High-Performing Information Systems Aligned With Utility Business Strategy

200 Pages·2013·5.65 MB·English

High-Performing Information Systems
Aligned With Utility Business Strategy
Web Report #4316
Subject Area: Management and Customer Relations
High-Performing Information Systems
Aligned With Utility Business Strategy
©2013 Water Research Foundation. ALL RIGHTS RESERVED.
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High-Performing Information Systems
Aligned With Utility Business Strategy
Prepared by:
David W. Harris and Esteban Azagra
Red Oak Consulting, an ARCADIS group, 410 North 44th Street, Suite 1000, Phoenix, AZ 85008
Rod van Buskirk
Westin Engineering, Inc., 3100 Zinfandel Drive, Suite 300, Rancho Cordova, CA 95670
and
Corey Williams
Inflection Point Solutions, 8500 West 110th Street, Suite 550, Overland Park, KS 66210
Jointly sponsored by:
Water Research Foundation
6666 West Quincy Avenue, Denver, CO 80235
and
U.S. Environmental Protection Agency
Washington, DC 20460
Published by:
©2013 Water Research Foundation. ALL RIGHTS RESERVED.
DISCLAIMER
This study was funded by the Water Research Foundation (Foundation) and the U.S. Environmental
Protection Agency (USEPA) under Cooperative Agreement No. EM-83406801-1. The Foundation
and USEPA assume no responsibility for the content of the research study reported in this
publication or for the opinions or statements of fact expressed in the report. The mention of
trade names for commercial products does not represent or imply the approval or endorsement
of the Foundation or USEPA. This report is presented solely for informational purposes.
Copyright © 2013
by Water Research Foundation
ALL RIGHTS RESERVED.
No part of this publication may be copied, reproduced
or otherwise utilized without permission.
Printed in the U.S.A.
©2013 Water Research Foundation. ALL RIGHTS RESERVED.
CONTENTS

LIST OF TABLES ....................................................................................................................... VII
LIST OF FIGURES .................................................................................................................... VIII
FOREWORD .................................................................................................................................. X
ACKNOWLEDGMENTS ........................................................................................................... XII
EXECUTIVE SUMMARY ....................................................................................................... XIV
PREFACE ........................................................................................................................................1
PART 1 ALIGNING IT WITH UTILITY STRATEGIES ..............................................................5
CHAPTER 1 THE WATER BUSINESS CHALLENGE ...............................................................7
CHAPTER 2 THE CASE FOR BUSINESS-IT ALIGNMENT ...................................................17
CHAPTER 3 A FRAMEWORK FOR ALIGNMENT .................................................................27
CHAPTER 4 ALIGNING THE IT PLAN ....................................................................................35
CHAPTER 5 ALIGNING THE LEADERSHIP THROUGH IT GOVERNANCE .....................44
CHAPTER 6 BUSINESS PERFORMANCE MANAGEMENT .................................................52
PART 2: INFORMATION TECHNOLOGY OPPORTUNITIES ................................................65
CHAPTER 7 PERSPECTIVES ON IT OPPORTUNITIES .........................................................67
CHAPTER 8 PRIMARY IT OPPORTUNITIES .........................................................................82
CHAPTER 9 SYSTEM INTEGRATION AND BUSINESS PROCESS MANAGEMENT
SYSTEMS....................................................................................................................................115
CHAPTER 10 BUSINESS INTELLIGENCE AND REPORTING SYSTEMS ........................122
PART 3 INFORMATION TECHNOLOGY IMPLEMENTATION .........................................126
CHAPTER 11 SOFTWARE SELECTION AND PROCUREMENT .......................................128
CHAPTER 12 IT PROGRAM AND PROJECT MANAGEMENT ..........................................134
CHAPTER 13 ORGANIZATIONAL CHANGE MANAGEMENT .........................................138
PART 4 MANAGING INFORMATION TECHNOLOGY .......................................................144
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©2013 Water Research Foundation. ALL RIGHTS RESERVED.
CHAPTER 14 IT SERVICE MANAGEMENT .........................................................................146
CHAPTER 15 IT EFFICIENCY AND COST REDUCTION ...................................................153
CHAPTER 16 DATA GOVERNANCE .....................................................................................164
REFERENCES ............................................................................................................................170
ABBREVIATIONS .....................................................................................................................172
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©2013 Water Research Foundation. ALL RIGHTS RESERVED.
TABLES

