Business and IT Alignment: An Oracle View
If you’re a CIO or IT strategist Oracle’s view on Business and IT Alignment could help you design and evaluate IT strategies so that you can build a business case for IT.
As part of that view, Oracle introduces three elements; management excellence, operational excellence and technology excellence. Most people are familiar with the term operational excellence; optimising cost, quality, and speed. It has become a prerequisite to fuel the next level of competitive differentiation — management excellence — which is characterised by three other attributes; smart, agile, and aligned. Neither can be achieved without technology excellence; an IT strategy that focuses on being complete, open, and integrated.
So much has been said about business and IT alignment (BIA), what could possibly be added? There are IT governance principles, IT architectural concerns, areas of IT innovation, IT key performance indicators, and IT cost saving elements. However, ask ten people for a definition of what business and IT alignment means, and you will get twelve answers.
But, what about the business side? Although the business often challenges IT to show their benefits and overall value, most of the BIA discussions take place within IT. Alignment can only be successful if it comes from both sides. Is there an equally structured discussion taking place on the business side about how to receive the benefits from IT?
Is there a discussion on the business side on how to adapt corporate strategy to IT-driven innovation? Most CIOs have plenty of business performance indicators on their scorecards, but how many business executives manage their business with IT performance indicators? BIA doesn’t seem to be as reciprocal as it should be. And, while we are at it, what about business-to-business alignment?
IT can only be efficient and successful in the long term if it is based on a decent architecture. Long term success is difficult to achieve if the business treats IT in a stove-piped way, forcing business cases to focus on departmental benefits only.
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Uncertainty Management: Risk and Performance, Two Sides of the Same Coin
This article is from an Oracle thought leadership whitepaper.
The bottom-line role of management is balancing performance and risk to create stakeholder value.
This requires both performance management and risk management. Performance management focuses on achieving the desired goals and targets of the organization, but is often practiced in business silos based on the organizational structure and decision authorities in place.
Risk management is another critical discipline, yet is hardly ever performed across an entire organisation. Performance management and risk management are often pursued as different and separate activities; frequently disconnected from each other. This, simply, should not be.
EPM is a management discipline that embraces and combines all management processes. These management processes include strategic ones, such as gain-to-sustain, investigate-to-invest, and design-to-decide, as well as tactical and operational management processes, such as plan-to-act, analyze-to-adjust and record-to-report.2
EPM creates a competitive advantage for those organizations that adopt it by enabling them to reach a state of, what we call, “management excellence”; anticipating and responding to changing business conditions faster and with more insight than their peers, improving their strategic agility to act on those insights, and improving alignment and collaboration between individual business units and external stakeholders.
Enterprise risk management (ERM) is a management discipline which is performed to deal with possible threats to the organisation and seize opportunities in line with business objectives. By identifying and proactively addressing risks and opportunities, business enterprises protect and create value for their stakeholders including owners, employees, customers, regulators, and society overall.
To succeed, in a sustainable way, performance and risk management must be performed in tandem across the entire organization. These disciplines should not be performed as separate activities as they are two sides of the same coin. What’s the name of that coin? Uncertainty management.
Any management decision inherently carries some uncertainty. It doesn’t matter if the decision is about an investment, a new product introduction, or budget plans for the future, there is always a chance that the expected outcome may not be achieved. Performance and risk, therefore, are two important perspectives from which uncertainty in making business decisions should be studied.
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GRC: Risk Management: Protect and Maximise Stakeholder Value
The following GRC (Governance, Risk and Compliance) article from Oracle is relevant if you want to protect and maximise stakeholder value.
Recent economic volatility has given risk management a new focus and eminence. The strongest companies are the ones that are able and willing to adapt, who actively integrate risk management as a critical factor at all levels of management process from strategy to success.
Regrettably, organizations have been hampered by pitfalls in traditional approaches to risk management. Seen as a back-office function, risk management may be limited to annual assessments that are not integrated with strategic and operational planning.
Without the ability to apply a common taxonomy and weighting for different risk categories, organizations are forced to manage risk in functional silos, unable to see the interconnected nature of multiple risk events.
Internal control and external risk transfer methods are largely manual, leaving firms open to unnecessary exposure.
Business survival requires organizations to take risk. Successful firms manage risk well while those that do not suffer. The unprecedented breakdown of credit markets and eye-opening demise of well established financial institutions have led companies small and large to pause, look at themselves, and ask: What’s our risk? Do we have a handle on it? Is that good enough?
Recent actions from regulatory bodies and ratings agencies have also highlighted the need for risk management. For example, the Public Company Accounting Oversight Board (PCAOB) is guiding audit firms to pay more attention to the level of risk associated with management processes. Assuming management is likely to accept greater risk when acting under economic pressure, the PCAOB is encouraging auditors to adjust their audit plans and increase monitoring for high risk behavior.
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6 Tips for Better Business Intelligence
- Select the Right Service Provider
Shop around. The right service provider should demonstrate a unique appreciation of your needs and the challenges you are facing. They must be involved in the roll-out of the solution and provide training to all users. Make sure they also offer on-going support once the solution is up and running. Get references and follow these up. - Suitability
Be sure to choose a BI solution that is right for your business. Have a specific business need in mind when shopping for a solution. Before purchasing a complete data warehouse solution, do some research – your current challenge may not require a warehouse solution. Instead you could save money and time with a simpler solution that locates and extracts data from its current location as required. - Ease of Integration
Your service provider should be familiar with the systems your business relies on and should provide a solution that integrates easily into your current business infrastructure. The best BI application will be one that meets a specific business requirement and fits into your business processes seamlessly. - Flexibility and scalability
Your BI requirements will change as your company grows and develops. It is important to plan for this by selecting a modular solution that can be adapted and expanded to suit your changing needs. - Keep it Simple
While it may be tempting to go for the most sophisticated, top-of-the-range solution, often the simpler option is easier to work with. Consider who will be using the system. Don’t forget the true end user and include them in the selection process. Their technical proficiency will determine the level of complexity you may incorporate in the solution. Remember, a good BI solution should save your employees time – not force them to struggle with a complicated system. - Insist on Security
Data security is crucial – especially in the increasingly mobile business world. The ideal BI solution should deliver accurate, targeted information at maximum speed; while protecting your data from falling into the wrong hands.
Getting to the Financial Truth: Financial consolidation and data warehouse
Financial consolidation is at the basis of management information and management processes in most organisations. But financial consolidation has some specific architectural, procedural and practical requirements. This particular management process is better off not using a data warehouse as an intermediary in the closing process. The best practice is to directly link financial consolidation to the general ledgers.
The Bottom Line – Keeping financial consolidation outside the data warehouse architecture is not an ‘exception to the rule’, but a matter of architectural soundness, combined with an understanding of governance issues and simply a practical solution. Key to keeping the architecture ‘clean’ is the understanding that financial consolidation is not a management process, but transactional of nature.
Source: Oracle – Frank Buytendijk Vice President and Fellow frank.buytendijk@oracle.com
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