With worldwide annual spend on ICT estimated at $1.6 trillion, leading companies in every business sector will come to rely on the IT-CMF (Capability Maturity Framework) as the global standard for IT - making IT investment and operating decisions, proving value to shareholders and training IT Leaders - a senior IT expert said today. Intel Global Director of IT Innovation, Professor Martin Curley was speaking in Boston at the annual North American Conference of the Innovation Value Institute (IVI), the developer of IT-CMF, which has now engaged with over 250 CIOs and IT executives from more than 20 countries.
IVI was established in 2006 as a joint venture between Intel, The Boston Consulting Group, and the National University of Ireland Maynooth to tackle the universal problem of otherwise highly sophisticated companies 'shooting in the dark' on their IT investment decisions. IVI is now an international open-forum learning consortium that has attracted more than 40 blue chip members including Microsoft, Chevron, BP, Ernst & Young, SAP and Axa. It was named as a Centre of Excellence by the Irish Government in 2009 and expects to be used by two-thirds of all Fortune 500 companies within five years. IVI members are now firmly putting into practice the tools and methods devised during research with quantifiable results.
Among the results reported by members employing IT-CMF practises are:
* 8% saving in total operating budget for Technology Innovation and 20% saving of total budget for experiment execution (Merck)
* 25% improvement in IT capability, for 10% reduced spend (Intel)
* Significant success with initial applications has led to decision to use IT-CMF's 36 process framework to organize and unify the IT function across corporate group (Chevron)
* 96% reduction in set-up working time for new servers; and -81% (-63%) reduction in total cycle time for set-up of virtual (physical) servers (Axa-Tech)
The driving force behind the establishment of IVI was the need to develop a roadmap to allow organizations assess and benchmark their IT maturity level and help them make effective decisions regarding IT investment with confidence professionalize the IT industry.
Gregg Wyant, Intel's IT CTO, who spoke at the conference, said that the IT-CMF has proved a key tool to unlocking the value of IT spend in Intel. "Using IT-CMF helped guide us to a 25% improvement in IT effectiveness, while at the same time reducing spend by 10%. In addition, a recent IT-CMF assessment has demonstrated a 19% improvement in Enterprise Architecture Management in just one year - allowing IT solutions to better meet the needs of Intel's business".
Peter Forte, CIO of Analog Devices Inc, who attended the IVI conference in Boston, said "Analog is very interested in using the IT-CMF to carry out an in-depth assessment of our IT function. Of particular value is the ability to benchmark, identify gaps and use the assessment to prioritize future IT investment", he said.
Peter Breunig, Chief Technology Officer, Chevron said IT-CMF was that following success with a number of processes it planned to apply the framework across its entire IT function. "Chevron has found value in the way IVI allows us to assess, measure and manage critical areas including Enterprise Architecture and Innovation Management. With IT-CMF's 36 Critical Process framework we have found what I believe is a unifying framework for IT throughout Chevron", he said.
Mike Bevil, Manager of MRL IT Innovation, Merck, said the company was using IT-CMF to develop a long term plan to improve innovation capability. "We found through an analysis of 14 processes that we were at a maturity level of 2, which signified only 'Sporadic Innovation'. Our plan will see us greatly improve maturity over the next 18 months, allowing us to bring more innovation projects through to pilot stage. Already, in Phase One we have seen efficiency savings of 20% in our experiment execution budget", he said.
Vincenzo Marchese, Group Enterprise Architect, BP, said that BP has carried out two IT-CMF assessments in Enterprise Architecture Management over the last two years and has recorded significant improvements in this area. "Our maturity has risen to a level 3 in most areas in 2009 (from an overall level 2 in 2008), and in many pockets we have reached level 4. But more importantly we have learned that training and certifying our people in an architecture framework significantly has improved the quality and consistency of our work", he said.
"The results which have been coming back from the field over the past six months demonstrate that IT-CMF is proving itself in a very real way in the business world. The need to prove value from IT investment is now very urgent but we are trying to catch up on four decades of paying little attention to the issue. This unique cross-industry collaboration process at IVI is providing the road map to secure IT's future as a value driver in business", added Professor Martin Curley.
