Creating a Process-Driven Organization at AgCredit
- Pages: 9
- Word count: 2044
- Category: Business
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1. Propose an organizational structure for the IT department that you feel would support the transformation of AgCredit into a process-centric organization.
AgCredit should appoint a CEO who is responsible for carrying out the strategic plan and will ultimately responsible for managing company operations coupled with a Vice President would oversee operations, carry out the strategic plan set forth by the CEO, and manage the four separate divisions. The CIO would direct the IT department, which would include several IT senior leaders, as well as guide the company’s technological direction.
The CFO would be largely involved with both the business and IT departments, helping to give a deeper understanding of cost components and act as an advisor to both IT and business regarding legacy software and future projects. A business analyst would be the link between the IT and business departments, matching technology to business needs, and predicting future business directions. The IT relationship manager would be the connection between the business and IT departments and would ensure the IT governance is translated into business terms.
Other staff could include an applications architect who would design applications, implement middleware and infrastructure; and a Network manager who would direct daily IT operations, test, deploy, and integrate network systems.
A steering committee will be needed to be implemented as part of the approval process of all projects.
2. Outline a project selection process for AgCredit to ensure alignment with the enterprise business vision.
First of all, a thorough inventory of what software, practices, process standards, and groups already exist before implementing new technology. Next create a technology roadmap to show the opportunities for technology to serve the business for more effectiveness and efficiency. complete a Gap analysis to assess the current state of technology which will support the current and forecasted needs of the business, and work with enterprise architects and technical experts to understand the future business ventures. This will allow staff to see the technology required to support the business’s vision and strategy.
In addition, perform a business analysis between IT and the business to align IT planning, match technology to business needs, and forecast future business directions. Additionally, create an application portfolio which will help them categorize, assess, and rationalize to identify which applications to maintain, invest in, replace, or retire, and which new business applications would bring the most value to the business. It will include an analysis of operating and capital expenses by application, demand analysis and an application portfolio analysis which will assess the current versus the desired state of both the technology and business value.
It is important to also create a project portfolio which focuses on future spending, which will attempt to balance IT cost reduction efforts and investments to develop new capabilities with technology and application upgrades. Additionally, goals, deliverables, and a set of governance procedures should be created to guide the management in creating the application portfolio. For ongoing rationalization of the applications portfolio, an analysis and reporting capability should be created such as a business case which will include metrics and a quarterly reporting structure to ensure that savings targets are obtained.
Before implementing new applications, they need to be clearly identified and a basic understanding provided of its functionality. In addition, applications will need to be categorized for comparison and portfolio management purposes, as well as rate the technical quality of the application which should include various elements of risk, rate each application as to the value of the application to the business, capture the overall cost of the an application after deployment which will include maintenance and support costs.
3. How should Manley “make the case” for SOA to ensure that the executive team at AgCredit buys in? Manly should begin with what is wrong with the present system in that programs no longer talk to each other ….. and that the present IT systems are not helping them to meet their establish goals for the future. They have become expensive and cumbersome which leads to less automation as they require many man hours to fix the ongoing problems. Then Manley should follow up with the promise that the SOA can transform the IT assets of AgCredit, making it possible to do more with less, and faster.
In addition, the SOA can integrate with the system they is established. With reuse of services and components, new applications can be quickly changed to respond to ever changing market conditions and challenging business demands. She should continue to state that with SOA, they will gain a flexible architecture comprised of reusable components. Additionally, a SOA can cut IT maintenance demand by reducing the number of components needed and drastically reduces the amount of time compared to the time that is required to implement the smallest change on the legacy system. It also improves quality and reliability since testing has already been done before implementing the software to assure compliance with standards.
SOA will extend the life and ROI of legacy applications, processes and data from existing systems which will cut costs. Information is shared, and information and processes from systems that were previously isolated or integrated via point solutions. The SOA’s have been tested which lowers the potential of bugs. If they get SOA’s that have general language, it will be easily integratable in their existing legacy systems.
IT would like to spend more time on innovations and less time and on developing software. The SOA model has the ability to decrease IT budgets in several ways since the fundamental applications and technology to support an SOA are already in place with the development focus on integration and existing business logic remains viable cost on system maintenance. There would be no frequent upgrades and will not need to be re-architected or replaced to meet new business requirements. 4. What new internal IT capabilities will have to be developed in order to create an IT department to support AgCredit’s future business architecture?
