NorthPoint Initiative Asssement Overview_2013

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Maximizing the Value of Project ROI with a Software-based Assessment Solution

Initiative Assessment Overview

Predictive Insights for Actionable Decisions

1992 – 2013 Confidential to The NorthPoint Group © www.thenorthpointgroup.net All Rights Reserved Atlanta - Boston – Cleveland – Detroit - NYC

Based on current course and speed of the most critical factors for a projects success, predict the project duration and cost with 90+% accuracy

Reduce the time and budget overruns with prescriptive actions to alter the current course and speed

Increase the value obtained from the desired process, system and knowledge improvements

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All initiatives have risks… the key is to identify which risks to leverage and which risks to minimize

Risk essentially comes from two factors:• Not doing something (missing a key step, task, process…)• Not doing something well (poor execution)

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Risk Index BenchmarkCopyright NorthPoint Software Ventures Inc. All rights reserved.

Very High Risk High Risk Medium Risk Best In Class

• Additional risks typically seep into projects over time as teams identify and attack known issues

• Project value is enhanced by proactively leveraging / managing risks to minimize cost and time overruns

• To do this, these questions must be answered:• Where are the risks?• What are the risks?• What is their impact?• How do I leverage or

minimize their impact?

NorthPoint’s Initiative Assessment software-based product identifies project risks and opportunities to maximize ROI providing answers to these questions and more

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NorthPoint’s Initiative Assessment software-based solution helps project teams deliver on committed time, cost and business value…

NorthPoint research indicates that effective implementation is still a challenge… Greater than 50% of projects incur 2x overrun or more Less than 40% of originally committed functionality and business value is actually delivered Significant gaps between committed delivery and actual implementation – with limited improvement over the last decade 72-80% of failed initiatives are due to lack of business knowledge 20-28% of the business knowledge to effectively manage initiatives is missing from the team 27-42% of the critical knowledge required to manage to “Best-in-Class” is missing Cost and risk grow exponentially over the first 55% of a project’s life when knowledge is low Initiatives with a high Knowledge Index (Knowledge, Experience and Performance) are 4.4 - 6.3 times more successful as those

with “Needs Change” 24% of the time new problems are created as a result of the implementation

Significant ROI delivered with use of NorthPoint’s Initiative Assessment software-based solution Identifies the root cause of issues and therefore reduces the project expenditure by 20-31% Identified budget overruns on 81% of the assessments (overruns averaged between 41% and 2X of the budget) Identified schedule overruns on 86% of the assessments (overruns averaged between 55% and 150% of the schedule)

Root cause for budget and schedule overruns: insufficient project plan, knowledge of users to effectively and efficiently use new capabilities, issues with infrastructure installation

Reduces the plan and delivery time by 40+% Improves the implementation value by 17%-43%- improvement impacted most by: (1) ability to identify unmet and unidentified

needs, (2) integration of old and new data Skills and Knowledge, Experience and Performance (KEPTM) in IT improves by 21% Skills and KEPTM for the Business Leadership improves by 36% - 58% - improvement impacted most by: alignment of unmet and

unidentified needs to new capabilities

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NorthPoint’s Initiative Assessment software-based assessment solution identifies project risks and opportunities to maximize ROI

NorthPoint’s software-based Initiative Assessment product & proprietary database 250+ fundamental elements of project success scored by the project team on a consensus basis The “right” statements weighted based on impact to the success of the initiative Methodology that is complete and accurate Records and shares the answers with current and new team members Focuses on risk to realizing committed business value, not just on-time & on-budget Assesses the KEPTM (Knowledge, Experience and Performance) of the organization to maximize initiative ROI – KEPTM

is a leveragable assetExamples of the areas covered in the Initiative Assessment include:

Process Management (knowledge, effectiveness,

efficiency, metrics, etc.)

