Essence of IT Integration in Business Strategic Planning

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					Essence of IT Integration in
Business Strategic Planning
IT History in Business Support

   In   70’s:     IT   was Computational Tools
   In   80’s:     IT   was Operations Support Arm
   In   90’s:     IT   was Business Solution Provider
   In   2000’s:   IT   is Business Strategic Distinction Power



If IT Investment cannot empower business strategic planning
with trusted dynamics, then IT investment is definitely a
“questionable cost”.
Jeffrey Kaplan, [Strategic IT Portfolio Management]
    Business Strategic Planning
       Business Strategic Planning is Dynamic Computed
        Alternative Plans that helps Transforming the
        Environmental Challenges into Opportunities to
        achieve the Business Strategic Goals.

You should be able to:
1.   Forecast the change and evaluate its probability
2.   Identify its impact on the business strategic goals.
3.   Position to transform the change into opportunity.
4.   Trigger a fulfillment action plan in short time.
5.   Refine the action plan as ambiguity level shrinks
6.   Measure the strategic objectives achievement level.
       Strategic Planning Objectives
      Strategic Planning Main Objective is to Maintain the
       organization Ability to Improve its Financial and
       Performance measures under the Environmental Changing
       Parameters.


Samples of financial and Performance Measures:
1. Net Income for the Equity (NIE), Return on Equity (ROE)

2. Revenue-to-Expense Ratio (RTE)

3. Return On Assets (ROA), Return On Investment (ROI)

4. Net Commissions Income (NCI)

5. Total Operating Income (TOI),

6. Total Operating Expenses (TOE)

7. Earning per Share (EPS)

8. Customers Deposits
      Organization STOP
         The most suitable strategy should lead to achieving the
          strategic objectives considering the organization STOP:
          (Structure, Technology, Operations, People)

Possible Strategic Objectives could be combination of products objectives as:
1. Grow vertically or horizontally against probable gains

2. Shrink against high probable loss risks

3. Acceleration or de-acceleration based on risk levels.

4. Transforming business to address customer expectations

5. Balance risk taking within investment portfolio

6. Or other objectives
      IT Projects Portfolio Management
        The most governed model of managing IT
         investment is Project Portfolio Management models
         to screen and prioritize IT projects

IT investment council sets the strategic objectives for the PPM to screen and
    track projects fulfillment:
1. Demand Management

2. Capacity Management

3. Block out unjustified investments

4. Scoring Projects ROI and Prioritization

5. Manage the Portfolio Risks at Enterprise Level

6. Tracking Projects from initiation till ROI is realized
Demand management Cycle
                        SUSTAINED BUSINESS VALUE
              Business
                                                Applications,
 Demand       process
                                                 services,
 capture       needs
                                                 products           IT
                                                                chargeback


       Strategic                     Project
                    Project         Portfolio
       demand      portfolio       Management




                                                       management



                                                                       management
                                                        Resource



                                                                        Financial
       Tactical                      Service
                   Service          portfolio
       demand      catalog         management

                          Application
                           portfolio
                          management
    Operational
     demand                          Asset
                                   management
       Strategic Planning Modeling

            Strategic Plan is Weighted Decision Tree.

Action Plan (Cost, Duration, Risk Value)
                                                                 AP4(C4,D4,R4)


                                  AP2(C2,D2,R2)
                                                                                    G1
                                                   P1   Pr2
                                                                 AP5(C5,D5,R5)


            AP1(C1,D1,R1)
P0    Pr0                   Pr1
                                                                                    G2
                                                                 AP6(C6,D6,R6)


                                                   P2
                                                        Pr3
                                   AP3(C3,D3,R3)
                                                                                    G3
                                                                 AP7(C7,D7,R7)




     Position           Goal                       Action Plan        Probability Calc.
      Strategic Plan Positioning

         Strategic Planer should position Correctly the
          organization STOP to achieve cheaper and faster
          opportunities catching.

Ask the questions that improve your position:
 How the organization Structure can absorb changes?

