4/16/2014 business value workshop summary & recommendations foundations of business value
TRANSCRIPT
4/16/2014
Business Value WorkshopSummary & Recommendations
Foundations of Business Value
On April 16th, 2014, representatives from Karen Sampson’s CIO Leadership Team met to explore how the company should measure business success for project Telesys and options for how business and IT performance might be improved.
The workshop was facilitated by Navicet using a structured approach for defining business value called a Business Value Workshop. The workshop is a component of a larger methodology for improving IT performance called Design for Business Value.
The following slides are a synthesis of the day’s activities.
Introduction
Project Telesys
April ‘14
Jun Dec Jun Dec Dec JunJun
FY14 FY15 FY16 FY17
Incremental Investment: $6 Million
$3 Million run $3 Million run $3 Million run
Funding Source: Karen Sampson
$6 Million
$9 Million run
$15 Million through FY17
+
=
Value Proposition:• Reduce Server Deployment Cycle
Time• Improve Data Quality (latency,
accuracy)• Contain costs as service scales
About Causal Loop DiagramsCausal loop diagrams describe the relationships between various measures of business performance and help project teams identify the most appropriate ones to measure the success of the project or initiative. It allows the team to develop a comprehensive map of potential business value to be realized.
The most important measures of business success may not be directly influenced by the project under consideration, or may have multiple conflating influences. However, a team may have the capacity or authority to change other measures which, while less important by themselves, clearly contribute to more important measures.
The first draft of the causal loop diagram is inevitably messy and disorganized, but is still a powerful tool to elicit various points of view and insights from the team building it. The purpose of this draft is to capture these group insights, which can then be distilled into high-level maps between capabilities and outcomes. This L1 model can validate that the scope of the project is appropriately within the capabilities of the team and highlight any external dependencies they may have.
An L2 model can be derived from the combination of the draft model and the L1 distillation. The L2 model will describe the components of each important outcome area and describe the general measures that describe them. Priorities from the draft are preserved and validated in the L1 and L2 diagrams and establish the projects “ North Star,” or “what” the project will deliver and how success will be measured. These measures can then be further operationalized in an L3 diagram that describes specific process measures.
Next StepsAppendix
ay 1st Presentat
ion
AppendixCausal Loop Session Capture
Causal Loop Draft
Quality of Management Information
Disposal Income
Compliance Risk
Cost
Load Bank Utilization
Server Count
Customer Outages
Automation
Revenue
Standard Equipment Decom
Revenue
Rebate Revenue
Brand Image
Cost of Operations
Dependency Management
Wait Time
Vendor Charges
Cost of Hard drive Maintenance
Audit Effectiveness
Data Continuity
Data Accuracy
Data Completeness
Data Currency
Data Accessibility
Maintenance Termination
Critical Equip Decom
Revenue
Load Bank Leasing
Revenue
Residual Warrantee Revenue Recovery
Effective Capacity Management
Critical Equipment Tracking in System of Record
Tracking Policy Compliance
Fed Ramp
ISO
Sox ViolationsSOC1SOC2PCI
# of Audit Findings
Data Defects
Defect Free Deployment
On-Time Delivery
Network Cabling Defects
Configuration Latency
Customer Availability
Status Latency
Receive -> Customer Availability Cycle
Time
+
+
+ +
-
-
-
-
-
+ +
+
+
+
+
+ +
+
+
+
+
+
+
+ -
+-
-
-
+
+
+
-
-
-
-
+
-
-
+
1.1m->2.7m (FY17)
95%->50% (100% of SC015 ) FY17
$12m->$30m->$42m
20%->80%
$0->$1m
$8m->$08hrs->57min
Causal Loop L1 Conceptual Measures
Quality of Management Information
Cost
Capacity Service Quality
Decom Revenue
Manage Dependency
Manage Capacity
Deployment Quality
On-Time Deployment
-
-+
+
+
+
Compliance
Deployment Cycle Time
-
Intermediate Result
Result or Outcome
+
+
Track Asset
+
-
Manage Risk
+
Risk-
-
-+
Defect-Free Deployment
+
+
+
-
Decom Asset
Violations
-
-
Activity/Capability/Function
+
$12m->$30m->$42m45% improvement in defect density
1.1m->2.7m Servers (FY17)
TSG
Supply Chain +
+
Causal Loop L2 Component Measures
Quality of Management Information
Cost
Customer Outages
Decom Revenue
Standard Equipment Decom
Revenue
Rebate Revenue
Cost of Operations
Wait Time
Vendor Charges
Cost of Hard drive Maintenance
Data Continuity
Data Accuracy
Data Completeness
Data Currency
Data Accessibility
On-time Maintenance Termination
Critical Equip Decom
Revenue
Load Bank Leasing Revenue
Compliance Violations
Fed Ramp
ISO
SOX# of Audit Findings
Data Defects
Network Cabling Defects
Configuration Latency
Customer Availability
Status Latency
Receive -> Customer Availability Cycle
Time
+
+
+
+
+
+
+-
+
+
+
+
+
+
+
Deployment Cycle Time
+
+
+
+
- -
-
-
-
SOC1
SOC2
PCI
++
+
+
++
++
+
+
++
$12m->$30m->$42m
$0->$1m
Load Bank Utilization
+
20%->80%
$8m->$0
$3m->$3m (FY17)
8hrs->57min
95%->50%(100% of SC015 ) FY17
About Capability Assessments
The Capabilities Assessment reflects the team’s assessment of the capabilities that must be improved in order to achieve the business value targets identified in the causal loop diagrams – in other words, “how” we will improve them. Each capability describes a collection of processes or activities that collectively achieve outcomes that are worth measuring. Initial assessment are based on a scale of 0-10, 0 meaning the capability does not exist or is rarely performed, 10 signifying world-class excellence. Key attributes of capability excellence can be defined in the business goals workshop or developed later. Subsequent analysis can uncover more sophisticated measures of performance, typically related to effectiveness, cycle-time or other measures, or quality. Each capability defined should be potentially within the scope of the team to improve.
