Presenter: Irwin Goverman Partner, Business IT Strategy and CIO Services

© 2003 Deloitte. All Rights Reserved

Perspectives on IT Performance Management – Stewardship of the IT Investment and Function

June 29, 2004

Presenter: Irwin Goverman Partner, Business IT Strategy and CIO Services

Presenter: Irwin Goverman Partner, Business IT Strategy and CIO Services

CIOadvisory SERVICES

+ CIO Services

+ CIO Services

==

2Pacific Northwest Digital Government Summit - June 2004

Today’s ObjectivesToday’s Objectives

Discuss Changes and Challenges in Measuring and Proving IT Performance

Discuss Special Challenges Facing the CIO

Discuss Some Approaches to Performance Measurement

Identify Relevant Tools and Methods


Remember the “Good Old Days”?Remember the “Good Old Days”?

Performance Measurement Used to Have a DifferentMeaning

Performance Measurement Used to Have a DifferentMeaning


What is Performance?What is Performance?

What is Performance?

Many words and concepts are associated with the concept of Performance.

Many words and concepts are associated with the concept of Performance.

ACHIEVEMENT PRODUCTIVITYSUCCESS

EFFICIENCYHEALTHY

EFFECTIVENESS

LEADER

Performance ImprovementBONUS

Growth


What is Performance Management?What is Performance Management?


The fulfillment of a claim, promise or request.Webster’s

The fulfillment of a claim, promise or request.Webster’s

PERFORMANCE: A condition or results that we can achieve through actions over which we do have control.

OUTCOME: A desired state that we wish to achieve, but over which we do not have direct control.

Hammer & Company

PERFORMANCE: A condition or results that we can achieve through actions over which we do have control.

OUTCOME: A desired state that we wish to achieve, but over which we do not have direct control.

Hammer & Company



Performance Measurement is the process of collecting, analyzing, evaluating,

and communicating information relative to an organization's performance

and results. Effective Performance Measurement provides information

for the planning and control of organizations, and is a means of ensuring that

the direction, efforts and results of an organization are in alignment.

Performance Measurement is the process of collecting, analyzing, evaluating,

and communicating information relative to an organization's performance

and results. Effective Performance Measurement provides information

for the planning and control of organizations, and is a means of ensuring that

the direction, efforts and results of an organization are in alignment.

A Definition of Performance Measurement



Performance Management is the integration of the results of performance measurement into management processes so that the results can influence the decisions made by the organization.

Performance Management is the integration of the results of performance measurement into management processes so that the results can influence the decisions made by the organization.

STRATEGIC

DIRECTION

BUSINESSPLANNING

PERFORMANCEMEASUREMENT

PERFORMANCEMANAGEMENT

INFORMATION FORDECISION MAKING

AND TAKING ACTION

Activity Based Management Priority Setting Impact Analysis


Why Create an I.S. Scorecard?

Why Worry About Performance Measurement?Why Worry About Performance Measurement?

To demonstrate the value added by the I.S. Organization

To guide the creation of I.S. strategic plans which link into operational plans

To establish a balanced set of measures to determine I.S. effectiveness

To communicate and motivate I.S. performance in key areas

To establish a framework for I.S. Management reporting

To justify getting funding for:– New projects

– “LODO” – Lights On, Doors Open

– Infrastructure improvments

Raise the average tenure of CIOs


Statutory obligations

Electoral commitments

Avoiding embarrassments

Demonstrate achievements

Public Servants have to balancemultiple stakeholder demands

Public Servants have to balancemultiple stakeholder demands

“Doing more with less”

Sustainable Economy

Quality of Life

Safety Net

Timely and responsive service

Accurate communications

Accessibility

Equity and dignity

Job security and compensation

Workload and morale

Satisfaction

Values

Legislature Taxpayers/Voters

Customers Employees

Public Sector Has Special ChallengesPublic Sector Has Special Challenges


The Four Phases...The Four Phases...

Performance Management is a lot more than the selection of measures…

I II III IV


Measuring Performance

Monitoring and Managing Performance

Optimizing Performance

Typically, IT organizations progress through four phases towards performance management...


The Four Phases...The Four Phases...

The four phases are common to all organizations and represent the journey from awareness and performance measurement to the management of performance …

I II III IV


Measuring Performance

Monitoring and Managing Performance

Optimizing Performance

... most are caught either in Phase I or in Phase II


The Bad Part of Being Stuck...The Bad Part of Being Stuck...

Frustration over measures that are hard to interpret and use

Unreasonable amount of effort expended in data collection

Long delays between events and availability of measurements

Little correlation between business goals and IT performance measures

Strong dissatisfaction with high cost of measurement and reviews

Heavy emphasis on financial and volume measures unrelated to operational realities

Inordinate amount of terminological profusion, conceptual complexity and variations across companies

Too much measurement, too little used, and too late

For example, being caught in Phase II for too long will most likely resultin a cynical attitude towards the topic within the organization…

For example, being caught in Phase II for too long will most likely resultin a cynical attitude towards the topic within the organization…


A Potential Solution – The Balanced Scorecard A Potential Solution – The Balanced Scorecard

Known as the Kaplan Framework. At the source of the Performance Measurement trend in the last few years.

Approach developed by Robert Kaplan and David Norton in the United States.

Started as an article in the Harvard Business Review back in 1992.

Book published in 1996 - “Translating Strategy into Action - The Balanced Scorecard”.

“Sold” as an alternative to the traditional financial accounting model which focuses only on financial performance measures.

The Balanced Scorecard:

– complements financial measures of past performance with measures of the drivers of future performance

– Objectives and measures of the scorecard are derived from the organization’s vision and strategy.


Balanced Scorecard Balanced Scorecard

The Balanced Scorecard Model has four quadrants linked to strategy and vision.The Balanced Scorecard Model has four quadrants linked to strategy and vision.

“To succeed financially, how should we appear to our

shareholders?”

FINANCIAL

“To achieve our vision, how will we sustain our ability to change

and improve?”

LEARNING AND GROWTH

“To satisfy our shareholders and customers, what business

processes must we excel at?”

INTERNAL BUSINESS PROCESS

“To achieve our vision, how should we appear to our

customers?”

