DATA ARTERIES

- ENABLING BUSINESS STRATEGY

THROUGH INFORMATION TECHNOLOGY

NIGEL A.L. BROOKS

THE BUSINESS LEADERSHIP DEVELOPMENT CORPORATION

Article reprint
 DATA ARTERIES - ENABLING BUSINESS STRATEGY
THROUGH INFORMATION TECHNOLOGY

Information technology is essential for both the administrative and

operational activities of every enterprise, especially for building links with
constituencies. Because knowledge management and connectivity are
essential to building competitive, collaborative, and cooperative
advantage, every enterprise is heavily dependent upon data arteries - its
information supply, value, and demand chains. Information technology
strategy is an enabler of business strategy, and is delivered through
programs and projects on a phased basis.

Regardless of size and industry, every enterprise is dependent upon

information technology, and must have a strategy for how to employ it,
especially as the internet becomes more pervasive. Information technology
strategy is an enabler of business strategy. Not only must an enterprise
manage relationships with its constituencies, but it must be able to connect
with them electronically through data arteries - information supply, value,
and demand chains. The information supply and demand chains are
external; the information value chains are internal.

An information technology strategy is a special case functional strategy

because every function in the enterprise requires electronic information
delivery capabilities, and many require electronic process control also. In
very large enterprises, strategy may be formulated at both the enterprise
and organizational unit levels.

As websites such as Facebook, LinkedIn, MySpace, Plaxo, and Twitter

become more pervasive in business, linkages between application systems
and databases and social networking websites will be more important to
enable constituencies to communicate both collaboratively and
cooperatively. Just as email has become a primary method of
communication between enterprises and their constituencies, so will social
networking sites especially for advertising and ecommerce.

Business intelligence information can be used to identify opportunities for

competitive advantage. However, information technology itself can be an
enabler of competitive advantage, especially when there are opportunities
to digitize products or deliver information products electronically. In such
cases, business strategy is inseparable from information technology
strategy.

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Information technology comprises the analytical and operational
application systems, databases, and technical infrastructure (hardware and
networks) of an enterprise. Not all computer technologies are information
based. Computer technology is used for process control applications in
special purpose equipment. However, connectivity is essential as
applications become more integrated. As digital construction and
manufacturing practices develop through such technologies as computer-
aided design/computer-aided manufacturing (CAD/CAM), the processes,
the control of processes, and the products and/or services delivered by
processes all rely upon information technology for connectivity.

For example, in the manufacturing industry, not only can design and
manufacturing work be conducted through integrated CAD/CAM
processes with electronic linkages to carriers, such as FedEx and UPS, but
the entire project and process management activities can be monitored
electronically from ideation to product delivery.

Through technologies such as electronic data interchange and electronic

funds transfer, data and both digital and information products flow through
information supply and demand chains in parallel to material supply and
product and/or service demand chains. Within the enterprise, data flows
through information value chains from supply chains and to demand
chains.

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Developing an information technology strategy document is essential for
describing the requirements and for educating users because:

● The impact is enterprise or organizational unit wide and other

elements of strategy cannot be implemented without it

● Administrative activities, such as legal, finance, and human

resources, and operational activities, such as research and
development, procurement, manufacturing or equivalent, distribution,
marketing, sales, and service depend on information technology -
analytical and operational systems support both administrative and
operational functions

● The time frames, expenditures, risks, and magnitude of efforts are

usually larger and more complicated than other initiatives and must
be clearly understood; information technology projects have a
tendency to go out of control and under deliver - therefore,
contingency plans are always necessary

● The subject matter can be complicated if not well explained

Information technology strategy is usually packaged as a separate but

related document to the strategic plan. It is deployed and executed through
specific programs and projects that develop new or enhance or maintain
existing application systems, databases, and technical infrastructure.

Large information technology development projects are usually cross-

functional, and may be part of a broader initiative sponsored by multiple
functions collectively. Broader initiatives that have information
technology components include:

● Market research and development

● Product research and development

● Infrastructure research and development for processes and

information delivery

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For example - for the development of a:

● Digital manufacturing system integrating both research and

development and sales and production activities (sponsors:
Manufacturing and Sales functions - impact is on Research and
Development, Procurement, Manufacturing, Distribution, Sales, and
Service functions)

● Financial, managerial, and regulatory accounting and reporting

system (sponsor: Finance function - impact is enterprise wide)

● Human resource management system (sponsor: Human Resources

function - impact is enterprise wide)

● Sales tracking system (sponsor: Sales function - impact is on all

salespeople enterprise wide)

Some projects can be solely for the Information Technology function, in

which case it is a customer of itself.

Steering committees should be established for major programs and

projects representing the various impacted functions in order to resolve
cross-functional barriers. Major programs should come under the review
of a planning and policy committee at the enterprise level.

Information technology strategy formulation is a project in its own right at

the enterprise or organizational unit level. Very large projects are grouped
as a program of inter-related components under a program manager.
Projects can be stand alone also. A single project can deliver one or more
application systems and related databases and technical infrastructure, or
multiple projects may be required depending upon complexity.

For example, when launching a new product, it may be necessary to

conduct marketing, product, and infrastructure development projects that
include the delivery of new systems, and upgrades to existing systems.
However, if an addition to the product line is launched at a later time, a
new project or set of projects may be required to enhance or maintain the
current systems, or even develop new ones.

