prioritize investments that provide the most value to your business
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SAPPHIRE' Orlando 2006 Event speaker presentation on Prioritize investments that provide the most value to your businessTRANSCRIPT
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© Copyright IBM Corporation 2005
Express Value CreationBusiness Consulting Services for Midsized Businesses
Presenter:
Henrik von ScheelVice President, IBM Business Consulting Service - Europe, Middle East & Africa And Author of Express Value Creation
Prioritize investments that provide the most value to your business
Express Value Creation supports CxOs to increase the value of they business
Henrik Scheel | Express Value Creation2
Business Consulting Services
© Copyright IBM Corporation 2005
Agenda
Today’s market
Aligning IT investments with business goals - a senior executive responsibility
An IBM value creation approach tailored to mid-market companies
Roadmap to value creation and realization
Henrik Scheel | Express Value Creation3
Business Consulting Services
© Copyright IBM Corporation 2005
Unstoppable drivers are creating a new market reality
CompetitiveDarwinism
Due to increasingly transparent markets, competitive intensity is growing in severity as existing players and new entrants scramble to provide value to customers
The change in customer demands, technological innovations and government regulation is increasingly sudden and dramatic
The growth and pre-dictability of revenues and margins becomes even more challenging due to economic uncertainties and demanding investors
Pervasive dangers become real and prevalent as global firms see increased exposure to natural disasters, unstable geopolitics and other market shocks
UnrelentingFinancial Pressures
UnpredictableThreats
ContinuousDiscontinuous
Source: IBM Institute for Business Value
Eroding competitive advantage
Sub-optimal resource allocation
Undifferentiated customer value proposition
Lack of clear organizational focus
Empowered customers Aggressive competition
challenging industry models
Reacting to changes in market demand and product definition
Complexity and compe-titive shifts in supplier and partner networks
Inflexible value chains and processes
Unpredictable costs leading to increased operational risk
Close scrutiny from stakeholders and the broader market
Need to reduce fixed costs and capital requirements
Business recovery from natural disasters, terrorism, etc.
Risk management across product and business portfolios
Support for complex globalization and business expansion
Maintaining privacy and security for customers and employees
Henrik Scheel | Express Value Creation4
Business Consulting Services
© Copyright IBM Corporation 2005
Sources: Gartner and CIO Magazine
75% of IT projects fail to deliver the expected business value
The lack of a framework to identify benefitsis cited as the key reason that benefits did not emerge as planned
What is missing in the market?
CEOs know they need IT, but feel it is slow and cumbersome when it comes to delivering change and value
"The key to demonstrating the contribution of IT investments to business value is to link the IT business-case benefits to the drivers of business value."
Henrik Scheel | Express Value Creation5
Business Consulting Services
© Copyright IBM Corporation 2005
Executive goals – today and tomorrow
Henrik Scheel | Express Value Creation6
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© Copyright IBM Corporation 2005
Executives demand high value from IT
A higher percentage of the IT budget must be allocated to the development of new vital solutions – in support of the core businesses and the achievement of key business objectives
IT must suggest technology investments that can improve the satisfaction of customers, employees, investors, and other stakeholders
IT must contribute significantly to improvements in responsiveness and resilience
IT must support rapid change – even act as a change enabler
Promised ROI must be delivered
IT must contribute significantly to lower TCO
Henrik Scheel | Express Value Creation7
Business Consulting Services
© Copyright IBM Corporation 2005
Agenda
Today’s market
Aligning IT investments with business goals - a senior executive responsibility
An IBM value creation approach tailored to mid-market companies
Roadmap to value creation and realization
Henrik Scheel | Express Value Creation8
Business Consulting Services
© Copyright IBM Corporation 2005
A new perception of value
It is sufficient to managethe investment to realizethe benefits
The investment determines the natureand scope of the benefits
Business cases based on tangible benefits only
Benefits are stable over time
The organization must plan for the delivery of the potential benefits
The organization and its business context deter-mine the benefits realized
Intangible benefits represent an importantsource of value
Potential benefits from an investment changeover time
Traditional Mindset Value Creation Mindset
Henrik Scheel | Express Value Creation9
Business Consulting Services
© Copyright IBM Corporation 2005
The more senior executive involvement – the more value creation and realization you achieve
Because:
comprehensive understanding of the company wide strategy is vital.
a company perspective on all major challenges is important.
senior executives have the power to determine major changes in areas like organizational structure, the business model, partner strategies, and core business focus.
only senior executives can prioritize the investment initiatives – to ensure alignment with short and long term company goals.
soft values (in contrast to tangible values) may often play a major role in the “value equation”– and to decide on what weight soft values should have is not a task for none-executives.