Team knowledge of requirements for company to gain industry leadership

position

Team knowledge of who the real customer / user is

Management team strategy to leverage new solution

Scope and size of project / team to support

Knowledge & status of Business Model

Management team KEP to ensure effective

leadership

Knowledge of managing projects in the industry

Management team knowledge of the market segment

(customers & competitors vision)

Knowledge & delivery of customers / users adoption

criteria

Improvement & valueTeam KEP in successfully implementing projects in

the market segment

Knowledge of current / future computing environment

Value propositions committed to be delivered

Team knowledge of the new value delivered compared to

current solution

Knowledge of how the business problem /

opportunity can be solved with the new solution

Knowledge & support for team within the

organization

Knowledge of solution requirements and risk

Team knowledge of operating system

Team knowledge of potential impacts

Knowledge of customer business process

Knowledge & support within customer / user

organizations

Required support & service organizations

New knowledge that must be acquired for successful

completion

New knowledge provided for customers / users

Team KEP (Knowledge, Experience and

Performance) of the technology

Knowledge requirements and how to schedule into

project plan

Knowledge of training services required

Management awareness of the missing knowledge required for

success

Knowledge of partners the team is dependent upon

Team knowledge of systems integration and

implementation methods

Knowledge to develop and implement a performance management and tracking

system

Team knowledge gained through working with

competitive / alternative solutions

Management team focus on factors that drive success

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Our process is rapid, knowledge based, and inclusive of all critical stakeholders impacted by the project…

Assess RiskFactors

(1-Day Session)

Assess RiskFactors

(1-Day Session)

Compare Results

To“Best-in-Class”

Compare Results

To“Best-in-Class”

DevelopRisk Mitigation

Plan

DevelopRisk Mitigation

Plan

EstablishCheckpoint

Cycle

EstablishCheckpoint

Cycle

IdentifyRate of

Improvement

IdentifyRate of

Improvement

Typically 1 - 2 week period to complete Assessment & Plan

Research shows that initiatives not utilizing a software-based tool with the capabilities of NorthPoint’s Initiative Assessment:

Exceeded the implementation schedule by a factor of 2.1 – 3.7 Exceeded the initiative budget by a factor of 1.8 – 3.2

Company’s using Initiative Assessment have limited budget overruns to: 8.6% with strong execution and follow through on the prescriptive analytics and insights 19.4 – 24.4% with less effective execution follow through

NorthPoint Initiative Assessment software & proprietary database has been used: Over 100 times to assess risks on product and process initiatives Over 70 times to assess risks on SAP/ Oracle, etc. implementation projects (prior to and

during implementations)

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Facilitated Stakeholder

Sessions

Consensus Driven Results

Principles are … If the organization knows all of the required Steps, Tasks

and Processes (STP’s) and executes them well…. then they can achieve a higher ROI on the initiative investment.

Risk with any investment is that the organization is not aware of all of the required STP’s and/or does not have the necessary KEP™ (Knowledge, Experience and Performance) to execute them.

NorthPoint analytical process and database has the STP’s required and the level of KEP™ necessary for success

NorthPoint process overview… Step 1: Value-Risk Assessment (VRA) Session

Facilitated session with key stakeholders (1-day) Analyze and score statements comprised of the

Fundamental Business Activities (FBA’s), as well as the supporting Steps, Tasks and Processes (STP’s)

Drive stakeholder alignment through facilitator-led consensus scoring for each FBA/STP

Capture key discussion points / issues Analytics and management report completed by

NorthPoint based on proprietary “Best-in-Class” database (<5 days)

Step 2: Value-Risk Solution (VRS) Session Facilitated session with key stakeholders (1-day) to

develop action plan / solutions from assessment results Gain deep understanding, buy-in and follow through

across the organization from collaborative methodology Step 3- Establish Checkpoint Cycle

By leveraging Initiative Assessment in a regular performance review cycle, project teams can systematically mitigate unwanted risks and increase project value

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Step 1: Value-Risk Assessment (VRA) Session

Value-Risk Assessment Session (1-Day)

Simple – 250+ statements that a cross functional group of IT and business professionals score

Fast - takes one day

Accurate - every statement is weighted in terms of importance to success

Provides prescriptive and predictive value based on NorthPoint’s “Best-in-Class” database

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Step 2: Value-Risk Solution (VRS) Session

Technology Team experience with technology

solution e.g.• Development tools• Database tools

Analysis / identification of what technologies to develop, acquire or license to provide solution

Team’s knowledge, experience and performance (KEP) with appropriate technology needed to provide solution

Examples of Specific Risks Measured

Marketing (Communications) Team’s experience in identifying

and communicating value propositions required to maximize user adoption

Internal and external communication process

Project success metrics continuously monitored and communicated to stakeholders

Management Management team’s focus on

financial objectives for project Management team’s commitment to

change management as part of the project delivery and implementation

Management team’s connectivity to customers / user adoption criteria

Management team’s focus on overall project risk management

Value-Risk Solution Session (1-day)

Team reconvenes and reviews the assessment output to identify the areas of greatest opportunities for improvement and risk by looking at the highest level Indexes.

