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Aligning IT With Business Strategy David Caruso VP Research Fellow AMR Research Inc. The Good News: IT Has A Seat in the Boardroom Now… The Bad News: Major IT implementations targeting traditional cost savings haven’t achieved expectations Changing business models push the action beyond the ERP footprint The new focus: Strategic applications - Global processes – 2nd order benefits Technology Investment Gets Competitive The visible reasons: Entering new markets channels Dealing with a network supply chain model Cost reduction in mainstream activities… The power play: Industry leaders are focusing core competencies to dominate markets High Tech Margin Model IT Governance: Where Does the Corporate World Stand? Leaders: Top 20% - The Value managers In place business-led IT governance councils Middle of the Pack: 50% - Transitional players ERP steering committees- now concerned with wringing value out of systems The Rest: remaining 30% - Late starters No formal business/IT operating models Seven Habits of Highly Effective IT Governance Clarity of Mission Organised for action Well crafted agenda Control of the Budget Standardised processes Messages that matter Executive ownership of benefit delivery When It All Goes Right… Industry example: Fujitsu Process Focus: Established Benchmarks, Process Improvement, Measurement… Chief strategic thrust: Use Process and Technology to Impact Competitive Position. Tools: Extended ERP to Fully Realise Business Process Design Results: Build cycle-- 21 days down to 2.3 days Inventory cycle - 60 days down to 27 Forecasting Accuracy - 70% up to 85% On-time Deliveries - 80% up to 92% Sales doubled to $1.5B--headcount down 20% The IT Win: Align Yourself with your Business Partners Talk their language Educate them Provide Aggressive Assessments of Cost and Time Focus on Time-to-Benefit Show them how to measure success for the Initiatives Thank you, David Caruso AMR Research Mfg cost Sell price Compete on price Compete with innov