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IT MANAGEMENT
IMPROVEMENT
Eight cases from the
Master of IT Management
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FIVE YEARS OF
IT MANAGEMENT
IMPROVEMENT
Eight cases from the Master of IT Management
Written by eight alumni
Edited by Guus de Mari
2009 IOS Press and the Authors. All rights reserved.
ISBN 978-1-58603-960-8
Published by IOS Press under the imprint Delft University Press
Publisher
IOS Press BV
Nieuwe Hemweg 6b
1013 BG Amsterdam
the Netherlands
tel: +31-20-688 3355
fax: +31-20-687 0019
email: info@iospress.nl
www.iospress.nl
www.dupress.nl
Master of IT Management
Delft TopTech
School of Executive Education
Delft University of Technology
P.O. Box 612, 2600 AP Delft,
the Netherlands
tel: +31 15 278 80 19
fax: +31 15 278 10 09
www.delft-toptech.nl
info@delft-toptech.nl
LEGAL NOTICE
The publisher is not responsible for the use which might be made of the following
information.
PRINTED IN THE NETHERLANDS
Five years of IT management improvement
- 1 -
TABLE OF CONTENTS
Preface 3
Guus de Mari
Writing a thesis as part of the executive Master of IT management 5
Gerard Wijers
IT Governance in Europe 9
Kees Trommel
A structure creating transparency between Business and IT 17
Jacco Schonewille
Improvement of a high reliable and scalable ICT-infrastructure for
the new OPG head quarters 27
Gwan Kho
Making IT-Governance work with Enterprise Architecture 37
Corn Pol
Command Vehicle IT Architecture: The challenge ahead 45
Jan van de Pol
Right sourcing IT 55
Guus Keizer
Forecasting in retailing 61
Nico Wartenbergh
From Technology to Service 71
Paul Leenards
Academic View on the Master of IT Management 77
Anne Persson
We are in the midst of IT Management improvement 79
Udo Groen
Five years of IT management improvement
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Five years of IT management improvement
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PREFACE
Guus de Mari MBA is senior project manager at Delft
TopTech, school of executive education of Delft
University of Technology and has his own consultancy
firm on HR development. In his career, he created
many development programmes; key words in all his
work are applied knowledge, creating innovation
power, combining internal and external expertise. He
is responsible for the Master of IT Management.
It has now been five years since the launch of the postgraduate Master of IT
Management at TU Delft. A host of students have now completed the programme.
This publication showcases the results of a handful of these graduates. It presents
summaries of eight theses written between 2003 and 2008, selected to provide an
excellent picture of the full range of graduation projects.
Since all of our theses focus on real-life management problems, they have gone on
to influence processes and progress within a range of business environments.
This overview therefore not only gives you an insight into an academic programme,
but also into the IT issues that have helped shape various organisations. In other
words, it gives you a flavour of IT management improvement over the last five
years. All of the graduates personally reflect on their completed project, applying
the knowledge they have since acquired. In most cases, their colleagues and
managers also look back on developments.
The book ends by addressing two fundamental questions. The first question, What
is the academic value of this work?, is answered by Anne Persson, Professor at
the University of Skvde, Sweden. Udo Groen, member of the executive board of
ProRail in the Netherlands, answers the same question from a business
perspective. These two perspectives perfectly mirror the structure of the master
programme: bringing academic knowledge to business experience and vice versa.
The book as a whole is an outstanding example of cooperation between university
and industry. It not only demonstrates how an academic programme can initiate
successful projects within businesses but also shows how business experience
can enrich an academic programme. It is the ideal illustration of cooperation as the
dissemination of knowledge and experience in both directions.
The process of creating such a publication is in itself an exercise in life long
learning. The participating graduates were all given a unique opportunity to revisit
and reflect on their own thesis project. Most of them had little experience of writing
articles and had to take up the challenge of developing this competence.
Five years of IT management improvement
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The theses were written for the Master of IT Management at TU Delft. It is a part-
time post academic master for experienced IT managers, aimed at developing their
skills at strategic level. Life long learning is a key aspect of education at TU Delft
and is the very reason why Delft TopTech was founded in 1986. The chapter
written by the programme director, Dr Gerard Wijers, provides an interesting insight
into the educational programme and the context in which the theses were
produced.
I would like to take this opportunity to thank all those involved in this book.
The candidates invested a great deal of time and effort in producing their
summaries. It was far from easy to capture the essence of their theses in texts that
were both readable and accessible. Furthermore, the need to remove all
confidential information entailed a lot of extra work. All of the graduates worked on
a voluntary basis and clearly relished the experience. As one of them said Its nice
to have an assignment again. They received guidance and feedback on their
drafts from experts involved in the programme: Albert Plugge, Nico Brand, Marijn
Janssen and Frank Grift. The book you have in your hands is the result of fruitful
cooperation between writers and editors.
Many other people were involved in this project, too many to mention by name.