Henrik Scheel | Express Value Creation10
Business Consulting Services
© Copyright IBM Corporation 2005
High
Low
Source: Interviews with IBM Clients
Value identification is crucial for deciding on the most important values to go for
The project in itself is the most prominent phase but doesn’t provide the value per se
The post implementation phase is when the results have to be accrued
Typical project resource
consumption
Value Creation and Realization
ValueResource (people and money)
The Value Creation Life-Cycle
Henrik Scheel | Express Value Creation11
Business Consulting Services
© Copyright IBM Corporation 2005
Agenda
Today’s market
Aligning IT investments with business goals - a senior executive responsibility
An IBM value creation approach tailored to mid-market companies
Roadmap to value creation and realization
Henrik Scheel | Express Value Creation12
Business Consulting Services
© Copyright IBM Corporation 2005
Express Value Creation …
Strategy, process, organization and technology are parameters that you can adjust and that will initially have an effect on the way you run your business and the value you experience at the end of the day.
Designed for:
taking a holistic view combining business and IT
getting business and IT goals better aligned
focusing on business aspects
rapid value identification
rapid value realization and ROI
lowering cost (TCO)
making the value creation journey happen
in steps – at your pace
...an approach aimed at helping executives better prioritize and align IT investments - to realize those values that matter the most in reaching key business objectives.
Henrik Scheel | Express Value Creation13
Business Consulting Services
© Copyright IBM Corporation 2005
With a focus on fundamental business values
Despite the recent economic slowdown, change continues to accelerate across nearly every dimension of business. Link IT initiatives to the drivers of the fundamental business values like:
Henrik Scheel | Express Value Creation14
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© Copyright IBM Corporation 2005
The Value Tree a EVC tool to help understand and sell to CxOs
Henrik Scheel | Express Value Creation15
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© Copyright IBM Corporation 2005
How to understand and use the Value Tree
Henrik Scheel | Express Value Creation16
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© Copyright IBM Corporation 2005
How the On Demand Imperatives are mapped to the different Values
Henrik Scheel | Express Value Creation17
Business Consulting Services
© Copyright IBM Corporation 2005
How the CBM Operational Levels are mapped to the different Values
Henrik Scheel | Express Value Creation18
Business Consulting Services
© Copyright IBM Corporation 2005
How the CBM Competencies are mapped to the different Values
Henrik Scheel | Express Value Creation19
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© Copyright IBM Corporation 2005
How the key focus areas of EVC are mapped to the different Values
Henrik Scheel | Express Value Creation20
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© Copyright IBM Corporation 2005
How the responsible C-level Executives are mapped to the entire information
Henrik Scheel | Express Value Creation21
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© Copyright IBM Corporation 2005
Rapid execution enabled by powerful tools
You will not have to start from scratch. We providemodels and frameworks – you just have to quicklyadjust them.
This is attractive for you - the participating executives –because it:
rapidly leads to new insight and results
is easy to work with
stimulates innovation
has the potential to expand your mindset –concerning business and IT strategy tasks
Henrik Scheel | Express Value Creation22
Business Consulting Services
© Copyright IBM Corporation 2005
Express Value Creation Method
Value Identification RoadmapThe IBM Express Value Creation approach offers a step-by-step roadmap built around a set of workshops.
A holistic view secures that all major business and technology perspectives are taken into consideration, thus helping companies prioritize IT investments according to the business values that matter the most.
Executive workshopsExpress Value Creation is about zooming in on values that matter the most. The executive workshops secure that the project moves in the right direction from the very beginning.
The extent of the project varies from 2-5 workshops of approximately 6 hours each. Moving from one step to another requires some analysis and preparation primarily by the IBM team, but will also involve some of your business and IT experts.
