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How intrascope can help you Reduce execution cost and risk

Across large scale change management and transformation projects

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1.  Intrascope  so.ware  reduces  the  cost  of  large  scale  change  • Using  an  illustra9ve  $1.25m  change  management  budget,  we  demonstrate  how  savings  of  30-­‐40%  are  possible  

2.  Intrascope  so.ware  reduces  the  risk  of  change  disasters  • On  the  same  project  we  demonstrate  risk  reduc9on  of  c.$8m  (or  c.30%  of  business  case  return)  

3.  Reducing  your  change  costs  will  save  you  millions  • Sensi9vity  analysis  examining  cost  impact  across  a  range  of  large  scale  cultural  transforma9on  projects  /  M&A  

4.  Reducing  your  change  risk  will  save  you  tens  of  millions  • Examining  dollar  impact  of  project  risk  reduc9on  at  small,  medium  and  large  scales  

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Summary and table of contents

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Business  case  return2  

Implementa1on  budget1  

Total  project  risk3  

Change  Management  

$10m  

$25m  $27m  

Total  project  risk  is  c.$27  million  (at  c.108%  of  return  case)  

This  presenta1on  uses  the  illustra1ve  example  of  a  large  scale  change  project,  with  an  implementa1on  budget  of  $10  million  (of  which  $1.25  million  is  

direct  change  management  spend)  

The  business  case  return  is  $25  million  (2.5:1  on  implementa1on)  

The Illustrative, large scale change management project

Notes:  1.  PWC,  ChangeFirst  (Benchmark  external  change  management  cos9ng  of  12.5-­‐15%)  2.  ChangeFirst,  The  ROI  for  Change  Management    (Average  first  year  return  case  for  large  change  management  projects  >  £1  million)  3.  McKinsey  &  Company,  Helping  Employees  Embrace  Change  (Risk  calculated  as  the  difference  between  realised  return  of  top  quar9le  performers  at  

average  143%  of  business  case  benefit,  and  bodom  quar9le  at  average  of  only  35%  of  business  case.)  

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1 Intrascope software reduces the cost of executing large scale change management

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execution cost savings Given $1.25m change management spend

Consultant  spending  

Hypothesis  forming  and  tes9ng  

Roadblocks  and  bodlenecks  

Focus  groups  and  interviews  

Reduce  spending  

Reduce  the  workforce  9me  commitment  in  inves9ga9on  and  

pulse  checking  

Quicker,  more  accurate  hypothesis  forming  and  tes9ng  –  Agile,  responsive  change  team  

Iden9fy  and  mi9gate  bodlenecks  and  roadblocks  before  they  slow  

or  stall  change  

Produc9vity  benefit  through  elimina9on  of  one  survey/yr  and  50%  of  focus  group  commitment  

Quickly  form  and  test  hypothesis  with  project  team  (saving  2  

weeks  in  overall  project  9meline)  

Iden9fy  one  manager  blocking  a  core  team  (saving  a  2  month  

project  delay)  

Key  change  factor   Target   Illustra1ve  saving   BoOom  line  impact    ($1.25m  change  management  spend)1  

$63-­‐125k2  

$52k4  

$208k4  

$116k3  

$439-­‐501k  

5-­‐10%  of  external  change  management  budget,  through  accelerated  project  start-­‐up  

Total  execu1on  cost  saving  

Notes:  1.  Bodom  line  impact  on  the  basis  of  a  project  with  a  $10m  implementa9on  budget  /  $1.25m  external  change  management  spend.    Es9ma9ons  on  the  basis  

of  1,000  people  directly  affected  with  average  annual  salary  of  $100k.  Project  implemented  over  48  months.    2.  Benchmark  external  change  management  cos9ng  from  PwC  and  ChangeFirst.  3.  Elimina9on  of  one  annual  survey  for  project  dura9on.  Comple9on  9me/produc9vity  impact  30  minutes  per  survey  per  employee.  Focus  group  reduc9on  

from  20%  to  10%  of  total  workforce  on  an  annual  basis.  Produc9vity  impact  of  one  hour  per  focus  group  per  employee.  4.  Assumes  core  change  management  spend  completed  over  ini9al  12  months  at  run  rate  $104k/month.    