• Technology elements often receive a disproportionate amount of focus

• Missing or underperforming Communications and Management elements are often difficult to identify and address

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Step 2: Value-Risk Solution Session (continued)

Significant knowledge gaps identified – this project will not meet ROI expectations

Many risks and low knowledge

(Customer)Current

Performance Index

Initiative Assessment has 16 categories of performancemetrics that are decomposed to identify the root cause

Results from the Value-Risk Assessment Session – baseline Performance Index

Team reviews the assessment output at the Fundamental Business Activity level to identify areas with significant performance issues (a level of detail underneath the Technology, Marketing and Management Indexes)

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Baseline Performance Index Software identifies the risk and missing knowledge and it’s importance to

the success of the initiative

Performance Index – Identifies a program’s

baseline and compares the delivery process of an initiative against “Best-in- Class” using NorthPoint’s proprietary database.

It enables early and full disclosure of risk and a risk management process through an initiative’s lifecycle.

Designed to measure and track either internal or external performance (e.g., partners, dependent functions), optimum performance is 95+ percent.

(Customer)

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The team can now review the assessment output at the next level of detail (in this case we are reviewing the “Knowledge of the Management, Administrator’s & Teachers Business Process” FBA)

For each of the major areas assessed (component level-Fundamental Business Activity scoring) there is a detailed statement with the Team’s score of the related the Steps, Tasks and Processes.

Team scoring of the Steps, Tasks and Processes is the input to the Performance Score Lowest Performance Scores may indicate areas with the most significant ROI’s for improvements

Team score

Step, Task, Process

1.00 Project team has identified the solutions and services that will improve the constituencies business process.

0.00 Anticipated financial impact to the MNPS business due to the use of the solution (0,5, 15,35,45,>55%).

1.50 Project team has identified the appropriate adoption criteria for project through direct communication with management.

-3.00 The management team endorses the value delivered by the project.

-3.00 Completeness of the internal and external marketing / communications strategy for the project (55,65,80,90,95%).

1.00 Evaluation of any direct competing / alternative solutions by the project team.

1.00 Project team has implemented a strategy for MNPS project that will raise the barriers to entry for alternative / competing solutions.

(Customer)

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The team can now identify the prescriptive improvements required to improve performance for each Step, Task and Process

Leaders are identified to address the areas of low performance. The Steps, Tasks and Processes in conjunction with the notes recorded in the software from the facilitated session (scoring of the statements) provides the knowledge required to commission the teams.

Team score

Step, Task, Process

1.00 Project team has identified the solutions and services that will improve the constituencies business process.

0.00 Anticipated financial impact to the MNPS business due to the use of the solution (0,5, 15,35,45,>55%).

1.50 Project team has identified the appropriate adoption criteria for project through direct communication with management.

-3.00 The management team endorses the value delivered by the project.

-3.00 Completeness of the internal and external marketing / communications strategy for the project (55,65,80,90,95%).

1.00 Evaluation of any direct competing / alternative solutions by the project team.

1.00 Project team has implemented a strategy for MNPS project that will raise the barriers to entry for alternative / competing solutions.

• The project team has identified some of the solutions that will improve business processes .• A detailed analysis of the impact on the core business processes must be completed

based on the improvements from the solutions and services .

• A detailed analysis for each functional / process area impacted by the solution has notbeen performed.

• Anticipated financial impact completed at a high level-detail level required.

• Facilitated session on adoption criteria with process owners and key stakeholders has not been completed.

• Internal communications focused on additional capabilities not required training, time saved, reduction is reporting requirements, etc..• External communications have not included value propositions to customers.

• Evaluation completed of alternative solutions, but financial metrics not included in the business case.• Gaps in future solution as compared to alternative solutions need to be documented and schedule created to address with new software provider.

• Strategy is being worked on, but not completed. • Barriers to entry have not been agreed to by executive management.

• Value propositions need to be refined as detail is lacking.

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Note: TTP stands for Time to Profitability

Budget Impact by Performance Category This table is a breakdown of the budget multiplier projections for this project by Performance

Category. It essentially identifies the budget variance projections by major category, assuming this project stays on current course. Note that the category of management, the project’s business model, financial case, business planning and performance factors.