Each capability may be described by a maturity model that plots the incremental, and measurable steps from the current performance to the stated target performance score. A maturity model provides not only a roadmap for success, but checkpoints in capability improvements such as process or change management investments to improve tools, communications, awareness, and adoption.
Key Enabling CapabilitiesCapability Current
PerformanceTarget Performance
Bright Spots Comments Critical to Quality
Decom Equipment- Record
disposal activity
4 5 7 LTS Procom Rob to work on this
Design and Govern Disposal Process
1 6 5 Keytel Group
(Not sure if this is a separate capability.
Maybe the capability is Design and Govern Process. One focus
area is Disposal Process)
Track Asset
2 75 (Inbound, non-network devices)
Scalability, automation, compliant with standards, high data quality, clearly defined scope
Audit Process/Data 4 4
Verify Data 2 4
Publish Data
1 8
Consumable, accessible, controlled, secure, actionable, automated, automatable, reliable, relevant, scalable
Manage Policy and Standards (Design, Implement, Govern)
1 98 (KCS Ops Run
Book)
(Related to Asset tracking and decom
only?)
Enforcement effectiveness, automation, effective compliance measurement and reporting
Capabilities Next Steps
• Identify end points (start/stop) of processes that Telesys performs. Establish baseline performance measure and target performance measure. This process should contribute to reduction in cycle time for “Dock to Customer Availability,” currently 3 hours, target 51 minutes.
• Validate list of capabilities, and assign to owners for additional definition.
• For each capability, determine characteristics of world-class performance.
• For each capability, establish baseline, propose target scores and identify any bright spots.
• Identify and define any additional required capabilities to move the business value measurements.
• Associate requirements to capabilities and add additional requirements.
About Personas & Scenarios
Personas and scenarios help make the projects impact real. Personas encourage empathy and scenarios create a personal, concrete outcome that the team can work towards delivering – they tell us “why” we are doing the work from a personal perspective. Understanding the user’s expectations and constraints leaves room for inspiration and design of the final solution. Good scenarios also suggest test criteria that will allow the team to determine whether they are on the right track early in the process, before they make big investments in a full solution that may turn out to be wrong.
Scenarios and personas allow the team to check the project charter, causal loop and capability assessments intuitively against the real experience they want to impact for real users. Aligning the persona’s themes to measures described in the causal loop diagram yields a clear and focused prioritization of greatest impact in delivering Business Value. The investments in capabilities are then prioritized to enable this "North Star.”
Meet Paul…
Pains:
Goals:
Paul the Partner Group PM
• I’m a 45 year old Partner Group PM, living in Kirkland, WA.
• I’ve been at Innogen for 8 years and I’ve been a Partner group PM for 4 years.
• I started at Innogen in NMS as a PM and have over 15 years of experience managing large scale projects
• My primary responsibilities include:
About me…
• I’m constantly struggling to meet customer demand for capacity
• I’m can’t find assets• Unpredictable deployment cycle time• I feel like NMS is slower, worse, more expensive
• I need you to provide a wiping solution• Please understand my business model• Lifecycle planning• Unexpected costs from decom
• Deliver capacity to meet demand• Drive cost down• Deliver high availability• Secure, reliable• Comply with Innogen policy and meet expectations• Plan effectively• Track assets including arrival at the dock
“Without the right data at the right time I don’t know the status of assets with a high degree of reliability and my customers are counting on me to deliver.” - Paul
Paul’s weekly staff meeting…Paul the Partner Group PM
1. Data Quality
2. Capacity & Cycle Time
3. Asset Tracking
4. Decom & Depreciation
Scenario Themes
Paul is in a weekly staff meeting with his PM's. He scans through a list of items he wants to discuss and receive updates on today. On the top of his list is a priority item; a new utilization project for AWS, which is spiking up due to a promotional campaign. He expects it to bump up to unprecedented levels in the following quarter. Paul is worried about this because he's not sure if the capacity he has in the pipeline can keep up in with the forecasted demand. Nearly three years ago he had a similar ramp up. Deploying the capacity was painful but eventually they got a bunch of new servers set up and ready to support the need. He realizes those servers must be coming up on decom very soon. He wonders whether the plans for new capacity have accounted for the spike in decom coming.
