- Business Technology Management
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Business Technology Management (BTM) is a management science that seeks to unify business and technology decision-making at every level in an enterprise. BTM delivers a set of guiding principles, known as BTM Capabilities. These capabilities are combined to form BTM solutions, around which a company's practices can be organized and improved. BTM also defines the expected characteristics of an organization according to five levels of a maturity model.
BTM builds bridges between previously isolated tools and standards for business technology management by strategically incorporating both operational and infrastructure levels of technology management to ensure that an enterprise’s business strategy can be realized by the technology it deploys. This structured approach is used by enterprises to align, synchronize and even converge technology and business management for the purpose of ensuring better execution, risk control and profitability.
Where does Business Technology Management (BTM) fit?
Most companies employ a number of methodologies and techniques to improve business and technology alignment. While many of these methods have acknowledged strengths, they typically represent piecemeal solutions. Disparate islands of practice exist within the technology management domain, particularly in the areas of operations and infrastructure. These range from the
Project Management Body of Knowledge( PMBOK) and Balanced Scorecardto the Software Engineering Institute’s Capability Maturity Model( CMM). However, none of these approaches focuses on integrating and enabling the capabilities necessary to achieve strategic business technology management and the sustainable value that follows. The danger of relying solely on “downstream” technology management methodologies is that by the time alignment problems become apparent, they may be irreversible. Furthermore, when methodologies are borrowed from the business domain, there are often deficiencies with respect to focus, goals/objectives and adaptability. For example, Balanced Scorecard is a performance measurement methodology originally designed for the HR function, and Six Sigma is a quality improvement methodology first applied to the manufacturing function. These methodologies are often applied to technology operations with varying degrees of success, but they may not be comprehensive enough to address the unique needs of business-technology integration.
BTM addresses this challenge by providing a set of guiding principles around which a company’s practices can be organized and improved. It harmonizes and integrates and elevates previously isolated tools and standards for “IT” management to deliver a seamless strategic management approach that begins with the concerns of Board and
CEOand connects that all the way through business technology investment and implementation.
BTM alignment, synchronization and convergence
Many enterprises perceive the alignment of business technology with the business to be a sort of management “Holy Grail”. From a BTM perspective, alignment can be defined as a state where technology supports, enables, and does not constrain the company’s current and evolving business strategies. It means that the IT function is in tune with the business thinking about competition, emerging threats and opportunities, and the business technology implications of each. Technology priorities, investments, and capabilities are internally consistent with business priorities, investments, and capabilities. When that’s the case, the company has reached a level of BTM maturity that relatively few have achieved to date. Alignment is a good thing, and sometimes sufficient to serve a particular business situation.
There are other higher states to consider however, and for some enterprises, synchronization of technology with the business is the right goal. At this level, business technology not only enables execution of current business strategy but also anticipates and helps shape future business models and strategy. Business technology leadership, thinking, and investments may actually step out ahead of the business (that is, beyond what is “aligned” with today’s business). The purpose of this is to seed new opportunities and encourage far-sighted executive vision about technology’s leverage on future business opportunities. Yet the business and technology are synchronized in that the requisite capabilities will be in place when it is time to “strike” the strategic option.
Finally, there is the state of convergence, which assumes both alignment and synchronization, with technology and business leadership able to operate simultaneously in both spaces. Essentially, the business and technology spaces have merged in both strategic and tactical senses. A single leadership team operates across both spaces with individual leaders directly involved with orchestrating actions in either space. Some activities may remain pure business and some pure technology, but most activities intertwine business and technology such that the two become indistinguishable.
BTM supports and guide enterprises to any of these three states. Whether the appropriate level for a company is alignment, synchronization or convergence, effective BTM is the source of dramatic competitive successes in today’s and tomorrow’s marketplace.
