Do You Need Professional E-Business Blueprint Management?

Is your company building and investing in “enterprise application foundation” without a coordinated blueprint?

The goal of a blueprint is to provide a balance between day-to-day operations and long-term strategic decision-making. We found that a majority of Global 3000 companies with multiple business units, complex application and infrastructure assets are not using professional blueprint planning and management techniques in linking their Strategy to Execution. [1]

Today's problem is in aligning E-business solutions with business design or strategic intent. Not having a coordinated planning and management effort is a recipe for poor Return on Investment (ROI) at best and abject failure at worst.


How did we get here?
In the bull market of the 1990s and Y2K problem-solving mode, many companies decided that all they needed was an ERP system to fix their date, integration and process problems. The myths propagated by dot.com companies in in the form of half-baked e-business solutions in the early 2000s further exacerbated the problem.  The result: a mish-mash of partly implemented solutions.

With the stock market generally moving in one direction, it seemed easy to believe the hype. However, the stock market isn't to blame for everything; it was an aggravating factor. E-business technology promised too much and didn't deliver. Euphoria became general disappointment; we're now adjusting to reality, getting through the tough times, and beginning to make substantial progress. The industry has begun a new cycle, in a positive direction, although it's more subdued than the previous one.

Another factor in the failure of many e-business efforts is the lack of effective corporate governance as over 60-80% of IT dollars go into application and infrastructure assets. The volatility of business coupled with extraordinary complexity of the application and infrastructure in large companies such as General Motors or Georgia Pacific has exposed the risk of a “garage” approach to managing complex application and infrastructure assets.  

Dissatisfied with “ad-hoc garage” approaches to E-business, a growing number of companies are turning to professional management of E-business Blueprints (business/technology mapping). Even CIOs who characterize themselves as sophisticated IT asset managers are increasingly inclined to seek professional help with risky IT investments, underscoring the difficulties of making investments decisions in today’s complex and volatile markets.

In our research, we also found that there is another reason more companies are retaining professional E-business Blueprint management: an average tenure of a CIO is less than two years. As a result, blueprint knowledge that is extremely hard to replace is being lost in large companies at a faster rate than ever before. Replacing this knowledge is hard to do if you’re under execution pressure in a capricious market.

Large e-business projects consist of integrated blueprints indicating the strategic design intent of the company. This trend towards E-business Blueprint Management is very similar to what took place in the construction industry. Companies like Bechtel, one of the world's largest construction and engineering firms, thrive on planning and managing large projects. Bechtel and its affiliated companies have managed extremely complex multi-year infrastructure projects that include the Hoover Dam, the “Big Dig” in Boston, Hong-Kong International Airport, and the Alaska oil pipeline.

Let’s look at some common aspects of E-business Blueprint Management: Integrated investing/ planning and Continuous Management.
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Integrating, Investing and Planning
Each company works with an assigned team of professionals to develop appropriate E-business objectives and a plan to achieve them. This team approach serves two important purposes: First, gain a thorough understanding of client needs and objectives; Second, by coordinating planning with execution, the team can make sure that the actual investments are consistent with, and designed to carry out, the overall strategic plan. This type of integration is very important as not doing it can lead to chaos.  

For example, a well-run company may already have a carefully thought-out, soundly crafted plan designed to achieve multiple objectives --- provide growth potential, reduce the cost structure, and enable merger integration more seamlessly. The Technology Steering Committee might have done a wonderful job of putting the plan together. But if the IT investments don’t match up with plan objectives, it’s pretty tough to get the desired results and derive positive returns from investment.  

That’s why Blueprint Management is such an important element of the IT/E-Business process. Companies that appear to be good at E-business Blueprint Management include Home Depot, Cisco and Wal-Mart.

Our Hypothesis: As E-business matures and becomes a core foundation of corporations, it demands more disciplined management.
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Continuous Management
Blueprint is both a product and as well as on-going process. Unfortunately, few companies have internal teams in place that have the skill to oversee multiple projects across multiple business units.  

Managing the balance between long-term flexibility with day-to-day activities is central to the blueprint process. When it comes to building the application and infrastructure assets flexibility is the key. But, the firm must keep an eye on the day-to-day details of a large corporation. These include making sure that there is compliance and reporting. This is an area where companies can improve substantially today. 

Where do we go from here? As inter-enterprise e-business in the form of enterprise wide portals, SCM and CRM takes off, companies have to adopt an E-business Blueprint Management approach.  Not doing so will lead to sub-optimal investments that will require significant re-work.

Our Hypothesis: We anticipate that this will be an area that CEOs will be paying more attention to Blueprint planning and management in 2002.
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Blueprint Leadership
If your company has very substantial legacy assets and complex planning concerns, you are probably looking for professional help with your E-business investments.  The questions that you should be investigating include: what is the most effective structure for E-business Blueprint Management?  

There are different structures being adopted to manage e-business blueprints. These include:

• The E-Business Steering Committee -- A federated model with the corporate CIO and senior vice presidents from various business units. Most prevalent in large, multinational companies.
• The Office of the CIO -- A corporate CIO with divisional CIOs from various business units. Most prevalent in companies that are narrowly focused in scope and scale.
• The Office of the CTO -- Creating a specialized group tasked with technology architecture decisions. This is less business oriented and more technology and infrastructure oriented.

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Business priorities, culture and politics play a large part in deciding which structural model companies adopt. To know more about E-business blueprint planning and management, contact us.

References:
[1] See Chapter 13 of E-Business 2.0: Roadmap for Success for an in-depth discussion of E-business Blueprint basics