CUSTOMER

VISION AND

STRATEGY

VISION AND

STRATEGY



The Balanced Scorecard performance measures are linked to strategy and vision.

The Balanced Scorecard performance measures are linked to strategy and vision.

Obj

ectiv

es

Mea

sure

s

Targ

ets

Initi

ativ

es

EXAMPLE:

CUSTOMER

EXAMPLE:

CUSTOMER



It Also Provides A Way To Facilitate “Taking the Journey Together”It Also Provides A Way To Facilitate “Taking the Journey Together”

• Clarifying the Vision• Gaining Consensus

CLARIFYING AND TRANSLATING THE VISION AND STRATEGY

• Articulating the shared vision• Supplying strategic feedback• Facilitating strategy review and

learning

STRATEGIC FEEDBACK AND LEARNING

• Setting Targets• Aligning strategic initiatives• Allocating resources• Establishing milestones

PLANNING AND TARGET SETTING

• Communicating and Educating• Setting goals• Linking rewards to performance

measures

COMMUNCATING AND LINKING


Strategy

Marketplace Operations

People/Capabilities

Effective ITthat

Supports the Business

Effective ITthat

Supports the Business

IT Strategy

Applications and

Services

Technology, Architecture &Infrastructure

People &Process

Bu

sin

ess

Info

rmat

ion

Tec

hn

olo

gy

What is The Goal of the Balanced Scorecard?

It’s a Way of Running IT like a “Business within the Business”It’s a Way of Running IT like a “Business within the Business”


Alignment is a key component of the Scorecard

Knowing What Kind of Value You Are Being Asked For is Important

Are the views consistent?Are the views consistent?

BusinessPartner

StrategicPartner

ITEntrepreneur

CommodityServiceProvider

Innovation

FastFollower

LeadingEdge

Inw

ard

to

ITO

utw

ard

to B

usi

ness

Ori

en

tati

on


The “Customers” Views of I.T.

IT is for business growth Budgets are driven by business strategy

IT is inseparable from the businessIT is seen as an investment to manage

IT managers are business problem solvers

Strategic PartnerStrategic Partner

Differing Value Across the Continuum

Commodity Service ProviderCommodity Service Provider

IT is for efficiency Budgets are driven by external benchmarks IT is separable from the business IT is seen as an expense to control IT managers are technical experts


IT View of Itself – It Helps to Know “Where You Are”IT View of Itself – It Helps to Know “Where You Are”

D

I

M

E

N

S

I

O

N

S

D

I

M

E

N

S

I

O

N

S

AAAA

Strategy

BBBB

Process

CCCC

Roles

I&T Business Management strategy does not exist or is limited and little or no formal policies or procedures are employed.

I&T Business Management strategy is developed, but not formally communicated or updated. Policies and procedures are documented, but are not readily available or are ignored.

I&T Business Management strategy is communicated and ratified in all areas of the organization and policies and procedures are known and followed.

Formalized I&T Business Management strategy and relevant policies and procedures are well understood by the IT organization and are fully integrated into day-to-day procedures.

I&T Business Management strategy is broadly developed encompassing corporate vision and strategy with the goal of successfully configuring and managing all aspects of IT required to deliver against the IT strategy and plans.

I&T Business Management processes are not defined or deployed.

I&T Business Management processes are informal, not documented, and not consistently applied.

Processes are defined and deployed to set IT performance goals and monitor results, and manage IT finances. Other processes are informally applied.

Formal processes exist to establish IT direction, set strategic priorities, and manage change. The IT process framework is reviewed and updated on an on-going basis.

Processes are consistently deployed throughout the organization. Processes continually improved to integrate leading practices.

Job descriptions not defined (tacit information only).

Responsibility for I&T Business Management is clearly delegated. Formalized I&T Business Management roles and responsibilities are generic in nature.

Permanent staff dedicated to I&T Business Management. I&T Business Management roles and responsibilities clearly defined and communicated to the IT organization. CIO reporting relationship is optimized to reflect business drivers.

Dedicated I&T Business Management group . Training delivered to build I&T Business Management skills. Succession and career planning in place.

Continuous training and education delivered to I&T Business Management team.

No tools or technology supporting I&T Business Management.

Only basic tools (e.g. spreadsheet templates) supporting I&T Business Management processes. Intranet leveraged to facilitate performance monitoring and communicate strategy and direction.

Automated IT charge-back / billing system in place. Second or third generation IT Budgeting and Finance tools and templates enable scenario planning and automatic generation of performance measurements.

Integrated enterprise-wide I&T Business Management toolkit. Advanced analytical tools (e.g. Cognos) utilized for performance data analysis. A rolling master plan is used for continuous IT Business planning.

Comprehensive IT Management dashboard in place to track operating and financial performance.

No performance measures exist. No benchmark information considered.

Basic aggregate IT cost metrics and measures are used to track IT operating and financial performance.

Cost savings measures and metrics are defined and tracked.

A comprehensive set of metrics are used to assess all aspects of I&T Business Management , including IT investment return and IT workforce evaluation.

Performance measures are updated to monitor and address new I&T Business Management issues.

DDDD

Tools and Technology

EEEE

Performance Measures

Stage IStage INonexistent

Stage IStage INonexistent

Stage IIStage IIDevelopedStage IIStage II

DevelopedStage IIIStage III

CommunicatedCommunicatedStage IIIStage III

CommunicatedCommunicatedStage IVStage IVIntegratedStage IVStage IVIntegrated

Stage VStage VMonitoredStage VStage VMonitored


Concept of Value

InputsInputs

Cost of I.S. Cost of I.S. ServicesServices

ValueValue

OutputsOutputs

Beauty Will Always Be in the Eye of the Beholder


How is Value Measured?

