Cxo 2013 new Customer Value Proposition

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Copyright CXO Advisor & SaaS-it Consult 2013 A deeply experienced advisory and transaction advisor team, backed by Ovum in Africa with strength in IT Finance, IT cost and value analysis and a focus on agile business and IT transformation.
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A deeply experienced advisory and transaction advisor team, backed by Ovum in Africa with strength in IT Finance, IT cost and value analysis and a focus on agile business and IT transformation. As a Board Member, use our independent Board advisory and transaction advisor team for assurance As a CIO you can use Innovation to drive revenue and improve efficiencies. There needs to be a balance between cost optimization, service efficiency and innovation

Transcript of Cxo 2013 new Customer Value Proposition

Page 1: Cxo 2013 new Customer Value Proposition

Copyright CXO Advisor & SaaS-it Consult 2013

A deeply experienced advisory and transaction advisor team, backed by Ovum in Africa

with strength in IT Finance, IT cost and value analysis

and a focus on agile business and IT transformation.

Page 2: Cxo 2013 new Customer Value Proposition

Copyright CXO Advisor & SaaS-it Consult 2013

The IT landscape is changing – change at the speed of business

Page 3: Cxo 2013 new Customer Value Proposition

Copyright CXO Advisor & SaaS-it Consult 2013

As a Board

Member, use our

independent

Board advisory

and transaction

advisor team for

assurance

As a CIO you can

use Innovation to

drive revenue

and improve

efficiencies.

There needs to be

a balance

between cost

optimization,

service efficiency

and innovation

As a Business

you need agility

and change.

Build a

compelling

business case for

change and gain

competitive

advantage

A D V I S E I N N O V A T E C H A N G E

Page 4: Cxo 2013 new Customer Value Proposition

Copyright CXO Advisor & SaaS-it Consult 2013

We do 3 things : - Advise

Deeply experienced team Backed by Ovum in Africa – IT Finance strength Business – IT Transformation Model

Innovate Return on Business Agility Rapid Innovation with Outsystems Business Model Innovation – Saas-it.net

Change Liberate legacy – Momentum Model Transformation Business Process as a Service – Procurement, IT Finance, Portfolio Governance as a Service – Programme & delivery assurance

Page 5: Cxo 2013 new Customer Value Proposition

Copyright CXO Advisor & SaaS-it Consult 2013

IT spend to business efficiency

5

0%

5%

10%

15%

25%

40% 50% 60% 70% 80%

Cost / Income Ratio

IT /

Op

erat

ing

Co

st

Unexploited business efficiency potentialEfficient IT / Efficient business

Inefficient IT / Inefficient businessEnabling increased business efficiency

(Median 11- 59.1%, 12– 59.3%, 13 – 58.3%)

(Median 11- 8.2%, 12– 12%, 13 – 12.9%)

20%

Company A

Company B

Company C

Company D

Based on Butler Group IT efficiency benchmark model

Page 6: Cxo 2013 new Customer Value Proposition

Copyright CXO Advisor & SaaS-it Consult 2013

SHARED SERVICES MODEL SOURCES

Porters Value Chain – Michael Porter – Harvard Business SchoolWhat Business Really Wants from IT – Terry White

Reinventing the IT department – Terry WhiteSpeed up the mess – Terry White

Page 7: Cxo 2013 new Customer Value Proposition

Copyright CXO Advisor & SaaS-it Consult 2013

How we see the world: The three ‘roles’ in business

Shared and support services

Core businessStrategy

LeadershipInnovation

• Porter’s value chain maps to the three ‘roles’ of business• Core business (not systems)• Shared services / business and customer support• Strategy, leadership, innovation – the ‘glue’ that holds it all together

after Porters value chain

Drive each Role differently

Strategy / Leadership / Innovation

Inbound logistics

Operations

ServiceOutbound logistics

Marketing& sales

Human resourcesFinance & Admin

ITSupply Chain

Firm infrastructure

Page 8: Cxo 2013 new Customer Value Proposition

Copyright CXO Advisor & SaaS-it Consult 2013

Baseline momentum• Baseline - rate of sales / against your cost burn rate

• Sales• Costs• Geography• Staff• Legacy

• All of these have their own cycle times• Decisions which ignore cycle times tend to fail

Shared and support services Core business

StrategyLeadershipInnovation

Business momentum

Current sales rate / cost burn

The business engine

Page 9: Cxo 2013 new Customer Value Proposition

Copyright CXO Advisor & SaaS-it Consult 2013

The business drivers of agility

Shared and support services Core business

StrategyLeadershipInnovation

Business momentum

DeliverCore business engine

Value delivery engine

Support engine

FixRegulation, mandates

New CxO, value propositionsFix support engine

ServiceLooming ThreatService business growth

Training, upgrades

ImproveChange the strategyNew, improved

processesNew, improved

processes

Differentiate

Change the environment

New products, markets, channels

Cloud, outsource, BPaas

Page 10: Cxo 2013 new Customer Value Proposition

Copyright CXO Advisor & SaaS-it Consult 2013

Are we doing the right things?