They include those who worked on the layout of the book, the proofreaders and
those who supported the project in other ways.
Creating this book and compiling the various elements has been a fascinating
challenge. It was very rewarding to see the enthusiasm of the writers and the
learning process they underwent. If you enjoy reading this book as much as I
enjoyed producing it, you will not be disappointed.
Five years of IT management improvement
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WRITING A THESIS AS PART OF THE EXECUTIVE MASTER
OF IT MANAGEMENT
An interesting and challenging journey
Dr.ir. Gerard Wijers began his career at TU Delft
where he gained a Masters degree in Computer
Science and a PhD in IT Management and Infor-
mation Planning Methodologies. At present, he has a
part-time senior research fellowship in Delft in the
field of IT management & Sourcing and he is
programme director of Delfts Executive Master of IT
Management. He is director of EquaTerras Gover-
nance and Sourcing Management practice in the
Benelux. He is an experienced advisor with an extensive background in
IT strategy and IT governance. Gerard Wijers has been concerned with
customer-supplier relationships in IT for more than 15 years and is
known as a committed, professional and entrepreneurial advisor. He
helped found ISPL, the Information Services Procurement Library, a
well-known contract management methodology. In the 90s he owned
an IT innovation consultancy firm, ID Research, which was later sold to
one of the large Dutch IT service providers. Gerard Wijers speaks
regularly at conferences and has produced a large number of
international publications.
Over a period of five years we have been supervising the participants of the
Executive Master of IT management programme in writing their master thesis. It is
therefore time for some observations and reflections and to share these with you
as a reader. The thesis in itself is a very important part of the executive programme
and it is the most essential element of the programme for guaranteeing the
academic quality of this programme.
In this reflection paper we first would like to highlight the role of the thesis in the
entire programme, secondly we discuss some typical assignments and the
character of the work and third we reflect on the process of supervision and
examination.
The thesis as part of the entire executive master programme
The thesis is the last part of the modular executive programme and participants
can start with their Master module and with writing their thesis as soon as they
have successfully completed five modules. Each module of the programme
consists of 8 days of interactive education by leading scientific and business
leaders and each module contains a specific assignment. These assignments have
to be carried out within the business context of the participant and have a visible
impact for these organisations. The assignments also prepare the students in
applying a (scientific) structured way of solving and analysing problems. The
executive master of IT management programme has (at the moment of writing) five
Five years of IT management improvement
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modules: IT Governance, Business & IT Architectures, IT Financials & Decision
Making, Strategic Sourcing and IT Service Delivery Management.
The thesis counts for about 25% of the study load of the whole programme and
has to be delivered in a period of around 6 months, see figure below.
Each thesis is being evaluated on a set of predefined scientific criteria. These
criteria are:
Five years of IT management improvement
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In total a thesis will consist of around 25000 words plus appendices but of course
more important than just criteria and length is that we stimulate the students to
select a challenging problem within their own organisation.
Some typical assignments
As the executive programme has its focus on the business IT relationship and on
how to achieve an optimal fit between business and IT, many of the topics are
related to:
Decision making in IT;
Improving the way an organisation has organised its IT governance or its IT
organisation;
Introducing new technologies for new markets, products or services;
Creating a future architecture and roadmap for future IT developments;
Defining a sourcing strategy for their business;
Typically a thesis results in products such as a set of recommendations, a design,
an evaluation framework, an implementation plan, or a choice for a future scenario.
The process of supervision and examination
Though all participants enter into the programme at bachelor or master level, thesis
writing experience has to be (re)trained as part of the programme. We therefore
apply the same evaluation criteria for the module assignments as for the final
thesis so that participants get used to a consistent evaluation method. More
importantly, at the start of the Master module, specific training is given by the
Faculty on research methodology in which the students learn how to demarcate
their problem, how to define their research questions, how to find relevant
literature, etc. Through panel sessions and peer-to-peer reviews feedback is
generated. Every student has a personal supervisor from the Faculty and midway a
draft version of the thesis will be evaluated by members of the examination
committee.
Five years of IT management improvement
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With great respect we see an intensive thesis writing process going on in which the
participants combine this intensive process with their (ongoing) management
position and step-by-step improve and work on their business problem in a
scientific and structured way. Alas not all participants find the discipline and
inspiration to fulfil this challenging final task. As supervisors we always try to find a
good balance between giving active support and the personal responsibility of the
participant himself. The examination committee has the role to make the final
judgement.
Conclusions
Even though most participants find it difficult to get used to applying a scientific
approach to solving a business problem, many at the end succeed and learn that
such an approach leads to real understanding and thorough underpinning of
recommendations, conclusions and designs. For the university it is inspiring to
supervise these experienced participants and to learn about the bigger business-IT
concerns within the organisations of these students.