Operational Measures (Dinosaur focus)

Financial Measures (traditional focus – cost side only)

Information Economics (traditional focus – cost per unit)

Economic Value Added (EVA) (contribution to business metrics)

Balanced Scorecard (overall approach)


Aligning the Scorecard

Structure– Guiding principles

– Organization

– Roles and responsibilities

– Standards

– Architectures

– Partners and vendors

– Plans

– Budgets

Strategy– Major business

direction

– Competition and response

– New products and initiatives

– Constraints

– Mandates

Execution– Marketing and

hardware collaboration

– Customer collaboration and input

– Requirements definition

– Development

– Test

– Configuration

– Support

– Training

Go

vern

ance

Pro

gra

m M

anag

emen

t


Alignment Leads to Acceptance of Measures

Agree on what is important

Agree on the role of IS in what’s important

Agree on the objectives and measurements

Agree on how things will be measured

Develop a feedback and refinement mechanism


Obj

ectiv

es

Obj

ectiv

esM

easu

res

Mea

sure

sTa

rget

s

Targ

ets

Initia

tives

Initia

tivesFinancialFinancial

““To succeed financially, To succeed financially, how should we appear to how should we appear to our shareholders?”our shareholders?”

Internal Business ProcessInternal Business Process

Obj

ectiv

es

Obj

ectiv

esM

easu

res

Mea

sure

sTa

rget

s

Targ

ets

Initia

tives

Initia

tives““To satisfy our To satisfy our

shareholders andshareholders andcustomers, what customers, what business processesbusiness processesmust we excel at?”must we excel at?”

““To achieve our vision, To achieve our vision, how will we sustain ourhow will we sustain ourability to change and ability to change and improve?”improve?”

Learning and GrowthLearning and Growth

Obj

ectiv

es

Obj

ectiv

esM

easu

res

Mea

sure

sTa

rget

s

Targ

ets

Initia

tives

Initia

tives

Obj

ectiv

es

Obj

ectiv

esM

easu

res

Mea

sure

sTa

rget

s

Targ

ets

Initia

tives

Initia

tives

CustomerCustomer““To achieve ourTo achieve ourvision, how vision, how should we should we appear to ourappear to ourcustomers?”customers?”

Obj

ectiv

es

Obj

ectiv

esM

easu

res

Mea

sure

sTa

rget

s

Targ

ets

Initia

tives

Initia

tives

Traditional Balanced Scorecard

VisionVisionandand

StrategyStrategy

VisionVisionandand

StrategyStrategy

So, Now to the IT Balanced “Scorecard”


I.S. MgmtI.S. MgmtReportingReporting

AccountabilityAccountability

I.S.I.S.AlignmentAlignment

EvaluateEvaluate EvolveEvolve

Basic Approach

DevelopDevelopKey MeasuresKey Measures

CustomizeCustomize

Select/Select/EvaluateEvaluate


Stakeholder Driven Potential Performance MeasuresStakeholder Driven Potential Performance Measures

Performance measures can also be established by looking at each stakeholder’s needs through the reporting tools.

Client and Customers •Performance Reports•Service Level Agreements

•Service delivery•Client satisfaction

•Client satisfaction•System availability•Time for services•Reliability of services

Stakeholders Reporting Tools Subjects of Interest Sample measures

Senior Managers •Management Dashboard

•IT efficiency•Issue identification•Financial

•Performance against budget•Cost per unit output•Volume of work•Staff satisfaction•IssuesIT Managers •IT Balanced

Scorecard•Performance Reports

•IT efficiency•Financial•Staff•Process management

•Work per unit labor•Performance against budget•Staff morale•Skills gap•vlume of workIT Staff •Performance Reports •IT efficiency

•Service delivery•Client satisfaction•System availability•Time for services•Reliability of services


Model Driven Potential Performance MeasuresModel Driven Potential Performance Measures

Skill Sets, Innovation

Satisfaction

Career Development

Systems Performance

Systems Availability

Systems Standards

Support Requests

Continuous Improvement

Customer Satisfaction

Project Budget, Time

Functionality, Training

Quality

Strategic Plan

Architecture Standards

Steering Committee / Governance

Effectiveness

Survey of IT Staff

% Turnover/year

plans for IT staff developed

0 Downtime

Hours of Operation

Existence and % compliance

Resolve requests within 1 day

Number of Help Desk Calls

Satisfaction Index

Variance from Plan

100% Customer Satisfaction

# of errors and defects

Existence and currency

Existence and % compliance

# of meetings, decisions made

Attendance, metrics

Potential Indicator Potential MetricFunction

Support

IT Products

& Services

Delivery

IT Client

Services

IT Strategy

& Planning

IT

Management

Policy &

Direction

Performance measures can also be established by using the functions of an IT Service Delivery Model, deriving potential indicators and measures from IT functions.

POLICY & DIRECTION

MANDATESStrategic

InfrastructureBusiness

PartnershipProject and Quality

ManagementCreative and Supportive

Work Environment

IT ManagementIT Project ManagementIT Financial ManagementIT Performance & Capacity Management

IT Operations Management & Admin.IT Contract and Vendor ManagementIT Procurement ManagementIT Asset Management

IT Function ManagementDisaster RecoverySecurity ManagementConfiguration Management

Support ProcessesIT Human Resources Management IT Education Management IT Administrative Support

• InformationManagement

• ApplicationServices

• TechnologyPlatform

• InfrastructureServices

• IT FunctionPlanning

• Policies andStandards

• Strategic Direction

• Risk and QualityManagement

• Architecture

• InvestmentPlanning

• BusinessPrograms

• AAMVA

• ExternalAgencies

• MDOS staff

• ComputingInfrastructure

• AutomationTools

• Data/ApplicationArchitecture

• Desktops

• LANs

• Handle clientrequests andprovide resources

• Determine andResolve problemsand manage issues

• Define ITRequirements

• Provide ITadvice andcounsel

Clients &Partners

IT Products &Services Delivery

IT Strategyand Planning

OutputsClient Service

IT Service Delivery Model


Performance MeasuresPerformance Measures

• Taxpayer satisfaction

• Employer satisfaction

• Client satisfaction against benchmarks

• Program partner satisfaction ratings

• State/federal recognition

• Agency progression milestones

• Public fairness perception

• Pubic awareness

• Publication understandability

• Readability ratings of publications

• Complaints and problem resolution

• Objections and appeal counts

• Accessibility

• Calls answered/abandoned

• “One-stop shopping” availability

• Speed of refund

• Internal client satisfaction

• Employee turnover

• Employee overtime hours• Employee retention• Employee satisfaction survey scores• Union relations• Employee communications• Staffing speed• Training hours• Internal support hours• Management as a % of total staff• Processing times• Processing error rates• Downtime• Perceived support tool adequacy• Service mix• Revenue earned / dollar spent• Savings/cost reductions• Project milestone status• % electronic returns

Measures can be developed in a brain storm session using a variety of creativity techniques such as starting with a list of thoughts. Some examples:


Documenting the MeasuresDocumenting the Measures

A measurement template, containing the following items, is used for each of the core measures:

– name of indicator

– operating definition

– detailed formula (as required)

– reference to goal, objective or deliverable which the measure supports

– significance (implication if the indicator increases or decreases)

– data source

– data supplier/owner (contact name(s))

– frequency of reporting

– target/standard

– links to other measures

– issues

The selected performance measures are then documented using a template.


