Unlocking the Value from
Implementation & Delivery
R Ramki, SAP India
1
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
When it comes to Value Creation, only 20% of the organizations
get all the value
17%
Business Case
0%
100%
Only 17% of
organizations have a
formal business case for
their IT Projects
100%
Only 20% of
organizations get
measurable value from
their IT initiatives
100%
Only 5% of organizations
had any plans to realize
the value in their
business case
20%
Value Realization
0%
5%
Value Realization Plan
0%
Source: SAP Value Engineering analysis of 1,609 completed business case engagements
How do Companies Realize Value?
Joint Business and IT initiatives drive 2.5x more value
Joint IT and Business Driven Initiatives
IT and Business Units Disconnected
8%
2%
Investing in IT
Improving
Management
Practices*
* Key performance improvements i.e. Lean Manufacturing, Performance Mgmt., Six Sigma.
Source: “When It Lifts Productivity”, The McKinsey Quarterly, 2004 Number 4
Increased Value
%
Improved Productivity
20%
Investing in IT while
Improving Management
Practices
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
On-Time, On-Budget, On-Value
Business
Need
Investment
Approval
Value
Lifecycle
Go Live
1
Value
Discovery
Why should we
do this?
■
Finalize scope and
project objectives
■
Baseline current
performance
■
Build the business
case
■
Identify key value
drivers and KPIs
What proof of
success is
available?
4 key
elements of
a great
business
case
How should I
execute?
What issues
do I face
today?
Measuring Drives Time-to-Value
Measurement Is Essential to Improve Time-to-Value
On-time or
Better
11%
On-time or
Better
73%
No
Measurement of
Value
Measurement
of Value
Programs that measure quantitative
benefit attained
Source: 230 participants in ASUG/SAP Value Realization Survey Findings, 2006
Measurement drives benefit
attainment
2
Value
Realization
■
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
Discipline requires a solid methodology; otherwise adoption
drops as project continues
2
0
1
Mission
Alignment
& Readiness
Project
Preparation
75%
45%
3
Business
Blueprint
4
Realization
Go-Live
Final Prep
63%
38%
61%
30%
47%
23%
28%
4%
Scope
driven by
ROI
5
Project goals
documented for
guiding
principles
Business case
translated to
design strategy
Consistent KPI
development for
operational
improvement
Design
checked
against
business
case
25%
7%
Ownership
for benefits
assigned
before golive
Adoption of Value Realization
Maturity Level 3 – 4
Maturity Level 1 – 2
Source: ASUG/SAP Value Realization Survey Findings
Governance Model
Executive Sponsor provides overall direction while PMO and CCC support
unit-level roll-outs/ users
Executive Sponsor/ Project Sponsor
Executive Sponsor
Central Project Sponsor
CMD/ Chairman of Board
Director/ Board Member
Respective Project Sponsor for
Unit
Unit Heads
Steering Committee
Central Process
Managers
Infrastructure
Manager
UNIT - 1
Process Owners
Production
Material
Change Manager
Data Manager
Data Lead
Central Core Team (PMO)
Customer Competence
Center (CCC)
Project Manager
Support
Sales
Roll-out Manager
Functional
Tech.
Team Lead + Member
UNIT - N UNIT - 2
Project Manager
Data Lead
Change
Data
Training
Manager
Functional
Leads
Technical
Leads
User
User
User
Key User
Key User
Key User
Business Application Support
Infrastructure Support
AS ABOVE
Functional
Team
Members
Technical
Team
Members
Service Desk & 3rd Level Support
Template Management
AS ABOVE
Roll-out Management
Tracking KPIs
KPIs are measured continuously:
■
During Business Blue-print Phase
■
Before Go-Live
■
6 Months Post Go-Live
■
Every 6 Months Thereafter
■
1
Identify Processspecific KPIs and
Owners
2
■
Baseline KPI
During Blue-print
■
Benchmark with
Leaders
■
Track Performance
■
KPI Owners Adopt
Control Measures
■
Show-case Value
Realized
3
Communication and Change Management
Change Management is the bridge from the ‘old’ to the ‘new’
Change Management Roadmap
Structure, plan and control all roll-out related change management activities
Stakeholder
Management
Communication
Training


Training Needs
Analysis

Training Material

Skilled Trainers
Communication from
Executive Sponsors to
Show Commitment

Top Management
Commitment

Strong Project
Management

Communication Plans

Continuous Monitoring


Robust Governance
Communication
Material

A+ People Engaged
Fewer and Lower Resistances
Higher Readiness for Change


Every transformational project brings changes
for the employees involved, which
frequently leads to different kinds
of resistances


Change Acceptance
Adoption of best practices
Lower customization
3
Value
Optimization
■
Continuously measure
performance
■
Identify further
improvement
opportunities
■
Define action
■
Leverage best
practices
■
Continuous training
Value Management is a Journey
Value Management is the next generation of Change Management
Value
Management
Value Portfolio
Planning
Mandatory Business Case
Reactive IT
Business Partner
Business / IT
Relationship
Governance
Results
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
CxO
CFO
Great alignment between
CIO and other CxOs
Collaborative approach to
business case
justification
Projects are analyzed
one at a time
A disciplined approach to
IT investment
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
Success = Real Change
Value Management is the next generation of Change Management
Communi+
cation
Skills
+
Tools
+ Incentives +
Action
Plan
+ Communi+
cation
Skills
+
Tools
+ Incentives +
Action
Plan
= Confusion
Vision
+
Skills
+
Tools
+ Incentives +
Action
Plan
= Rejection
Vision
+ Communi+
cation
+
Tools
+ Incentives +
Action
Plan
= Fear
Vision
+ Communi+
cation
Skills
+
+ Incentives +
Action
Plan
= Frustration
Vision
+ Communi+
cation
Skills
+
Tools
+
Action
Plan
= Slow Change
Vision
+ Communi+
cation
Skills
+
Tools
+ Incentives +
Vision
+
+
+
= Real Change
= Chaos
Thank
You