IT MANAGEMENT SKILLS - ITMS

TOPIC 2 - SKILLS FRAMEWORK & IT

PERFORMANCE ASSESSMENT FRAMEWORK

Dr. Huy Nguyen

ITMS John von Neumann Institute - Vietnam National University IT

HoManagement
Chi Minh City
Skills
ITMS

Agenda

1. Skills framework

2. IT performance assessment framework

IT Management Skills 2
ITMS

Agenda

1. Skills framework

2. IT performance assessment framework

IT Management Skills 3
 ITMS - SKILLS FRAMEWORK & IT
PERFORMANCE ASSESSMENT FRAMEWORK
Skills Framework

ITMS John von Neumann Institute - Vietnam National University IT

HoManagement
Chi Minh City
Skills
ITMS

Skills framework

• Generic skills

• Business skills & methods

• Enterprise Architecture skills

• Portfolio, Program & Project Management skills

• IT General Knowledge skills

• Technical IT skills

• Legal Environment skills

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Skills framework (cont.)

Generic skills IT Manager IT Leader

Leadership and problem solving 3 4

Teamwork, interpersonal and IT team building 3 4

Communication and conflict management 3 4

Stakeholder management 3 4

Risk management 3 4

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Skills framework (cont.)

Business skills and methods IT Manager IT Leader

Structures and IT related roles in organization 2-3 3-4

Budget management for IT activities 2-3 3-4

Business analysis 2 3

IT strategic planning 2-3 3-4

Business culture and performance 2 3

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Skills framework (cont.)

Enterprise Architecture skills IT Manager IT Leader

Business modeling and business process design 2 2-3

Role design, organization design, data design,

2 2-3
application design, and services design
Systems integration, systems behavior, and
2 2
business interworking

IT industry standards 2 2-3

Architecture principle design, architecture views

2 3
and viewpoint design

Building block design and solutions modeling 2 2-3

Benefits and cost analysis in IT activities 2-3 3-4

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Skills framework (cont.)

Portfolio, Program & Project Management skills IT Manager IT Leader

IT portfolio, program and project management 2-3 3-4

Manage scopes and requirements of IT projects and

2-3 3-4
programs
Manage and optimize IT investment (CAPEX) and
2-3 3
operation cost (OPEX)
Time management 3 3-4

Manage and improve quality of systems and services 3 3-4

Change management 3 3-4

Value management 3 3-4

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Skills framework (cont.)
IT General Knowledge skills IT Manager IT Leader
IT application development methodologies and tools 2-3 2-3

Programming languages 2 2
Brokering applications, information consumer
2-3 2
applications, and information provider applications
IT infrastructure, networks, and systems 2-3 2

Storage management 2 2

Web-based services 2 2
Commercial-Off-The-Shelf (COTS) products,
2 3
Software-as-a-Service (SaaS) products
Service level agreement 3 3-4

Management utilities 2-3 3

Enterprise continuums 2- 3 3

Migration planning 3 3-4

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Skills framework (cont.)

Technical IT skills IT Manager IT Leader

Software engineering 2-3 2

Configuration management 3 3

Security and business continuity 3 3

Systems and network management, network

services, operating system services, and 3 2
communications infrastructure and services

Data interchange and data management 2 2

Graphics, image and user interface 2 1-2

Transaction processing and international 2-3 3

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Skills framework (cont.)

Legal Environment skills IT Manager IT Leader

Contract law and management 3 3-4

Commercial law, procurement law and bidding

3 3-4
law

Fraud and data protection 2-3 2

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Agenda

1. Skills framework

2. IT performance assessment framework

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Agenda

1. Skills framework

2. IT performance assessment framework

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 ITMS - SKILLS FRAMEWORK & IT
PERFORMANCE ASSESSMENT FRAMEWORK
IT Performance Assessment Framework

ITMS John von Neumann Institute - Vietnam National University IT

HoManagement
Chi Minh City
Skills
ITMS

Maturity and IT Portfolio Management

1. IT as Service Performance

2. IT as Business Enabler

3. IT as a Business within the Business

4. Full Integration of IT in the Business

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Business - IT Alignment

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Maturity and IT Portfolio Management

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IT Investment Management Maturation Model

1. Creating investment awareness

• Expenditure of money on IT without establishing sound
investment processes
2. Laying the foundation for investment
• Formation of investment committees
• Gaining insight into IT projects
• Inventory of IT assets
• Determination of the business needs for IT projects
• Selection of proposals

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IT Investment Management Maturation Model (cont.)