Measure TemplateMeasure Template

A selected performance measures is documented using the template.

Overall Client Satisfaction

The score assigned by the client representation on a scale of 1 to 5 in response to the question: “How satisfied are you with the IT service provided your organization by BRMS?”

The number is assigned as follows: 1 - Highly Dissatisfied, 2 - Somewhat Dissatisfied, 3 - Neither Satisfied nor Dissatisfied, 4 - Satisfied, 5 - Highly Satisfied. The resulting metric is an average of all returns

The measures is directly related to the strategic objective of client satisfaction

The decrease of the score indicates that clients are less satisfied in the services provided them by BRMS

The measure is derived from returns of a quarterly survey of client satisfaction

The measure is produced by the Office of Integration of BRMS who are responsible for conducting the quarterly client satisfaction survey

Produced quarterly

The target for the measure is a score of 4.0, a score below 3.5 triggers investigation by BRMS management

The measure is provided at the same time as six other client satisfaction measures from the survey including: help desk satisfaction, IT staff satisfaction, knowledge of IT initiatives, perceived value from IT

Issues: Any individual score below 3 is examined for rationale and remediation. Scores of 5 are also examined to identify effective measures and pass on congratulations of staff involved.


Proposed Measures - Volumetric Proposed Measures - Volumetric

The following set of measures are recommended for tracking work volumes.

Manual Business

Transactions

Drivers License Renewal Monthly Number of renewals processed (all)

Measure Frequency DefinitionType

Vehicle Renewal Monthly Number of renewals processed (all)

Voter Registrations Monthly Number of renewals processed within branches

Appeals Scheduled Monthly Number of appeals schedule

Alternative Channel

Transactions

Web Site Hits Monthly Number of hits recorded on home page

Web Vehicle Renewal Monthly Number of renewals processed on the web

Mail Renewals MonthlyNumber of renewals processed by the Renewal by Mail unit of BDVR

IVR Requests MonthlyNumber of calls received by all call-in centers and handled by IVR equipment

Office Automation Transactions

E-Mails MonthlyNumber of e-mails handled by departmental mail servers

Volume of files mailed Monthly Volume of mail transactions in Gigabytes

GroupWise Schedules MonthlyNumber of scheduling requests managed by GroupWise


Proposed Measures - Volumetric (cont’d) Proposed Measures - Volumetric (cont’d)

IT Process Transactions

Help Desk Calls Monthly Number of calls logged to the help desk


Service Requests Monthly Number of service requests logged

Program Modifications MonthlyNumber of programs modified and recorded in change management systems

Projects Managed MonthlyNumber of programs currently managed as of last day of month

Staff Transactions

New Hires Monthly Number of new hires

Departures Monthly Number of staff departing for all reasons

Reprimands MonthlyNumber of staff reprimanded or receiving disciplinary measures

Commendations/Awards Monthly Number of staff receiving commendation or rewards

Financial

Expenditure Monthly All monies spent during the month

Capital Acquisitions QuarterlyVolume and value of capital computer acquisitions during the quarter

Contracts QuarterlyVolume and value of contracts entered into that quarter

Transfers outside "client" QuarterlyValue of any IT funds transfers outside of the Department either funds in or funds out


Proposed Measures - Outcomes Proposed Measures - Outcomes

Service Availability

Mainframe Uptime MonthlyPercentage of working hours mainframe was available


Network Outages MonthlyNumber of branch hours of network outage (number of branches affected * duration)

Branch Application Outages MonthlyNumber of branch (B-38) applications taken out of service unscheduled for fixing

Branch Equipment Outage MonthlyNumber of replacements of branch equipment requested

Service Effectiveness

Unscheduled Batch Runs MonthlyNumber of batch updates performed due to urgent need unmet by current schedule

Batch Re-runs Monthly Number of batches re-run due to processing error

Client Delays MonthlyNumber of times a client is told to wait that are attributed to IT failing

IT Staff Effectiveness

Client Staff Satisfaction QuarterlyIndication from survey of client satisfaction with IT staff capabilities

Staff Complaints MonthlyNumber of complaints from clients regarding staff effectiveness


Proposed Measures - IT Processes Proposed Measures - IT Processes

Technology

Compliance to Architecture MonthlyPercentage of infrastructure compliant to evolving standards (estimate with explanation for changes)


Number of Protocols MonthlyNumber of network protocols supported throughout "client"

Number of Operating Systems

MonthlyNumber of operating variants supported (e.g., HP-UNIX, Solaris, NT, etc.)

Number of Users of Old Software Versions

MonthlyNumber of staff known to be using a superceded version of software such as WordPerfect 5.1

Management

Unsupported Workstations MonthlyNumber of workstations that have passed their supported use (e.g., B-38s, 486 PCs)

Late, Over-budget Projects Monthly Number of projects behind schedule on time or cost

Documentation MonthlyPercentage of documentation for existing programs (estimate with explanation for changes)

Approvals MonthlyNumber of projects that have a phase awaiting approval either from BRMS managers or clients

Processes

Time to Respond - Service Request

MonthlyAverage time to acknowledge a service request with a considered response

Time to Respond - help Desk

MonthlyAverage time to acknowledge a help desk call with a considered response

Time to Resolve Help Desk call

MonthlyAverage time to address a help desk call to the client’s satisfaction

Help Desk Survey Response QuarterlyPercentage of help desk callers who fill in a satisfaction survey

The following set of measures are recommended for managing IT processes.

