Strategic IT-Management - Increase value, control performance, reduce costs

Preface third edition

Preface: What is Strategic IT Management?

Table of Contents

Introduction

Part A: Enhancing Value – IT as a Value Driver for the Company

1. IT Strategy – Using IT for Value Creation

Deriving IT strategy from corporate strategy

Developing an IT strategy for a consumer goods manufacturer

2. Using IT as an Enabler for Business

2.1 Optimizing Business Processes

2.1.1 Reduced costs in business processes through introduction and optimization of ERP

2.1.2 Increased efficiency and improved customer service with IT solutions and mobile communication technologies

2.1.3 Cost reductions and improved supply chain performance through integrated supply chain management systems (SAP APO)

2.1.4 Reducing costs with IT-based maintenance in machinery-intensive businesses

2.1.5 Reducing procurement costs through comprehensive system support (data warehouse)

2.2 Assuring Revenues and Increasing Sales with IT

2.2.1 Diversified potential benefit through data warehouse technology

2.2.2 Faster product development with Product Lifecycle Management (PLM) in engineering-oriented industries

2.2.3 Increasing sales with CRM technologies

2.2.4 Faster sales by shortening clinical phases until registration using IT-assisted document management in the pharmaceutical industry

2.2.5 Improved customer bonding through better information exchange in global container logistics

2.3 IT as a Part of the End Product

The birth of transaction banking

3. Enterprise Transformation – Ensuring the Benefits of IT are Achieved

3.1 Planning and Controlling IT-driven Enterprise Transformation

3.1.1 Strategic planning of enterprise transformation

3.1.2 During implementation pay attention to results, rather than aiming for perfection in every aspect

3.1.3 Using risk management

3.1.4 Carrying out benefit management

E-government: Transforming a government body (pensions agency)

3.2 Using External Partners for Accelerating Transformation: Build – Operate – Transfer (BOT)

Transformation of a payment service provider

4. IT Merger Integration and IT Carve-Out – Fostering External Growth and Disinvestment with IT

4.1 Successful Mergers with IT Merger Integration

4.1.1 Ensuring capacity to act from day one through rapid IT integration

4.1.2 Realizing cost cutting and synergies

Takeover of an international manufacturing company by a German conglomerate

4.1.3 Fostering long-term external growth strategies

4.2 Divesting Operations Successfully with IT Carve-out

4.2.1 Preparing business units for disinvestment

Divesting four business units of a technology conglomeration

4.2.2 Supporting the sales phase with IT carve-out

5. Green IT – Meeting Social Responsibility through IT

5.1 Green IT: Turning IT into a “Green” Object of Climate Protection

5.1.1 Actions for IT-related CO2-reduction

Server Consolidation

Energy-efficient Cooling Solutions and Building-Design

Hardware-Purchase and Green IT (Out-)Sourcing

Energy-efficient Consumer Behaviour

Adopting and Using Renewable Energies

Case Study STRATO: Green Data Centre at a Hosting Service Provider

5.2 Green Business: Using IT as Enabler for Climate Protection

Detailed Recommendation for Reducing CO2 Emissions

5.3 Green IT and Green Business Mean Ecology and Cost Minimising at the same Time

Case Study Chemicals Industry: IT Decision Support for Optimising CO2 emissions of a Company’s Network in the Chemicals Industry

Part B: Controlling Performance – Value-Oriented IT Management

1. IT Governance – Creating the Organizational Framework for Value Enhancing IT

1.1 Separating the Organization of IT Demand and IT Supply

1.2 Establishing Centralized and Decentralized Areas of IT Responsibility and IT Control Structures

1.3 Defining IT Management Processes

Designing and implementing an IT governance concept in an international group

2. IT Planning – Integrating IT Planning into Corporate Planning

2.1 Using Cost and Performance Accounting as a Basis for Planning

2.2 Establishing Procedural Frameworks for Best Practice

2.3 Planning IT Operation and IT Projects

2.3.1 Planning from the bottom up

2.3.2 Planning from the top down

2.4 Identifying Cost Reduction Potential for IT Operation and IT Projects

2.4.1 Reducing IT operating costs through benchmarking

2.4.2 Reducing process costs by using synergies

2.4.3 Prioritizing planned projects

Designing a group-wide IT planning process for an international service provider

3. IT Performance Management – Managing IT Holistically

3.1 Deriving IT Goals and Key Performance Indicators (KPI) from Corporate Strategy

3.2 Anchoring IT Performance Management within the Company

3.2.1 Detailing IT performance management for the IT organization

3.2.2 Establishing continuous IT performance management processes

3.2.3 Supporting IT performance management with suitable tools

3.2.4 Implementing IT performance management smoothly

Challenges to IT performance management

Part C: Reducing Costs – Increasing the Efficiency and Effectiveness through IT

1. IT Optimization – Reducing Costs without Diminishing Returns

1.1 Strategic IT Cost Analysis: Finding the Right Leverage Points

1.2 Reducing Costs in IT Applications

1.2.1 Harmonizing business processes

Optimization of business processes in a chemical company

1.2.2 Standardizing and consolidating IT applications

Standardization of application systems at a manufacturing company

1.3 Reducing Costs for IT Infrastructure

1.3.1 Standardizing the IT infrastructure

Standardization and consolidation of IT application systems at a manufacturing company

1.3.2 Centralizing IT infrastructure and consolidating computing centers

Centralization of computing centers at four financial service providers

1.4 Exploiting Cost Savings Potential through Strategic IT Sourcing

1.4.1 Examining the degree of vertical integration in IT

1.4.2 Bundling IT services

Introduction of strategic sourcing at a global IT service provider

2. In-House IT Service Providers – Exploiting Efficiency Potentials

2.1 Strategically Aligning and Spinning-off the IT Provider

2.1.1 Determining ‘strategic parameters’ for the IT provider

2.1.2 Allowing for a start-up phase to set up and professionalize the IT provider

2.2 Stipulating Strategic Rules for Cooperation

Spin-off and professionalization of an internal IT provider at a manufacturing group

2.3 Expanding, Insourcing, or Divesting the IT Provider

3. IT Outsourcing and IT Offshoring – Cost Advantages from Contracting Out Services

3.1 Reducing Vertical Integration with IT Outsourcing

3.1.1 Defining the objectives of IT outsourcing and identifying suitable IT services

Outsourcing IT by selling an internal IT provider (disinvestment)

3.1.2 Developing the outsourcing partnership

3.1.3 Selecting a suitable outsourcing partner

3.1.4 Using the outsourcing contract to constitute a long-term partnership

3.1.5 Actively managing the outsourcing partnership

3.2 Using Factor Cost Advantages by IT Offshoring

3.2.1 Developing a corporate IT offshoring strategy

Systematic development of an offshoring strategy for a U.S. based group

3.2.2 Evaluating risks and opportunities of a location

3.2.3 Selecting a suitable offshoring model

Outlook

Providing basic IT supply at moderate cost

Using strategic IT demand for value increases

Glossary

Acknowledgements

The Authors