Table S.1 Typical Utility Decision Rights Matrix ..................................................................... xviii
Table P.1 Suggested Report Usage Guidelines ................................................................................2
Table 1.1 Business-IT Maturity Model Process Areas ..................................................................13
Table 1.2 Typical Characteristics of Each Maturity Level ............................................................14
Table 3.1 Representative List of Business Processes ....................................................................31
Table 5.1 IT Value Evaluation Criteria .........................................................................................48
Table 5.2 Typical Utility Decision Rights Matrix ........................................................................50
Table 6.1 Performance Measures Recommended by EUM Primer ...............................................55
Table 6.2 Service Level Categories ..............................................................................................56
Table 6.3 Sample Utility KPIs .......................................................................................................57
Table 6.4 Sample Data Dictionary for a Performance Management System ................................61
Table 7.1 Common System Architecture Layers ...........................................................................71
Table 7.2 Elements of a High Level System Architecture.............................................................73
Table 7.3 SaaS vs. Traditional Software Licensing .......................................................................80
Table 14.1 Perception of IT Services Value ................................................................................147
Table 14.2 IT Service Catalog ....................................................................................................150

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©2013 Water Research Foundation. ALL RIGHTS RESERVED.
FIGURES

Figure S.1 Expected Benefits of Effective Business-IT Alignment ...................................... xiv
Figure S.2 Business-IT Alignment “Chasm” ..........................................................................xv
Figure S.3 Example of High Level System Architecture Diagram ....................................... xvi
Figure S.4 Critical Inputs and Outputs into the Strategic IT Planning Process.................... xvii
Figure S.5 Significant IT Developments over Time.............................................................. xix
Figure S.6 Benefits of Core Utility Information Systems .......................................................xx
Figure S.7 Traditional Methodology and EPIC Process....................................................... xxii
Figure S.8 Performance Management through OCM .......................................................... xxiii
Figure S.9 IT Service Management Improvement Processes .............................................. xxiv
Figure S.10 Multiple Focus Areas for Data Governance ........................................................xxv
Figure 1.1 Industry Threats .......................................................................................................8
Figure 1.2 Expected Benefits of Effective Business-IT Alignment ........................................10
Figure 1.3 Ability to Access Information ................................................................................11
Figure 1.4 Relevant Decision Support Tools ..........................................................................12
Figure 1.5 Relevant Decision Support Information ................................................................12
Figure 2.1 Business-IT Alignment “Chasm” ..........................................................................19
Figure 2.2 Asset Management Information Tracking .............................................................20
Figure 2.3 Cyclical Improvement Process ..............................................................................26
Figure 3.1 High Level Utility Business Process Diagram.......................................................32
Figure 3.2 High Level System Diagram ..................................................................................33
Figure 4.1 Critical Inputs and Outputs into Planning Process ................................................36
Figure 4.2 Relationships between Business Strategies ...........................................................38
Figure 4.3 Alternative IT Governance Approach ....................................................................42
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©2013 Water Research Foundation. ALL RIGHTS RESERVED.
Figure 5.1 IT Value Framework ..............................................................................................48
Figure 5.2 Spreadsheet Tool for IT Value Evaluation ............................................................49
Figure 6.1 Deming Cycle Plan-Do-Act-Check Model ............................................................53
Figure 6.2 Typical Performance Management System Solution .............................................59
Figure 7.1 Benefits of Core Utility Information Systems .......................................................69
Figure 7.2 Sample High Level System Architecture ...............................................................72
Figure 7.3 Significant IT Developments over Time................................................................75
Figure 8.1 Typical Arrangement of Industrial Control System...............................................83
Figure 8.2 Three Areas of PMIS Focus .................................................................................103
Figure 9.1 Point-to-Point Integration Model .........................................................................116
Figure 9.2 Enterprise Application Integration Model ...........................................................117
Figure 9.3 Web Service Model.............................................................................................119
Figure 11.1 BPMN Example for a Laboratory Business Workflow ......................................130
Figure 11.2 Traditional Methodology and EPIC Process........................................................132
Figure 13.1 Performance Management through OCM ............................................................139
Figure 14.1 ITSM Processes ...................................................................................................149
Figure 14.2 Sample IT Service Management Dashboard........................................................152
Figure 15.1 Conventional vs. Virtualized Server Setup ..........................................................154
Figure 15.2 Typical SaaS Arrangement .................................................................................155
Figure 15.3 Cloud Computing Overview ................................................................................156
Figure 15.4 Enterprise Service Bus .........................................................................................158
Figure 15.5 Evolution of Disk Drive Capacity .......................................................................160
Figure 15.6 Disk Drive Capacity and Throughput Comparison ............................................160
Figure 16.1 Data Governance as Part of IT Governance .......................................................165
Figure 16.2 Multiple Focus Areas ..........................................................................................167
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©2013 Water Research Foundation. ALL RIGHTS RESERVED.