Help Desk Call Tracking MonthlyPercentage of Help Desk calls formally tracked (estimate)


Performance Monitoring

Linking the Scorecard Back to Other MeasuresLinking the Scorecard Back to Other Measures

The measures developed must support four tools: IT Balanced Scorecard, Management Dashboard, Performance Reports and Service Level Agreements.

The SLAs help to define the measures required to support the Performance Reports. measures from both the Performance Reports and IT Balanced Scorecard are used for the Management Dashboard.

Performance Reports including Customer Surveys: requires process efficiency indicators and client service indicators. SLA will define minimum set of indicators

Management Dashboard: provides overview,high level measures that will be a rollup of those in Performance Reports and the IT Balanced Scorecard

IT Balanced Scorecard: provide indicators of five types: •financial•process•organization•technology•client service

Service Level Agreements: defined by end state type indicators - the result of IT Processes. SLAs require measures on service delivery, client satisfaction

37Pacific Northwest Digital Government Summit - June 2004AT&T WIRELESS Proprietary and Confidential Page 1

CHANNEL EFFECIENCY PROGRAM – PHASE 1 DRAFT.

Q3’03 Q1’04Q4’03 Q2’04 Q3’04 Q4’04

EIM / Callidus – 1st Channel Deployment

EIM / Callidus – Remaining Channels

PAC / OneLink Releases

Odyssey II

DMDR Call Center Systems & Ops

Funding Request 1 Funding Request 2 Funding Request 3Compensation

Partner Relationship Management

Ordering Process Improvements

Capabilities Delivered: • EIM / Callidus deployment•Standard processes & capabilities• simplified support model

Capabilities Delivered: • VISION Enhancements• Credit Application Automation•Tax & Credit Card Auth

Major Milestone (may have more than one in a release)

Cross work stream Interdependency

Electronic Data Interchange (EDI)

DM Call Systems Telephony Integration

2004 PAC / OneLink Releases

Capabilities Delivered: • Reseller Provisioning• OneLink Enhancements

Siebel PRM

Siebel & Ordering System Capabilities Capabilities Delivered: •Corp Cust Enhancements• Address Ver to Street Level•AWID / Partner Name Changes• Access to Siebel Tax / UPS Services

Oracle Capabilities for Channels

Odyssey II

Allocation of Value by Business Area and

Priority

IT Capacity and Mix

Current Initiatives

Interdependencies

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecBEST 0% 0% 0% 5% 10% 15% 15% 25% 30% 35% 50% 50%NBO 0% 0% 0% 0% 0% 5% 5% 15% 100% 100% 100% 100%Axys 0% 0% 30% 30% 50% 100% 100% 100% 100% 100% 100% 100%eBPP 0% 0% 0% 10% 30% 40% 60% 60% 60% 70% 70% 70%FusionWorks 0% 0% 0% 0% 0% 20% 25% 55% 65% 70% 70% 85%Vitria 0% 0% 0% 0% 0% 0% 0% 14% 14% 14% 14% 14%K2K 0% 0% 0% 0% 0% 0% 0% 5% 5% 10% 10% 15%IVR 0% 0% 0% 0% 50% 90% 90% 90% 90% 90% 90% 90%Atlys / MacroCell 0% 0% 0% 0% 0% 0% 0% 0% 0% 20% 20% 20%OCS 0% 0% 0% 0% 0% 0% 20% 20% 40% 40% 40% 40%SSO 0% 0% 0% 0% 0% 0% 20% 20% 40% 40% 40% 40%EA 0% 0% 0% 0% 0% 0% 20% 20% 40% 40% 40% 40%SCPS 0% 0% 0% 0% 0% 0% 20% 20% 40% 40% 40% 40%eProfile 0% 0% 0% 0% 0% 0% 20% 20% 40% 40% 40% 40%EBI 0% 0% 0% 0% 0% 0% 20% 20% 40% 40% 40% 40%eBOD 0% 0% 0% 0% 0% 0% 20% 20% 40% 40% 40% 40%ATTWS.COM 0% 0% 0% 0% 0% 0% 20% 20% 40% 40% 40% 40%ACV 0% 0% 0% 0% 0% 0% 20% 20% 40% 40% 40% 40%SCV 0% 0% 0% 0% 0% 0% 20% 20% 40% 40% 40% 40%Orbit 0% 0% 0% 18% 28% 21% 42% 42% 52% 52% 55% 55%Switch Manager 0% 0% 14% 14% 14% 11% 14% 18% 18% 18% 18% 18%PeopleSoft 0% 0% 0% 0% 0% 65% 80% 80% 83% 83% 84% 87%EDW 0% 0% 0% 0% 0% 0% 0% 0% 0% 5% 10% 10%Wisdem 0% 0% 0% 0% 0% 0% 0% 0% 0% 10% 10% 10%WebAXE 0% 0% 0% 0% 0% 5% 0% 0% 0% 0% 35% 35%Numeritrak 0% 0% 0% 0% 0% 9% 9% 9% 9% 9% 9% 9%Siebel 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%Oracle 0% 0% 28% 28% 65% 70% 78% 78% 100% 100% 100% 100%Calidus 0% 0% 0% 7% 7% 7% 7% 7% 7% 7% 7% 7%bStar 0% 0% 0% 7% 7% 7% 7% 7% 7% 7% 7% 7%CASH 0% 0% 0% 7% 7% 7% 7% 7% 7% 7% 7% 7%

Percentage Availability (2003)Application

Summary - Process and DeliverablesSummary - Process and Deliverables

02/09 02/16 02/23 03/01 03/08 Apr ‘04 May ‘04 Jun ‘04 Jul ‘04

Countrywide Enterprise Portfolio Management Timeline

Aug ‘04

Target Definition &Target Definition &Vendor SelectionVendor Selection

ImplImpl..PlansPlans

ProjectStart

Current EnvDocumented

Phase 1Complete

ObjObj..