3. Compiling a complete investment portfolio

• Coordination of authorities given IT investment committees
• Establishment of selection criteria for the portfolio
• Analysis of investments
• Development of the portfolio
• Gaining insight into portfolio performance
4. Improving the investment process
• Post implementation interviews and feedback
• Evaluation and improvement of portfolio performance
• Management of changes to system and technology
5. Employing IT to achieve strategic results
• Benchmarking of investment processes
• Strategic modification of business based on IT
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CFFs for IT investment

• Introducing IT transfer charging without any clear understanding of (or
communication of) its objectives, how it is going to achieve these objectives
and the difficulty, complexity, costs and risks associated with it;
• Not allocating the entire cost base to the services sold or cross-subsidizing
services or simply not allocating costs accurately to services, resulting in
users not having a true picture of the cost of service provision;
• Not making provision in the pricing structure to fund such costs as
infrastructure refresh, product development, research, disaster recovery
infrastructure, etc;
• Defining chargeable services in such a way as to be ‘easy for IT to measure’
rather than defining them in an ‘end-to-end’ way that relates to the user’s
experience of the service;
• Creating costing and pricing models that are generally not understood by the
business users;
• Setting tariffs that under- or over-recover IT costs.
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CFFs for IT investment (cont.)

• Frequently materially changing tariffs to try to meet cost recovery targets;

• Not reflecting the fixed nature of certain costs in the tariff structure;
• Billing the business at such a high level in the organization that the actual
user is still not incentivized to change behaviour;
• Billing users for IT services without giving them the choice to purchase their
services elsewhere or giving them effective levers;
• Not directly linking price levels to service levels;
• Failing to validate and justify internal charges by benchmarking prices against
other comparable organizations and/or ESPs.

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CSFs for IT investment

• Agree and state the objectives clearly;
• Implement a ‘pricing model’;
• Keep the pricing model simple;
• Keep the bills simple;
• Ensure that the prices/tariffs set are precisely those that appear in project business
cases;
• Implement timesheets for development staff and record the actual costs of projects;
• Package products and services in such a way that they are both ‘end to end’ and
clearly understandable to the user;
• Make users directly accountable for the costs ‘billed’;
• Ensure that different cost vs service level SLA packages are offered to users;
• Make prices ‘honest’;
• Don’t be tempted to sell IT services externally;
• Don’t ‘financially’ penalize IT for failure to achieve SLA targets;
• Don’t make service sourcing decisions based solely on comparing internal and
external tariffs.
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Balanced Scorecard

Financial

Mission,
Internal
Vision
Customer Business
and
Processes
Strategy

Learning
and
Growth

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Activity-Based Costing

• Itemize all direct costs and concretely attribute them to

business activities instead of simply apportioning them
(TCA - Traditional Cost Accounting)
• Support price fixing for items such as IT services

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Activity-Based Costing (cont.)

• ABC Process Model:
Cost
Objects:
Resource Activity Cost
Products,
Cost Drivers Drivers
Services,
Customers

Activity 1 Direct Material

Cost Costs
Category 1 Cost
Activity 2
Objects
Direct Personal
Cost Costs
Category 2

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Economic Value Added

• Take the costs of capital acquisition into consideration

• Cash flow in EVA is involved with NPV but not any
specific variants and metrics as NPV or IRR

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Alignment of BC, EVA and ABC

BC - EVA
Nonfinancial
Determiners
of Value

ABC - BC EVA - ABC

Value
Operational Value
Planning and Measurement
Value of Products,
Creation Customers,
Initiatives Processes
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Performance Driven IT Management

1. Developing an actionable business and IT strategy
• Develop an effective actionable IT strategy
• Implement and sustain the IT strategy
• Focus on capability improvement
• Consider both internal and external business drivers
2. Developing business performance targets
• Apply for overall and specific investments
• Measure benefits against defined, quantitative criteria
• Validate benefits realization and mitigate risks
3. Investing for results
• Develop business case for a change or operations initiative
• Estimate costs, benefits and risks to make an investment decision
• Rank the investments by effective ROI
• Create an evolving transition plan with new capabilities and
business performance improvement
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Performance Driven IT Management (cont.)