Henrik Scheel | Express Value Creation23
Business Consulting Services
© Copyright IBM Corporation 2005
Express Value Creation Method
Objectives: Inform key players and
agree on objectives Ensure sponsorship
and executive support Define and align scope
and expectations Establish common
understanding for “as is” situation
Understand value and solution gaps
Select initiatives for further investigation in the assess or accelerated assessment phase
Identify quick wins for the accelerated phase
3- 9 weeks
Objectives: Establish a common view on the
“to be” situation (business and IT perspective)
Establish a Value Case for decision-making
1- 4 weeks
1- 4 weeks
Align Assess Activate
Accelerated Assessment
Objectives: Establish a common vision for
the “to be” situation Build a desire for change Qualify and quantify values to be
achieved from the selected implementations/changes initiatives
Build plan and Business Case for desired values
Objectives:
Project “ value creation” delivery
Tune solutions, processes, organization, people skills, etc.
Confirm values delivered -qualify and quantify the values achieved from the selected implementations / project initiatives
Ensure common understanding for current “as is” situation
Establish or confirm the “to be”situation
Identify next steps – further values
Henrik Scheel | Express Value Creation24
Business Consulting Services
© Copyright IBM Corporation 2005
Roadmap – high level description of phases and steps
Align Assess Activate
1
3
5
2
4
6
7 8
9 10
1211
Implement
Prepare/Analyze
Workshop Decision Prepare/Analyze
Workshop Decision
13 1
Accelerated AssessmentPrepare/Analyze
Workshop Decision
The roadmap is a set of workshops bring the executive team effectively through the process of selecting exactly which areas to focus on in order for the company to realize most business value. The project develops in three steps – Align, Assess and Activate – with workshops tailored for each. Depending on complexity a company will go through 2-5 workshops before the final decision making and actual implementation.
Henrik Scheel | Express Value Creation25
Business Consulting Services
© Copyright IBM Corporation 2005
Express Value Creation – a powerful approach …
… supported by:
Unique IBM research
IBM consultants with deep business and industry insight
IBM consultants with outstanding capabilities concerning design and implementation of business solutions
Experience from dozens of value creation initiatives within IBM
IBM frameworks and tools that will help you break down your business into logical building blocks
Experience from hundreds of similar customer engagements
Henrik Scheel | Express Value Creation26
Business Consulting Services
© Copyright IBM Corporation 2005
Are you an Express Value Creation candidate?
What new IT investments will deliver most value to our business?
We want to strengthen competitive differentiation – how can IT support that ?
Our IT solutions can not cope with rapid change – how can this be fixed ?
IT is not our core business – how much should we outsource?
How can IT help us optimize collaboration with clients, suppliers, and partners ?
Most of our IT budget is spent on operating and maintaining existing solutions - how can we move more money to new solution investments ?
We need better intelligence in support of key business decisions – how should a staged implementation plan look like?
What shared services should we consider – and how should they be implemented ?
How can our IT solutions strengthen our position as a subcontractor or a strategic partner?
Henrik Scheel | Express Value Creation27
Business Consulting Services
© Copyright IBM Corporation 2005
Relying on proven IBM experience
Industry expertise and though leadership such as Institute of Business Value
End-to-end solutions
On demand enabler for midsized companies
Ingrained commitment to development of new ideas, technologies
Delivers capabilities that were, until now, available only to large corporations
Innovative commercial & financing arrangements
Detailed knowledge of industry problems and solutions
Teams that drive end-to-end value transformation
Proven value methodology, toolkits and benchmarking
Exploiting the depth of IBM World class of scalable, reliable and flexible capabilities
More than 15 years of experience in serving medium sized companies
Accountability for outcomes
Collaborative relationships based on mutual respect & trust
Openness in management of assignments
Excellent price performance ratio
Protection of investment and security
Short and long-term value for identify KPIs, financial levers
Tangible and Intangible business benefits such as revenue growth, cost savings, release of capital, risk reduction, etc..
Expertise to reduce risk & increase speed to benefits
Guaranteed scope of performance at a fixed price
Value track record such as reduced risks & costs and improved cash flow
Value Creation for your company
Accountability for Results
Better and FasterExecution
Deeper Innovation
Cooperation with a accountable and long-term partner
+ + =
Henrik Scheel | Express Value Creation28
Business Consulting Services
© Copyright IBM Corporation 2005
Questions?
Henrik von Scheel
Author of Express Value Creation and
Vice President, IBM Business Consulting ServiceEurope, Middle East & Africa
Engagement support [email protected]
For more information [email protected]