Phase 2 ImplementationPhase 2 Implementation

Current Current AssessmentAssessment

Future EnvDefined

Ph 3 Operations Ph 3 Operations and Supportand Support

Sep ‘04

Project ScopePhase 1 Planning & Analysis

02/09 02/16 02/23 03/01 03/08 Apr ‘04 May ‘04 Jun ‘04 Jul ‘04

Countrywide Enterprise Portfolio Management Timeline

Aug ‘04

Target Definition &Target Definition &Vendor SelectionVendor Selection

ImplImpl..PlansPlans

ProjectStart

Current EnvDocumented

Phase 1Complete

ObjObj..

Phase 2 ImplementationPhase 2 Implementation

Current Current AssessmentAssessment

Future EnvDefined

Ph 3 Operations Ph 3 Operations and Supportand Support

Sep ‘04

Project ScopePhase 1 Planning & Analysis

Project Name

CAPEX '03 Invested

(,000)2003 Actuals &

ForecastCAPEX '03 Required

Running Total

Status (Go Forward, Cancelled, Delay to

2004, Dropped, Moved to another program - please

specify )

IT Ability to Deliver (High,

Meduim, Low)

Business Case Status (Complete, Partial, No)

0 Program Summary 16,442 2,824 20,487

Top Priorities: 40% = 6,807,0001 F_A223102 - Tax Compliance System Updates 700 63 637 637 GO Forward High Yes

2 F_A180202 - Procurement Company & Sales / Use Tax Automation

1,575 1,575 2,212 Go Forward Med No

3 F_A177202 - Oracle Tax Books 706 706 2,918 Go Forward Med No

4 F_A233302 - Tax Scrub Phase II 324 324 3,242 GO Forward Med No

5 F_A160102 - Accountability Reporting, Phase I 3,502 2,000 1,502 4,744 Go Forward High Yes

Next Priorities: 40% = 6,176,000

6 CAR37901 - Time and Labor 1,798 423 1,375 6,119 Go Forward High Yes

7 F_A245203 - HR Recurring Events (HR Bug Fixes and Critical Work Requests)

500 500 6,619 Go Forward High No

8 F_A200902 - SARA Filling System 250 250 6,869 TBD No

IT Governance Funding Level 6,800 Intiative Total 6,869

9 F_A160102 - Accountability Reporting, Phase II 1,000 1,000 7,869 TBD No

10 F_A224302 - Oracle ERP Development for Finance 500 500 8,369 TBD No

11 F_A155702 - Atlys – RRS Interface and Supporting Functionality

133 133 8,502 TBD Partial

12 F_A232702 - Managing the NPW Process 1,995 1,995 10,497 Delay to 2004 High Partial

Lower Priorities: 20% = 3,459,000

13 F_A157602 - eRecruit 1,592 1,592 12,089 Delay to 2004 High Partial

14 F_A183902 - ERP Data Mart 500 500 12,589 TBD Partial15 F_A228702 - Employee Portal/Self Service (Retire Domino) 500 500 13,089 Delay to 2004 High No

16 BSD212502 - SCOOP (Subpoena Court Order Operations Program)

867 338 529 13,618 GO Forward High Yes

Original Governance

Decisions and Benefit

Statements

Strategy

Marketplace Operations

People/Capabilities

Initiatives

Solutions(Applications &

Services)

Technology, People &

Infrastructure

Results and ReturnedBenefits

Bu

sin

ess

IT

Increase BREADTH ofCurrent Relationships

(Sell New Products)

Increase Shareholder Value

Revenue Growth Operating Margin

Grow Current Revenue Streams(Current Customer Relationships)

Create New Revenue Streams(New Customer Relationships)

Increase LENGTH ofCurrent Relationships(Reduce Churn / Attrition)

Increase VOLUME ofCurrent Relationships

(Sell More of Current Products)

ImproveSpeed/

Responsiveness

Make Productsand Services

Easier to Accessand Use

ProvidePleasant

InteractionsAcross

Channels

Meet / ExceedContracted

Service Levels

Develop StrongAccount

Relationships

Integrate withCustomer

Processes &Technologies

ProactivelyTarget ValuableCustomers WhoAre Likely to

Churn

ProvideIncentives forLong-Term

Relationships

ProactivelyExtend

ContractsBefore End

Increase Share inCurrent Customer

Segments

Enter NewGeographic Markets

Penetrate NewCustomer Segments

Develop NewProducts /Services

BroadenChannels

ExpandGeographical

Reach ofAdvertising

ExpandGeographical

Reach ofRetail/

Wholesale SalesChannels

Acquire NewProducts and

Services

Pursue JointVenture /

OEMOpportunities

Develop NewProduct /Service

Categories

RefocusMarketing on

SpecificSegments

Identify andProvide

DifferentiatedService for

Highest-Risk/Value/Potential

Customers

ProvideUpgrade

Incentives

Build ProductProfitability intoSales Methods& Incentives

Build Product /Service

Profitability intoProductBundles

Focus Offers /Campaigns on

TargetedSegments &

Sub-SegmentsIdentify andTarget Key

Segments andSub-Segments

Improve Asset ProductivityReduce Total Cost ofCustomer Interactions

ImproveContactCenter

Efficiency

Route Inquiriesto Other

Channels (e.g.Portals)

Reduce Reasonsfor Calling (e.g.better literature)

Provide Labor/Time SavingSystems and

Tools

Route Calls toRight Staff

Simplify ServiceProcesses

Improve ITEfficiency

OutsourceDevelopment ofWeb Content

Outsource /ConsolidateApplication

Development

Consolidate /OutsourceContent

ManagementProcesses

Renegotiate /ConsolidateNetworkService

Contracts

Outsource /Consolidate

Operations ofApplication

Servers

AutomateOrdering /

OrderManagementProcesses

AutomateTroubleshoot-ing / Dispatch

Processes

ImproveField ServiceEfficiency

Reduce Inventory /Order Management

Costs

ImproveField SalesEfficiency

ImproveInventory

ManagementEfficiency

ImproveSales


ImproveFulfillmentEfficiency

ImproveCampaignEfficiency

FocusReporting andAnalytics to

SupportOperationalProcesses

AutomateReporting

ConsolidateData Sources

EliminateRedundant /ConflictingCustomer

Information

ConsolidateProcurement of3rd Party Data

Consolidate /RenegotiateMedia Usage

ImproveTargeting /

Narrow Focus

ImproveTargeting ofCustomers

ImproveStructuring of

Offers

Improve Use ofAvailableCustomer

Information

ChangeWholesalePricing

ChangeCommission /

IncentiveStructures

ChangeOrdering

Requirements(e.g. size,breadth)

Implement Self-Service Options

for ProductInfo, etc.

