HCL Benefits Approach Presentation
High-Level Overview January 2013
1
© HCL AXON 2012 – Commercial in Confidence
Companies that explicitly use Benefits Realisation
techniques perform better
Companies with high benefits realization best practice adoption realize:
60%
53%
HIGHER
HIGHER
benefits
achieved
return on
investment
…and execute projects that are:
2x
MORE LIKELY
1.9 x
MORE LIKELY
to deliver “on” or
“below” budget
to attain value
“on” or “ahead of”
time
(1) Performance of companies with high level of best practices adoption compared to those with low levels of adoption
© HCL AXON 2012 – Commercial in Confidence
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Failing to Address Benefits is a Key Lesson
3
Concerns Pre Implementation
Mistakes Noted After Implementation
Scale 1=Unimportant, 5=Very Important
The State of ERP Services Multi-Client Study
source META Group (now Gartner)
© HCL AXON 2012 – Commercial in Confidence
The Role of Benefits Realisation
• Technology-enabled transformation programmes support business strategy
and improve business outcomes.
•
These programmes are costly.
– Costs are managed within the programme
– There is pressure on costs to increase
– Programme Governance supports cost control
• Benefits are realised within the business;
– There is pressure on benefits to decrease
– Controls of benefit are not generally part of the programme
• Benefits realisation:
– Ensures the programme enables the anticipated benefits; and
– Actively manages the realisation of benefits through changes across the business
4
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Benefits Realisation and Programme Delivery
Time
Directly links the
programme with the
realisation of business
outcomes
Facilitates investment
approval
Cost
Programme
dimensions
and the role
benefits
Maximises return on
investment by aligning
scope and costs around
benefits
Value
Shapes program scope
through benefits-led
design
Scope
© HCL AXON 2012 – Commercial in Confidence
From the outset a non-emotional, objective story needs
to be developed
 Agree the key business drivers for
benefits
 Sign off top down to get accountability
Top Down
Align Top
Management
 Understand the detailed benefits areas
Ensure
Accountability
 Sign off benefits cards
 Agree benefits realization plans
Integrated
Process Design
 Ensure functional design optimizes the
realization of the identified benefits
 Use SMEs to prove the benefits with
business owners
© HCL AXON 2012 – Commercial in Confidence
Bottom Up
 Agree review and tracking mechanism
6
The HCL Benefits Realisation process goes beyond
identifying Benefits to deliver value to the client P&L
Change
Control
Benefits
Identification
Benefits
Management
• What are the
benefits
• How much
are they
worth
• How will they
be delivered
The actual
process of
delivery i.e.:
• Strategic
sourcing
• FTE reduction
• Rolling out
Direct Debits and
P Cards
• Changing the
way client
investments
decisions are
made
Benefits
Tracking and
Reporting
• Weekly
reporting on a
exception
basis focuses
efforts
• Based on
performance
there may be
a change in
approach mid
flight
Programme
Governance
• Benefits will
report into the
programme on
a regular basis
and follow the
programme
governance
requirements
© HCL AXON 2012 – Commercial in Confidence
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Any material
change to
Benefits levels
gets managed
through Change
Control
Benefits
Recognition
• How and when
are the Benefits
realised
• How does
Benefit
recognition get
communicated
and actioned in
the client
Our Benefits Realisation Method
8
Identify
Identify
Identify strategic
objectives and
develop associated
benefits hypotheses
and tactical
performance
improvement
opportunities
Design
Understand
Validate
Realise
Enable
Validate benefits
opportunities and
test hypotheses
through detailed
operational analysis.
Secure stakeholder
agreement to benefit
targets
Design benefit driven
Target Operating
Model. Specify drivers
for realisation and
incorporate into
programme planning
activities. Enable
benefits through
prioritisation and
delivery of technology
& business activities
Embed
Manage benefits
realisation through
programme delivery,
stakeholder
management,
operational
management and
business problem
solving Tracking &
monitoring in place.