Five years of IT management improvement
Kees Trommel; IT Governance in Europe
- 9 -
IT GOVERNANCE IN EUROPE
Ir. Kees Trommel MITM studied Informatics at Delft
University of Technology. After his graduation, he
worked for Incontrol Management Consultants where
he executed several IT design, package selection
and implementation projects. In 1998, he started at
Yamaha Motor Europe N.V. as a project manager.
He led ERP implementations at national distributors
all over Europe and was involved in several business
improvement projects. Since 2006, he manages the
application maintenance, application support and IT infrastructure
teams of the company and is responsible for the availability and quality
of all Yamahas business applications and IT infrastructure. He graduated
in November 2004 in the Master of IT Management.
The subject of the thesis is the European headquarters of a Japanese multinational
(further: the company). The companys prime responsibilities are sales, marketing
and manufacturing of consumer goods in Europe. Throughout Europe and per
country the company has distributor organisations that are responsible for sales
and marketing in their country. The company has a 100% shareholding in the
majority of these distributor organisations.
In the last two decades, the companys role in the European market place is
changing from that of a holding company of distributor organisations into a head-
quarters of an integrated operation in Europe, a transition process that is still not
finished.
The global IT headquarters has indicated that the IS division (ISD) of the company
is responsible for European IT governance. As such, ISD and the entire European
IT organisation have been faced with the question in which manner IT governance
in Europe could be organised.
Therefore, the thesis first has ascertained the definition and coverage of IT go-
vernance in the companys context. Obviously, the new IT governance organisation
should be supportive in realising the companys business and IT strategy. As the
latter is currently not defined, several hypotheses have been formulated that could
describe the companys IT strategy.
By far, the most important hypothesis is that the companys European IT
organisation should aim for adaptable and standard core systems that can swiftly
and efficiently be enhanced to meet changing business requirements. This is
specifically important as the rate of business changes is increasing and quick
action and implementation are necessary. What is more, new developments are
almost never local anymore, but instead are pan-European in nature.
Five years of IT management improvement
Kees Trommel; IT Governance in Europe
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Derived from the hypotheses, the objectives for the IT governance organisation
comprise of:
ISD should assume the leading role in the formulation, planning and execution
of IT strategies on a European scale;
A truly European approach to IT should be realised to promote synergy and
cooperation;
The application portfolio should be managed on a European level;
Cost management should be introduced to increase cost transparency, to
detect efficiency gains and to realise economies of scale.
Based on these objectives, the European IT organisation was analysed. First of all,
ISD has an operational focus and little emphasis is placed on tactical and strategic
issues. What is more, the European IS organisation basically consists of six
separate entities, namely ISD and the IS departments of the five biggest national
distributors (so-called local ISDs or LISDs). There is little structural synergistic
behaviour between these entities. This leads to overall excessive costs.
Specifically, the companys ERP system exists in six completely different versions,
maintained by both ISD and the five LISDs. As a result, European wide projects
that require the headquarters changes encounter additional costs and more elapse
time. There is also little proactive IT cost management.
In summary, the role of ISD has been classified as one of Strategic Guidance, a
typification that is used for corporate IT functions that are less pro-active and
mainly focus on operational excellence
1
. The latter is amplified by the fact that ISD
is also responsible for IT within smaller distributors. The analysis therefore
concluded that the European IT organisation (and its current IT governance
structure) does not result in achieving the objectives set.
1
[Stephen L. Hodgkinson, 1996]
Five years of IT management improvement
Kees Trommel; IT Governance in Europe
- 11 -
In the exhibit below, the position of the entities in the companys European IT
organisation in relation to typical IT organisations is shown.
Scale
economies
Control
of standards
Critical mass
of skills
Unresponsive
No BU ownership of systems
No BU control of central
overhead costs
Doesnt meet every BU needs
User control
IT priorities
BUs have
ownership
Responsive
To BU needs
Excessive overall
cost to group
Variable standard of
IS competence
Reinvention of wheels
No synergy
Pooled
experience
Synergy
Functional IT
leadership
Group-wide
perspective
Decentralised IT Centralised IT Federal IT
Smaller
distributors
LISDs ISD
Advantages and disadvantages of IT organisation types
2
At first glance, some of the objectives might be realised by also centralising LISDs
into ISD. From literature it can be concluded that centralisation of the IS function is
necessary to integrate applications and to realise economies of scale. Managing
information on a corporate level can result in value for money benefits as well.
However, decentralisation is required to respond quickly to real business
requirements
3
. For similar reasons it can be argued that it is not sensible to fully
centralise the LISDs. They are part of the bigger distributor organisation giving
them a responsive service. In addition, the bigger distributors will not easily agree
with a complete centralisation of all IT activities but will be most likely willing to
centralise common IT activities.
To achieve the objectives, the company should realise a European IT governance
structure that attempts to capture both the benefits of the centralised and of the
decentralised IT organisation while mitigating the disadvantages thereof as much
as possible. The design of the new European IT governance organisation should
therefore take the federal IT structure as its foundation. The picture below indicates
in which manner the European IT organisation should shift towards a federal IT
organisation model. An assessment of eight factors that influence the IT
governance structure, such as organisational culture and corporate governance
structure supports this conclusion
4
.
