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SAP Value Mgmt Overview
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Value Management OverviewChristian Thisgaard, Head of Value Engineering - NordicsSeptember 15th, 2011
2©SAP CONFIDENTIAL 2011
Lack of Business
& IT Alignment Business Case
Project Team Involvement
Decreases after the Investment
Decision
Current Practices
Automation vs. SAP Best Practices
Long, Risky and Expensive
ProjectsUnrealized
Value
Low Business Satisfaction
Software Project Rather than Business Transformation
Too Often Companies Do Not Achieve Expected Value from IT-driven Transformations
SAP Customers Want Secured Business Outcomes
3©SAP CONFIDENTIAL 2011
The Value Leakage is caused by 3 main factors
Expected Value
Poor Selection and Prioritization
Implementation Changes Affecting
Potential Value
Poor Absorption and Value Tracking
Realized Value
10% – 15%
20% – 25%
Building Things RightBuilding the Right Things
Exploiting What We Built
Source: Corporate Executive Board -Applications Executive Council Research
50-65%
100%
5% – 10%
4©SAP CONFIDENTIAL 2011
StrategyEnablement
Measurable Benefit
Risk & Compliance Innovation
Business Value
Defining Value
A balanced view between strategic and tangible benefits is crucial. This is the only way to keep all stakeholders engaged.
The Four Value “Buckets”
5©SAP CONFIDENTIAL 2011
Heavy Value Management Adopters Over-Achieve on All Value Drivers
Quantitative1
Increased program sponsorship & engagementIncreased alignment between business & ITCloser strategy-to-execution loopImproved change management & end-user adoptionBetter IT Demand Management
Value Management: Establishing the Common Language of Business and IT
2.0XMORE
Projects delivering value on or ahead of time
On Time
1.9XMORE
Projects delivered on or below budget
On Budget
1.6XHIGHER
Business Benefits Achieved
On Value
Strategic
Source: SAP/AMR Value Management Survey Results 2010; 400+ Companies Surveyed
(1) Performance of companies with high level of best practices adoption compared to those with low levels of adoptionSource: : SAP/AMR Value Management Survey Results 2010; 400+ Companies Surveyed
6©SAP CONFIDENTIAL 2011
SAP Value Management
Value Management
Lifecycle
Plan
How well are we performing today?What will make us better?Are we willing to do something about it?
Execute
How do we enact the recommended changes?How do we measure progress?How do we get the right visibility & accountability?
Institutionalize
How do we scale the value-based approach across our portfolio?Where should VM live in our organization?How do I make VM part of our organization’s DNA?
Sustainable Approach to Drive On-Time, On-Budget, On-Value Performance
7©SAP CONFIDENTIAL 2011
Nordic Engagement Case:Nordic 5 yrs Results: +400 Benchmarks, +300 Value Discoveries, +30 Value Realisations and 3 Value Optimizations
Global company 10Bill revenueAlready have SAP Order Mgmt and Finance
Transformation of global Supply Chain & Production (50 countries)
Procurement Supply chainManufacturing
Build common “change urgency” from all stakeholders
Benchmark program (+30 submissions)Consolidation of strategic drivers and pain-pointsTarget setting & PlanningEstablishment of Value management on two levels
Value realization of SCP TransformationAdoption of Value Discovery for other IT-projects
Context
Challenge
ApproachValidation
Alignment
Benchmarking
Analysis
Secure executive alignmentConfirm timeline, deliverables and interviewees
Benchmark performanceFacilitation
Quantify valueBuild solution roadmapEstimate costsPrepare business case
Validate findings and recommendationsPresent to Executive sponsor(s)Agree on next steps
Adoption
Review Governance ModelReview IT Portfolio ModelRoles and Skills
8©SAP CONFIDENTIAL 2011
SAP’s Value Mgmt Services, Tools, Data and Training
Performance Benchmarking
Business Case Development
Value Academy
Value Realization
Value Optimization
Available to SAP and non-SAP customers
One of the largest and most global benchmarking programs10,000* submissions from 3,000 companies30+ Business Processes, 700 KPIs, 1,000 Best PracticesEstablish performance baseline & set goals for transformation
Performance BenchmarkingCentral portal to manage end-to-end benchmarking processFlexible peer group definitionsOn-demand benchmark results
Value Management Center
VMC LinkNote: Data as of December 2010
9©SAP CONFIDENTIAL 2011
Which Benchmarks are relevant for you?