I believe all of the IT functions are important as they all touch the business architecture. They include: * Business analysis will verify the needs and develop solutions to match technology to business needs. The business analysis begins with analyzing the strategic profile and implementing policy based on the analysis, next is analyzing the Business Architecture which is the current business process, and last defining the required changes that are needed to be in line with the business. * Systems analysis would assist in understanding their existing system and identify problems which would help to improve the system. * Strategy and planning could be done by performing a SWOT analysis to pinpoint strengths and weaknesses in budgeting, strategy development, policy development, and in making a portfolio analysis.
Furthermore, it would help to identify key goals, objectives, strategies, and action plans. * Data Management would help improve knowledge and business intelligence. This would include data architecture; categorize, assess, retrieve and share enterprise information such as database, documents, policies, and procedures; and business intelligence would include analyzing raw data to help cut costs and identify new business opportunities. * Initiating IT governance will assist in creating a successful relationship and collaboration between IT and the business unit. * Project Management is needed to execute business projects and tie those to the established business goals. * The Enterprise Architecture should be designed with the business components in mind making sure they support the organizations objectives.
* Application development should be created to meet specific needs of the business. This also includes an operating system that is able to manage all of the other programs on the computer that are pertinent to the business. * Quality Assurance and Testing is important to ensure quality of the installed software and that they conform to ISO 9000 standards. If the software is not installed properly, the business cannot function efficiently and effectively. * The correct network is essential in designing the computer system to support the business. * Up–to-date hardware is necessary be able to handle the load of all of the system applications.
* IT staff development
* Nothing works and nothing talks to anything else
* Project delays
* Customer complaints
* It staff doesn’t understand the business
Want better system integration
Doesn’t know how business strategy would fit with everyone elses to deliver enterprise value IT doesn’t understand business processes – IT doesn’t have credibility with the business They need to know key strategic drivers and how the business processes enable them No written processes
Need simpler business processes – too many steps in computer system such as renewing a loan
Need better handle on what desired future business processes will look like Have 40 million of projects on the books – until they know where they r going as an enterprise its hard to tell whats worthwhile and whats not Key strategic drivers are continuous growth, expanded customer relationship, the ability to spend more time with the customer, the ability to cross-sell between business divisions, and the ability to provide a consistent customer experience across all delivery channels. Need transformational roadmap
Need agreement on new key business processes
There was no architecture plan
They had outsourced chunks of IT for the wrong reasons making the staff feeling highly disengaged from the company. Staff unclear of their roles and were performing roles for which they were not qualified. There was a significant lack of technical skills in certain areas, and the organization was missing senior IT managers who could be “thought leaders”. Many IT vacancies were unfilled because the company couldn’t find qualified staff for what it was willing to pay.
Had 4 major systems each with their own databases and special interfaces had been built to enable them to communicate with each other. Now they had duplicated information in different formats which were difficult to reconcile which created a significant challenge when creating accurate reports for banking and other regulators. If they went SOA, they would have foundational services, such as forms management and identity management, no redundant information, internal services which would decompose applications into small pieces of functionality such as changing a customer address.
Strategy development –
Business process design – Define processes and workflows, review develop and implement measures, identify, assess, and develop a plan for IT infrastructure, define roles and responsibilities of IT staff, implement specific fiscal practices and controls, establish and align business goals to help meet evolving needs, improve performance and look for potential cost savings across the IT function, initiate IT governance which will help create an successful relationship between IT and the business unit, collaboration with the Business department, Clarification of roles will be necessary to ensure everyone is working to their potential, SOA standards and guidelines need to be conformed,
Knowledge Asset Management
* Relationship Asset Management – Enhance communication between IT and business units, thereby enabling critical knowledge sharing to occur and reducing the risk of misalignment and project delays that would result from poor coordination and inflexible information systems * Increase opportunities for innovation and collaboration as a consequence of more frequent, regular communications * Improve the perception of IT in the business, working towards the role of IT as an appreciated business partner
5. What aspects of IT governance do you think would be important in supporting this transformation?
Establishes chains of responsibility, authority, and communication; measurement, policy, standards, and control mechanisms to enable people to carry out their roles and responsibilities; decide who make decisions; What mechanisms will be used to communicate IT investment decisions to the board of directors, executive management, business management, IT management, employees, and shareholders; ensure alignment between the business units and IT; manage IT risks including both security and project failures;
IT should be part of the executive team where most strategy discussions begin and end; establish an IT portfolio management which will enabling better strategic decision-making, setting service-level agreements on SOA’s; provide transparency and education firms with more effective IT governance had more senior management involvement. CIOs must be effectively involved in IT governance for success. Other senior managers must participate in the committees, the approval processes, and performance reviews.