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© HCL AXON 2012 – Commercial in Confidence1
HCL Benefits Approach Presentation
High-Level Overview January 2013
© HCL AXON 2012 – Commercial in Confidence
2Companies that explicitly use Benefits Realisation techniques perform better
2 xMORE LIKELY
to attain value “on” or “ahead of” time
1.9 xMORE LIKELY
to deliver “on” or “below” budget
benefits achieved
53%HIGHER
return on investment
60%HIGHER
Companies with high benefits realization best practice adoption realize:
(1) Performance of companies with high level of best practices adoption compared to those with low levels of adoption
…and execute projects that are:
© HCL AXON 2012 – Commercial in Confidence
3Failing to Address Benefits is a Key Lesson
Concerns Pre Implementation Mistakes Noted After Implementation
The State of ERP Services Multi-Client Study source META Group (now Gartner)
Scale 1=Unimportant, 5=Very Important
© HCL AXON 2012 – Commercial in Confidence
The Role of Benefits Realisation
• Technology-enabled transformation programmes support business strategy and improve business outcomes.
• These programmes are costly. – Costs are managed within the programme– There is pressure on costs to increase– Programme Governance supports cost control
• Benefits are realised within the business;– There is pressure on benefits to decrease– Controls of benefit are not generally part of the programme
• Benefits realisation:– Ensures the programme enables the anticipated benefits; and– Actively manages the realisation of benefits through changes across the business
4
Cost
Benefit
© HCL AXON 2012 – Commercial in Confidence
Benefits Realisation and Programme Delivery
Programme dimensions
and the role
benefits
Programme dimensions
and the role
benefits
Time
Scope
Cost Value
Directly links the programme with the
realisation of business outcomes
Shapes program scope through benefits-led
design
Maximises return on investment by aligning
scope and costs around benefits
Facilitates investment approval
© HCL AXON 2012 – Commercial in Confidence
6From the outset a non-emotional, objective story needs to be developed
Align Top Management
Agree the key business drivers for benefits
Sign off top down to get accountability
Ensure Accountability
Understand the detailed benefits areas Sign off benefits cards Agree benefits realization plans Agree review and tracking mechanism
Integrated Process Design
Ensure functional design optimizes the realization of the identified benefits
Use SMEs to prove the benefits with business owners
Top
Do
wn
Bo
tto
m U
p
© HCL AXON 2012 – Commercial in Confidence
7The HCL Benefits Realisation process goes beyond identifying Benefits to deliver value to the client P&L
Benefits Tracking and
Reporting
Benefits Management
Change Control
Programme Governance
Benefits Recognition
Benefits Identification
• What are the benefits
• How much are they worth
• How will they be delivered
The actual process of delivery i.e.:• Strategic
sourcing• FTE reduction• Rolling out
Direct Debits and P Cards
• Changing the way client investments decisions are made
• Weekly reporting on a exception basis focuses efforts
• Based on performance there may be a change in approach mid flight
• How and when are the Benefits realised
• How does Benefit recognition get communicated and actioned in the client
• Benefits will report into the programme on a regular basis and follow the programme governance requirements
Any material change to Benefits levels gets managed through Change Control
© HCL AXON 2012 – Commercial in Confidence
8Our Benefits Realisation Method
Identify Understand Realise Operate and Improve
Design
Identify Embed Enable Validate Deliver
Identify strategic objectives and develop associated benefits hypotheses and tactical performance improvement opportunities
Validate benefits opportunities and test hypotheses through detailed operational analysis. Secure stakeholder agreement to benefit targets
Design benefit driven Target Operating Model. Specify drivers for realisation and incorporate into programme planning activities. Enable benefits through prioritisation and delivery of technology & business activities
Manage benefits realisation through programme delivery, stakeholder management, operational management and business problem solving Tracking & monitoring in place.
Embed the benefits realisation approach and management mechanisms into BAU. Implement continuous improvement mechanisms
© HCL AXON 2012 – Commercial in Confidence
9Our Benefits Realisation Method
Identify Embed Enable Validate Deliver
Benefits Strategy
Outline Benefits Inventory
Outline Benefits Case
Validated Benefit Inventory
Agreed Benefit Cards
Governance Model
Dependency Maps
Realisation plans
Solution & reporting design review & sign off
Benefits Baseline
Solution sign off
Adjusted performance objectives
Performance Reports & Trend Analysis
Targeted interventions
Improvement opportunities
Target business outcomes agreed
Agreed business outcomes confirmed and owned within the business
Business solution enables business outcomes defined in business case.
