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Library of Congress Cataloging-in-Publication Data

McKeen, James D. IT strategy: issues and practices/James D. McKeen, Queen’s University, Heather A. Smith, Queen’s University.—Third edition. pages cm ISBN 978-0-13-354424-4 (alk. paper) ISBN 0-13-354424-9 (alk. paper) 1. Information technology—Management. I. Smith, Heather A. II. Title. HD30.2.M3987 2015 004.068—dc23 2014017950

ISBN–10: 0-13-354424-9 ISBN–13: 978-0-13-354424-4

10 9 8 7 6 5 4 3 2 1

CoNTENTS

Preface xiii

About the Authors xxi

Acknowledgments xxii

Section I Delivering Value with IT 1

Chapter 1 DeVelopIng anD DelIVerIng on The IT Value propoSITIon 2 Peeling the Onion: Understanding IT Value 3

What Is IT Value? 3

Where Is IT Value? 4

Who Delivers IT Value? 5

When Is IT Value Realized? 5

The Three Components of the IT Value Proposition 6 Identification of Potential Value 7 Effective Conversion 8 Realizing Value 9

Five Principles for Delivering Value 10 Principle 1. Have a Clearly Defined Portfolio Value Management

Process 11

Principle 2. Aim for Chunks of Value 11

Principle 3. Adopt a Holistic Orientation to Technology Value 11

Principle 4. Aim for Joint Ownership of Technology Initiatives 12

Principle 5. Experiment More Often 12 Conclusion 12  •  References 13

Chapter 2 DeVelopIng IT STraTegy for BuSIneSS Value 15 Business and IT Strategies: Past, Present, and Future 16

Four Critical Success Factors 18

The Many Dimensions of IT Strategy 20

Toward an IT Strategy-Development Process 22

Challenges for CIOs 23 Conclusion 25  •  References 25

Chapter 3 lInkIng IT To BuSIneSS MeTrICS 27 Business Measurement: An Overview 28

Key Business Metrics for IT 30

v

vi Contents

Designing Business Metrics for IT 31

Advice to Managers 35 Conclusion 36  •  References 36

Chapter 4 BuIlDIng a STrong relaTIonShIp wITh The BuSIneSS 38 The Nature of the Business–IT Relationship 39

The Foundation of a Strong Business–IT Relationship 41

Building Block #1: Competence 42

Building Block #2: Credibility 43

Building Block #3: Interpersonal Interaction 44

Building Block #4: Trust 46 Conclusion 48  •  References 48

Appendix A The Five IT Value Profiles 50

Appendix B Guidelines for Building a Strong Business–IT Relationship 51

Chapter 5 CoMMunICaTIng wITh BuSIneSS ManagerS 52 Communication in the Business–IT Relationship 53

What Is “Good” Communication? 54

Obstacles to Effective Communication 56

“T-Level” Communication Skills for IT Staff 58

Improving Business–IT Communication 60 Conclusion 61  •  References 61

Appendix A IT Communication Competencies 63

Chapter 6 BuIlDIng BeTTer IT leaDerS froM The BoTToM up 64 The Changing Role of the IT Leader 65

What Makes a Good IT Leader? 67

How to Build Better IT Leaders 70

Investing in Leadership Development: Articulating the Value Proposition 73

Conclusion 74  •  References 75

MInI CaSeS Delivering Business Value with IT at Hefty Hardware 76

Investing in TUFS 80

IT Planning at ModMeters 82