it industry strategy and insight · • share of segment • channel mix change ... opportunity...

Industry specific cover image

May. 2013

贾贯华

Industry strategy and insight

企业IT价值评估的策略和方法

Copyright ©2012 Oracle. All rights reserved.

内容提要

2

• 为什么要进行IT价值的评估

• 使用价值导图确认企业的战略价值

• 利用财务报表评估IT价值

• 制定IT投资的财务评估

• 利用甲骨文Inisght帮您进行IT价值评估

Copyright ©2012 Oracle. All rights reserved. 3

Following the Dot.Com Crisis, scepticism grew with

regard to the business value from IT

“Information Technology

has increasingly become a

simple factor of production

– a commodity input that is

necessary for

competitiveness but

insufficient for advantage”

Source. “Does IT Matter”, Nicholas Carr, 2003


Trends 2010-2019： From IT Productivity to an

Intelligent Economy

4

IDC predict IT

growth will be

focused on these

four areas in this

decade.


内容提要

5







Strategy is how an organisation intends to create

value for its stakeholders.

"If we succeed, how will we

look to our shareholders?”

The Strategy

Financial Perspective

"To achieve our vision, how

must we look to our

customers?”

Customer Perspective

"To satisfy our customers, at

which processes must we

excel?”

Internal Perspective

"To achieve our vision, how

must our organization learn

and improve

Learning & Growth

Strategy Maps

A simple model of the

value creation process

Through cause-effect

diagrams and linked to

the creation of

measures

Objectives

• Provide

technology

& resources

• % new technology used by staff

Inte

rna

l L

ea

rnin

g

Cu

sto

me

r

Measures

• Provide

personalized

care

• Customer satisfaction survey rating

Longer Term (3-5 year) View

• Service level

spot check

rating

• Keep patients

informed

Fin

an

cia

l

• Grow high-

margin

service

• % revenue from high-margin services

Strategy and Map

L4

P1

P2

F1

F2

C1


Example Balanced Scorecard

Perspective

Financial Perspective

F1 Increase earnings per share F2 Add and retain high value customers F3 Increase revenue per customer F4 Reduce cost per customer

Strategic Objectives Strategic Measures

Customer Perspective

Customer Management

Inte

rnal

Pe

rsp

ecti

ve

Human Capital

Lea

rnin

g &

Gro

wth

Pe

rsp

ecti

ve

Product Innovation

Operations Management

Information Capital

Organization Capital

• Net income (vs. plan) • Revenue mix (by target segment) • Revenue per customer • Cost per customer

C1 Become a trusted financial advisor C2 Provide superior service

• Customer satisfaction (survey) • Share of wallet • Target customer retention

I1 Understand customer segments I2 Shift to appropriate channel I3 Cross-sell the product line

• Share of segment • Channel mix change • Cross-sell ratio

I4 Develop new products • Revenue from new products (%)

I5 Minimize problems I6 Provide rapid response

• Service error rate • Request fulfillment time

L1 Insure readiness of strategic jobs • Strategic job readiness

L2 Insure availability of strategic info • Information portfolio readiness

L3 Create a customer-focused culture L4 Build cadre of leaders L5 Align the organization L6 Best practice sharing

• Customer survey • 360° Survey (leadership model) • Strategic awareness survey • Personal goals aligned to BSC (%) • KMS utilization/currency

Responsible Citizen I7 Build diversity reflecting community • Diversity mix versus community

Targets

+$100M 30%(A) 70%(B)

$300 $75

90% 50% 90%

30% 40% 2.5

50%

0.% < 24hrs

1.0

100%

100%

100% 70% 90% 100% 100%


•Improve Market

Share / Manage

Competition

•Reduce Cost Structure

•Increase Revenue

•Increase VAS Usage

(ARPU)

•Increase subscriber

base (market share)