"IT has been viewed for too long as a cost item by business. It was expected to perform but could not quantify its contribution. This in turn had undermined the role of the CIO at board level. Through IT-CMF, companies can show real measurable return for their IT investments, which are typically up to five per cent of all revenues. That should always have been important, but is especially vital now in a recessionary climate. It is companies which can innovate, and prove their innovation which will succeed. IT-CMF is an important enabler of this", said Ralf Dreischmeier, Partner and Managing Director of The Boston Consulting Group.
President of National University of Ireland Maynooth Professor John Hughes said "The open innovation which is at the core of IT-CMF will be the real driver of learning and development for the 21st Century. The IT-CMF is playing a vital role in professionalizing the IT industry and will be to IT standards what the ISO system is to quality standards".
At its annual North American conference IVI also announced that the US Department of Homeland Security had joined the consortium. By 2015 IVI expects that over two-thirds of all Fortune 500 companies will be using IT-CMF as the core framework to manage their IT capability.
3rd February 2010
Further information from:
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Notes to Editor
About the Innovation Value Institute (IVI) IVI was co-founded by NUI Maynooth, Intel and The Boston Consulting Group in 2006 and is made up of a strong consortium of leading industry players and academia. IVI's mission is to create the global standard to realise the business value from IT investments. The key areas of focus are the developments of frameworks, such as the IT-CMF, to improve IT effectiveness as well as providing continuous professional development. To date over 250 IT Professionals from 20 countries have interacted with the IT-CMF. IVI is also working towards creating the global accreditation standard for IT management.
About the IT-CMF (Capability Maturity Framework) The IT-CMF is a framework to evaluate an organization's IT maturity level, benchmark with industry peers and best practice, and identify a roadmap for improvement. It has been developed by practioners and academics in real time, and tested in the real world at every stage. See attached document for further information.
For more information please visit http://ivi.nuim.ie/
How does it Work?
The IT-CMF consists of a five stage maturity model which is used to organize, measure and structure a framework for mapping IT improvement efforts in an organisation. The IT function of any organization can be measured with this model. The five maturity levels consist of the following:
Initial - no formal processes, ad-hoc Basic - delivering basic service or function Intermediate - intermediate level of process sophistication Advanced - delivering an advanced level of output Optimizing - all critical processes are optimized
To fully implement the IT-CMF an organisation must establish which level of maturity they are currently operating at by measuring themselves over the four macro processes. The four foundational macro processes are:
1. Managing IT like a Business - shifting the focus from technology and production to a focus on customers and services
2. Managing the IT Budget - investing in innovative IT solutions that deliver better value and performance
3. Managing the IT Capability - managing IT assets throughout the value chain and developing core competencies
4. Managing IT for Business Value - linking IT investments to overall business benefits
In total, the four macro processes of IT-CMF are subdivided into 36 critical processes to cover all activities in an IT department. An assessment of an IT organization's maturity across these 36 processes, together with comparisons to industry benchmarks and best practices is then given to the CIO.
To assess the maturity of an organisation against the IT-CMF's model, two layers of assessments are provided. First, a high-level assessment covers the complete IT organisation and highlights particular areas in need for improvement. Second, drill-downs are conducted in these areas with detail-level assessments to identify specific gaps and give recommendations on how to close them. The IT-CMF contains collections of industry practices to compare against for gap identification and to draw from for identifying recommendations.
The IT-CMF highlights the company's key maturity gaps and any potential overinvestment. Contrary to many other frameworks, it is not assumed that a higher maturity level will automatically generate business value for the company. Take, for example, a coal mine for which it would clearly be an overinvestment to be as mature at IT security as a major bank. The assessment results provide CIOs with a clear roadmap to avail of any value-creation opportunities and guide them in reaching the optimal maturity level for their organization across all 36 critical processes. Using this framework, CIOs can help their department's transition from being perceived as a utility or technology supplier to a core competency of the firm that delivers and demonstrates bottom line value from IT investments.
Pictured at the IVI North American Conference are: Prof John Hughes, Chair IVI & President of NUI Maynooth, Peter Forte CIO Analog, Gregg Wyant IT CTO Intel Corp