Strategic IT-Management (eBook)

Dr.-Ing. Dirk Buchta is Vice President and Partner of A.T. Kearney. Dr. Marcus Eul is Vice President and Partner of A.T. Kearney. Dr. Helmut Schulte-Croonenberg is Vice President and Partner of A.T. Kearney.

Preface third edition 5
Preface: What is Strategic IT Management? 6
Table of Contents 7
Introduction 9
Part A: Enhancing Value – IT as a Value Driver for the Company 13
1. IT Strategy – Using IT for Value Creation 16
Deriving IT strategy from corporate strategy 16
Developing an IT strategy for a consumer goods manufacturer 19
2. Using IT as an Enabler for Business 21
2.1 Optimizing Business Processes 22
2.1.1 Reduced costs in business processes through introduction and optimization of ERP 23
2.1.2 Increased efficiency and improved customer service with IT solutions and mobile communication technologies 24
2.1.3 Cost reductions and improved supply chain performance through integrated supply chain management systems (SAP APO) 24
2.1.4 Reducing costs with IT-based maintenance in machinery-intensive businesses 26
2.1.5 Reducing procurement costs through comprehensive system support (data warehouse) 27
2.2 Assuring Revenues and Increasing Sales with IT 29
2.2.1 Diversified potential benefit through data warehouse technology 31
2.2.2 Faster product development with Product Lifecycle Management (PLM) in engineering-oriented industries 33
2.2.3 Increasing sales with CRM technologies 35
2.2.4 Faster sales by shortening clinical phases until registration using IT-assisted document management in the pharmaceutical industry 37
2.2.5 Improved customer bonding through better information exchange in global container logistics 38
2.3 IT as a Part of the End Product 40
The birth of transaction banking 40
3. Enterprise Transformation – Ensuring the Benefits of IT are Achieved 44
3.1 Planning and Controlling IT-driven Enterprise Transformation 47
3.1.1 Strategic planning of enterprise transformation 48
3.1.2 During implementation pay attention to results, rather than aiming for perfection in every aspect 50
3.1.3 Using risk management 51
3.1.4 Carrying out benefit management 53
E-government: Transforming a government body (pensions agency) 54
3.2 Using External Partners for Accelerating Transformation: Build – Operate – Transfer (BOT) 56
Transformation of a payment service provider 58
4. IT Merger Integration and IT Carve-Out – Fostering External Growth and Disinvestment with IT 60
4.1 Successful Mergers with IT Merger Integration 63
4.1.1 Ensuring capacity to act from day one through rapid IT integration 66
4.1.2 Realizing cost cutting and synergies 67
Takeover of an international manufacturing company by a German conglomerate 69
4.1.3 Fostering long-term external growth strategies 70
4.2 Divesting Operations Successfully with IT Carve-out 73
4.2.1 Preparing business units for disinvestment 74
Divesting four business units of a technology conglomeration 75
4.2.2 Supporting the sales phase with IT carve-out 76
5. Green IT – Meeting Social Responsibility through IT 78
5.1 Green IT: Turning IT into a “Green” Object of Climate Protection 79
5.1.1 Actions for IT-related CO2-reduction 80
Server Consolidation 80
Energy-efficient Cooling Solutions and Building-Design 81
Hardware-Purchase and Green IT (Out-)Sourcing 81
Energy-efficient Consumer Behaviour 82
Adopting and Using Renewable Energies 82
Case Study STRATO: Green Data Centre at a Hosting Service Provider 82
5.2 Green Business: Using IT as Enabler for Climate Protection 83
Detailed Recommendation for Reducing CO2 Emissions 84
5.3 Green IT and Green Business Mean Ecology and Cost Minimising at the same Time 85
Case Study Chemicals Industry: IT Decision Support for Optimising CO2 emissions of a Company’s Network in the Chemicals Industry 85
Part B: Controlling Performance – Value-Oriented IT Management 88
1. IT Governance – Creating the Organizational Framework for Value Enhancing IT 91