2
Adapted from [Stephen L. Hodgkinson, 1996]
3
[Michael J. Earl, Brian Edwards and David F. Feeny, 1996] and [Joe Peppard, 1999]
4
[Anton Joha, 2003]
Five years of IT management improvement
Kees Trommel; IT Governance in Europe
- 12 -
Re-positioning the European IS organisation
To implement the federal IT governance structure, the thesis first recommends to
reorganise ISD and to explicitly assign the mandate to ISD to proactively define the
companys corporate IT strategy. This reorganisation should specifically focus on
enforcing the planning department within ISD that is responsible for tactical and
strategic issues. Furthermore, the companys ERP system maintenance and
support should be centralised.
Also, it is recommended to use the CObIT framework, an international and
generally accepted IT control framework to implement IT governance
5
. Using the IT
processes defined in CObIT, the effects of the new IT governance structure can be
made more explicit. The future responsibilities of ISD, LISDs and small distributors
can be identified in relation to these processes. What is more, the CObIT
processes already will cover issues such as cost management, definition and
monitoring of service level agreements and the like. Last but not least, using
CObIT will assure coverage of all IT governance areas defined by the IT
governance institute
6
.
Introducing the proposed European IT governance structure as sketched above will
be a sensitive and most likely gradual process, as it will change responsibilities and
activities of parties involved. This will not be an easy task as little guidelines are
available on how to approach this
7
. Therefore it is recommended to follow a
phased approach for its implementation, as depicted below.
5
[IT governance institute, 2007]
6
[IT governance institute, 2003]
7
[John Ward and Joe Peppard, 2002]
Scale
economies
Control
of standards
Critical mass
of skills
Unresponsive
No BU ownership of systems
No BU control of central
overhead costs
Doesnt meet every BU needs
User control
IT pri orities
BUs have
owner ship
Responsive
To BU needs
Excessive overall
cost to group
Variable standard of
IS competence
Reinvention of wheels
No synergy
Pooled
experience
Synergy
Functional IT
leadership
Group-wide
perspective
Decentralised IT Centralised IT Federal IT
LISDs
Smaller
distributors
ISD
Five years of IT management improvement
Kees Trommel; IT Governance in Europe
- 13 -
Recommended phased approach towards the new IT governance structure
Once commitment has been granted, phase 1 should start with the re-organisation
of ISD, with the aim to shift focus from operational to tactical and strategic
activities, such as the formulation of the companys IT strategy. In parallel, quick
wins should realise obvious benefits. What is more, it should also prove the new IT
governance structure in which a number of IT activities can be safely handed over
to ISD.
The final phase entails the full-scale realisation of the new IT governance structure
in which numerous activities are to be executed. Obviously, the implementation of
CObIT is the most extensive and difficult task but, as argued above, also very
important as the oncoming business challenges require quite a different approach
towards the companys IT in Europe.
References
Stephen L. Hodgkinson, The role of the corporate IT function in the federal IT
organisation,
In: Information Management the organisational dimension, Oxford University
Press, 1996
Michael J. Earl, Brian Edwards and David F. Feeny, Configuring the IS function
in complex organisations, In: Information Management the organisational
dimension, Oxford University Press, 1996
Joe Peppard, Information management in the global enterprise: an organising
framework,
In: European Journal of Information Systems (issue 8, pages 77-94), 1999
Anton Joha, The retained organisation after outsourcing (chapter 6), Master
thesis Faculty of Technology, Policy and Management, Delft University of
Technology, 2003
IT governance institute, CObIT framework (4
th
edition), www.isaca.org, 2007
IT governance institute, Board briefing on IT governance (2
nd
edition),
www.isaca.org, 2003
John Ward and Joe Peppard, Strategic management of IS/IT: organising and
resourcing,
In: Strategic Planning for Information Systems (chapter 8), Wiley, 2002
Phase 0
- commitment -
Phase 1
- foundation -
Phase 2
- quick wins -
Use CObIT to implement
IT governance structure
Promote synergistic
behaviour, cooperation
and standardisation
Centralise ERP of bigger
distributors
Phase 3
- full implementation -
Reorganise
ISD
Formulate
IT strategy
Communicate
IT strategy
Discuss IT services
smaller distributors
Centralise
Italian ERP
Define SLAs
with distributors
Build and explain
business case
Request approval
of top management
Five years of IT management improvement
Kees Trommel; IT Governance in Europe
- 14 -
Reflection by the author
Reflecting on the thesis recommendations and the anticipated outcome
cannot be performed without mentioning the following influencing factors:
Between 2004 and 2006 the companys business structure in Europe has
been drastically changed. In short, the company took over ownership and
planning of European inventory and related logistic operations. This
transition was in many aspects very complex as longstanding business
rules were redefined and responsibilities shifted.