•Additional

processing capacity

for bill generation

•Improve transaction

speed

•Improve speed to

load data for audit

effectiveness

•Additional CDR

processing capacity

•Additional CDR

storage capacity

•Improve data

compression

•Reduce cost related

to fraud

•Reduce billing costs

/ cycle times

•Improve CSR

productivity

•Reduce storage,

facilities & power

costs

Sample Map Strategic Priorities to IT Operational Priorities

•Increase cross-sell

/up-sell of services

•Improve speed to

generate insightful

reports from DW

•Outside

•Pressure •Strategies

•Business Perspective

•Enablers •IT Implications

•Ma

na

ge

da

ta v

olu

me

gro

wth

acro

ss th

e b

usin

ess,

with

ou

t h

avin

g im

plic

atio

ns o

n c

ost

•IT Perspective

•Manage Capacity in

Real Time

•Increase CDR

processing speed /

reduce risk

•Improve mediation

speed

•Data

+ V

oic

e


内容提要

9







Core Financial Statements

10

• Shows revenue, expenses, and profit /loss over a period of time

• Revenue and expenses can be one-time or recurring. They can be from core operations or non-core operations

• Also known as Statement of Operations or P/L

Income Statement（损益表)

Balance Sheet (资产负债表）

Cash Flows Statement

（现金流量表）

• Shows assets, liabilities, and owners’ equity at a particular point in time. It’s a snapshot, not a flow, view

• Assets = Liabilities + Owners’ Equity

• All resources (assets) are owned by creditors (liabilities) or owners (equity). Hence, everything is “balanced”

• Shows the sources (inflows) and uses (outflows) for cash over a period of time

• Business activities are divided into operating, investing, and financing categories

• Bridges net income from income statement to cash on balance sheet


Leveraging Financial Statements on the

Discovery Path

11

1 2 3 4

FINANCIAL

STATEMENT

RATIOS

COMPARISON

ANALYSIS

PRELIMINARY

INSIGHT

FURTHER

DISCOVERY

• Offer a fact-based

starting point

• Attract everyone’s

attention

• Provide a

scorecard on the

company’s strategy

and execution

• Drive future

shareholder value

prospects

• Use earlier work to

open more doors

• Determine focused

capabilities these

initiatives need to

achieve the

business

objectives

• Understand how

Oracle offerings

could help and

start prioritizing

• Compare relative

to peers, best-in-

class, or internal

goals

• Check both trends

and most recent

period

• Understand gaps

• Link improvement

opportunities with

current or potential

strategic initiatives

• Estimate potential

impact of

improvement


Currency: USD, in Millions Source: OneSource

Benchmarking: Peer Comparison

Table View

Opportunities

Strengths

China

Unicom

(Hong Kong)

Limited

Peer Avg. China

Telecom

Corporation

Limited

Telefonica

SA

Hutchison

Whampoa

Limited

China Mobile

Ltd.

PCCW

Limited

1 Year Revenue Growth (%) 21.9 5.8 18.3 -5.6 4.4 8.7 3.1

Revenue / Employee ($) 180,663 241,049 146,747 290,340 125,350 486,641 156,164

Gross Margin (%) 61.3 66.7 67.4 72.1 46.8 93.7 53.3

Operating Margin (%) 3.8 14.4 7.5 16.7 10.1 26.9 11.1

Profit Margin (%) 2.9 11.7 5.3 6.8 13.3 23.1 10.1

SGA Expenses / Revenues

(%)

17.9 32.5 42.4 13.2 NA 34.4 40.1

Asset Turnover 0.5 0.5 0.6 0.5 0.3 0.6 0.5

Day Sales OutStanding

(DSO)

22.7 52.6 30.3 73.2 91.3 16.2 52.2

Days In Inventory (DII) 20.0 42.7 21.5 24.2 53.5 79.4 34.7


Key Performance

Indicator (KPI)

China Unicom (Hong

Kong) Limited Opportunity Analysis Sensitivity Analysis

Affected

Parameter Baseline

Value

($m)

KPI Value Peer

Average

Oppty.