4. Achieving investment results
• Revalidate the business case
• Monitor the project’s progress to ensure the achievement of
the expected ROI
• Assess projects against the business case to narrow process
assessments to proactively mitigate risk
• Validate the project by its viable, cost-effective and enhanced
performance
• Collect lessons learned from differences between the
business case analysis and actual results
5. Realizing the benefits and closing the strategy loop
• Compare the results and the target values
• Feed back into the next round of strategic planning
• Document and share best practices
• Improve the process for the next success
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Optimizing business value-added

• Optimizing IT function alignment:
• Optimizing the strategic alignment of the IT function with the business it serves;
• Optimizing competitive advantage:
• Optimizing the identification of IT opportunities that will yield the highest
business competitive advantage;
• Optimizing portfolio alignment:
• Optimizing the alignment between the products of the IT function and the priority
needs of the business units that they support;
• Optimizing portfolio value:
• Optimizing the value (alignment/cost/benefit/risk) of the planned project portfolio;
• Optimizing value delivery:
• Sustaining the value-adding imperative throughout the process of developing
projects in the portfolio;
• Optimizing benefits realization:
• Optimizing the realization of promised project benefits.
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Optimizing cost efficiency

• Optimizing sourcing and purchasing cost efficiency:

• Optimizing the sourcing of IT services and optimizing purchasing
efficiency, the supplier mix and contractual terms;
• Optimizing technology and infrastructure cost efficiency:
• Optimizing the utilization and efficient use of hardware, software and
office space/facilities;
• Optimizing organization and people cost efficiency:
• Optimizing the staff resourcing of projects and teams;
• Optimizing activities and sevices cost efficiency:
• Rationalizing, and improving the efficiency of, IT activities and services.

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Optimizing cost efficiency (cont.)

• CFFs for cost efficiency improvement programme:

• Adversarially attempting to take costs out of an IT function that is being run ‘as an ESP’,
because their costs are also their profit/revenue when they bill it to the business;
• Lack of stakeholder buy-in;
• Lack of a really compelling need for change, or, more typically, there is a compelling
need for change but it is largely unrecognized or poorly articulated;
• Lack of senior management sponsorship;
• Lack of business management buy-in;
• Allowing too much special pleading;
• Taking too long;
• Allowing too much smoke and too many mirrors;
• Unrealistic expectations of the speed of cost reduction delivery;
• Allowing bun fights over who identified particular savings and therefore which savings are
attributable to the programme;
• Setting an unrealistic burden of proof on the project team;
• A conservative, complacent, stonewalling corporate culture;
• A corporate culture that rewards successful political game playing more than actually
adding value to the business.
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Optimizing cost efficiency (cont.)

• CSFs for cost efficiency improvement programme:

• Get explicit, demonstrable sponsorship for the programme at the highest level possible;
• Get absolute clarity on the budget baseline from which savings will be estimated;
• Make it the responsibility of the IT management team to identify and deliver the savings;
• Put your best people on the programme team;
• Keep the team continually focused on the opportunities that appear to be offering the
highest payback;
• Define and implement a clear communications plan, stakeholder management plan and
risk management plan;
• Use external benchmarks;
• Don’t start with a ‘blank sheet of paper’, identifying opportunities from first principles;
• Gain stakeholder ‘buy-in’ to developing opportunities as you go along;
• Don’t get hung up on ‘ownership’ of an opportunity;

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Optimizing cost efficiency (cont.)