Dimensions of BTM
BTM addresses four critical dimensions that serve as integrated building blocks supporting improvements across the enterprise:
The first dimension for institutionalizing BTM principles is set of robust, flexible and repeatable processes. Simply defining these processes is insufficient though, to effectively implement BTM requires that processes be defined and consistently optimized evaluated to ensure:
* General quality of business practice—Doing the right things
* Efficiency—Doing things quickly with little redundancy
* Effectiveness—Doing things well.
Management processes are more likely to succeed when they are supported by appropriate organizational structures based on clear understanding of roles, responsibilities, and decision rights. Such organizational structures generally include:
* Participative bodies—involving senior-level business and technology participants on a part-time but routine basis
* Centralized bodies—requiring specialized, dedicated technology staff
* Needs-based bodies—involving rotational assignments, created to deal with particular efforts
The right set of structures will vary according to an enterprise’s value discipline, its primary organizational structure, and its relative BTM maturity. Centralized bodies, such as an Enterprise Program Management Office (EPMO), tend to require specialized, dedicated staff. Participative bodies, such as a Business Technology Investment Board, are ongoing, part-time assignments for their participants— the key stakeholders. Needs-based bodies—functionally specialized groups such as project teams—tend to be rotational assignments created in response to particular needs.
Valid, timely information is a prerequisite for effective decision making. This information must be delivered in a way that is comprehensible to non specialists and, at the same time, actionable in terms of informing choices that matter. Useful information does not just happen. It depends on the interaction of two related elements: data and metrics. Data must be available, relevant, accurate, and reliable. Metrics distill raw data into useful information. Thus, metrics need to be appropriate and valid for strategic and operational objectives. Internally, they should be comparable across the enterprise and across time; and externally across industries, functions, and extended-enterprise partners.
Effective technology, (that is, management automation tools) can help connect all the other dimensions. Appropriate technology helps make processes easier to execute, facilitates timely information sharing, and enables consistent coordination between elements and layers of the organization. It does this through the following:
* Automation of manual tasks
* Analytics for decision making
* Integration between management systems
The simple addition of technology to automate existing processes leaves most of its potential value untapped. The largest gains result from the optimization of processes, organizational structures, and information flows. The complexity of managing the business technology function and increasing demands of an ever-evolving business climate require more information transparency and operational synchronization than basic computing tasks can provide. The appropriate use of technology should not only ease the development and reporting of information needed to fuel management processes across the organization, but also to achieve consistent horizontal and vertical management integration.
A BTM Capability is defined as a competency achieved by combining each dimension and creating well-defined repeatable management processes that are executed through appropriate organizational structures, using an effective information architecture that is supported by the right level of automation and technology. BTM defines 17 of these specific capabilities, and each is grouped into one of four functional areas.
The first area is Governance and Organization is focused on enterprise CIOs and business executives concerned with enterprise-wide governance of business technology. The capabilities that must be developed to support this functional area ensure that required decisions are identified, assigned, and executed effectively. Necessary capabilities also include the ability to design an organization that meets the needs of the business, manages risk appropriately and gives proper consideration to government, regulatory and industry requirements.
The second area is Managing Technology Investments. This functional area focuses on the Enterprise Program Management Office (EPMO) and other technology and business executives who are concerned with ensuring selection and execution of the right business technology initiatives. The capabilities that must be developed to support this functional area ensure that the organization understands what it owns from an IT standpoint, what it is working on, and who is available. The organization must make certain that business technology investment decisions are closely aligned with the needs of the business and that technology initiatives are executed using proven methodologies and available technology and IP assets.
The third area is Strategy & Planning. This functional area focuses on enterprise CIOs, divisional CIOs, and business executives who are responsible for the efforts to synchronize business technology with the business. The capabilities that must be developed to support this functional area ensure that a target set of applications will meet the needs of the business and reduce overall complexity. In addition, annual planning and budgeting must incorporate elements of business technology strategy and other evolving needs of the business.