1.1 Separating the Organization of IT Demand and IT Supply 93
1.2 Establishing Centralized and Decentralized Areas of IT Responsibility and IT Control Structures 95
1.3 Defining IT Management Processes 97
Designing and implementing an IT governance concept in an international group 99
2. IT Planning – Integrating IT Planning into Corporate Planning 101
2.1 Using Cost and Performance Accounting as a Basis for Planning 102
2.2 Establishing Procedural Frameworks for Best Practice 104
2.3 Planning IT Operation and IT Projects 106
2.3.1 Planning from the bottom up 106
2.3.2 Planning from the top down 108
2.4 Identifying Cost Reduction Potential for IT Operation and IT Projects 109
2.4.1 Reducing IT operating costs through benchmarking 110
2.4.2 Reducing process costs by using synergies 111
2.4.3 Prioritizing planned projects 114
Designing a group-wide IT planning process for an international service provider 117
3. IT Performance Management – Managing IT Holistically 119
3.1 Deriving IT Goals and Key Performance Indicators (KPI) from Corporate Strategy 121
3.2 Anchoring IT Performance Management within the Company 127
3.2.1 Detailing IT performance management for the IT organization 128
3.2.2 Establishing continuous IT performance management processes 129
3.2.3 Supporting IT performance management with suitable tools 131
3.2.4 Implementing IT performance management smoothly 132
Challenges to IT performance management 132
Part C: Reducing Costs – Increasing the Efficiency and Effectiveness through IT 135
1. IT Optimization – Reducing Costs without Diminishing Returns 137
1.1 Strategic IT Cost Analysis: Finding the Right Leverage Points 138
1.2 Reducing Costs in IT Applications 141
1.2.1 Harmonizing business processes 141
Optimization of business processes in a chemical company 143
1.2.2 Standardizing and consolidating IT applications 143
Standardization of application systems at a manufacturing company 145
1.3 Reducing Costs for IT Infrastructure 147
1.3.1 Standardizing the IT infrastructure 147
Standardization and consolidation of IT application systems at a manufacturing company 148
1.3.2 Centralizing IT infrastructure and consolidating computing centers 149
Centralization of computing centers at four financial service providers 151
1.4 Exploiting Cost Savings Potential through Strategic IT Sourcing 152
1.4.1 Examining the degree of vertical integration in IT 154
1.4.2 Bundling IT services 155
Introduction of strategic sourcing at a global IT service provider 155
2. In-House IT Service Providers – Exploiting Efficiency Potentials 157
2.1 Strategically Aligning and Spinning-off the IT Provider 158
2.1.1 Determining ‘strategic parameters’ for the IT provider 159
2.1.2 Allowing for a start-up phase to set up and professionalize the IT provider 163
2.2 Stipulating Strategic Rules for Cooperation 166
Spin-off and professionalization of an internal IT provider at a manufacturing group 169
2.3 Expanding, Insourcing, or Divesting the IT Provider 170
3. IT Outsourcing and IT Offshoring – Cost Advantages from Contracting Out Services 173
3.1 Reducing Vertical Integration with IT Outsourcing 174
3.1.1 Defining the objectives of IT outsourcing and identifying suitable IT services 179
Outsourcing IT by selling an internal IT provider (disinvestment) 183
3.1.2 Developing the outsourcing partnership 184
3.1.3 Selecting a suitable outsourcing partner 184
3.1.4 Using the outsourcing contract to constitute a long-term partnership 187
3.1.5 Actively managing the outsourcing partnership 191
3.2 Using Factor Cost Advantages by IT Offshoring 196
3.2.1 Developing a corporate IT offshoring strategy 196
Systematic development of an offshoring strategy for a U.S. based group 199
3.2.2 Evaluating risks and opportunities of a location 200
3.2.3 Selecting a suitable offshoring model 204
Outlook 208
Providing basic IT supply at moderate cost 208
Using strategic IT demand for value increases 209
Glossary 212
Acknowledgements 215
The Authors 216