Shared and support services Core business

StrategyLeadershipInnovation

Business momentum

Deliver

Fix

Service

Improve

DifferentiateSustainability

Risk

Strategic Risk

Tactical RiskUncertainty

Operational Risk

BTL activity drives cost

ATL activity drives revenue

Page 11: Cxo 2013 new Customer Value Proposition

Copyright CXO Advisor & SaaS-it Consult 2013

Can we measure them?

Shared and support services Core business

StrategyLeadershipInnovation

Business momentumServiceRisk

NPV/Time

ROI = Breakeven?Benefits realisation

Baseline

Hit rate >70%Real Options Analysis

Time < 2yrs

ImproveBTL- PBPCVA

ROI > IRRHit rate > 50%

PoAHorizon 1-3 yrs

Differentiate

PBPCVAPoA

ROI = IRR + >40% **

Hit rate > 30%PoA

Horizon – 1-20 yrs

DeliverHistorical CVA

Ongoing BenefitsTCO

Current CVAOngoing Benefits

Current Performance

Planned CVAPlanned Benefits

Planned Performance

FixRiskCostPoA

RiskCost efficiency

Time

Risk Tolerance

Sustainability Risk

Strategic Risk

Tactical RiskUncertainty

Operational Risk

Page 12: Cxo 2013 new Customer Value Proposition

Todays decisions drive subsequent spend profiles

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Each subsequent period shows the effects of activities from the previous period• High spend in IBR in year 1 results in higher Ops engine costs in year 2• High spend in “Strengthen the engine” in year 2 should result in lower Ops engine costs in year 3

Year 1

Year 3

Year 2

Page 13: Cxo 2013 new Customer Value Proposition

Copyright CXO Advisor & SaaS-it Consult 2013

Benchmark comparisons

13

Portfolio to budget Y0 Year to year Between divisions Between countries Between organisations Between Products

Both spend the same… Which plans better ? Which is more

sustainable? Which is more strategic?

Shared and support services -

81%Core business – 19%

StrategyLeadership

Innovation – 0%

Organisation 1

2 %8 %

67 %

14 %2 %

3 %

67% - Deliver

13% - Fix

17% - Service

3% - Improve0% - Differentiate

Organisation 2

1 %3 %

Shared and support services

StrategyLeadershipInnovation

3% - Differentiate

2 %1 %

Core business

3 %1 %

67 %

12%3 %

1 %

67% - Deliver

2% - Fix

10% - Service

18% - Improve

2 %

1 %2 % 2%

2 %

1 %

Page 14: Cxo 2013 new Customer Value Proposition

Copyright CXO Advisor & SaaS-it Consult 2013

Momentum Model Indices

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Shared and support services -

81%Core business – 19%

StrategyLeadership

Innovation – 0%

Organisation 1

2 %8 %

67 %

14 %2 %

3 %

67% - Deliver

13% - Fix

17% - Service

3% - Improve0% - Differentiate

1 %3 %

Model 1

Model 2

Bureaucracy Index X/Y 34% 26%Innovation Index ∑SLI:D 0% 12%Inertia Index 1-A/B 91% 73%Growth index C/D 2% 16%Focus index ∑F/100 27% 36%

X Y

Bureaucracy Inertia

A

B

Focus

F

Innovation

Growth

C

D

Page 15: Cxo 2013 new Customer Value Proposition

Copyright CXO Advisor & SaaS-it Consult 201315

The steps to portfolio prioritisation successPrioritisation

pain points

• How do you compare apples with monkeys?

• Noise & politics define priorities?

• What about regulatory compliance projects?

• Everything MUST have a positive ROI

• Are your initiatives aligned with your strategy?

• What about the real value from the initiative?

• How do dependencies play out in prioritisation?

• What about marginal projects, that just must be done?

• What about innovation – how do you put a value to it?

Right of Way TM

benefits

• Fixes the prioritisation problem

• Prioritisation aligned with your strategic objectives

• Rigorous & fair prioritisation

• ROI is not the only criterion – focus on value to your organisation

• Has the right discussion around project right of way

• What should we do, & why?

• What should we delay & why?

• What value will we derive?

• Develops scenarios around different priorities

• What benefits will we focus on?

• Clarifies understanding!

