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Unlocking the Value from Implementation & Delivery. R Ramki, SAP India. Agenda Are we investing in the right IT initiatives that are aligned with our organization’s goals? Are we realizing the full value potential of these investments? - PowerPoint PPT Presentation
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1
Unlocking the Value from Implementation &
DeliveryR Ramki, SAP India
Agenda
Are we investing in the right IT initiatives that are aligned with our organization’s goals?
Are we realizing the full value potential of these investments?
What governance, empowerment, business involvement and change management competencies are required to ensure value is achieved?
How do we enforce benefit commitments with the same passion that we drive budget commitments?
Value Creation and IT
Business Case
Value Realization Plan
Value Realization
0% 100%
0% 100%
0% 100%
17%
20%
5%
Only 17% of organizations have a
formal business case for their IT Projects
Only 20% of organizations get
measurable value from their IT initiatives
Only 5% of organizations had any plans to realize
the value in their business case
Source: SAP Value Engineering analysis of 1,609 completed business case engagements
When it comes to Value Creation, only 20% of the organizations get all the value
How do Companies Realize Value?
Improving Management Practices*
Investing in IT Investing in IT while Improving Management Practices
2%
* Key performance improvements i.e. Lean Manufacturing, Performance Mgmt., Six Sigma.Source: “When It Lifts Productivity”, The McKinsey Quarterly, 2004 Number 4
% Imp
rove
d P
rod
uct
ivit
y
20%
Incr
ease
d V
alue
Joint IT and Business Driven Initiatives
IT and Business Units Disconnected
2.5XMoreValue
8%
Joint Business and IT initiatives drive 2.5x more value
Linking Vision to Value
Alignment of Operational Drivers is Key to Achieving Value
Value
Technology
Metrics
Business Processes
Strategy
Vision
Value Management Lifecycle
Investment Approval
Go Live
Business Need
Value Lifecycle
On-Time, On-Budget, On-Value
Value
Discovery1
■Finalize scope and project objectives
■Baseline current performance
■Build the business case
■Identify key value drivers and KPIs
Why should we do this?
How should I execute?
What proof of success is available?
What issues do I face today?
4 key elements of
a great business
case
Measuring Drives Time-to-Value
Measurement Is Essential to Improve Time-to-Value
No Measurement of
Value
Measurementof Value
On-time or Better
Source: 230 participants in ASUG/SAP Value Realization Survey Findings, 2006
Programs that measure quantitative benefit attained
Measurement drives benefit attainment
11%
On-time or Better
73%
Value
Realization2
■Organization-wide mission clarity
■Implement and Design for value
■Design governance model
■Define KPIs to track
■Communication and change management
■Training
Highest Value Achieved From IT Investments
Design to Value
Scope driven by
ROI
Maturity Level 3 – 4
Maturity Level 1 – 2
Adoption of Value Realization
Discipline requires a solid methodology; otherwise adoption drops as project continues
Source: ASUG/SAP Value Realization Survey Findings
45%
75%
Project goals documented for guiding principles
38%
63%
Business case translated to
design strategy
Consistent KPI development for
operational improvement
Design checked against
business case
Ownership for benefits assigned
before go-live
30%
61%
23%
47%
4%
28%
7%
25%
0Mission
Alignment & Readiness
1Project
Preparation
2BusinessBlueprint
3Realization
4
Final Prep
5
Go-Live
Governance Model
Executive Sponsor/ Project Sponsor
Executive SponsorCMD/ Chairman of Board
Central Project SponsorDirector/ Board Member
Respective Project Sponsor for Unit
Unit Heads
Central Process Managers
Infrastructure Manager
Project Manager Change Manager Data Manager
Data Lead
Data Lead
Steering Committee
Central Core Team (PMO)
Project Manager
Training Manager
Functional Leads
Technical Leads
Functional Team
Members
Technical Team
Members
Customer Competence Center (CCC)
Support
Template Management
Roll-out Management
User User User
Key User Key User Key User
Business Application Support
Infrastructure Support
Service Desk & 3rd Level Support
Process Owners
Roll-out Manager
Production Material Sales
Functional Tech. Change
DataTeam Lead + Member
AS ABOVE
AS ABOVE
Executive Sponsor provides overall direction while PMO and CCC support unit-level roll-outs/ users
Tracking KPIs
KPIs are measured continuously:■ During Business Blue-print Phase
■ Before Go-Live
■ 6 Months Post Go-Live
■ Every 6 Months Thereafter
■ Baseline KPI During Blue-print
■ Benchmark with Leaders
■ Track Performance
■ KPI Owners Adopt Control Measures
■ Show-case Value Realized
■ Identify Process-specific KPIs and
Owners
2
3
1
Communication and Change Management
Change Management is the bridge from the ‘old’ to the ‘new’
Fewer and Lower Resistances Every transformational project brings changes
for the employees involved, which frequently leads to different kinds of resistances
Higher Readiness for Change Change Acceptance Adoption of best practices Lower customization
Change Management Roadmap Structure, plan and control all roll-out related change management activities
Value
Optimization3
■Continuously measure performance
■Identify further improvement opportunities
■Define action
■Leverage best practices
■Continuous training
Customers
Suppliers
Value Management is a Journey
CFO
Collaborative approach to business case
justification
Projects are analyzed one at a time
A disciplined approach to IT investment
Budget Owner
IT services the business based on budget
allocation and first-come first-serve basis
Users provide budget and have a big say in solution
selection
On-time and on-budget is the only focus
Business Partner
Business / IT Relationship
Governance
Results
CxO
Great alignment between CIO and other CxOs
Regular review of all IT requests - a transparent value based prioritization
process
A balanced view of all IT investment and a clear
alignment with the overall strategy
CEO / Board
CIO and IT are seen as a critical business partner delivering real tangible
value. CIO reports directly to CEO
All project are measured based on: On TIME, On
BUDGET and On VALUE
Fewer projects and more effective IT spend - few
business applications and clear master data
standard with high BI adoption
Reactive IT
Mandatory Business Case
Value Portfolio Planning
Value Management
Value Management is the next generation of Change Management
Success = Real Change
Value Management is the next generation of Change Management
= RejectionVisionVision SkillsSkills ToolsTools Action Plan
Action Plan
IncentivesIncentives+++ ++
= FearVisionVision Communi-cation
Communi-cation ToolsTools Action
PlanAction Plan
IncentivesIncentives+++ ++
= FrustrationVisionVision Communi-cation
Communi-cation SkillsSkills Action
PlanAction Plan
IncentivesIncentives+++ ++
= Slow ChangeCommuni-cation
Communi-cation SkillsSkills ToolsTools Action
PlanAction Plan
VisionVision +++ ++
= Confusion Communi-cation
Communi-cation SkillsSkills ToolsTools Action
PlanAction Plan
IncentivesIncentives+++ ++
= ChaosVisionVision Communi-cation
Communi-cation SkillsSkills ToolsTools IncentivesIncentives+++ ++
VisionVision Communi-cation
Communi-cation ToolsTools Action
PlanAction Plan
IncentivesIncentives+ ++ ++ SkillsSkills = Real Change
Thank You