Business ready realise benefits
Benefits realised
Benefits realisation best practice adopted
Activ
ity
Key
Task
sO
utpu
tO
utco
me
Identify strategic objectives and develop associated benefits hypotheses and tactical performance improvement opportunities
Validate benefits opportunities and test hypotheses through detailed operational analysis. Secure stakeholder agreement to benefit targets
Design benefit driven Target Operating Model. Specify drivers for realisation and incorporate into programme planning activities. Enable benefits through prioritisation and delivery of technology & business activities
Manage benefits realisation through programme delivery, stakeholder management, operational management and business problem solving Tracking & monitoring in place.
Embed the benefits realisation approach and management mechanisms into BAU. Implement continuous improvement mechanisms
© HCL AXON 2012 – Commercial in Confidence
10Detailed Activity
Phase ActivitiesIdentify • Agree opportunities
• Identify Owners• Confirm scope (eg business unit and geography, other organisation scope issues)• High-level estimates for prioritisation• Create initial benefits inventory
Validate • Review existing documentation• Determine data availability]• Define data required, gather & analyse data• Confirm baseline• Agree targets• On-going stakeholder meetings – benefits owner(s)• Document dependencies – system (validation against blueprint), process, organisation etc• Benefit specific risks• High-level benefit strategy (eg how will benefit be recognised – headcount reduction, improved efficiency
through growth• Sign-off benefit cards
Enable • Develop dependency maps & realisation plans• Dashboard design – (Data entity, Data source(s) & validation, Calculations, Format, Timing etc)• Mock up, iterate & sign-off prototype• Determine on-going benefits realisation governance
Embed • Tracking realisation plans – establish process & handover• Financial/Performance target changes defined and embedded• Test scripts validated against benefits requirements/dependencies (would like to understand the test
strategy to ensure we integrate effectively)
Deliver • Realisation reporting• Benefits management – stakeholder engagement, identification of mitigation actions, driving action plans.• Continuous improvement
© HCL AXON 2012 – Commercial in Confidence
11Stage 1: Identification of Benefits
Identification
• Corporate Objectives• Executive Objectives• Key Business Contacts
• Peer Group Benchmarks• Business Knowledge• Industry Benchmarks
• Executive Input
Activities • Top down analysis of corporate / executive objectives and alignment with potential benefits
• Analysis of tactical and near term operational performance issues
• Establish scope & timeframe• Establish required analysis
levels & data availability• Identify & initiate key stakeholder
engagement
• Obtain data & business insight• Bottom up analysis of potential
benefits in each segment, i.e. Customer Service, Billing, IT
• Provide assumptions for 1st cut benefits
• High level analysis of current performance vs internal and external benchmarks
• Validate & update benefits with key personnel
• Identification of benefit owners• Identification of associated
operational management• Planning for the next phases
Deliverables • Strategic and tactical benefit drivers
• Engagement with key personnel
• Outline Benefits Inventory• Initial benefits case, to be
confirmed by review process
• Benefits Strategy - agreed framework and measures of success
• Outline benefits case• Key risks & assumptions
Outcome Target business outcomes , associated outline benefits case and benefit strategy agreed
Objectives & Key Stakeholder Engagement
Data Analysis & Initial Benefits Profile
Steering Group Presentation – Approach & Outline
Benefit Case
Inputs
Steps in Identification Process
Identify Understand Realise Operate and Improve
Design
© HCL AXON 2012 – Commercial in Confidence
12Stage 2: Validating Benefits
Validation
• Project Scope• Business Unit Data• Outline Business Case
• Updated Benefit Cards• Realisation Schedule
• Executive Input
Activities • Agree benefits types• Validation 1-2-1 meetings with
key stakeholders• Agree scope of improvement• Agree benefit multipliers• Agree baseline definitions
• Define and document detailed dependencies, risks & assumptions
• Interview key personnel• Ensure that benefits (and
baselines) can be measured• Agree benefits cards
• Sign off cards and benefits case
• Understand and include benefits as a key driver for business transformation
• Refresh benefits inventory• Define benefits governance
Deliverables • Validated Benefit Cards• Cash flow of benefits delivery
• Required reporting structure for benefits
• Signed off benefits cards
• Validated Benefits Inventory• Finalised benefits case• Governance Model
Outcome Agreed business outcomes confirmed and owned within the business
Detailed Benefits Analysis Sign-Off with Benefits Owners
Steering Group Presentation – Full Benefit Case
Inputs
Steps in Identification Process
Identify Understand Realise Operate and Improve
Design
© HCL AXON 2012 – Commercial in Confidence
13Stage 3: Enabling Benefits
Enablement
• Project Scope• Benefits Inventory• Full Business Case
• Benefit Dependency Maps• Benefit Realisation Plans• Executive Input
Activities • Document detailed benefits dependencies
• Identification of “Quick wins” that are not dependent on other specific deadlines
• Creation of reporting requirements to allow measurement of ongoing benefits areas
• Obtain business understanding of challenges
• Validate challenges of potential benefits; identify solutions to challenges
• Agree and embed benefit realisation requirements within technical design & documentation
• Presentation / agreement on actions to overcome the top challenges to achieve the identified benefits
• Ensure that identified dependencies are being addressed by the business
• Develop benefits reporting approach
Deliverables • Benefits Dependency Maps• Quick win implementation plan
• Agreement on owners and responsibilities to overcome the challenges identified.
