Fail to prepare, prepare to fail

October 2011

Introduction to Sage

3

What Sage does

Sage is a leading supplier of business management software and services to over 6 million customers worldwide. From small start-ups to larger organisations, we make it easier for companies to manage their business processes

Our vision is to be the most admired and respected business software and services provider in the world

Sage - Global Vendor, Local Strategy

Sage is a leading supplier of business management software and

services to over 6 m customers worldwide.

From small start-ups to larger organisations, we make it easier for

companies to manage their business processes

3rd business management software vendor (Total ERP Software Revenue Market

Share by Vendor, 2008 (Source: Gartner June 2009)

GlobalGlobal

£1.439Bn revenue

6 m customers world-wide

13,100 employees in 26 countries

27,000 resellers, 40,000 accountants

What we offer

6

What we supply:

Business management solutions …

7

What are business management solutions?

CustomersImprove serviceMeet their needsBuild loyaltyMultiple payment optionsMultiple channels

OperationsManufacturingDistributionServices

PeoplePay correctly & on timeRecord sickness & absenceFile legal documentsManage performanceDevelop potential

SuppliersGet what you need on timeManage costs

FinancesManage debtors & creditorsManage cash flowImprove revenue and profitForecasting & PlanningElectronic payment processing

AdvisorsFile accounts Statutory reportingForecasting & business planningAdvice & help from Sage

Software and services that help companies manage their business processes and relationships.

Yourbusiness

Customers

People

Fina

nces

Operations

Suppliers

Advi

sors

Not just small business. All business

8

Our view on the market

Market Trends on our radar

• e-commerce maturity

• IT impact on enterprise productivity

• Web users and web clients explosive growth– 5.5M new users every week– 3.2+B mobile devices vs 980+M PC

• From Web 1.0 to Web 2.0– The participation age – next generation users– User generated content prevails– From Desktop to Webtop: The user centric

UI on the net– Social Networking is centre stage to Web 2.0

• Enterprise 2.0: Web 2.0 technologies enter the enterprise space

– “Enterprise 2.0 is the use of emergent social software platforms within companies, or between companies and their partners or customers.” Andrew McAfee

• Modernisation and development will be user centric

Trends and needs into 2012 - Top Drivers for Strategies

• Reduce Time & Cost

– Streamline & accelerate business processes

– Optimise the use of current capacity

• Interoperate across locations

– Standardise business processes

– Provide visibility across functions & departments

– Cope with increasing complexity

• Improve Customer Experience

– Link global operations for better collaboration

– Increase agility & responsiveness

– 360° visibility

Benefits Realisation

Benefits Realisation- Why it matters

A recent survey revealed that 27% of clients

either have not been able or did not attempt

to measure business benefits…an additional

64% have only measured ‘some’ benefits.

Determining benefits, along with lack of a

repeatable ‘benefits process’ were the top

two obstacles to justifying investments.”

Source: Gartner Group

“Less than 25% of IT projects will

deliver hard, monetary benefits

that exceed the cost of the

implementation”Source: Information Week

Benefits Realisation - OverviewCommon Challenges

Benefits Realisation - OverviewCommon Challenges: Why Projects Fail

•Unclear business rationale for implementing ERP/CRM

•Lack of adequate executive buy-in

•Failure to consider key business requirements during vendor selection process

•Poor project management and project cost controls

•Lack of focus on organisational change management, communications, and training

•Failure to measure performance / ROI and to conduct post-implementation audit

Benefits Realisation - OverviewPurpose of Benefits Realisation

•A comprehensive project approach that focuses on identifying, measuring, and ensuring the business benefits achievable through applying technology

•Enables alignment between mid-level managers and project benefits

•Holistic approach with a focus on Performance Measurement, Organisational Change Management (OCM), Program Management support, and process improvement

Performance Management•Business Case / ROI Definition•Operational Measures•Benchmarks and Perf. Targets•Manage Measures to Bus. Case

Business Processes•Process Improvement & Design•Process Measures & Value-Add•Staff / FTE Optimisation•Six-Sigma & Quality

Organisational Change•Organisational Readiness•Organisation Design•Job and Work Design•Training & Communications

IT / Architecture•Vendor Selection•Project / Program Management•Solution Architecture•Reporting and Business Analytics

Business Strategy Alignment•Strategy Definition / Articulation

•Performance Measure Alignment with Strategy

•Business Optimisation•Benefits Realisation

Applies To:•ERP / CRM Projects

•Merger and Acquisition Integration•Operational, Process, and Supply Chain Improvement

•Global Operations Standardisation and Integration•Shared Services and Outsourcing

Benefits Realisation - OverviewKey Components of Benefits Realisation

Benefits Realisation- The approach

ERP Benefits Realisation - ApproachThe Business Benefits Pyramid

Business Process Improvement

And Business Requirements

Technology Development

Organisational Design and Change

Management

Performance Measurement

For projects to be successful, business processes should serve as a foundation, with IT and organisational change management enabling those processes.