 How long the structure takes to react to the change?

 How to build Technology that gives me advantage?

 How to minimize the Operations impact?

 How to prepare People agility to catch the opportunity?

 How long it takes to realize the goals after the catch?

 How I can reposition in a better STOP after the catch?

 If I miss, can I catch an alternative opportunities?
      The Opportunity Qualifications
         A business opportunity should be qualified by its
          value, contribution to strategic goals, timing,
          realization duration, and risks of regulations,
          competitor’s positioning and market acceptance.

Avoid attacking false and dead opportunities with:
 market does not need it yet.

 ROI is suspicious and cost is high.

 Regulatory grounds are shaky.

 Competitors are ready to eat most of it.

 Will lead you to a wrong position.

 Beyond your ability to realize its value within reasonable time limits.
Why IT can give you better hits?

The right IT Infrastructure should help you in:




1.   Maintain business fitness
2.   Improve your positioning
3.   Hit the opportunities of maximum ROI
4.   Reduce wasted energy and cost
5.   Repositioning will be easier
6.   Reduce the risk value in faulty hits
      IT Improves Organization STOP
         IT should unleash business innovation in strategic
          planning, monitoring opportunities, scoping
          solutions and realizing target benefits.

IT foundation should secure the organization’s position by:
1.   Strengthen organization structure to bridge between functions,
     eliminate ownership conflicts and fill gaps.
2.   Speed up time to market and enhance solution offering
3.   Expand parallel opportunities handling bandwidth
4.   Minimize operating cost and adaptation impacts
5.   Cut people cost and overheads in reacting to a change
6.   Improve measurability of business performance
7.   Improve reporting on strategic objectives realization
      IT Standards Is Time and Cost saving
         IT reaction time is relative to standardization level of
          the organization that allows products to integrate
          efficiently, people to communicate easily, vendors to
          engage smoothly and measurements to reflect truth.

IT standards are including:          IT standards References:
1.    Processes,                          CMMI, PMI, ITIL
2.    Communications                      EMV, XFS
3.    Interfaces,                         ISO, XML
4.    Applications,                       J2EE, Web Sphere,
5.    Operations,                         PCI DSS
6.    Databases                           Oracle, Sybase, SQL
7.    Security                            VISA & MasterCard
8.    Infrastructures                     UNIX, WINDOWS,
    Business Process Modeling
   For effective business-IT alignment, BPM is a new
    practice that extend the business requirements and
    systems analysis into common meta-data presentation
    layer, common transaction flows, common business
    rules and operations fulfillment terms and conditions.

    The traditional business analysis practice are subject to change and
    the business should work in sting his global rules, operations
    requirements and systematic flows.
    Business intelligence is the outcome of the defined BPM
    implementation on an IT dynamic Infrastructure. Together business
    leaps to higher level of solution offering freedom dimensions.
     Strategic IT Infrastructure Components
       IT infrastructure should be aligned with business
        strategic plans. The cost should be recovered over
        multiple opportunity's achievements.

Strategic IT Infrastructure modules are integration of:
1.   Networks that gives the banks wide reach
2.   Hardware that expands with volumes growth
3.   Uniform security layer that prevents cracking risks.
4.   Databases that maintain reliable business information.
5.   Transaction Monitoring Middleware
6.   Applications that maintain homogeneous integrated links and avail
     reliable encapsulated business services.
7.   Self service channels that attract customers use.
8.   MIS system that presents facts, trends analysis, business
     segmentation and probability calculation.
Strategic IT Infrastructure Components



     BS1          BS2      BS3      BS4    BS5      BS6
                  Transaction Monitoring Middleware

    Operational        Transactional          MIS

                  Integrated Applications     Standard Interfaces




           Unified Security and Access Layer

   Personal H/W          Central H/W       Channels H/W

                    Voice & Data Networks
   Service Oriented Architecture (SOA)

      Applications Architected to integrate business blocks
       in a flow that offer an integrated business service.
How SOA units are built:
 Build IT applications functional blocks with standardized interface
  and well defined functions.
 List the application blocks in a catalogue with documented business
  logic description.
 Use workflow engine to integration these blocks in a structured
  business flow. This flow is providing a total business service.
 Load these business services into a Transaction Integration Engine
  that controls the services execution.
 Request the service by message through the Enterprise Service Bus.
   Business Services

      How a business service look like?