• Benefits Realisation Plans
• Agreed action plan• Migration strategy• Transformation dashboard &
benefit reporting defined
Outcome Business Solution enables the outcomes defined in the benefits caseSuccess can be measured and reported on by the business solution
Develop Dependency Maps & Identify Quick Wins
Agree Realisation Challenges
Steering Group Presentation – Full Benefit Case
Inputs
Steps in Identification Process
Identify Understand Realise Operate and Improve
Design
© HCL AXON 2012 – Commercial in Confidence
14Stage 4: Embedding Benefits in the Transformed Organisation
Embed
• Realisation Plans• Challenges to Realisation• UAT output
• Benefit Cards• Realisation Plans• Challenges to Realisation
• Strategic Roadmap
Activities • Confirm ongoing benefits governance approach
• Review assumptions and dependencies against solution test output.
• Finalise performance baselines• Identification of issues that still
hinder benefits delivery• Integration with business
readiness
• Report against benefits realisation• Escalate benefits realisation
issues as appropriate• Extend ownership of ongoing
activities and capability for continuous improvement
• Assess and sign off [programme owned] benefits that have been delivered
• Assess new opportunities for improvement
• Ensure benefits targets are reflected in budgets and performance objectives
• Move to “business as usual”
Deliverables • Agreed action plan to ensure the benefits delivery
• Benefits baseline
• Progress and performance tracking
• Communication plans for stakeholders
• Continuous improvement approach and tools
• Identification of new strategic priorities
Outcome Business ready to realise benefits
Review of Challenges & Benefit Realisation Plans
Agree Actions to Ensure Delivery of Benefits
Identification of Next Phase of Benefits Realisation
Inputs
Steps in Identification Process
Identify Understand Realise Operate and Improve
Design
© HCL AXON 2012 – Commercial in Confidence
15Stage 5: On-going Benefit Delivery
Delivery
• Realisation Plans• KPIs
• Performance Reports & Trends
• Realisation Plans
• Strategic Roadmap• Benefits Methodology
Activities • Identification of performance issues against target
• Historical trend analysis of operational and benefit measures
• Detailed analysis on performance issues where out of tolerance.
• Focused intervention plan to address performance issues
• Training and coaching key stakeholders in performance challenge impacts and need for intervention
• Clear results plan for success
• Hold “awareness and understanding” sessions on performance management
• Review and revise performance targets and tolerances
• Training in Benefits methodology to support ongoing programmes
Deliverables • Performance reports• Trend Analysis
• Results plan• Communication plans for stake
holders
• Training and communication sessions
Outcome Benefits RealisedBenefits management adopted as standard business practice
Ongoing Performance Review
Escalation & Targeted Interventions Driving Cultural Change
Inputs
Steps in Identification Process
Identify Understand Realise Operate and Improve
Design
© HCL AXON 2012 – Commercial in Confidence
Case Studies: IT Delivering Business Solutions
Global Leader in Document Management Products and Services
Business Solution: Automation of service management and scheduling process• drive engineer efficiency through optimised
routing•Real time data means 2hr response time can be
met without increasing headcount•Customer service levels increase while costs
decreaseBenefits:•Direct, easily measurable benefit in cost to serve –
major contributor to a package of benefits contributing to £5M a year in savings.
•Less tangible benefit in customer loyalty and business growth
$30Bn Diversified Technology Manufacturer
Business Solution: Real time visibility of materials to support best practice supply chain and manufacturing processes•Reduction in warehouse headcount by a 19%•Reduction in stock levels of 10%•Reduction in cycle time of 2-5%•Financial Benefits Exceeded original benefits case
and validated base target.