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The work breakdown structure for downstream development,
enhancement, and maintenance projects decomposes into planning,
analysis, design, construction, implementation, and performance
measurement phases. The performance measurement phase can be
conducted in parallel with the other phases, and each must end with a
performance review. A feedback loop to future planning activities must be
established so that lessons learned from the past can be reflected in future
initiatives.

Meeting the cost and schedule requirements is always a major

consideration. Hence, "meeting the date" is a frequent requirement for
project success. However, after implementation, the scope of what was
delivered and its quality is usually remembered more than when. In
anticipation of the need to make changes after implementation, an
adaption project may be necessary to tune, standardize, and integrate the
deliverables.

The planning phase is conducted at the enterprise, organizational unit, or

program levels for one or more projects depending upon size and
complexity. However, each application system and related databases and
technical infrastructure is delivered through a project with distinct
analysis, design, construction, and implementation phases. Each phase
always begins with a detailed planning activity to ensure that resources are
allocated appropriately. The work breakdown structure does not preclude
the use of iterative methodologies within each phase for rapid application
development and prototyping. Development, enhancement, and
maintenance of websites can be very rapid, and heavily interactive with
user involvement, when the appropriate tools are used.

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Key questions and deliverables by information technology strategy project
and downstream phases include:

Strategy project (enterprise and organizational unit levels):

Key questions:

● How does information technology enable business strategy?

● What are the investment priorities?

Deliverables include:

● Information technology architecture (applications, data and

databases, and technical infrastructure)

● High level project phasing and plans

Planning phase (enterprise, organizational unit, and program levels):

Key questions:

● What are the administrative functions' systems and information

needs?

● What are the operational functions' systems and information needs?

● What are the priorities for the candidate analytical systems?

● What are the priorities for the candidate operational systems?

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Deliverables include:

● Process models
● Function models
● Data models
● Information models
● Economic evaluation
● Scope of analysis projects and schedules

Analysis phase (project level):

Key questions:

● How do processes, functions, and systems fit together?

● How do systems processes and functions relate to enterprise

processes and functions?

● How do systems processes and functions and enterprise processes

and functions fit together?

Deliverables include:

● Functional requirements
● Economic evaluation
● Scope of design projects and schedules

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Design phase (project level):

Key questions (by system):

● What are the system's functional requirements?

● What are the system's technical requirements?

● What is the total cost of ownership and benefits (tangible and

intangible)?

Deliverables include (by system):

● Application system specifications

● Data and database specifications

● Technical infrastructure specifications

● Scope of construction project and schedule

● Total cost of ownership/benefit analysis

Construction phase (project level):

Key questions (by system):

● Is the system being constructed according to design?

● If not, what change orders are required, and why?

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Deliverables include (by system):

● Tested application system and interfaces, databases, and technical

infrastructure

● Trained users

Implementation phase (project level):

Key questions (by system):

● What are the costs and schedule relative to plan?

● What is the scope relative to plan?

● What is the quality relative to plan

● When will the benefits be realized relative to plan?

● What adjustments for tuning, standardization, and integration are

required relative to plan?

● What are the current anticipated enhancement requests?

● What are the current anticipated maintenance requests?

● What are the lessons learned for the future?

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Deliverables include (by system):

● Working application system and interfaces, databases, and technical

infrastructure

● List of enhancement requests

● List of maintenance requests

● Performance measurement report

As enterprises become more dependent upon the internet for connectivity

with constituencies, it is essential to develop, enhance, and maintain the
information technology strategy on an ongoing basis. The strategy must
emphasize connectivity through the data arteries as digital and information
products become more pervasive.

Formulating information technology strategy is an enterpriship

(entrepreneurship, leadership, and management) competency.

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About Nigel A.L Brooks...

Nigel A.L Brooks is a management consultant to entrepreneurs, business

enterprise owners, executives, and managers, and the enterprises they
serve. He specializes in developing the entrepreneurial, leadership, and
managerial competencies that build sustainable advantage from vision to
value. He is an author and a frequent speaker.

He obtained his professional experience as a partner at Andersen

Consulting (now Accenture, Ltd.), as a vice president at Booz Allen
Hamilton, Inc. (now Booz and Company), as a senior vice president at the
American Express Company, as president of Javazona Cafes, Inc., and as
president of The Business Leadership Development Corporation. He has
been a contributing editor for the Bank Administration Institute magazine,
and has served on boards of entrepreneurial networks. He was educated at
the University of Exeter, Devon, United Kingdom.

His clients are in the financial services, food services, high-tech,

manufacturing and distribution, pharmaceuticals, oil and gas, professional
services, retail and wholesale, transportation, and government industries.

He has experience in North and Latin America, Europe and Asia-Pacific.

www.nigelalbrooks.com

About The Business Leadership Development Corporation (BLD)...

The Business Leadership Development Corporation is a professional

services firm that works with entrepreneurs, lifestyle business enterprise
owners, executives, and managers, and the enterprises they serve.

BLD develops entrepreneurial, leadership, and managerial competencies

that achieve performance excellence by building sustainable advantage
from vision to value through:

 Strategic Management Consulting

 Executive Coaching and Mentoring
 Professional Training via The Center For Business Leadership
Development (CBLD)
 Motivational Speaking

www.bldsolutions.com

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