This is a daunting task with multiple variables– servers in, servers out, and change in demand. In the past he's also received a bill due to unanticipated costs of decom. Paul has a sinking feeling in his stomach because he is unable to predict a positive outcome since he's never had accurate data that he could count on in the past. He wonders if he should have ever taken this job.
In the past week Paul had great meetings with Coca-Cola, US Naval Command, and Walmart and they've all agreed to come on board next quarter if he can commit to delivering the additional required capacity. The data Paul has from NMS suggests that cycle time has reduced on average from 3 hours to 1 hour and defect rates are dropping– this is great news if it's true. He's asked Oliver, a PM on his team, to look into it.
Data
Q
ualit
y
Capaci
ty
&C
ycl
e
Tim
e
Paul’s weekly staff meeting continued…Paul the Partner Group PM
Oliver, fresh back from a visit to the data centers, reports that he hasn't been able to find any variance in data between the information NMS provided and what's actually happening on the ground. Turns out the reason the deployment cycle times are dropping and defect rates are going down is because the quality of asset tracking data is improving, so that when problems do occur they're getting solved faster, which is speeding up the deployment of new capacity. "Nice progress," thinks Paul. Paul is delighted that he will be able to deliver this big win to his customers.
Paul reflects back on the unexpected decom fee he got last year, and wonders whether he will see another surprise charge to him this quarter. As he digs deeper into the data he finds instead of a charge, it says he will receive nearly 1 million in forecasted revenue from sales of the decom equipment which will help offset the cost of his new capacity. Theresa, who works on Paul's team, takes this data to compare with Craig Nickel's financial forecasts– they are precisely the same. Another data point lines up and Paul's confidence is growing. While Theresa is with Mike, she asks to see the total depreciation for the current fleet of AWS servers and finds those numbers match the NMS report as well.
Paul is delighted. He now feels like he has the integrity of data he needs to deliver high business value to his customers with confidence. With NMS supporting and now accelerating the success of his business with this new solution, Paul is optimistic and able to focus on growing the business and winning customers instead.
Ass
et
Track
ing
Deco
m &
D
epre
ciati
on
1. Data Quality
2. Capacity & Cycle Time
3. Asset Tracking
4. Decom & Depreciation
Scenario Themes
Requirements
As a Group PM, I need the…
• Ability to aggregate assets in rack in receiving.
• Ability to discover assets in rack on network as built/deployed.
• Ability to associate discovery data to a SKU.
• Ability to associate assets to purchases in order to collect financial information about that asset.
• Ability to detect when assets move from one colo to another colo.
• Ability to bulk receive asset records (receive parent asset, all children come with it).
• Ability to receive Advanced Shipping Notices of equipment for as-built equipment.
• Ability to monitor data compliance and exceptions to policy standards
• Ability to programmatically describe policies and standards for data compliance.
• Ability to report on availability of assets. Performance: < 5 minutes.
• Ability to validate asset record updates for accuracy (Event to visibility in Asset Management Org in < 5 minutes)
Business Value
Workshop
Draft Additional Personas & Scenarios
Assess Capabilitie
s
Define Core
Success Criteria
Elicit & Refine
Requirements
Research & Validate Personas
& Scenarios
Collaborative Design Sessions
Execution Planning & Kickoff
Road to Project Kickoff
Design Brief Complete
(AKA Business Case)
establish baseline measurements & validate proposed targets
To complete a Design Brief (AKA Business Case) for Telesys, we recommend the following next steps:
• Review workshop feedback and synthesis
• Further development of Capabilities• Inventory of current Measurement practices• Evaluate Design Practice Maturity• Assess current standards for Business Case analysis
• Conduct Survey of IT Effectiveness (SITE)– business partner feedback
• Align results of survey to Causal Loop diagram to inform baselines
• Business Goals Workshop with Business Partners/Customers in the room
• Prioritize key Capabilities for enablement against Causal Loop diagram
• Draft Maturity Map that supports each key capability to define incremental next steps for improvement
• Review the portfolio of projects for the year and identify target projects to focus on
Recommendations and Next Steps