Prioritize investments that provide the most value to your business

deeper

© 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


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




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




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."




Executive goals – today and tomorrow




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




Agenda

Today’s market







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




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.




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




Agenda

Today’s market







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.




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:




The Value Tree a EVC tool to help understand and sell to CxOs




How to understand and use the Value Tree




How the On Demand Imperatives are mapped to the different Values




How the CBM Operational Levels are mapped to the different Values




How the CBM Competencies are mapped to the different Values




How the key focus areas of EVC are mapped to the different Values




How the responsible C-level Executives are mapped to the entire information




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




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.




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




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.




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




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?




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

+ + =




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]

Prioritize investments that provide the most value to your business

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