A business service should have:
 Interface definition in form of input/output message format,

 Security validation, Access rights verification and data formatting
   checks
 Business rules and risk controls validations

 Business workflow of integrated steps each is a functional application
   block (could be from different applications)
 Checking on execution results (error checking)

 Service Performance measures logging
   Business Services is Assembling Game
       Reuse concept reduces overheads and cut time to
        market tremendously.
                                 S(n) Service Workflow
Functional Blocks Repository     Integration Vector

                 Formatting
  FB2     FB1

                                                         Workflow Engine
                  Validation
  FB3     FB4

                 Verifications                                  S(1)

  FB5     FB6     FB7      FB8                           S(2)
                                               LOADING           S(3)
                 Processing
                                                           S(n)
  FB9     FB10      FB11


   Logging and Error Handling
   FB12    FB13         FB14
Building Functional Blocks
   Applications should maintain a core for operational
    purpose and functional blocks for service offering.
        What is a functional block:
        1.  Checking customer credentials
        2.  Checking account balance
        3.  Checking limits for product/channel
        4.  Debiting/crediting account
        5.  Processing Check book request
        6.  Logging audit trail record
        7.  Ordering check book
        8.  Applying fees
        9.  Sending SMS notification to customer
        10. Etc.
Services should be Dynamically Built
   If business has the right application functional
    blocks, building business services should be cut and
    paste process, test, refine and implementation.

         What is a service Integration Vectors:
             Dynamic workflow structure that define for a
             specific service what is the sequence of executing
             the application functional blocks, how to validate
             their execution success and to take a decision on
             the execution results to commit the updates or
             revert back then to respond back to requestor with
             standard response message.
Enterprise Service Bus (ESB)
   The Engine that has the responsibility to handle the
    messages between SOA components and connect the
    various types of middleware, meta data depositories,
    registers and interfaces. Workflow Engine will execute
    the services according to its designed flow.
     Derived Value from IT Investment
         In 2002, “Mainstay” surveyed 450 companies across
          financial, energy, health care, manufacturing , retail,
          products and Telco on IT value of their projects. The
          sample was from USA.


1.       Optimizing IT processes derived ROIC (return on Invested
         Capital) of 10%-15%
2.       Reconstruction of Core Products derived ROIC of 2%-3%
3.       Inventing new IT capability to enforce business strategic
         solution modeling achieved 10 folds ROIC
  Business direct benefits
     Business under this infrastructure has the freedom
      to attend an opportunity with minimal IT
      development work.
How does SOA help business?
1.  It helps business focus on business rules and business modeling of
    the services
2.  It cross between applications and environment to integrate
    functional blocks that fulfill one integrated service
3.  It helps business construct, reconstruct and generate new services
    in simple and quick process.
4.  It helps business avoid large amount of testing as the functional
    blocks are well tested.
5.  Transfers human knowledge into functional blocks.
   Channels Integration Objectives
      Once Customer passes engagement stage he/she prefers reliable
       self-services and self-services are cheaper than attended
       services.
      So you should offer more self-services because it make business
       sense.