© HCL AXON 2012 – Commercial in Confidence
Operate and
Improve
Deliver
Embed the benefits
realisation approach
and management
mechanisms into
BAU. Implement
continuous
improvement
mechanisms
Our Benefits Realisation Method
Key Tasks
Activity
9
Identify
Identify strategic
objectives and
develop associated
benefits hypotheses
and tactical
performance
improvement
opportunities
Outcome
Output
Benefits Strategy
Outline Benefits
Inventory
Validate
Enable
Validate benefits
opportunities and
test hypotheses
through detailed
operational analysis.
Secure stakeholder
agreement to benefit
targets
Design benefit driven
Target Operating
Model. Specify drivers
for realisation and
incorporate into
programme planning
activities. Enable
benefits through
prioritisation and
delivery of technology
& business activities
Embed
Manage benefits
realisation through
programme delivery,
stakeholder
management,
operational
management and
business problem
solving Tracking &
monitoring in place.
Deliver
Embed the benefits
realisation approach
and management
mechanisms into
BAU. Implement
continuous
improvement
mechanisms
Validated Benefit
Inventory
Dependency Maps
Benefits Baseline
Realisation plans
Solution sign off
Agreed Benefit Cards
Adjusted performance
objectives
Targeted interventions
Business ready realise
benefits
Benefits realised
Outline Benefits Case
Governance Model
Solution & reporting
design review & sign
off
Target business
outcomes agreed
Agreed business
outcomes confirmed
and owned within the
business
Business solution
enables business
outcomes defined in
business case.
© HCL AXON 2012 – Commercial in Confidence
Performance Reports
& Trend Analysis
Improvement
opportunities
Benefits realisation
best practice adopted
Detailed Activity
10
Phase
Activities
Identify
•
•
•
•
•
Agree opportunities
Identify Owners
Confirm scope (eg business unit and geography, other organisation scope issues)
High-level estimates for prioritisation
Create initial benefits inventory
Validate
•
•
•
•
•
•
•
•
•
•
Review existing documentation
Determine data availability]
Define data required, gather & analyse data
Confirm baseline
Agree targets
On-going stakeholder meetings – benefits owner(s)
Document dependencies – system (validation against blueprint), process, organisation etc
Benefit specific risks
High-level benefit strategy (eg how will benefit be recognised – headcount reduction, improved efficiency
through growth
Sign-off benefit cards
Enable
•
•
•
•
Develop dependency maps & realisation plans
Dashboard design – (Data entity, Data source(s) & validation, Calculations, Format, Timing etc)
Mock up, iterate & sign-off prototype
Determine on-going benefits realisation governance
Embed
•
•
•
Tracking realisation plans – establish process & handover
Financial/Performance target changes defined and embedded
Test scripts validated against benefits requirements/dependencies (would like to understand the test
strategy to ensure we integrate effectively)
Deliver
•
•
•
Realisation reporting
Benefits management – stakeholder engagement, identification of mitigation actions, driving action plans.
Continuous improvement
© HCL AXON 2012 – Commercial in Confidence
Stage 1: Identification of Benefits
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Identification
Inputs
Steps in
Identification
Process
Activities
•Corporate Objectives
•Executive Objectives
•Key Business Contacts
•Peer Group Benchmarks
•Business Knowledge
•Industry Benchmarks
Objectives & Key
Stakeholder Engagement
• Top down analysis of corporate /
executive objectives and
alignment with potential benefits
• Analysis of tactical and near
term operational performance
issues
• Establish scope & timeframe
• Establish required analysis
levels & data availability
• Identify & initiate key stakeholder
engagement
Deliverables • Strategic and tactical benefit
drivers
• Engagement with key personnel
Outcome
Data Analysis & Initial
Benefits Profile
Identify
Understand
Design
Realise
Operate and
Improve
•Executive Input
Steering Group Presentation
– Approach & Outline
Benefit Case
• Obtain data & business insight
• Bottom up analysis of potential
benefits in each segment, i.e.