• CSFs for cost efficiency improvement programme (cont.):

• Agree and get documented the definition of a ‘quick win’;
• Get clarity on whether or not avoided or deferred spend can be counted towards the cost
saving target;
• Get agreement on the assumptions that are to be made on trend issues;
• Get explicit agreement at the outset on the period over which savings will be averaged;
• Get explicit agreement at the outset on the format and content of the deliverables of the
programme;
• Apply the ‘principle of materiality’ to the work;
• Be prepared to ‘make deals’;
• Establish clear, independent responsibility for the measurement of savings actually
realized;
• Think carefully before you try to strike a ‘contingent-based fee’ deal with any consultants
brought in to assist;
• Remember that ‘turkeys don’t vote for Christmas’ and conduct the cost reduction
programme correspondingly.

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Optimizing cost efficiency (cont.)

• CSFs for realizing cost reduction with ESPs:

• Negotiate from a position of strength, in which you clearly understand the supplier’s
commercial agenda;
• Ensure that you have a team of first class specialists with a proven track record in successful
IT outsourcing;
• Understand the scale of opportunities for cost reduction available to the supplier if he wins
the contract;
• Tell the suppliers bidding for the contract anything they want to know except your current
costs;
• Ensure that you have a clear understanding of how you would expect your IT cost base to
change over the life of the contract if you did not outsource;
• Understand exactly what is in and out of scope of the services to be provided;
• Critically review the supplier’s standard contracts and SLAs to ensure that proper provision is
made for monitoring the costs of service provision against the service levels provided;
• Separate out transition costs and ‘recharges’;
• Consider a joint venture approach to help retain some control over the outsourced service;
• Don’t be bulldozed into signing the contract until all the key service levels and the detailed
responsibilities matrix are completed and signed off.
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Implementing performance improvement programme

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Implementing performance improvement programme

(cont.)
• Defining the programme:

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Implementing performance improvement programme

(cont.)
• Developing the programme:

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Implementing performance improvement programme

(cont.)
• Implementing the programme:

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Implementing performance improvement programme

(cont.)
• CFFs for performance improvement programme:
• Poor calibre people responsible for designing, making or deploying changes;
• Lack of stakeholder buy-in;
• Lack of a really compelling need for change, or, more typically, there is a compelling need
for change but it is largely unrecognized or poorly articulated;
• Lack of senior management sponsorship;
• Lack of business management buy-in;
• Allowing too much special pleading;
• Taking too long;
• Allowing too much smoke and too many mirrors;
• Creating unrealistic expectations of the speed of benefits delivery;
• Implementing practices that are generally ‘academic’ and commercially unpragmatic;
• Being overambitious and failing to focus on the practices that will really add value, i.e.
‘best practices’, rather than ‘best value practices’;
• A conservative, complacent, stonewalling corporate culture;
• A corporate culture that rewards successful political game playing more than actually
adding value to the business.
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Implementing performance improvement programme

(cont.)
• CSFs for performance improvement programme:
• Ensure that there is absolute clarity on the objectives of the programme;
• Ensure that the programme sponsor clearly articulates the objectives, the benefits and
the compelling need for change to the whole business;
• Ensure that senior IT managers demonstrably commit the time and energy necessary to
make a success of the changes to be implemented;
• Critically assess the openness to change of the existing IT management team;
• Put your best programme manager and project leaders on the programme;
• Staff the project teams with your best people;
• Confront disagreements immediately and actively manage down resistance;
• Conduct a ‘change readiness assessment’;
• Identify ‘process champions’ or ‘change leaders’ across the IT function and make them
accountable for the success of specific process changes;
• Identify the various project stakeholders and make them genuinely accountable for the
realization of the benefits of the programme;
• Don’t run change projects ‘in silos’;
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Implementing performance improvement programme

(cont.)
• CSFs for performance improvement programme (cont.):
• Define clear deliverable and benefit milestones for each project;
• Don’t try to ‘solve world poverty’;
• Be realistic about the level of change that people can accommodate in any given time
period;
• Ensure that new working practices established are pragmatic;
• Test the acceptability and workability of proposed changes in working practices at the
earliest opportunity;
• Don’t try to ‘reinvent the wheel’, use existing ‘off-the-shelf’ solutions;
• Ensure that there is extensive ‘hand-holding’ available to IT staff;
• Ensure that there is extensive QA of compliance with the new processes;
• Monitor and report the success of the programme.

