softtek break through savings no need offshore 2011 asug final
DESCRIPTION
Value Generation is more important than cheap labor strategies.TRANSCRIPT
Real Experience. Real Advantage.
[
2
Real Experience. Real Advantage.
[ My roots - 1
3
Real Experience. Real Advantage.
[ My Roots - 2
4
Real Experience. Real Advantage.
[
Transformation Ready
Rate of change has increased dramatically
Countries Companies People
50 years in 5 years
5
Real Experience. Real Advantage.
[ As change speeds up and complexity grows,
so does the cost of keeping the lights on
Percentage of the annual IT
budget spent on application
maintenance and support
* 66% - Forrester – Forrsights Budgets & Priorities Tracker Survey, Q2 2010
66%
6
Real Experience. Real Advantage.
[ Typical approach to savings may be a dead end
Original team New team
$$$$$$ $$$$$$
Onsite Offshore
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Real Experience. Real Advantage.
[ Offshoring could be a dead end when …
• Short-term savings provide a false sense of progress
• Cultural barrier perpetuate or reinforce barriers to change
• Governance models remain at ad hoc maturity levels
• Important knowledge, talent and process is lost
• Rate cards discussions take center stage instead of productivity,
automation and efficiency
• Savings and impact remains inside IT, don’t necessarily
impact the business
8
Real Experience. Real Advantage.
[ Speed of industry change means the CIO
and his organization is under pressure
• Drop in credibility due to dismal
IT industry performance
• Burdens of legacy technology
hampers business’ agility
• Technology advancements outpace
ability to adopt at enterprise IT level
• Requirements grow exponentially
and budgets linearly (if at all)
9
Real Experience. Real Advantage.
[
85%
65%
30%
15%
10%
30%
50%
35%
5%
5%
20%
50%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2005 2010 2015
Value-added IP
Process
Cheap Labor
Value
Offshore Arbitrage
CMM Six Sigma
Lean Outcome
based
Business Value of Services
Rate cards and cheap labor are a thing of the past
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Real Experience. Real Advantage.
[
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A high performing application organization model
Real Experience. Real Advantage.
[
0 20 40 60 80
Optimizing
Quantitatively
Managed
Defined
Repeatable
Ad Hoc
Oct-10
Mar-09
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But few organizations have ventured
Source: Gartner (February 2011)
Distribution of Maturity Among Application Organizations
Real Experience. Real Advantage.
[
• Top 5 CPG and leading global brewer with
operations in 23 countries
• From ad-hoc process to IBS plus managed services
• From IT-centric organization to business process
focused organization
• Performance review linked to business outcomes
• Also tracking process accuracy, availability,
performance and responsiveness
• From and dozen of contractors to Business SLAs.
• Critical apps. performance: 100%, Non-critical 99.7%.
IT spending after transformation: 21% of baseline.
100% onshore.
No need to offshore to achieve break-though savings –
Case Study
13
IT spending evolution
IT spending evolution • Base year
for calculations
• Internally
managed
• Dozens of different
Contractors
• Service models:
Staff aug, T&M • Vendor
consolidation
• Control Demands
• Adjust Service
Levels
• ERP Stabilization
• Rationalization
• Infrastructure Integration
• Efficiency on Break/Fix
• Variable cost managed
• Support new initiatives
• Start managed
outsourcing
• Continuous Improvement
• Payment linked to
business process
performance
• 10% additional savings
year over year
2008 2009 2010 2011 (est.)
100%
53%
21% 19%
Real Experience. Real Advantage.
[ Why break-though savings
Innovation
33%
Operations
66% Operations
34%
Innovation
66%
After Before
14
Real Experience. Real Advantage.
[ Simple steps
15
Step I: Governance Model
Step II: Process Mapping
Step III: Services & SLAs Implementation
Step IV: Governance Model again
Real Experience. Real Advantage.
[ Step I – Governance Model
Business Requirements
• Governance model
• Managed Services (SLA)
• People > Service
• Ticket reduction
• End User Satisfaction
• Application > Business
• Dashboard – Monitoring
Process
• Financial Concepts
• Money Outbound
• Money Inbound
• Value Chain (Logistics)
• Value Chain (Production)
• Business Intelligence
People
• Change Management
• Service Workshop
• Governance Workshop
• Training
• Culture
Technology
• Project Office
• AMS
• Governance Tools
16
Real Experience. Real Advantage.
[ Step I: Governance Model
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“As a Service”
Business Strategy
1. Configuration
2. Validation (Testing)
3. Data Management
4. Development
5. GRC
6. Change Management
7. Business Intelligence
8. Web Services/Mobile
Process Tree (BPPs)
My Business Drivers
SLA Implement
Service Delivery
Service Monitoring & Evaluating
Service Improvement
Governance Objectives
Business Objectives
Real Experience. Real Advantage.
[ Simple steps
18
Step I: Governance Model
Step II: Process Mapping
Step III: Services & SLAs Implementation
Step IV: Governance Model again
Real Experience. Real Advantage.
[ Step II – Process Mapping
19
Real Experience. Real Advantage.
[ Step II – It’s all about Transformation
Information Management
Business Strategy
Business Process
Red Print®: change before designing SAP
20
• Before Blue Print: change organization before
blue print, solve business differences before
design
• Vision 5 years forward (Strategic Map)
and “Pain Points Inventory”
• Business Requirements
• Processes change
• Organizational Structure review
• Technology Architecture
• Change company policies, master data
and process
Real Experience. Real Advantage.
[ Simple steps
21
Step I: Governance Model
Step II: Process Mapping
Step III: Services & SLAs Implementation
Step IV: Governance Model again
Real Experience. Real Advantage.
[ Step III - Tracking Management
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Real Experience. Real Advantage.
[ Step – III Business Service Level Agreements (SLAs)
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Real Experience. Real Advantage.
[ Simple steps
24
Step I: Governance Model
Step II: Process Mapping
Step III: Services & SLAs Implementation
Step IV: Governance Model again
Real Experience. Real Advantage.
[ Step IV - Governance Again
25
Real Experience. Real Advantage.
[
State of the art / transformation
State of the art Facilities
State of the art Service design
State of the art
Governance
No Boundaries
Transparency
Easy Communication
All together
War Room (KPIs)
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Application Catalog
Service Catalog
Critical Applications
Preventive Maintenance
Managed Services
Application Monitoring
Knowledge Management
SLAs
Issue/Risks
Performance
Goals
Meetings
Accountability
Cont. improvement
Vendor
Management
Real Experience. Real Advantage.
[
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Overview: break-though savings model
• Model Assumptions
• Productivity + Managed + Business Driven
• Service Drivers
• Lower Cost + Better Service
• Service Model
• State of the art Infrastructure
• State of the art Services
• State of the art Governance
• Service Location
• Agnostic (but requires changing the model)
Real Experience. Real Advantage.
[ Cloud Services
Transformation Ready
Countries Companies People
50 years in 5 years
Real Experience. Real Advantage.
[ Past Present Future
Real Experience. Real Advantage.
[
] Thank you for participating.
Mauro Okamoto [email protected]
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