Human Capital Management
Talent Management
Financial Excellence
Customer Contact Centers
Sales Effectiveness
Finance
Financial Compliance
Order to Cash
Enterprise Health Checks
Best People and Talent
NPDI
Product and Service Leadership
Total Cost of Ownership (TCO)
Business Intelligence/ Analytics
Enterprise Information Management
Strategic IT
Supply Chain Planning
Transportation Management
Warehouse Management
SRM/ Procurement
Manufacturing
Enterprise Asset Management
EH&S Compliance
Operational Excellence
Responsive Supply Networks
High Performing Assets
Superior Customer Value
End-To-End Processes
= Best Practice Surveys* In Ramp Up
Financial Performance and Risk Management
Cash to Cash
Best Run IT
Healthcare ACO*
HR Shared Services
Finance Shared Services
Value Management
Lean Enterprise
Enterprise Architecture
Implementation ServicesRetail Merchandising*
Trade Promotion Management
Industry Specific
Mobility*
10©SAP CONFIDENTIAL 2011
What do you Receive?VMC Link
Cost Time
EffortProcess Maturity
Company Best Practice Importance Compared to Coverage Contrasted Against Peer Responses (Peer Group 1)
-
1,0
2,0
3,0
4,0
5,0
6,0
IT Governance Value Management
Solution Portfolio Management
IT Service Organization And
Delivery
Business Process
Improvement And Test
Management
Business Continuity And
TCO
Average Coverage Top 25% Coverage
1 = No Coverage5 = Full Coverage
11©SAP CONFIDENTIAL 2011
SAP’s Value Mgmt Services, Tools, Data and Training
Executive Alignment
DiscoveryWorkshops and Data
Collection
Business Case Analysis and
validation
Validation & Final Presentation
Note: Data as of December 2010
PerformanceBenchmarking
Business Case Development
Value Academy
Value Realization
Value OptimizationOnline, collaborative business case development toolRepository of industry based content:
business process level pain points, enablers, best practices and value drivers / KPIs
Linked to SAP Process Benchmark dataProject economics calculator (e.g. NPV, IRR, etc.)
VLM Link
12©SAP CONFIDENTIAL 2011
SAP’s Value Mgmt Services, Tools, Data and Training
Note: Data as of December 2010
2000 Companies4000 Attendees
Value Management education sessionHands-on exercises - benchmarking, VLM tool Insights on Value Management Adoption
Delivered as Public or Company-specific sessionsGeneralIndustry Line-of Business Topic (Mobility, BI, TCO etc.)
Performance Benchmarking
Business Case Development
Value Academy
Value Realization
Value Optimization
350 Academies140 Cities
13©SAP CONFIDENTIAL 2011
SAP’s Value Mgmt Services, Tools, Data and Training
Performance Benchmarking
Business Case Development
Value Academy
Value Realization
Value Optimization
Mobilization
Value K
PI’s
Audit
Value Readiness ScanAction Plan
Value MapsKPI and Analytics DetailValue Scorecard Model
Periodic Value AuditValue Risk Assessment (Summary of Business Case Implication)
14©SAP CONFIDENTIAL 2011
SAP’s Value Mgmt Services, Tools, Data and Training
Performance Benchmarking
Business Case Development
Value Academy
Value Realization
Value Optimization
Scope1. Value Discovery2. Value Realisation3. Value Optimisation
All Programs
IT
Pilot
One Process area
All Process areas Business
Institutionalize VM competencies across the organisationOrganizational DesignVM “upgrade” of existing functionsEstablish VM KPIs & Organisation
15©SAP CONFIDENTIAL 2011
CONTENT TRAINING SERVICESPerformance Benchmarking
10,000 submissions
25 Industries; 30 process areas
Business Case Development
1 Million content items
Pain points, solutions, value drivers
Value Academy (Customers)350 academies
4,000 attendees
2,000 companies
Value Management for Partners ProgramProgram to expose and align SAP’s VM Methodology with Partners
Value EngineeringCollaborative benchmarking and business case development for your business transformation
Business Transformation ServicesConsultative alignment of business strategy and IT
SAP Programs for Value Management
Note: Data as of December 2010
PLATFORM & TOOLS
Value Lifecycle Manager (VLM)End-to-end benchmarking platform
On-demand performance insights
Collaborative, on-line business case development & monitoring
15,000 users
1,500 active business cases
Value Management Center (VMC)
16©SAP CONFIDENTIAL 2011
Press and Analyst Validate SAP’s Value Based Approach
Press“SAP’s value management program is the most advanced effort of its kind…offer[ing] advanced business solutions along with deep-domain expertise and insights.
InformationWeek Bob Evans, “Global CIO: SAP Shares
Corporate Treasures With Customers”
Analysts“SAP has invested significant effort to develop services and intellectual property to help its clients get more value from their investments. Companies should evaluate these services to help identify opportunities, develop business cases and track results”
Gartner
“The Bottom Line: Companies that implement more value management best practices achieve more business value faster from their IT-enabled business transformation projects.”
AMR Research
17©SAP CONFIDENTIAL 2011
What can SAP Value Engineering do for you?
1. Ensure that SAP has a solid understanding of your business environment
2. Ensure that you have a good understanding of SAP’s technology solutions
3. Ensure that potential business value becomes real business value
4. Strengthen the linkage between Business Owners, IT and SAP
5. Strengthen the relationships between you and SAP