Decide on utility factors from strategic intent

Weight 3RM classes utility, according to investment policy

Fast, profitable, innovative, customer focused

Project 1

Project 2

Project 3

12 3

Classify projects & define utility contribution per project

Prioriitise projects by

strategically aligned

utility scores

Project 1

Project 2

Project 3

955674 P

roje

ct 1

Pro

ject

3

Pro

ject

2

Project …

Project …

Step 5

Step 3

Step 4

Step 1 Step 2

Score projects by

contribution, utility & class

95

Do thes

e Don’t do

these

Page 16: Cxo 2013 new Customer Value Proposition

Copyright CXO Advisor & SaaS-it Consult 2013

What IT really does – Terry WhiteIT without fuss

76%

Improve business results

22%

Information leadership

2%

Technology delivery

IT without fuss

20%

Improve business results

60%

Information leadership

20%

What the CEO wants

Agile Business - IT Transformation

Page 17: Cxo 2013 new Customer Value Proposition

Copyright CXO Advisor & SaaS-it Consult 2013

Maintenance

Innovation

”As a Service” Innovation

Managed internally

Hardware

Middleware

Application

Business Process

Scope of Activities

IT budget/Effort

Hardware

Middleware

Application

Business Process

Scope of Activities

IT budget/Effort

Innovation

Internally Managed

IaaS&

HaaS

Maintenance

Vendor Managemen

t

InnovationInternally Managed

PaaS&

IaaS&

HaaS

Maintenance

Vendor Managemen

t

Innovation

Internally Managed

SaaS&

PaaS&

IaaS&

HaaS

Maintenance

Vendor Managemen

t

Page 18: Cxo 2013 new Customer Value Proposition

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Strategic Sourcing- and the questions you need to ask

What’s our sourcing strategy and what deal principles support this?

Are we getting the best fit solution at the best value?

Can the vendor deliver on their promises and demonstrate their capabilites in good faith?

Can we achieve a win-win contract that is sustainable? Strategic

Intent – ProgramRationale

Requirements

Specification

Request for Solutions

Solution Evaluation

Vendor selection and due diligence

Contracting and

delivery assurance

What are our market and product options?

Page 19: Cxo 2013 new Customer Value Proposition

Copyright CXO Advisor & SaaS-it Consult 2013

How we support you

Transaction and Program

Advisory

Cost, value and

Innovation Benchmarking

Strategic Sourcing and Procurement

IT Value and benefits

Realisation

Shared Services -

BPaaS

Agile Business - IT Transformatio

n

Page 20: Cxo 2013 new Customer Value Proposition

Copyright CXO Advisor & SaaS-it Consult 201320

Contact us to optimise your :

As a service integration Business Process as a Service

Procurement Contract Management

IT Costs and Value Measures and Benchmarks Business Agility through IT transformation IT Value and Benefits Realisation Transaction, Program and Board Advisory

Page 21: Cxo 2013 new Customer Value Proposition

Copyright CXO Advisor & SaaS-it Consult 2013

Our team and panelKim Andersen

Kim is a senior business executive who worked as CIO and CTO with Tieto for the past 10 years. His strength lies in the ability to map business and technology needs from a strategic aspect. Implemented the entire Cloud Services Transformation strategy program for Tieto, a 17.000+ strong IT organization and largest Nordic SI.

Terry White

Terry’s strategic expertise in IT is recognized worldwide: “Terry White is one of the most original thinkers in IT to surface in recent years. He was one of the first IT gurus to identify the need for IT departments to radically transform themselves to accommodate the realities of the twenty-first century”. Professor of IT (UK)

Anders Trolle-Schultz

Anders has a long career in Sales, Marketing & Business Development. He has worked in various industries covering Telecom, IT distribution and sales, and Fast Moving Consumer Goods. Anders has a profound understanding of cross industry partnerships and how to leverage the strength of multiple industry players

Mika Jantunen

Mika is a visionary sales execution coach and business change facilitator. He has been working with IT Industry and business IT user companies for 15 years.  His keen interest are to accelerate sales of his customers, to execute actionable market intelligence and to facilitate customer centric product and service development.

Gerhardt van Wyngaard

Gerhardt is a Chartered Accountant with extensive experience in IT Management & Finance.  His passion is the development and implementation of financial and operational models in support of organisational strategy and strategy implementa-tion.  He has worked in a number of industries including commercial banking, software development & contact centres.

CXO-Advisor, 96 on Fourth, Parkmore, Sandton, Johannesburg, South [email protected]

Tel: +27(0)11-883-4816

SaaS-it Consult, Ringstedgade 24, 2.thDK-4000 Roskilde, [email protected]

+45 2425 0303