Convergence CharacteristicsBy Lawrence Walsh | Posted 2008-09-29 Email Print
The results of the Baseline/BTM 500 study show that enterprises that fully integrate business and technology management are more agile, more competitive and potentially more profitable.
Most of the companies assessed in the Baseline/BTM 500 have achieved at least a foundation for business-technology convergence (Level 3 rating and above), but only one-third have scored a position in the upper echelon of the maturity scale.
What makes for a mature, converged enterprise? The leaders in the Baseline/BTM 500 exhibited strong capabilities and competencies across the board of our assessment survey, but all enterprises that were close to convergence or on the path to convergence shared some characteristics: They are:
Governance & Organization determines the role of technology in the enterprise and manages technology to meet business goals; structures and manages the business-technology organization; manages enterprise technology risk and compliance; and ensures that there is regular communication of the activities and accomplishments of technology throughout the enterprise.
Strategic Investment Management approves and prioritizes technology investments; develops and manages enterprise project and asset portfolios and provides appropriate reporting; establishes and manages business-technology demand and resource requirements; and applies business technology to project execution through the implementation lifecycle.
Strategy and Planning articulates required business capabilities and the technology plans to enable them; provides a disciplined means of ensuring that budgets reflect and support strategy; supports the creation and management of relationships with those partners best suited to an organization’s strategy; and integrates accumulated or acquired technology assets to ensure consistency with the enterprise’s strategy.
Strategic Enterprise Architecture describes the enterprise’s business strategies, operating models, capabilities and processes in terms actionable for business technology; defines the applications and technical infrastructure required to meet enterprise goals and objectives; establishes a set of standard business-technology applications, tools and vendors; and identifies, organizes and manages existing business applications, technology assets and projects.
In other words, these leaders focus on the strategic, business-oriented management of technology. Taken together, these characteristics describe enterprises in which there are consistent processes with integration across the organization. The “enterprise view” is fully developed, and the enterprise has the means to address a broad array of issues.
Leading enterprises in the Baseline/BTM 500 study have demonstrated that data has become information. And, in large measure, this information is available through—and managed in—an integrated, enterprisewide fashion that facilitates better and faster decision-making. Leaders look at technology as an enabler of enterprise strategy. They consider the technology implications of business decisions and look for innovative ways to embed technology into their ways of doing business. “Technology” for them is more than “information technology” or “operational technology.” It is, instead, “business technology.”
Aligned and synchronized—and, over time, converged—business-technology management occurs in leader enterprises as a fundamental element of best management practices. That these business-technology convergence leaders do well financially should not be surprising: Well-managed business-technology leader enterprises are well-managed enterprises.
Creating a Benchmark
Originally, the goal of the Baseline/BTM 500 was to create a ranking of the top publicly traded U.S. companies by their technology-management maturity. Early trends in the process prompted us to shift gears and focus on the maturity of the top enterprises as a set, based on the sample, and establish a baseline for technology-management maturity and convergence.
The numbers speak for themselves. Companies such as U.S. Steel, Wyeth, Marriott International, Fidelity National Information Services, Avnet and NetApp demonstrate that the principles of business-technology convergence are not exclusive to any vertical market, technology specialty or organizational size. The results of convergence—or the march toward convergence—pay real dividends in terms of real dollars.
Convergence does equal dollars. The companies that Baseline and BTM evaluated saved billions of dollars through the convergence of their business and technology management structures. But that shouldn’t be the only measure of success. The various business-technology management stages—alignment, synchronization and convergence—will almost certainly result in efficiencies that reduce costs. The greater value of convergence is in making an enterprise more agile, adaptive and able to nimbly respond to change and in improving its total performance as an enterprise.
The conclusions of the Baseline/BTM 500 go beyond stating that the majority of the Fortune 500—based on our sample—have begun the journey toward a converged management model. The conclusions encompass a convergence model that provides the optimal governance over business initiatives and the implementation of technology that drives business.
While not all organizations have the same scale requirements, resources and capabilities of the Fortune 500, businesses of all sizes can adopt these principles to maximize technology’s value and ensure that technology serves the organization’s strategic goals and operational needs with efficiency and effectiveness.