At the beginning of 2006, the companys Japanese headquarter was
subject to legal investigations, alleging that products were exported that
could be used for military purposes without proper authorizations. In the
aftermath of this investigation, control and compliance procedures were
rigorously implemented worldwide.
In 2007, the company acquired a majority shareholding in two key
distributor organisations. What is more, the company itself merged its
several legal entities into one
The first factor directly relates with one of the implementation issues
addressed in the thesis i.e. that the pace of the companys transition process
will have a knock-on effect on the pace of the implementation of the proposed
IT governance structure. This has proved to be right. The complex and slow
transformation of the companys business structure required much ISD
involvement and resources.
The second factor also heavily determined the IT agenda several years.
Obviously, it required changes in IT applications in order to ensure that
business procedures were made compliant with all existing rules and auditing
guidelines. Concluding, the third factor also had an obvious influence on the
activities on ISD. Both factors required activities having an internal and
operational focus.
When looking back, it must be concluded that only few recommendations
were partially executed. The implementation project never really took off as
the company and its top management clearly had different priorities. The
suggested reorganisation of ISD was only executed for the operational
activities and still ongoing. The planning department is not reinforced.
Furthermore, although generally accepted, the companys IT strategy
remained a set of hypotheses. The centralisation of the Italian ERP is also far
from finalised.
However, the climate is changing. The new companys business structure is
now stabilised with standardised business procedures and applications. This
situation, together with the fact that in the current economic downturn several
LISDs have requested ISD for extensive support and even central hosting of
their ERP application, could after all lay the foundation be to implement the
proposed governance structure.
Five years of IT management improvement
Kees Trommel; IT Governance in Europe
- 15 -
Reflection by drs. R.G.M Angermann, division manager IS
When reflecting on the implementation of IT governance as described in the
thesis, the reality within the company has shown that it is very difficult to get
buy-in and support from local management and LISDs for the proposed
direction for IT in Europe. Also, support of the global IT head quarters has
been limited so far.
First of all, LISDs report to the local finance and administration (F&A)
function. Timely financial information to the local top management and to the
company is the most important trigger for IT activities of LISDs. European (IT)
projects initiated by the company are only actively supported when it
concerns F&A related issues.
Next to that, F&A management does not always share the companys target
with local (LISD) staff. There is much hesitation to do this as one is afraid that
experienced LISD staff might leave that will harm support to the local
business.
What is more, LISDs have started projects with the approval of local top
management. ISD was either not informed at all or at a very late stage.
Amongst others, this concerned a replacement of the companys DMS system
with a local solution and a feasibility study for a new financial package. If
possible, the company stopped these local projects.
The current economic downturn is affecting the companys business in
Europe and also world wide. The global head quarter therefore has instructed
all subsidiaries to cut expenses and postpone all investments, in the light of
the expected economy recession. This is obviously also influencing and
slowing down IT activities.
Without a doubt, the proposed IT governance structure is the right direction
for the companys IT in Europe. However, the above has sketched several
major obstacles in implementing the proposed IT governance structure in
Europe. The obstacles cannot all be removed instantly; this requires a step-
by-step approach that adheres to the companys culture when changes of this
magnitude are implemented. It does however not alter the fact that the
recommendations and the phased approach proposed in the thesis are valid.
On the contrary, they are still very much applicable.
Five years of IT management improvement
Kees Trommel; IT Governance in Europe
- 16 -
Five years of IT management improvement
Jacco Schonewille; A structure creating transparency between business and IT
- 17 -
A STRUCTURE CREATING TRANSPARENCY BETWEEN
BUSINESS AND IT
Jacco Schonewille MITM is CIO within Norfolkline
and member of the executive team. Before he worked
for Baan Company. Jacco got his Master of IT
Management in 2004. Currently he is responsible for
a major outsourcing project and an application
replacement programme. Outside Norfolkline he is
frequently asked to perform presentations and
training in the IT domain. He is maried, has 4 children
and loves to talk about IT Management. Finally he is
performing a PhD research via TU Delft.
The phenomenon business / IT alignment is on the agenda of business and IT
executives for many years; and for good reasons, because a proper alignment
between business and IT is a prerequisite for creating business value from IT.
However, this article will take a different view on the topic and presents a
description of a transparency structure that was developed as an attempt to make
business / IT alignment measurable and by increasing transparency also improve
the alignment itself. It offers a combination of existing theories and frameworks to
implement processes and best practices that will make it happen. We argue that
transparency will be increased within a company if the process is followed and the
framework used.
Background of the study
Many people have some theoretical and practical knowledge of IT management.