16
© HCL AXON 2012 – Commercial in Confidence
17
• 12,000 Users• 80 Locations• 18 Countries
•Integration of acquired business on a common platform
•$250m in projected benefits
• $5.4 Bn revenues• 22,000 Employees• 90 Facilities• 16 Countries
•Build and deploying long term SC solution including Demand Planning, Supply Planning and Available to Promise
•Forecasting to link flying hours and cycles with spare parts forecast
•Planning master data cockpit to provide a single point to monitor data like safety stock, lot size.
• $475 in projected benefits
• $450 Mn Revenues• 1,350 Employees• 9 Mfg Dist Svc Ctrs
•Served as the lead integration partner for implementing SAP’s TP/VS Solution
•Project completion in 4 months•Integrated 2 third party products:
•Ortec LEO VSO for stacking rules and load building of shipments
•Rand McNally for practical miles (versus generic geo-coding) input for route optimisation
• Reduce number of stops by 10%
•Reduce total number of miles travelled by 2%
•$5.6 Bn Revenues•19,000 Employees•24 Manufacturing Centres•200 Distribution Centres
•Increased visibility to inventory availability at various locations and customer requirements
•Improved visibility of inventory, response time to order requests was reduced. This resulted in higher fill rates and on time deliveries
• $32m in projected benefits
• $250 Bn Revenues• 1000 Users• 7 Countries in scope
•Global transformation and IT implementation for BP’s Trading Settlement and Finance teams.
•>$00M’s Capital Reduction benefits realised over 5 years.
•Procurement benefits realising >$80m per year
© HCL AXON 2012 – Commercial in Confidence
18
• $4.2B Revenues• 12,000 Users• 14 Countries
•Strategic ERP implementation.•Benefits focus on Procurement and Partner & Customer support performance and cost reduction
•$54m annual benefits
• 35,000 Employees• £3.5B budget
•Full scope ERP (Finance, Procurement, HR) & CRM Implementation
•Business transformation of core organisation
•£1.56b projected benefits over 10 years
•£942m cashable savings•£646m cashable realised to date (2 years)
• $6.2B Revenues• 2,000 Users• 2.4 M Customers
•SAP ERP implementation•Benefits focus on Customer Revenue Growth, Supply Chain & Finance Processes, Improved speed to market
• $250M benefits over 5 years•Revenue growth, service cost reduction & capital savings for services to 2.4M customers
•$980M Revenues•3,000 Employees
•Full scope ERP implementation•Supply chain transformation
• £49m benefits realised
• $46B Revenues• 84,000 Employees• 1000 Users• 14 Countries in scope
•Global HR Shared Service Centre Implementation •??
• £44B Revenues• 36,500 Employees
© HCL AXON 2012 – Commercial in Confidence
HCL AXON delivers results
Full scope SAP-enabled transformation “Axon delivered $250M of financial benefits” – David Snowden, Program Sponsor, Transport for London $50m budgeted benefits case $250m realized benefits case
Full scope SAP-enabled transformation “Axon is great at project delivery and benefit realisation ” – Brendan Arnold, Director of Finance, Birmingham City Council $1.56 billion target 10 year benefits target $942 cashable - $646m realized to date
SAP-enabled Supply Chain transformation “Axon delivered a structured approach to
accelerated benefits realization” – Mike Jones, CIO $49m cashable benefits realized to date
© HCL AXON 2012 – Commercial in Confidence
20
HCL AXON Have Used IT to Deliver Measurable & Sustainable Benefits for Many of Our Clients
Global Transformation and IT implementation for BP Trading’s settlement and finance teams
• >$100Ms of Capital Reduction benefits currently being realised over a 5 year period
• Procurement Benefits of $80M p.a. being realised
Strategic ERP implementation: benefits focus on Procurement and Partner & Customer Support performance and cost reduction
• £5M / year: Simplified pricing, service provision and logistics
• $47m / year: $4m resource efficiency, $18m compliance, $25m contract re-negotiation
Major IT implementation: benefits focus on Customer Revenue Growth; Supply Chain; Finance Processes
• £10 M / year working capital savings;• £25 M / year cost reduction benefits;• £35 M / year of revenue generation benefits
SAP ERP implementation: benefits focus on Customer Revenue Growth; Supply Chain; Finance Processes
• $250 M of benefits being realised over 5 yrs - revenue growth; service cost reduction and capital savings for services to 2.4m customers
Full Scope SAP ERP Transformation • £1.56 Billion benefits target over 10 years• £942 M Cashable savings with > £646 M realised
IT enabled Supply chain Transformation• £50 Million budgeted benefits case• £250 Million of supply chain and capital savings actual
benefits case