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Measuring success

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IT value transformation

• Triggers for IT value transformation:

• Senior management ‘backlash’ against the IT function;
• A step change in IT service provision;
• A step change in the strategic value of IT;
• A step change in the business competitive landscape;
• A step change in the criticality and visibility of IT services to the end
customer;
• A step change in the need for higher development productivity.

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IT value transformation (cont.)

• Objectives for IT value transformation:

• To help ensure that the IT function and the business are strategically aligned,
so helping to optimize the value that the IT function adds to the business;
• To facilitate the establishment of a more commercially focused demand and
supply relationship between the IT function and the business;
• To help ensure that the limited resources of the IT function are deployed to
deliver the optimum value to the business through effective work demand
management, ongoing value management and management of the delivery of
predicted benefits;
• To help ensure that commercially necessary and sufficient service levels are
provided for business users of the internal IT function (or outsourced ESP)
provided services, so facilitating a more commercial partnership between the
IT function and its customers;
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IT value transformation (cont.)

• Objectives for IT value transformation (cont.):

• To help ensure that all IT services to the business are sourced from the most
cost-effective supplier, whether that be internal or external;
• To help improve the reliability of the delivery of individual projects to budget,
schedule and quality needs;
• To help increase the likelihood of the realization of programme and project
benefits;
• To help minimize the business risks from failing or underachieving projects;
• To help reduce the total systems life-cycle costs and improve the quality,
responsiveness and flexibility of the systems delivery service within the IT
function;
• To help improve the integrity of the production environment and help ensure
that production service level targets are actually achieved.
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IT value transformation (cont.)

• Benefits for IT value transformation from IT:

• Increased respect from the business as a result of:
• The repositioning of the IT function as a value-adding business partner;
• The increased commercial credibility of the IT function;
• The increased ‘proactiveness’ of the IT function.
• Improved ability of the IT function to demonstrate its value-adding role to
the business;
• The creation of a far more stimulating work environment which will lead to
improved staff career prospects and staff retention.

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IT value transformation (cont.)

• Benefits for IT value transformation from business:

• Improved IT investment decisions resulting in the demonstrably highest value-
adding projects taking precedence, leading to improved profitability;
• Improved probability of delivering programmes and projects that add optimum value
to the business as early as possible;
• Improved probability of delivering IT services that add optimum value to the
business;
• Minimization of performing work that has low (or no) commercial justification; this, in
turn, freeing time to focus on work which demonstrably has, and sustains, a high
commercial justification;
• Early warning of programme/project value delivery problems and reduced instances
of project failures;
• Minimization of continuing to run systems that have ceased to have commercial
justification; this, in turn, freeing time and money to focus on running and supporting
systems that demonstrably have, and sustain, a high commercial justification;
• IT cost containment/reduction over time (if required);
• Increased customer satisfaction.
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IT value transformation (cont.)

• Risks for IT value transformation:

• The failure (or inability) of the business to ‘engage’ with their IT function as
a value-adding business partner;
• The failure (or inability) of the IT function to ‘engage’ with the business as a
value-adding business partner;
• The failure (or inability) of the business to appreciate that the IT value
transformation programme cannot succeed without changes in their
behaviours and working practices; it is not just about the IT function and
how it behaves and works.
• The failure (or inability) of IT function management and staff to ‘engage’
with the new working practices (i.e. they go into ‘denial’ until it is too late).

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IT value transformation (cont.)

• Behavioural change management to mitigate risks for IT value

transformation:
• Identifying and communicating the ‘burning platform’ for change;
• Clearly defined and communicated goals;
• Strong leadership and clearly demonstrable senior management
commitment;
• Significant incentives to adopt the changes proposed and significant
sanctions for overt or covert resistance;
• Managing stakeholders (inside the IT function and across the business)
and their expectations effectively;
• Identifying and publicizing ‘quick wins’ and success stories;
• Monitoring and reporting increased value delivered (the ‘balanced
scorecard’);
• Implementing changes incrementally, proving them and learning from them
before implementing them across the business.
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Thank You For Your Attention !

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