However, they often have questions about the validity and effect. Reasons for
these questions are that much of what you do and design is generic, and
applicable to other enterprises and IT environments. So the initial consideration
behind this study was the question about the availability of a framework that could
help executives to start an IT governance improvement process. IT governance is
a term that is widely used, with many meanings and interpretations. To me, it is the
start of everything you do in IT: ensuring you know what to do (the goals should be
clear) and how to achieve it (the way should be clear). We argue that the mission
of an internal IT organisation should be to add value to the core business of an
enterprise. Being an internal IT provider and using that position to create an
isolated domain without aligning with the business is not acceptable. Thus an IT
department cannot work in isolation because in todays business IT is a
prerequisite to support and enhance the business operation demanding a proper
alignment between business and IT.
Five years of IT management improvement
Jacco Schonewille; A structure creating transparency between business and IT
- 18 -
The Transparency Concept
To address this issue, a structure was developed to improve the alignment
between Business and IT by increasing the transparency. Transparency is defined
as: The state of the Processes, People and Technology in the IT governance
domain, determined by the level of explicitness, openness, simplicity and clarity.
In our opinion very little can be done to improve the alignment process unless
transparency is increased. The proposed structure focuses on increasing
transparency by explaining what to do, and how to do it. It shows how IT
Governance can help IT to better align with the business at all levels, and how the
various theories and methodologies can be related to a specific enterprise. It also
identifies potential problems in achieving this alignment and explains what an
improvement in transparency would mean to the various stakeholders.
Recommendations are given based on various frameworks and public domain
models available like COBIT, IPW, ITIL and PRINCE2, and how they relate to
transparency. The transparency concept exists of two elements. First the
transparency framework, and secondly the transparency process steps. The two
elements will be discussed in the following paragraphs.
The Transparency Framework
The developed structure contains a process with predefined steps that should be
followed, and a framework to assess and increase transparency. An important
element in the concept of transparency is the question of how transparency can be
measured. Once answered, we also have guidelines on how transparency can be
increased, as the only way to determine if transparency is increasing or decreasing
is by measuring the current and new status based on predefined criteria. The six
transparency criteria used within the framework are:
Completeness (What?): The criterion Completeness concerns knowing what
information you have access to and how that is determined and evaluated.
Justification (Why?): determining transparency is about assessing the reasons
why. This may be one of the most important criteria because it is the justification
of the effort, cost or investment.
Timeliness (When?): The fact that information is provided is not sufficient, it is
also important to give that information at the right time. This is about planning
and allocation.
Simplicity (How?): Reducing complexity is an important step in increasing
transparency. This criterion will determine: how easy it is; is the message
simple; can it be explained in a clear way; is it easy to use etc.
Accessibility (Where?): The Accessibility criterion is about the ease of finding
the relevant information or resources. Is information accessible in a format and
language that the stakeholder can understand?
Responsibility (Who?): The Responsibility criterion is about who is involved
and who is responsible?
Five years of IT management improvement
Jacco Schonewille; A structure creating transparency between business and IT
- 19 -
The figure below presents the transparency framework, using the 6 transparency
criteria that are applied to the Process, People and Technology angles.
Increasing transparency is first of all about determining the important drivers and
needs in the environment where you want to increase the transparency. This is
company specific and cannot be generalised. The next step is to determine the
characteristics of the environment and list the priorities that will determine success
or failure. The next step is how you can measure the transparency to assess
where you stand today, and where you want to be in the future. Based on the
previous steps we are ready to select models, frameworks and best practises that
are best suited to the specific enterprise context. Once the frameworks, models
and best practises are selected, and previous steps are completed, we can start
with the implementation plan. This takes all the findings into account, and puts
them in a structured plan, which also details the choices already made. Once the
project is finished, the transparency needs to be monitored, reviewed and
improved in a continuous cycle. It could be that because of a sweeping change in
strategy and environment, we need to go back to the first step and start all over
again. The following diagram shows the transparency process that should be
followed.
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Jacco Schonewille; A structure creating transparency between business and IT
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The Transparency Process Steps
Ultimately, just speaking about transparency will not add any value to an
enterprise. It should be about providing guidelines and direction for implementing
the transparency concept and communicating it to the business and IT stake-
holders. The study shows that there is a viable business case starting the
transparency process. It indeed shows that by increasing transparency, a better
business / IT alignment is achieved. Based on our findings this improvement is not
only realised because of just measuring the transparency, but also because
involving both business and IT in such a process, will in itself already result in a
better alignment. In the next section we will present some results that we have
achieved within Norfolkline by applying the transparency concept.
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Literature
Bom, J., Meijers, J. and van Herwaarden, H. (2001). Het ABC tot Integraal
IPWTM. tenHagenStam.
Broadbent, M. (2002). CIO Futures - Lead with Effective Governance. ICA
Conference.
Grembergen van, W. (2004). Strategies for Information Technology
Governance. Idea Group Publishing.
Guldentops, E. etc. (2000). COBIT Control Objectives 3rd Edition. IT
governance Institute.
Guldentops, E. etc. (2003). Board Briefing on IT governance 2nd Edition. IT
governance Institute.