($ m)

Change

in KPI

Potential

($ m)

Revenue Growth (1 Year,

%) 39,446 21.91 5.78 - 1% 394

Revenue

Revenue / Employee ($) 39,446 180,663 241,049 13,185 1% 394 Revenue

Gross Margin (%) 24,196 61.34 66.68 2,106 1% 242 Gross Profit

Operating Profit Margin (%) 1,509 3.82 14.44 4,187 1% 15

Operating

Profit

SG&A Expenses /

Revenues (%) 7,047 17.86 32.54 - -1% 70

SG&A

Expenses

Reduction

Day Sales Outstanding

(DSO) 22.68 52.60 - -1 day 108

Receivables

Reduction

Days In Inventory (DII) 19.98 42.70 - -1 day 42

Inventory

Reduction

Opportunity Analysis

Opportunities

Strengths

Industry: Communications Services Source: OneSource Data as of 09/05/2013 *Currency: USD, in millions

Saving opportunity


Opportunities

Strengths

*Source: OneSource Data as of Industry: Sector: Services 09/05/2013 Communications Services

Benchmarking: Industry, Sector & Index Comparison

* Hyperlink functions in presentation mode only

KPI Type KPI

China Unicom

(Hong Kong)

Limited

Industry Sector S&P500

Growth(%) Revenue (MRQ) vs Qtr 1 Yr Ago 19.74 3.33 -0.77 15.58

Growth(%) Revenue (TTM) vs TTM 1 Yr Ago 19.00 10.20 -4.27 17.69

Growth(%) Revenue 5 Yr Growth 9.25 26.11 23.25 8.97

Profitability(%) Gross Margin (TTM) 61.34 39.49 37.46 45.21

Profitability(%) Gross Margin - 5 Yr Avg 68.86 47.43 39.96 44.91

Profitability(%) Operating Margin (TTM) 3.82 5.09 10.36 20.63

Profitability(%) Operating Margin - 5 Yr Avg 4.01 6.46 2.67 18.28

Profitability(%) Net Profit Margin (TTM) 2.85 -1.42 4.44 13.65

Profitability(%) Net Profit Margin - 5 Yr Avg 2.83 2.28 2.82 12.10

Efficiency Revenue/Employee (TTM) 139,721.60 438,514.92 764,536.05 927,613.77

Efficiency Net Income/Employee (TTM) 3,982.97 58,915.02 144,529.55 116,121.92

Efficiency Receivables Turnover (TTM) 19.75 9.08 16.95 13.25

Efficiency Inventory Turnover (TTM) 18.41 32.78 17.44 14.53

Efficiency Asset Turnover (TTM) 0.51 0.95 1.00 0.93

Effectiveness(%) Return on Assets (TTM) 1.46 -5.80 0.41 8.54

Effectiveness(%) Return on Assets - 5 Yr Avg 1.28 2.30 3.69 8.40

http://gbbapplink.onesource.com/GetReport.asp?KeyID=44698919&Report=RatioComps


内容提要

15







Server Consolidation – Illustrative Example

(Major Assumptions)

• Approximately 40 older, EOL Sun servers are consolidated onto four

T5440 Sun servers

• The T5440 servers have more cores, more memory, and faster

processors, so they can handle the existing workload

• Oracle Standard Edition is running on most of the older servers. It is

licensed by chip ($17,500 per chip) and 22% annual maintenance

rate under pre-CIC (Sun) conditions

• 25% growth

• 20% hardware discount

• Legacy Sun service model (tiered-pricing and non-standardized

warranty periods) with a 10% service discount

• 10% cost of capital (mid-year discounting)

16

Note: Illustrative example only. Results will vary.


