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