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2Intrascope software reduces the risk of change disasters

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risk reduction given $10m implementation budget

Culture  and  people  change  management    

(19%  of  marginal  risk  moving  from  low  performing  change  to  top  quin9le)  

Organisa9onal  alignment  (9%  of  marginal  risk  moving  from  low  performing  change  to  top  quin9le)  

 

Key  marginal  risk  factor1   Prac1cal  risk  reduc1on   The  business  impact2  Risk  reduc1on  in  moving  to  

high  performance3  ($10m  implementa1on  budget)4  

$5.4m  

$2.7m  

$7.8m  Total  risk  impact  

Notes:  1.  IBM,  Breaking  Away  with  Business  Analy9cs  and  Op9misa9on  (Culture  and  People  Change  Management  measured  at  a  19%  contribu9on  to  top  quin9le  

performance.  Organisa9onal  Alignment  measured  at  a  9%  contribu9on  to  top  quin9le  performance.)  2.  IBM,  Breaking  Away  with  Business  Analy9cs  and  Op9misa9on  3.  McKinsey  &  Company,  Helping  Employees  Embrace  Change  (Top  change  performers  achieve  on  average  143%  of  business  case  benefit,  whereas  bodom  

performers  achieve  only  35%  of  business  case.)  4.  Example  uses  2.5:1  return  on  the  basis  of  $10m  implementa9on  budget  for  theore9cal  business  case  benefit  of  $25m.    

High  performers  use  analy9cs  to  challenge  the  business  21.9x  more  than  low  performers  

Track  underlying  behavioural  change  over  9me    

 Iden9fy  behavioural  regression,  

even  years  a.er  ini9al  implementa9on  

Iden9fy  and  mi9gate  roadblocks  and  bodlenecks  as  the  organisa9on  

con9nues  to  evolve    

The  data  to  drive  conversa9ons  with  management  at  all  levels  

High  performers  use  analy9cs  to  analyse,  decide  and  act  5.6x  more  

than  low  performers  

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3Reducing your change costs will save you millions

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Reducing change costs will save millions

1000  

10,000  

$5.9m  saving  

$2.0m  saving  

$0.5m  saving  

$6.9m  saving  

$3.1m  saving  

$1.5m  saving  

5,000   $6.4m  saving  

$2.5m  saving  

$1.0m  saving  

$10m   $50m   $150m  

Num

ber  o

f  dire

ctly  affe

cted

 employees  

Notes:  1.  All  assump9ons  and  references  consistent  with  those  shown  on  page  5  

Implementa9on  budget  

 Case  shown  

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4Reducing your change risk will save you tens of millions

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Reducing change risk will save tens of millions

$27.0m  Current  marginal  change  risk  

Modified  marginal  change  risk    

(Reflec9ng  best  prac9ce  people  and  change  management  and  

organisa9onal  alignment)  

Probability  weighted  saving  in  moving  to  high  performance  

$19.2m  

$7.8m  saving  

$135.0m   $405.0m  

$95.9m  

$39.2m  saving  

$287.6m  

$117.5m  saving  

Notes:  1.  All  assump9ons  and  references  consistent  with  those  shown  on  page  7  2.  Numbers  do  not  add  due  to  rounding  

$10m   $50m   $150m  

Implementa9on  budget  

 Case  shown  

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Summary and next steps:

We  set  out  to  show  how  Intrascope  

could  save  you  millions  in  

execu9on,  and  tens  of  millions  

in  risk  

The  illustra9ve  project  set  out  

in  this  presenta9on  clearly  shows  the  quantum  of  impact  possible  

We  will  work  with  you  to  calculate  ROI  given  your  project  specifics  

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APPENDIX

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AFailing to change kills companies (large organisations have to change more than ever before)