Customer Service, Billing, IT
• Provide assumptions for 1st cut
benefits
• High level analysis of current
performance vs internal and
external benchmarks
• Validate & update benefits with
key personnel
• Identification of benefit owners
• Identification of associated
operational management
• Planning for the next phases
• Outline Benefits Inventory
• Initial benefits case, to be
confirmed by review process
• Benefits Strategy - agreed
framework and measures of
success
• Outline benefits case
• Key risks & assumptions
Target business outcomes , associated outline benefits case and benefit strategy agreed
© HCL AXON 2012 – Commercial in Confidence
Stage 2: Validating Benefits
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Validation
Inputs
Steps in
Identification
Process
Activities
•Project Scope
•Business Unit Data
•Outline Business Case
•Updated Benefit Cards
•Realisation Schedule
Detailed Benefits Analysis
• Agree benefits types
• Validation 1-2-1 meetings with
key stakeholders
• Agree scope of improvement
• Agree benefit multipliers
• Agree baseline definitions
Deliverables • Validated Benefit Cards
• Cash flow of benefits delivery
Outcome
Sign-Off with Benefits
Owners
• Define and document detailed
dependencies, risks &
assumptions
• Interview key personnel
• Ensure that benefits (and
baselines) can be measured
• Agree benefits cards
• Required reporting structure for
benefits
• Signed off benefits cards
Agreed business outcomes confirmed and owned within the business
© HCL AXON 2012 – Commercial in Confidence
Identify
Understand
Design
Realise
Operate and
Improve
•Executive Input
Steering Group Presentation
– Full Benefit Case
• Sign off cards and benefits
case
• Understand and include
benefits as a key driver for
business transformation
• Refresh benefits inventory
• Define benefits governance
• Validated Benefits Inventory
• Finalised benefits case
• Governance Model
Stage 3: Enabling Benefits
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Enablement
Inputs
•Project Scope
•Benefits Inventory
•Full Business Case
•Benefit Dependency Maps
Steps in
Develop Dependency Maps
Identification
& Identify Quick Wins
Process
Activities
• Document detailed benefits
dependencies
• Obtain business understanding of
challenges
• Identification of “Quick wins” that
are not dependent on other
specific deadlines
• Validate challenges of potential
benefits; identify solutions to
challenges
• Creation of reporting
requirements to allow
measurement of ongoing
benefits areas
• Agree and embed benefit
realisation requirements within
technical design & documentation
Deliverables • Benefits Dependency Maps
• Quick win implementation plan
Outcome
Agree Realisation
Challenges
Identify
Understand
Design
Realise
Operate and
Improve
•Benefit Realisation Plans
•Executive Input
Steering Group Presentation
– Full Benefit Case
• Presentation / agreement on
actions to overcome the top
challenges to achieve the
identified benefits
• Ensure that identified
dependencies are being
addressed by the business
• Develop benefits reporting
approach
• Agreement on owners and
responsibilities to overcome the
challenges identified.
• Agreed action plan
• Benefits Realisation Plans
• Transformation dashboard &
benefit reporting defined
Business Solution enables the outcomes defined in the benefits case
Success can be measured and reported on by the business solution
© HCL AXON 2012 – Commercial in Confidence
• Migration strategy
Stage 4: Embedding Benefits in the Transformed
Organisation
Embed
Inputs
Steps in
Identification
Process
Activities
•Realisation Plans
•Challenges to Realisation
•UAT output
Review of Challenges &
Benefit Realisation Plans
• Confirm ongoing benefits
governance approach
• Review assumptions and
dependencies against solution
test output.