SOA technology is most fit for channels integration.
1.  Quick to integrate as channels are mostly use message base
    integration.
2.  Secure consistency of handling the same service
3.  Most effective to address volume expansion
4.  Protects the infrastructure under load sudden surges.
Sample of Samba Financial Group Awards

Euro money: "Awards for Excellence"
Best Bank in Saudi Arabia             1993,1994,1995
                                       1996,1997,1999
                                       2000,2001,2002
                                       2005,2006,2007
Best Private Bank in Saudi Arabia       2004, 2005

Best Debt House in Saudi Arabia           2005

Best Treasury Bank in the Middle          2006
   East
Best Private Bank for High Net            2007
   Customers ($10-$30Million)

Best Private Bank for Entrepreneurs       2007
Sample of Samba Financial Group Awards

Global Finance: "Best Emerging Market Bank"
Best Consumer Internet Bank in the
Middle East & Africa                               2006, 2007

Best Investment Bank in the Middle                 2006, 2007
East & Africa
Best Integrated Consumer Bank Site                 2004, 2006
in the Middle East & Africa

Best Integrated Consumer Bank Site                    2005
in Saudi Arabia
Best Corporate Online Cash Mgt. in                    2006
the Middle East & Africa

Best Corporate Trade Finance Services                 2007
in the Middle East & Africa

Best Bank in Saudi Arabia               1999, 2000, 2001, 2002, 2006, 2007
Sample of Samba Financial Group Awards

The Banker: "Best Banks of the Year"
The Banker Technology Awards
                                            2006, 2008

Bank of the Year in Saudi Arabia       2000, 2001, 2002, 2005


Deal of the Year in Saudi Arabia            2005, 2007


Best Corporate Bank in Saudi Arabia            2004
(Banker Middle East Awards)




Bank of the Year for the Middle East           2000
    Case Study


   Initial Public Offering Straight
    Through Processing (IPO-STP)
Samba was awarded the Banker’s Magazine of BEST BANK
TECHNOLOGY in 2006.

Samba has innovated the first worldwide straight through
model for IPO across all the channels from Customer to the
IPO Floatation Manager on-line/ real time/ on all channels.
    IPO as a Challenge

   2004 STC IPO was a new business that required a
    large number of staff during few weeks. Cost of
    ownership is much higher than revenues


       Regulator mandated very complex process. Application
        checking, signatures, copy of national ID, listing of family
        entitled members.
       Samba managed this challenge by recruiting temporary
        resources (+200) in equipped tents.
       Customer satisfaction was poor and cost was very high
        IPO as an Opportunity

       2004 Etisalat IPO was a business opportunity to
        collect customers data and come closer to the
        strategic objective of expanding the customers base.
   Samba introduced the e-application that allows the subscriber to fill
    application online then go to branch to verify and complete the
    subscription.
   Convinced the regulator to accept e-application.
   Then Samba built customer database that worth the effort. We cut few
    minutes and few SAR as well per transaction.
   SMS was used to notify the customer of the allocated shares.
   The IPO was covered 51 folds (51 Billion SAR)
    IPO is a strategic IT alignment

   2004-2005 business recognized that the IPO will
    continue and IT should put a solution to process on
    Channels

       A new model was set that cover Samba as a receiving bank
        and as floatation manager.
       Infrastructure to interface with the regulator and all other
        banks in case of being FM were established.
       Service model through all the channels were presented to
        the regulator while building was on going. Risk of change
        was high.
       Passed the solution to other banks to avoid shade of
        monopoly.
    IPO achievement

   Samba has successfully participated in more than 25
    IPO and Right Issues as a receiving bank or IPO
    manager since the first IPO in 2004.

   Reduced branch transactions from 100% to 10%
   Reduced average transaction cost by 75%.
   Reduced resources involved from 240 to 5
   Reduced average transaction time from 12 min to 2-3 sec.
   Capability to participate in multiple IPO(s) concurrently.
   IPO helped expand accounts base significantly
     Technology Alignment in IPO
     Business had the right vision and strategy and technology
      enforced the plan in gradual steps that improved the
      strategic position to reach together the business goals


1.     Provided the back end and branch service ahead of the first
       IPO
2.     Absorbed the volume by expanding the network and the
       number of processors in a very short time
3.     Provided e-application to captured subscribers master data in
       database
4.     Used the opportunity to revalidate the data based on provided
       documentations
5.     In two months Internet was ready for STP IPO
6.     Two months later all channels offered NCCI IPO.
Q&A



      Thank you

				
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