Return on strategy

PORTFOLIO OPTIMIZATION – “RETURN ON STRATEGY” PILOT PROPOSAL

2015-02-10

AGENDA

¢  Introduction to The Goodwind, Pro4U and ValueMiner

¢  Introduction to “Return on Strategy”

¢  Presentation of proposed Pilot - Portfolio Optimization (Return on Strategy)

¢  Next step

THE “RETURN ON STRATEGY” CONCEPT IS DESIGNED AND DELIVERY BY THREE PARTIES – EXPERTS IN IT MANAGEMENT

•  An agile IT Management consultancy firm with expertize in Performance Management and Strategy

•  Helping IT organizations to understand the affects of digitalization and increased unpredictability (X-factor)

•  Clients: ABB, Ericsson Global Services, Stockholms Stad, Dataföreningen

•  A combination of technique and software which clarifies thinking and focuses on achieving objectives

•  Helps to quickly identify blind spots as well as to recognize and avoid risks. Assists in identifying and bridging gaps and ensuring improved quality

•  Clients: TeliaSonera, Volvo, etc

•  Pro4u generates business value with clients through the initiation, and running business and change management project.

•  Pro4u supplies consultant with extensive experience of leadership, business development, project management and IT

•  Clients: Handelsbanken, ABB, Folksam, etc

AGENDA

¢  Introduction to The Goodwind, Pro4U and ValueMiner Company and



¢  Next step

“The main hypothesis of a traditional business case is that we can isolate the effects of an investment over time (3-5 years) to

calculate its benefit contribution. But the fact is that the hypothesis is far from true. In the ‘new normal’ we need new

investment management methods that eliminates ‘the X factor’ (unpredictability).”

DEFINITION AND GUIDING PRINCIPLES FOR “RETURN ON STRATEGY”

Principles for “Return on Strategy” •  Return on Strategy is a “snap shot” to help decision makers evaluate and

make changes to investments.

•  Return on Strategy is to define investments’ alignment with the strategic points of view at any given time (eliminating the X-factor)

•  The value of an investment is how well it contributes to the strategic objectives

•  The Strategy and Return on Strategy structure depends on the dynamics of the industry – the strategic break-down structure (ValueMIner) is a snap-shot of current situation.

Definition •  A method to align investments with the strategic objectives

•  A method to evaluate an investment’s contribution to the strategic objectives at any given moment (contribution/SEK)

ValueMiner

A 30% faster process that brings 100% alignment between strategic objectives, challenges, solution and investments

The ValueMiner method allows us to easily identify and evaluate the “Return on Strategy” of the Investments

(contribution/SEK)

WHAT ARE THE DEPENDENCIES AND CONTRIBUTION EXPECTATIONS?

Put a man on the moon!

Investment Portfolio

Send a man to the moon!

Get him back!

Objective

Challenge

Solution

Deliverable

Get him of the ground!

Don’t burn him!

Get him from the moon!

Land safely on the moon.

Land safely on earth!

Send device Moon land/leave

device Return device Heat

protection Landing device

Presentation Exercise

How much does each node contribute to the node (linked)

above? Sum of each node = 100

THE MAIN IDEA OF “RETURN ON STRATEGY” IS TO DEFINE THE STRATEGIC CONTRIBUTION OF THE PORTFOLIO

Solution (ValueMiner)

Contribution/SEK

Portfolio projects Investment Contributions

Send device 5% 150,000 SEK 7,500

Moon land/leave device

10% 320,000 SEK

32,000

Return device 5% 280,000 SEK

14,000

Heat protector 65% 130,000 SEK

84,500

Landing Device 15% 160,000 SEK

24,000

TOTAL 15,6% (max 100%)

1,040,000 SEK 162,500

Diagram 1: Return on Strategy dashboard

Definition: Contribution – a dimensionless metric defining the contribution to the strategic objective

Example

•  How to optimize “Return on Strategy” (contribution) of the Project Portfolio?

•  Which are the key investments scenarios?

•  Which investment will we fund?

•  Management coaching – together coming to insights of how the portfolio can be optimized for RoS.

•  Setting up KPI:s to ensure measure Return of Strategy effects. Tracking value creation of key scenario.

Key questions Approach

THE MAIN TASK IS TO OPTIMIZE THE PROJECT PORTFOLIO FROM A RETURN ON STRATEGY PERSPECTIVE

AGENDA

¢  Introduction to The Goodwind, Pro4U and ValueMiner



¢  Next step

THE PURPOSE OF THE PORTFOLIO OPTIMIZATION (ROS) PILOT IS TO TEST THE PROTOTYPE AND GAIN FEEDBACK

¢  The Portfolio Optimization (Return on Strategy) pilot will include three workshop (2-3 hours) with relevant stakeholder in the organization

¢  We need access to current project portfolio and investment plans to identify and calculate current RoS index

¢  Each workshop will have a coaching approach – with our facilitation we will gain insights together!

¢  The final report will show the current situation, gathered insights, and recommendations to improve Return of Strategy of project portfolio

¢  Free of charge (pilot) – first two client cases only!

¢  Our goal is to quality assure the concept, and gain a reference.

Approach

Price

PILOT PLAN

Time

Start-up meeting

-  Identify key stakeholders -  Book workshop meetings -  Identify documentation -  Set expectations

Final Report

-  Analysis of current situation

-  Insights -  Recommendations -  Evaluation of

expectations

2 – 3 weeks

Workshop 1

-  Introduction to RoS and ValueMiner

-  Mapping Objectives –> Solutions

Workshop 2

- Mapping portfolio to ValueMiner Solutions

-  Understanding strategic contribution

-  Insights

Workshop 3

-  Investment scenarios -  Benefit & Concerns -  Identify KPIs

AGENDA

¢  Introduction to The Goodwind, Pro4U and ValueMiner Company and ValueMiner



¢  Next step

NEXT STEP

¢  Book an information meeting with The Goodwind Company to learn more about Return on Strategy and how this can be used in your organization.

The Goodwind Company Contact: Hans Gillior Email: [email protected] Phone: 0768 643778

Business

Return on strategy