Improve/Centralize/Outsource

Pick/Pack/ShipProcesses

AutomateReportingProcesses

AutomateCampaign

Structuring /Design

AutomateMarketingAnalytics

ImproveDemand

Forecasting

Shorten Order-to-Ship Cycle /

IncreaseInventory Turns

Focus Visits onRight Service

Requests

DesignProducts /Services forLow Service


Tools

Route ServiceRequests toCorrect Staff


FocusResources on

KeyOpportunities

CommunicatePipeline Info toProduction/Warehousing

Areas

ImproveAccount

ManagementProcesses

ImproveOrder


ImproveOrdering

Processes andTools

Improve theProvision of

Order Status toStaff and

Customers

SimplifyContractingProcesses

SimplifyConfigurationand PricingProcesses

Simplify andShortenProposal

Developmentand Approval

Processes

Simplify andShorten

Production ofPurchaseContracts

Improve andExpand

MarketingAnalyticsProcesses

Build Analyticsinto Sales and

RetentionProcesses

Solicit and ActOn Customer

Feedback

FocusResources on

Key Accounts /Opportunities

Offer Value-Added Services

for KeyCustomers

(e.g.warehousing,financing)

LeverageProduct/

Contact/UsageHistory inServing

Customers

Simplify Accessto Service

Monitor andManage StaffPerformance

Build Efficiencyinto

Performance/IncentivePrograms

Improve StaffTraining

OptimizeService andQueuingModels

Broaden StaffSkills

LeverageKnowledge-

Based Systemsand Tools

AutomateProvision ofProduct /Service

Information

Monitor andManager StaffPerformance




ProvideEffective

Secondary /Administrative

Support

Focus Effortson Right

Opportunities

Move LowProbability Sales

to CostEffective Sales

Channels


Tools

Route Leads toCorrect Staff

Simplify SalesProcesses

ImprovePerformanceManagement

Decrease TimeSpent on Poor

Leads

Provide Staffwith Up-To-

Date Customer,Product, andSituation Info

AvoidCompetitive

BiddingSituations

Improve SalesSkills of Staff

Focus on High-Probability Sales

Increase Focuson MostProfitableProducts/Services

Build SalesEfficiency intoPerformance/

IncentivePrograms

Build Product/Service

Profitability intoPerformance/

IncentivePrograms

Increase Use ofVariable

CompensationSystems

ImproveTelesalesEfficiency


Tools

DistributeLeads to Right

Staff

SimplifyTelesalesProcesses





ImproveQuality of

Leads / Lists

TerminateIneffectiveCampaigns

Sell Higher-Valued / Larger

ProductBundles

RationalizeTerritory /Account

Assignments


ModifySubsidies

DeliverMarketingMessagesThroughRegular

CustomerInteractions

AutomateCustomer and

ProductProfitability

Analysis

Pursue Joint/Shared

Advertising

ImproveUnderstanding

of MediaEffectiveness

Identify /Restructure /

CancelIneffectiveCampaigns

Renegotiate /ConsolidateTelecomContracts

Offer New Products &Services

ImproveIndirectChannel

Efficiency

ImproveAdvertising/PromotionEfficiency

Reduce MARKETINGCosts

Reduce SALESCosts

Reduce SERVICECosts

ImproveWeb

Efficiency

ImproveWeb

Efficiency

EvolveProducts and

Services

IncreaseBarriers toSwitching

Build ProductProfitability into

ProductBundles

ImproveQuality /Reliability

Evolve Price-Point / Value

MaintainCompetitiveFunctionality

BundleProducts and

Services

ImproveCustomerExperience

(Convenience,etc.)

Utilize /LengthenContracts

ImplementLoyalty /Affinity

Programs

ReduceDefections

ImproveService

Effectiveness

ImproveAccount

Management

ImproveAccount

ManagementSkills

Improve SalesSkills

ImproveSpeed/

Responsiveness

ImproveKnowledge of

CustomerNeeds /Activity /History

Improve Focuson Right

Customers

ProvideVolume

Incentives

ProvideVolume-BasedPrice Incentives

Offer Value-Added Services(e.g. warehous-ing, financing,

etc.)

ImproveSales

Effectiveness

ImproveIdentification of

VolumeExpansion

Opportunities

ProvideIncentives to

Expand Volumefor Profitable

ProductsImplementAffinity

Programs

ProvideBreadth

Incentives

ProvideBreadth-BasedPrice Incentives

Offer Value-Added Services(e.g. consolidat-ed statements,financing, etc.)

ImplementAffinity

Programs

DevelopBundledOfferings

Cross-Sell /Up-Sell

ImproveIdentification ofCross/Up-SellOpportunities

Provide StaffIncentives to

Expand Breadthof CustomerRelationships

Develop/Improve Cross/

Up-SellCampaigns

ImproveCampaignExecution

Tailor SalesApproach to

NewSegments

Develop/Customize SalesProcesses forNew Segments

Develop/Modify Sales

ForceIncentives

Develop/TailorCampaigns forNew Segments

Develop SalesChannels for

New Segments

Customize /Repackage

Products andServices

Tailor Price-Point / Value toNew Segments

ProvideCompetitiveFunctionality

for NewSegments

Tailor CustomerExperience toNew Segments

ImproveSales

Effectiveness

ImproveQuality of Sales

Leads

ProvideIncentives toDevelop New

CustomerRelationships


Redevelop /Restructure

Sales Channels

Refine Brandingand Advertising

Provide Staffwith BetterData and

Analytical Tools

Provide SalesStaff with

Supportive Dataand Analytical

Tools



Tools

Tailor ServiceLevels

TailorProducts /Services forGeography

Tailor Quality /Reliability

Tailor PricePoint / Value

CustomizeFunctionality

Tailor BrandingApproach

CustomizeCustomerExperience

Broaden Reachof ServiceChannels

Restructure /EstablishChannels

RestructureService

Channels

RestructureRetail/


RestructureAdvertisingApproach

Build / ExpandBrandingApproach

ImproveData

Collection/Analysis

Efficiency

Rationalize /ConsolidateData Sources


Information


RationalizeChannelUsage

Move LowProbability andLow Value Sales


Channels

ImproveCompensation

Practices

ImproveTerritory and

QuotaManagement

FacilitateProduct

Configuration

FacilitateProduct

Configuration

Provide Self-Service Options

for AccountAdmin. &

Billing Services


Move LowValue

Transactions toLess Expensive

ServiceChannels

Provide SelfService Optionsfor Diagnostic /

ResolutionServices



Improve StaffRecruitment


IncreaseUtilization

(Time on Task)Increase

Utilization(Time on Task)