The fourth area is Strategic Enterprise Architecture. This functional area focuses on the Office of the Chief Technology Officer and business and technology executives who are concerned with the overall architecture and standards for the enterprise. The capabilities that must be developed to support this functional area ensure that appropriate information and documentation exists to describe the current and future-state environments. Also, it is necessary to verify that business and technology people can implement strategies and plans and make recommendations simplifying the existing business technology environment.
The BTM Maturity Model
A maturity model describes how well an enterprise performs a particular set of activities in comparison to a prescribed standard. In this case, the BTM Maturity Model defines five levels of maturity, scored across the four critical dimensions—process, organization, information and technology and assists in levying a grade based on objective, best practice characteristics. The maturity model also makes it possible for an enterprise to identify anomalies in performance and benchmark itself against other companies or across industries. The measurement of BTM capabilities through the BTM Maturity Model identifies areas most in need of improvement, fixes the starting point for the enterprise, and specifies the path for change. A growing body of research shows that at level 1, enterprises typically execute some strategic business technology management processes in a disaggregated, task-like manner. A level 2 organization exhibits limited BTM capabilities, attempts to assemble information for major decisions, and consults IT on decisions with obvious business technology implications. Enterprises at level 3 are “functional” with respect to BTM, and those at level 4 have BTM fully implemented. Organizations achieving level 5 maturity are good enough to know when to change the rules to maintain strategic advantages over competitors who themselves may be getting the hang of BTM.
The evidence also shows that enterprises at lower levels of maturity will score lower for business technology productivity, responsiveness, and project success than enterprises at higher levels. As BTM maturity extends past level 3, the resulting synchrony of business strategy and technology delivery makes the enterprise more agile and adaptable. For such companies, changes in the business landscape impel appropriate adjustments to strategy and corresponding action without major disruptions or anguish. Emerging opportunities are sensed and addressed more quickly. Project execution to deliver new capabilities is more sure-footed. As joint management of business and technology improves, the maturity of the enterprise is reassessed to focus the next set of priorities. As gains result from BTM, remaining weaknesses become more obvious and the business case for addressing them becomes more compelling.
A business strategy identifies target markets and the value proposition that will win in those markets. To implement the business strategy, the enterprise requires particular operational capabilities; for example, a high tech company pursuing a low-cost strategy may need the ability to build entirely to order and limit inventory risk. The most successful companies will craft their business strategies with full regard for any gaps or misalignments between current and required enterprise capabilities—including, of course, its technology capabilities.
The building blocks of the BTM Standard work together as a management system to clarify required enterprise business needs. BTM fulfills these needs through the application of 17 BTM capabilities that are grouped into the functional areas of Governance & Organization, Managing Technology Investments, Strategy & Planning, and Strategic Enterprise Architecture.
These capabilities are defined and created by four critical dimensions—processes, organization, information and technology. The BTM Maturity Model is used to identify areas most in need of improvement, to fix the starting point for the enterprise, to specify the path for change, and to measure progress. As a result, technology is governed in consonance with business requirements, with very measurable benefits.
Smart enterprises today are rightfully pursuing alignment of technology with the business, and that in itself is no small achievement. But for some, the right level is really synchronization, where technology shapes (not just enables) strategic choices. And at the highest level of achievement, business and technology leadership actually converges, reflecting an executive and management team that has achieved an extraordinary level of cross-understanding and vision for the future.
The BTM standard supports enterprises at all three levels. Assembling the components of Business Technology Management yields unprecedented capacity and opportunity for success in a marketplace where competitive advantage is increasingly defined through technology.
BTM is a major part of a Business-Agile Enterprise and forms the core of the Business Agile Enterprise Framework.
* [http://www.btminstitute.org/ BTM Institute]
* "Winning The 3-Legged Race" — When Business and Technology Run Together © 2006 BTM Institute /
Prentice HallThe Alignment Effect © 2002 Financial Times-Prentice Hall
* "The Alignment Effect" — How to get real value out of business technology © 2002 Financial Times-Prentice Hall
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