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CONFIDENTIAL Source:  McKinsey,  Crea9ve  Destruc9on    

Total  return  to  shareholders  of  new  entrants  rela1ve  to  industry  average  

Es1mated  life  span  of  S&P  500  companies  based  on  company  exits  

Half  of  companies  in  the  S&P  500  in  2013  are  likely  to  be  gone  by  2020  

There  seems  to  be  a  “survivors  curse”  whereby  beyond  a  20  year  life  cycle  organisa1ons  will  struggle  to  remain  compe11ve  and  effec1ve  

AOackers  

Survivors  

15%  

10%  

5%  

0%  

-­‐5%  

-­‐10%  

1   5   10   15   20   25   2008  

14  

1995  

19  

1975  

26  

1955  

45  

1935  

90  

Failing to change kills companies

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BBut change also kills companies (disasters happen with huge frequency)

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Why change kills companies

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Failed  change  damages  companies  in  four  key  areas:  High  dollar  cost,  High  people  cost,  Reduced  leadership  credibility  and  reduced  compe11veness1  

“Most  studies  and  reports  on  project  performance  have  focused  on  telling  us  about  failure  rates  in  the  60  to  80%  

range.”    

-­‐  ChangeFirst,    The  ROI  for  Change  Management    

“About  75%  of  all  organiza9onal  change  

programs  fail,  largely  because  employees  feel  le.  out  of  the  process  and  end  up  lacking  the  

mo9va9on,  skills  and  knowledge  to  adopt  new  systems  and  procedures.”  

 -­‐  PWC,  Human  Change  Management  

“Most  studies  s9ll  show  a  60-­‐70%  failure  rate  for  

organiza9onal  change  projects  —  a  sta9s9c  that  has  stayed  constant  from  the  1970's  to  

the  present.”    

-­‐  Ron  Ashkenas,  Harvard  Business  Review  

Source:    1.  David  Miler,  Successful  Change       17

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CANALYTICS HAVE A MATERIAL IMPACT ON BUSINESS PERFORMANCE

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THE IMPACT OF ANALYTICS in improving decision making

Analy1cs  empowers  beOer  decision  making  

1.5%   1.5%  4.4%  

32.5%  

22.7%  25.0%  

0%  

10%  

20%  

30%  

40%  

Challenging   An1cipa1ng   Empowered  

Lower  performers  

Top  performers  

Excep9

onal  organisa

9onal  perform

ance  (%

)  

Source:    1.  IBM,  Breaking  Away  with  Business  Analy9cs  and  Op9misa9on    

Disrupt  the  status  quo  to  improve  the  business  and  create  new  

opportuni9es  

Predict  and  prepare  for  the  future  by  evalua9ng  trade-­‐offs  

proac9vely  

Enable  employees  to  analyse,  decide  and  act  

21.9x  more   15x  more   5.6x  more  

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DThe difference between high and low change performance

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THE DIFFERENCE BETWEEN LOW AND HIGH change PERFORMANCE

19%  

17%  16%  

14%  

9%   9%  

7%  

5%  

2%  1%  

0%  

5%  

10%  

15%  

20%  

Culture  and  people  change  management  

Data  governance  

Business  process  change  

Program  governance  

Project  objec9ves  

Organisa9onal  alignment  

Mul9-­‐phased  execu9on  roadmap  

Building  sponsorship  

Capability  assessments  

Funding  and  budget  process  

management  

Ac1vi1es  in  support  of  driving  change  (contribu1on  of  analy1cs  to  marginal  performance  in  change)  

Note:    1.  Percent  contribu9on  to  top  quin9le  performance  predicted  by  Business  Analy9cs  and  Op9misa9on  project  ac9vi9es  2.  Sourced  from  IBM,  Breaking  Away  with  Business  Analy9cs  and  Op9misa9on     21

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