Lloyd, V. (2003). Planning to Implement Service Management (IT Infrastructure
Library). OGC.
Macfarlane, I. and Rudd, C. (2001). IT Service Management (version 2.1.b).
ITSMF.
Mack, R. and Frey, N. (2002). Six Building Blocks for Creating Real IT
Strategies. Gartner.
Onna, M. van. and Koning, A. (2003). The Little Prince 2. tenHagenStam
Opsware (2004). The new Business of IT. Opsware Inc.
Pastore, R. (2003). Peter Weill on Managing the IT Portfolio. CIO.com.
Weil, P. and Woodham, R. (2002). Implementing Effective IT governance. Sloan
School of Management.
Weill, P. (2004). Balancing Boundaries with Creativity. Optimizemag.com.
Wetzels, J. (2004). Voorkom teleurstellend ICT-beheer. Computable.
Zee, H. van der. (2004). Nieuwe wijn en nieuwe zakken. Tiem.
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Reflection by the author
Within Norfolkline the transparency framework and process are used in two
different ways. First of all the whole concept was used to test the designed
framework and process. In this exercise we have not actually implemented the
framework and process but it was more a theoretical exercise to apply
research findings. In this exercise we found sufficient evidence that the
assessment of transparency and the process steps included could be applied
to the Norfolkline environment. This was a valuable finding from a scientific
angle but not satisfactory from a Norfolkline angle. Therefore we decided as
second step to use concepts and elements of the transparency framework
and process to increase transparency and by that improve business / IT
alignment within Norfolkline. The Norfolkline context didnt allow for a full
implementation because the state of the business organisation and
cooperation with IT was such that we had to take a gentle and down-to-earth
approach, not even mentioning concepts like business / IT alignment. So, how
did we actually achieve more transparency and improved business / IT
alignment? First of all we performed a survey among business and IT
representatives. The domains that were mentioned as focus areas were: (1)
strategy; (2) finance; (3) organisation; and (4) infrastructure. From this
process the first phase in the transparency process was finished (the scope).
Secondly we created per focus area an assessment sheet with concrete
actions how certain elements would be changed to increase transparency. IT
funding was one of these focus areas and the figure below shows the sheet
that was created.
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The Transparency Assessment and Actions for IT funding
The next step that was completed was the selection of applicable best
practices and the design of a Norfolkline framework. This was finished in 2005
and included in the IT strategy. The final stage was the implementation and
monitoring. Within Norfolkline this was approached in a pragmatic way. We
didnt define a strict project plan; instead we listed the most important things
we wanted to achieve and the people that should be involved in that.
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Concrete results achieved between 2005 and 2007 stemming from the
transparency exercise are:
Norfolkline IT Strategy: as a result of a strategy process, an official
documented IT strategy was delivered and communicated.
New way of looking at IT cost: in 2006 a complete new way of reporting
and charging IT cost was introduced.
IT Governance structure: with the business we defined how the
governance structure should look like and several governance bodies like
an IT board were implemented.
IT Infrastructure: as a result of the transparency process a project was
initiated to ensure the continuity and cost reduction of our infrastructure.
In general we can conclude that applying the transparency concept to the
Norfolkline environment brought significant improvements and new insights in
the business / IT alignment domain. And although the findings were limited to
the Norfolkline environment, we argue that the same results can be achieved
in other environments.
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Reflection by Marit Struijk, Process and Information Manager Norfolkline
Logistics
In the past three years the transparency between business and IT has
improved. This is mostly due to closer involvement of business staff in IT-
projects. Also including business people in the IT governance structure has
lead to a better business/IT alignment and a better understanding on both
sides; IT is getting a better notion of what the business really needs and the
business gets a better grasp of what IT entails. It remains however a slow
process where both parties will need to get used to.
Communication between the two continues to be an important challenge and
is still up for improvement. Especially since communication is not only about
passing on information, but also about how, when and what kind of
information is passed on.
Reflection by Johan Krijgsman, Enterprise Architect Norfolkline Group IT
In my experience, transparency starts with a transparent IT governance
structure. This makes clear who should be involved in decisions about IT and
why, and what the decision taking process is. In Norfolkline, it has taken a lot
of work to establish the right governance structure, and once it was agreed
upon, it took some time until all the relevant people understood it, adopted it
and made it work. And sometimes it is still a struggle. However, in the cases
where people are starting to follow the agreed processes, you do see that the
quality of the decision process, for instance around software selection, greatly
improves, everyone feels more involved and more important aspects are
taken into account. You dont see decisions being pushed through by either
business or IT; you see the start of real cooperation.