Total Benefit

Annual EBIT Basis for Tight Financial Coupling

Server Hardware Cost Delta

$806K

•

Server Hardware Service

Cost Delta

$420K

Storage Hardware Service

Cost Delta

$252K

Improved Space Utilization

$425K

•Facilities Power Cooling

Improve Power Utilization

$525K

Reduction in Cost To

Identify SOD Violations

$84K

Storage Hardware Cost Delta

$840K

Provisioning Efficiency

$1.14M

•Productivity Improvements

Reduce Unplanned

Downtime

$2.11

Reduce Planned Downtime

$688K

System Admin, Operator

Productivity

$306K

• Total Cost of Ownership

Patching Efficiency

$1.14M

Freight, Installation

$252K Server Utilization, Virtualization

$840K

Identify The TCO and ROI Model Drivers

•Key Deliverables


TCO/ROI Cash Flows – Solution A (Installed Base)

Illustrative Example

18


INVESTMENTS INITIAL YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 TOTAL

Hardware Acquisition $0 $0 $295 $236 $194 $360 $1,085

Software Licenses $0 $219 $711 $671 $736 $1,143 $3,481

Tape Media $0 $0 $0 $0 $0 $0 $0

Hardware Service $0 $141 $177 $221 $263 $357 $1,159

Software Maintenance $0 $0 $0 $0 $0 $0 $0

Power, Cooling, and Floor Space $0 $63 $98 $124 $147 $201 $633

Freight, Installation, and Other

Implementation Costs $0 $0 $19 $14 $10 $29 $71

TOTAL (Undiscounted) $0 $424 $1,300 $1,265 $1,349 $2,091 $6,429

Currency: USD (000)

Total Cash Flows (NPV basis): $4.6M


TCO/ROI Cash Flows – Solution B (Proposed)

Illustrative Example

19


INVESTMENTS INITIAL YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 TOTAL

Hardware Acquisition $370 $0 $88 $167 $79 $151 $855

Software Licenses $280 $62 $147 $248 $193 $294 $1,224

Tape Media $0 $0 $0 $0 $0 $0 $0

Hardware Service $0 $0 $29 $38 $56 $67 $191

Software Maintenance $0 $0 $0 $0 $0 $0 $0

Power, Cooling, and Floor Space $0 $9 $12 $18 $22 $29 $91

Freight, Installation, and Other

Implementation Costs

$0 $0 $0 $0 $0 $0 $0

TOTAL (Undiscounted) $650 $71 $277 $471 $350 $541 $2,360

Currency: USD (000)

Total Cash Flows (NPV basis): $1.9M


TCO/ROI Cash Flows – Illustrative Example

20


SOLUTION COST SUMMARY INITIAL YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 TOTAL

Total Solution A cash flow $0 $424 $1,300 $1,265 $1,349 $2,091 $6,429

Total Solution B cash flow $650 $71 $277 $471 $350 $541 $2,360

Net cash flow -$650 $353 $1,023 $794 $999 $1,549 $4,069

Cumulative net cash flow -$650 -$297 $726 $1,520 $2,519 $4,069

Net cash flow (discounted) -$650 $321 $846 $597 $682 $962 $2,757

Cumulative net cash flow

(discounted) -$650 -$329 $516 $1,113 $1,795 $2,757

Currency: USD (000)

Financial Metrics and Assumptions •Total Savings (NPV): $2,757K

•Net Initial Investment: $650K

•ROI (based on total cash flows): 424%

•Payback (months): 16

•Cost of 3-month Delay: $77K

•Cost of Capital (Solution A): 10%

•Discounting (Solution A): Year-End


TCO/ROI Cash Flows Chart – Illustrative Example

21

INVESTMENT COSTS AND BENEFITS

$ Millions

$4.1M 5-Year Total Savings

-$1.0

-$0.5

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Savings Solution A Solution B

Payback: ~16 mo.

NET PRESENT VALUE

$ Millions

NPV: $2.7M, ROI: 424%

-$1.0

-$0.5

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5



内容提要

22







Insight Brings the Right Expertise to Articulate

Oracle’s Unique Value Proposition

Oracle Insight

• A methodology focused on enabling greater customer business

value

• Drives business impact by helping view technology as enablers

of business value

• Helps build a compelling value proposition

• Assists with alignment with your executive team

Industry

Experience

Solution

Knowledge

Value

Analysis

it industry strategy and insight · • share of segment • channel mix change ... opportunity...

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