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Note: “0.00%” indicates that these value propositions have not been identified or are irrelevant to the project.

Value Proposition Performance Scorecard As part of its risk assessment process, NorthPoint developed a method for analyzing the need/support

criteria of users and value offered to the user groups. It is critical for organizations to understand why their internal customers desire certain capabilities, what value their solutions deliver to their internal customers, from the internal customer’s perspective, and how to continually improve the number and quality of value propositions through future use of the solution.

An analysis of the initiative was performed against the twenty-two (22) value propositions defined by NorthPoint for value creation in the enterprise. This process provides a repeatable method for developing the financial business case of an initiative and quantifies value for the internal customer. MPNS’s overall score of 62.17% for its initiative indicates some room for improvement.

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Knowledge Performance Summary Graph

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Knowledge Performance Summary Graph: The knowledge quantification process includes experience and delivery performance capabilities and

provides management diagnostics to determine and assist in gap management of “value-at-risk.” The relative heights of each of the “Best-in-Class” bars indicates the importance of each factor in its

relationship to a given projects’ overall Risk Index and success factors.

Edusoft

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ORIGINAL TIME REFORECAST

TIME TO PROFITABILITY ADJUSTMENT PLAN MULTIPLIER PLAN

FORECAST TIME TO PROFITABILITY 30.00 3.24 97.15

(Months)

ORIGINAL COST REFORECAST

COST TO MARKET ADJUSTMENT PLAN MULTIPLIER PLAN

FORECAST COST TO MARKET 1,000,000$ 6.93 6,933,210$

6.93

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Performance Index

Project CostCost Multiplier

Current Cost Performance

3.24

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Performance Index

Time to Profitability/Breakeven©

Time Multiplier

Current Time Performance

The analytics underlying Initiative Assessment enables a thorough assessment of current project performance and an accurate prediction of the performance impact (project time and cost).

In a similar fashion Initiative Assessment is able to forecast the impact of improvement actions


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Step 3: Establish Checkpoint Cycle

Establish Checkpoint Cycle Every 60-90 days team convenes and reruns the assessment Identify projects current course and speed, new risks, new opportunities Identify needed remedial actions Update indices, risk curves, and cost to complete

Management system Early warning, feedback system Predictive, prescriptive outcomes Converting risk & knowledge to value Staying connected to change

Actual Plan

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Lowering the risk index yields higher probability of success “Best-in-Class” is single digit risk index

NorthPoint data base: changing curves accomplished only when re-provisioning of project occurs.

Initiative Assessment focuses on what needs to be addressed now, not just what the team knows how to fix

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Maximizing the value from the initiative….NorthPoint’s “J” curve

$$

Initiative performance and value increase

Best-in-Class

Time

Risk increases

Break-even point

How do we move in this direction?

Are we doing all the right things? Fundamental Business Activity and Step, Task & Process assessment

Are we doing the right things well? Do we have the required Knowledge, Experience and Performance? Once we know the most important areas to address… we can rapidly define improvement

actions The software can rapidly and accurately predict the impact (value, timing and cost) of the

actions


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Prescriptive and predictive What has to be done, how to do it, how to measure how well it is done

Identifies the root cause of issues and reduces the expenditure by 20+% to 31% Project cost and time to profitability

Identified budget overruns on 81% of the assessments (overruns averaged between 41% and 2X of the budget)

Identified schedule overruns on 86% of the assessments (overruns averaged between 55% and 150% of the schedule)

Reduces the plan and delivery time by 40+% Increase the rate of success

Management assurance Gain deep understanding, buy-in and follow through across the organization from collaborative methodology

Shorten the decision cycle Detail to make the decisions What provisions required for project

Early conversion of risk to economic value Reduces the risk of value achievement by 43%-71% Improves the implementation value by 17%-43%

Identifies and measures the gaps in required knowledge Skills and Knowledge, Experience and Performance (KEPTM) in IT improves by 21% Skills and KEPTM for the Business Leadership improves by 36% - 58%

Process is rapid, knowledge-based and inclusive of all critical stakeholders impacted by the project Customer/user, partners, vendors

Significantly increases team commitment to: Risk priorities Risk activities Risk mitigation

Process is repeatable, consistent and measurable

Significant ROI delivered with the use of the Initiative Assessment software-based tool

Documents

NorthPoint Initiative Asssement Overview_2013