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Five years of IT management improvement
Gwan Kho; Improvement plan for ICT infrastructure for a new head quarters
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IMPROVEMENT OF A HIGH RELIABLE AND SCALABLE ICT-
INFRASTRUCTURE FOR THE NEW OPG HEAD QUARTERS
Gwan Kho MITM is Chief Technology Officer at OPG
Group. An international retail and distribution com-
pany for pharmaceuticals and medical supplies active
in seven other European countries and the United
States. OPG is listed on Euronext Amsterdam since
1992. Gwan started in 1998 at OPG Groothandel, a
business unit of OPG Group and worked before that
at BAM/HBG and Initial Hokatex. He is married and
has 2 children. He graduated in 2006.
OPG is developing a new headquarters and this provides the unique opportunity to
design a new infrastructure meeting the high requirements found in the business at
OPG. In the past, infrastructure efforts were fragmented which resulted in high
costs for enabling an interoperable infrastructure and the risks of failure. The
research objective is to design an architecture for an uninterrupted and scalable
ICT-infrastructure. Reliability is necessary for ensuring business continuity and
scalability is necessary as all services will be built on top of the ICT-infrastructure.
This architecture should support the business strategy and is driven by a new
headquarters. Based on the TOGAF architecture method, a blueprint for the
infrastructure based on generic building blocks has been developed.
Artistic impression Facet, new headquarters OPG
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Background and drivers
OPG Group is a retail and distribution company for pharmaceuticals and medical
supplies. The Group is active in three channels: operating pharmacies and
wholesaling (Pharmacies), providing medical supplies for home healthcare and
related services (Direct), and marketing and distributing pharmaceuticals and
medical supplies to hospitals and nursing homes (Institutional). OPG focuses on
the consumer, supplying products through whatever channel the consumer wishes.
As well as being the market leader in the Netherlands, OPG has operations in
Poland, Belgium, Germany, Denmark, Norway, Hungary and Switzerland. The
company employs approximately 7,700 people, about 3,500 of whom work outside
the Netherlands. It was incorporated in 1899 and has been listed on Euronext
Amsterdam since 1992.
OPG trade marks
OPG is an European enterprise which has changed from wholesale to retail over
the past five years and aims at doubling its revenue over the next two years by
means of acquisition. At the moment OPG expanded the number of pharmacies
from none in 2001 to 218 pharmacies in the Netherlands and changed its focus
from wholesale to retail.
The OPG business strategy is customer-centric which is not common in the
healthcare industry because of the complex relation between GP (General
Practioner), insurers and patients. Synergy and economy of scale is generated
within OPG by pursuing a multi channel approach. This approach should lead to
better service to patients and a more cost effective operation. ICT services must be
able to support this business strategy. Desktop services, ERP (Enterprise
Resource Planning) and ICT services like mechanical automation (robots in the
pharmacy) are delivered and maintained by the central ICT department.
To reflect this new strategy with the proper housing facilities, a new headquarters
is being built on a premier location (next to the A2 motorway in Utrecht). The
current location which also was used as a national warehouse until 2002 is too
large to be used as a headquarters only. The new location was selected due to its
location in connection with the travelling distance of employees and the
concentration of the healthcare industry in this area. This already has resulted in
the cooperation between OPG and a new to be built hospital next to the new OPG
headquarters. In the hospital, a polytheek, a public pharmacy combined with a
hospital pharmacy, will be built.
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The relocation, geographically located a few kilometers from the current OPG
headquarters is planned for the fourth quarter of 2009. This new headquarters will
accommodate all current functions and a central Non-IT services and IT/HR-
services departments. This relocation provides the opportunity to develop a new
ICT-infrastructure. At OPG the definition of ICT infrastructure is the physical
hardware used to interconnect computers and users. Infrastructure includes the
transmission media, including telecommunication lines, and also the routers,
switches and other devices that control transmission paths. Infrastructure also
includes the software used to send, receive and manage the signals that are
transmitted.
Facet, OPG headquarters at night
Research objective
To manage the central infrastructure and ensure successful implementation of the
strategy there will be an ICT architecture suited to the needs of the infrastructure
which will be determined in the research. The new ICT-infrastructure is the
foundation of the OPG ICT. The infrastructure should be very reliable and scalable
to facilitate the development of new IT-services. The objective of this thesis is to
design an architecture for an uninterrupted and scalable ICT-infrastructure. This
architecture should support the OPG business strategy and is enabled by the
realisation of a new HQ.
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Architecture
Although defining the architecture for a generic ICT-infrastructure does not seem to
be a major assignment, it will be used as the solid basis for almost all IT-services
and is in this respect a key element to a successful implementation of OPG
strategy. OPG has misjudged issues in this area in the past, as a simple example
can illustrate. There are more than 20 different cabling systems in the current
building which cannot be easily connected to each other. In short the infrastructure
was developed independently from each other, which has resulted in a highly
fragmented infrastructure causing interoperability problems and not meeting the
requirements derived from the OPG business strategy.
For the development of this new architecture, the approach is an architecture
framework. IT supports the business, not the other way around. If IT supports the
business then IT should know what the business is about in order to be able to
support it appropriately.
Models (architecture) are faster and cheaper