintain tactical control over IT projects to make sure that they deliver the maximum business value by managing both quality and cost. The tactical control that BTM enables helps both to unify how projects are carried out across multiple business units, and to establish standards and best practices to mitigate the risk that projects will fail. Also, it promotes the reuse of assets across multiple projects in order to extend the life cycle of human and capital assets.