• Finalise performance baselines
• Identification of issues that still
hinder benefits delivery
• Integration with business
readiness
•Benefit Cards
•Realisation Plans
•Challenges to Realisation
Agree Actions to Ensure
Delivery of Benefits
Outcome
Understand
Design
Realise
Operate and
Improve
•Strategic Roadmap
Identification of Next Phase
of Benefits Realisation
• Report against benefits realisation • Assess and sign off
[programme owned] benefits
• Escalate benefits realisation
that have been delivered
issues as appropriate
• Assess new opportunities for
• Extend ownership of ongoing
improvement
activities and capability for
continuous improvement
• Ensure benefits targets are
reflected in budgets and
performance objectives
• Move to “business as usual”
Deliverables • Agreed action plan to ensure the • Progress and performance
benefits delivery
• Benefits baseline
Identify
14
tracking
• Communication plans for
stakeholders
Business ready to realise benefits
© HCL AXON 2012 – Commercial in Confidence
• Continuous improvement
approach and tools
• Identification of new strategic
priorities
Stage 5: On-going Benefit Delivery
15
Delivery
Inputs
Steps in
Identification
Process
Activities
Ongoing Performance
Review
Escalation & Targeted
Interventions
• Identification of performance
• Focused intervention plan to
issues against target
address performance issues
• Historical trend analysis of
• Training and coaching key
operational and benefit
stakeholders in performance
measures
challenge impacts and need for
• Detailed analysis on
intervention
performance issues where out of
• Clear results plan for success
tolerance.
Deliverables • Performance reports
• Trend Analysis
Outcome
•Performance Reports &
Trends
•Realisation Plans
•Realisation Plans
•KPIs
• Results plan
• Communication plans for stake
holders
Benefits Realised
Benefits management adopted as standard business practice
© HCL AXON 2012 – Commercial in Confidence
Identify
Understand
Design
Realise
Operate and
Improve
•Strategic Roadmap
•Benefits Methodology
Driving Cultural Change
• Hold “awareness and
understanding” sessions on
performance management
• Review and revise
performance targets and
tolerances
• Training in Benefits
methodology to support
ongoing programmes
• Training and communication
sessions
Case Studies: IT Delivering Business Solutions
Global Leader in Document Management Products
and Services
Business Solution: Automation of service
management and scheduling process
• drive engineer efficiency through optimised
routing
• Real time data means 2hr response time can be
met without increasing headcount
• Customer service levels increase while costs
decrease
Benefits:
• Direct, easily measurable benefit in cost to serve –
major contributor to a package of benefits
contributing to £5M a year in savings.
• Less tangible benefit in customer loyalty and
business growth
$30Bn Diversified Technology Manufacturer
Business Solution: Real time visibility of materials
to support best practice supply chain and
manufacturing processes
• Reduction in warehouse headcount by a 19%
• Reduction in stock levels of 10%
• Reduction in cycle time of 2-5%
• Financial Benefits Exceeded original benefits case
and validated base target.
© HCL AXON 2012 – Commercial in Confidence
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• 12,000 Users
• 80 Locations
• 18 Countries
•Integration of acquired business on a common
platform
•$250m in projected benefits
• $5.4 Bn revenues
• 22,000 Employees
• 90 Facilities
• 16 Countries
•Build and deploying long term SC solution including
Demand Planning, Supply Planning and Available to
Promise
•Forecasting to link flying hours and cycles with spare
parts forecast
•Planning master data cockpit to provide a single point
to monitor data like safety stock, lot size.
• $475 in projected benefits
• $450 Mn Revenues
• 1,350 Employees
• 9 Mfg Dist Svc Ctrs
•Served as the lead integration partner for
implementing SAP’s TP/VS Solution
•Project completion in 4 months
•Integrated 2 third party products:
•Ortec LEO VSO for stacking rules and load building
of shipments
•Rand McNally for practical miles (versus generic
geo-coding) input for route optimisation
• Reduce number of stops by
10%
•Reduce total number of
miles travelled by 2%
•$5.6 Bn Revenues
•19,000 Employees
•24 Manufacturing Centres
•200 Distribution Centres
•Increased visibility to inventory availability at various
locations and customer requirements
•Improved visibility of inventory, response time to
order requests was reduced. This resulted in higher fill
rates and on time deliveries
• $32m in projected benefits
• $250 Bn Revenues
• 1000 Users
• 7 Countries in scope
•Global transformation and IT implementation for BP’s
Trading Settlement and Finance teams.
