Developing IS Strategy© 2003 Sixhills Consulting LtdLinking Business and Technology DimensionsFacilitate accelerated change• Make continuous improvements• Make change a way of lifeTackle the fundamental business structures• Change the structure of costs and service• Make simultaneous improvements in cost and qualityImprove base level performance parameters• Improve service levels• Reduce costs – Improve qualityNon integratedApplication links/ user interface Fully integrated core systemsDEGREE OF TECHNOLOGY CHANGEPHASES OF BUSINESS CHANGEOutsource non core activities• Reduce costs– Improve serviceOutsource critical path activities• Introduce new skills• Introduce new technologiesDevelop alliances/ partnerships with leading edge providersDevelop alliances/ partnerships with leading edge providersAbilityto shift the curveDegree of ControlExternally FocusedInternally FocusedShort TermLong TermStructural ChangeImplementation Time frameOrganisational Change5-7% savings2–3 yearsIndustryCo-operation Initiatives10-15% savings2–5 years20-25% savings1–2 yearsLeanProduction15-20% savings1–2 yearsPerformancePerformance ImprovementUnit Cost DynamicsHighRe-engineerproduction environmentAcquire volume and technologyLowFocuselsewhereGainvolumeLowHighAbility to ‘ride the curve’Unit Cost VolumeAbility to shift the curveAbility to ‘ride the curve’XTechnology Cost ManagementShort-term• Sourcing• Lifecycle management• Asset management• Standardisation• Outsourcing• Development investment prioritisation• Maintenance budget optimisation• Development outsourcing• Application Architecture Standardisation• Demand management• 'Demystification' of end-user chargesLong-term• Governance revision• Architectural restructuring• Systems merger/ simplification• Data centre consolidation• Value chain restructuring (allowing application redesign)• Process re-engineering• Market restructuringzPlatformApplicationsManual ProcessingMarketing/ DistributionTypically ~20% of total expenseP6
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