The end result is optimised business benefits and a strong project ROI.

ROI

Pro

gram

Man

agem

ent S

uppo

rt

Corporate Metrics Tied directly to corporate-level goals

Sample Metrics:• Wholesale sales and profit• Retail sales and profit• Product development time

to market

• Sales and profit by region• Sourcing costs• Number of product

introductions per year

Business Unit Metrics

Business Unit Metrics

• Average inventory costs• Number of new product

designs completed per year• Inventory accuracy

Departmental Metrics

Individual Metrics Individual Metrics

Departmental Metrics

££s SavingsMeasured Results

ROI

Benefits Realisation - Approach High-level Measures Should Be Cascaded to Lower Levels of the Organisation to Drive Business Results

• Average inventory cost by location

• Number of new designs per employee

Benefits Realisation- In practice

Business Case, Measures, and ROI

Process Benefits• Improved process cycle times• Lower labour costs• Higher efficiency

Capital and Infrastructure Benefits• Reduced inventory ££s• Lower IT infrastructure costs• Decreased A/R levels• Increased A/P levels

Process Improvement

Average cycle times, average labor costs

Org. DesignIndividual job roles, MBOs, performance

evaluations, individual scorecards

Executive Alignment

MBOs, compensation structure, project

sponsorship

IT ConfigurationProcess workflow

modification, report designs, analytics

Benefits Realisation - Approach Focus on Measurement Enables Other Change Initiatives

Benefits Realisation - ImplementingFocus is on Integrated Set of Value-Add Activities

• Business Process Improvement / Optimisation and ERP/CRM Business Requirements

• Performance Measurement and Management

• Organisational Change Management, Training, and Communications

• Post Go-live Audit and Root Cause Analysis

• Program Management Support and Project Quality Assurance

Benefits Realisation - Implementing Sample Project Tools

• Business Case and Performance Metrics

• Organisational Readiness Assessments

• Job Impact Analyses

• Process Designs

• Process and Organisational Change Implementation Plans

• Benefits Realisation Scorecards

• Root Cause Analysis workshops and results

• Post-Implementation Corrective Action Plans

• Communications Plan

• Project QA Review and Assessment

Benefits Realisation - ImplementingCan Begin Implementation in Multiple Phases of Lifecycle

• During Vendor Selection and Project Planning– Establish Benefits Realisation framework early in process

– Establish baseline metrics and align to business case before project begins

• During Implementation– Can refine implementation process to emphasise process improvement and

performance measures

– “Project clean-up” to redirect troubled or over-budget projects to refocus on business value

• After Go-Live– Continuously improve and streamline business processes

– Establish operational performance measures and targets to improve business performance

Benefits Realisation- The outcome

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The purpose of this report is to summarize the findings and recommendations resulting from the Unapplied Cash Project undertaken by The North Highland Company from August 21, 2001 to October 16, 2001. This report contains the following sections: Project Goals Overall Project Status Approach and Work Performed Project Findings and Recommendations Conclusion Project Goals

To significantly reduce the amount of unapplied cash and other open credits in a 6-8 week timeframe.

To identify the root causes of the unapplied cash build-up. To analyze and implement solutions to prevent recurring problems.

Overall Project Status

The following table shows the number and dollar amount of unapplied cash transactions (RUs) measured at the beginning and ending dates of the project, backing out unapplied cash since 8/20/01:

August 21, 2001 October 12, 2001 Total Reduction # of

Items

Amount # of

Items

Amount

Unapplied Cash (RUs)

5,371

$7,098,791

3,188

$4,431,536

RUs since 8/20/01

- - 745

1,511,956

Unapplied Cash Prior to 8/20/01

5,371

$7,098,791

2,443

$2,919,580

2,928

$4,179,211

Over the 2-month project period, unapplied cash measured by number of RUs and dollar amount was reduced 55% and 59%, respectively.

Cost / Benefit Review If the unapplied cash had been resolved through a collection agency, the cost of the reduction would have been $417,921 (10% discovery fee * the unapplied cash reduction). The North Highland invoiced amount for the project will be _________. This represents a savings of $__________ compared to sending the items to a collection agency.

System Go Live

Benefits MeasurementBalanced scorecards,

reports

Root Cause Analysis of Benefit Gaps

Fishbone diagrams, activity based costing, process analysis

Implement Corrective Action Process improvement plans,

Org. realignment, job redesign

Benefits Realisation

Benefits Realisation - Results Focuses on Improving Post-Go-Live Results

Benefits Realisation - Results Creates Measurable ROI and Business Value

• Reduces project risk

• Closely aligns business and technical activities

• Proactively identifies and addresses potential obstacles to realising project benefits

• Provides more thorough understanding of underperformance and lessons learned

• Improves justification for future IT project approvals

• Provides quality and continuity through ERP project lifecycle

Fail to prepare, prepare to fail

October 2011