•>$00M’s Capital Reduction
benefits realised over 5
years.
•Procurement benefits
realising >$80m per year
© HCL AXON 2012 – Commercial in Confidence
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• $4.2B Revenues
• 12,000 Users
• 14 Countries
•Strategic ERP implementation.
•Benefits focus on Procurement and Partner & Customer
support performance and cost reduction
•$54m annual benefits
• 35,000 Employees
• £3.5B budget
•Full scope ERP (Finance, Procurement, HR) & CRM
Implementation
•Business transformation of core organisation
•£1.56b projected benefits
over 10 years
•£942m cashable savings
•£646m cashable realised to
date (2 years)
• $6.2B Revenues
• 2,000 Users
• 2.4 M Customers
•SAP ERP implementation
•Benefits focus on Customer Revenue Growth, Supply
Chain & Finance Processes, Improved speed to market
• $250M benefits over 5 years
•Revenue growth, service cost
reduction & capital savings for
services to 2.4M customers
•$980M Revenues
•3,000 Employees
•Full scope ERP implementation
•Supply chain transformation
• £49m benefits realised
• $46B Revenues
• 84,000 Employees
• 1000 Users
• 14 Countries in scope
•Global HR Shared Service Centre Implementation
•??
• £44B Revenues
• 36,500 Employees
© HCL AXON 2012 – Commercial in Confidence
HCL AXON delivers results





Full scope SAP-enabled transformation
“Axon delivered $250M of financial benefits” –
David Snowden, Program Sponsor, Transport for London
$50m budgeted benefits case
$250m realized benefits case





Full scope SAP-enabled transformation
“Axon is great at project delivery and benefit realisation ” –
Brendan Arnold, Director of Finance, Birmingham City Council
$1.56 billion target 10 year benefits target
$942 cashable - $646m realized to date
 SAP-enabled Supply Chain transformation
 “Axon delivered a structured approach to
accelerated benefits realization” – Mike Jones, CIO
 $49m cashable benefits realized to date
© HCL AXON 2012 – Commercial in Confidence
HCL AXON Have Used IT to Deliver Measurable & Sustainable Benefits
for Many of Our Clients
20
Global Transformation and IT implementation
for BP Trading’s settlement and finance teams
Strategic ERP implementation: benefits focus
on Procurement and Partner & Customer
Support performance and cost reduction
• >$100Ms of Capital Reduction benefits currently being
realised over a 5 year period
• Procurement Benefits of $80M p.a. being realised
• £5M / year: Simplified pricing, service provision and
logistics
• $47m / year: $4m resource efficiency, $18m compliance,
$25m contract re-negotiation
Major IT implementation: benefits focus on
• £10 M / year working capital savings;
Customer Revenue Growth; Supply Chain;
• £25 M / year cost reduction benefits;
Finance Processes
• £35 M / year of revenue generation benefits
SAP ERP implementation: benefits focus on
• $250 M of benefits being realised over 5 yrs - revenue
Customer Revenue Growth; Supply Chain;
growth; service cost reduction and capital savings for
Finance Processes
services to 2.4m customers
Full Scope SAP ERP Transformation
• £1.56 Billion benefits target over 10 years
• £942 M Cashable savings with > £646 M realised
• £50 Million budgeted benefits case
IT enabled Supply chain Transformation
• £250 Million of supply chain and capital savings actual
benefits case
© HCL AXON 2012 – Commercial in Confidence