Framework Based on Benefits Management and Enterprise Architecture: The Private Cloud in the Business Strategy

Framework Based on Benefits Management and Enterprise Architecture: The Private Cloud in the Business Strategy

António Rodrigues (Instituto Universitário de Lisboa (ISCTE-IUL), Portugal) and Henrique O’Neill (Instituto Universitário de Lisboa (ISCTE-IUL), Portugal)
Copyright: © 2014 |Pages: 21
DOI: 10.4018/978-1-4666-4506-6.ch016
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Abstract

In 2010, a framework aiming to address strategic investment decisions on IT infrastructure was developed. It was based in Benefits Management principles and Enterprise Architecture concepts, being inspired by the emerging public cloud technological trend. Meanwhile, the public cloud concept did not materialise at the expected pace and other alternatives have emerged in the market, in particular the private cloud-based solutions. This fact required the framework to be updated to cope with the business and technological requirements of the private cloud concept. A new version of the framework has been developed and was used to help managers to address IT investment decisions on private cloud in an international bank.
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Introduction

In the “distant” year of 2010 a research project was set-up to address two pressing issues in the IT business strategy domain (Rodrigues & O’Neill, 2012):

  • Benefits management in IT investments: At that time the economic climate already stressed the need for the firms to thoroughly reflect on the planned investments. At such it became imperative to provide a distinctive reason for each new IT project, often only seen as a cost centre. The recommendations then presented stressed the need to provide an effective liaison between the project and the added value the investment brings to the business;

  • The cloud based enterprise architecture: The paradigm adopted by companies to view the management of their IT was clearly in a moment of change. The traditional data center as it was known until then, was starting facing the competition of alternative solutions, from managed services, outsourcing and possibly the most disruptive cloud computing. The offerings in this field were multiplying and coming up on the most varied forms. Interestingly, most of the new solutions were being introduced by the traditional suppliers of the past on-premise solutions. This fact alone helped to justify the opportunity of the research subject.

The research enabled to establish the framework presented in Figure 1.

Figure 1.

First version of the framework, presented in 2010 (Rodrigues & O’Neill, 2012)

The 6 phases that comprise the model may be described as follows:

  • Alignment Business-IT: To assure that the investment made in IT is aligned with the business objectives and that the project is able to achieve the expected benefits. This phase is materialized through a Dependencies and Benefits Network that enables to define the relationships between IT→Stakeholders→ Business changes →Business benefits;

  • Analysis of IT-Architecture: To identify what is the most suited solution for the IT architecture. The model considers on premise, cloud and hybrid solutions. This phase results are of vital importance as the generated architecture will decisively determine the project subsequent phases;

  • Business Case: The data collected will be integrated in a decision tree model that enables to assess the project, not just from a financial perspective but also considering other non financial benefits. Sometimes projects and business initiatives are justified using just a cost-benefits financial analysis. This approach may be misleading. Although being an undoubtedly important factor, the financial dimension should not be the only one to take into account as a decision making criteria;

  • Proof of Concept: This phase is very important, especially when the option to outsource an application is being considered. The proof of concept enables to anticipate service levels and quality of response, among other key performance indicators;

  • Implementation: The implementation phase must be carefully managed (plan, execute, control, assess) in order to minimize the effect of future constraints;

  • Results Analysis: This phase enables to analyse results to validate all the premises and assumptions previously made. This phase becomes also very important to confirm the benefits that usually are announced in the early conception stages of the project.

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