Improve Parts/Supplies

Management

ImproveDiagnostic and

ResolutionProcesses and

Tools

Build Efficiencyand Utilization

intoPerformance/

IncentiveSystems


intoPerformance/

IncentiveSystems

IncreaseUtilization

(Time on Task)

IncreaseUtilization

(Time on Task)

ReduceBackorders and

SpecialHandling

Improve Use ofEconomic

OrderQuantities

ImproveService


SimplifyAssignment of

Territories

ImproveTracking ofSales Results

(Timeliness andAccuracy)

ImproveDistribution

and Tracking ofLeads and

Opportunities

Simplify Staffand ChannelPerformanceMonitoring

ImproveTracking of

ServiceRequests


SimplifyAssignment ofTerritories /

Routes

Simplify StaffPerformanceMonitoring

ImproveDistribution

and Tracking ofService

Requests

ImproveTracking ofService Level

Metrics

ImproveMarketing


Monitor andModify

Campaigns inReal Time

ImproveCompetitiveIntelligence

Provide BetterCompetitiveIntelligence

ProvideCompetitiveIntelligenceAround New

Segments

ProvideCompetitiveIntelligence


Reduce Infrastructure /Central Services Costs

Integrate withKnowledge

Bases


ManagementFunctions

ConsolidateManagement of

SoftwareLicenses

Consolidate /OutsourceSoftwarePackageSupport

Consolidate ITAdministration

Improve RealEstate

Efficiency

Consolidate /Outsource End-User Support

ConsolidateReal Estate

Consolidate /Renegotiate

Leases

Relocate to LessCostly Facilities

ImproveProduct/Service

Ease of Use

Improve ServiceLevels /

Responsiveness

ImproveCompetitive-ness of Offer


Improve Price-Point / Value

Improve/Expand

Functionality

StrengthenBrand


ImplementWin-BackCampaigns

Build andMaintainImage /

Good Will

Develop andPromote Good

Brand /Perception

LeverageBrand


Brand /Perception

ImproveAwareness

WithinTarget

Segments


Brand /Perception

Tailor ProductPositioning andCommunica-tion to NewSegments

ImprovePerception /Awareness

StrengthenBrand /

Perception

Escalate /Improve

Advertising

Improve Use ofSole/ JointMarketingCampaigns

ImproveAwareness

WithinGeography

Establish /Strengthen

Brand WithinGeography

ImproveAwareness

Around NewProducts /Services

Establish /Leverage Brand

Communicate /Position NewProducts &Services

LeverageCombination of

Sole/ JointMarketingCampaigns

RationalizeProduct/Service

Portfolio

Develop /Deliver

CustomizedProductMessages

DeliverConsistentMessagesAcross

Channels


Channels

ImproveDistributionProcesses

Build /Maintain Brand

AcrossChannels

Build Brand /Image Across

Channels

Promote BrandAcross NewChannels

Launch NewChannel

MarketingPrograms

Change MediaMix

Deloitte ConsultingCRM Value Map

Version: January, 2002


Feedback

PublicizeProduct/ServiceAchievements

(Awards,Patents, etc.)

PublicizeCommunity

Involvement /Contributions

Provide SalesLeads for New

Segments

Redefine /Clarify

Positioning

© 2002 Deloitte Consulting. All rights reserved.

Major CRM Themes:Refocus ResourcesImprove Execution

Increase Value to Customers,Partners & Employees

Strengthen Brand

Increase Focuson MostProfitableCustomers

Increase Focuson MostEffectiveChannels

Integrate withWork Orderand ServiceRequestSystems

Integrate withBilling andInvoicingSystems

Integrate withParts /

Supplies/Repair / RMA

Systems


Consumption /Usage Data

Systems

Integrate withCustomer /AccountSystems

Integrate withService

Configuration /Provisioning

Systems

Integrate withConfigure &

Quote Systems


Integrate withCampaign /

Offer Systems


Integrate withSales Systems

Integrate withOrder

ManagementSystems

Integrate withProduct

KnowledgeBases


ManagementFunctions

RationalizeProductPortfolio

AutomateAccount / Sales

Analytics


Analytical Tools

Asset Turns

Operating Drivers Impact(High Level Summary - Detail Available)


Create New Revenue Streams(New Customer Relationships) Improve Asset ProductivityReduce Total Cost of

Customer Interactions

Focus on MostProfitableChannels

Refocus Resources on Higher-Margin Products & Customers

Improve CustomerSegmentation /Differentiation

VolumePrice RealizationCOGSSG&AGross PP&EInventoryReceivablesPayables

RevenueGrowthOperatingMargins

AssetTurns

= Primary Focus Area = Watch Out for Impacts

Realign Products andChannels

RefineSegmenta-

tionApproach

RefineSegmentation

(Based on Value,Potential-Value,

Preferences,Needs, Behavior,Demographics,

etc.)

DifferentiateCustomerTreatment

DifferentiateMARKETING

Approaches

DifferentiateSALES

Approaches

DifferentiateSERVICEApproaches

AlignProduct

Strategies

AlignChannelStrategies

Improve Focuson MostProfitable


Develop /Evolve

Products forKey Segments


of ProductProfitability

Improve Depth/Breadth ofCustomer

Information


of ChannelEconomics

Realign ChannelStrategies withSegmentationand ProductStrategies

Refocus Resources on Higher-Margin Products and Customers

www.dc.com/crmFor more information on Deloitte Consulting and CRM visit

X XX X

X XX X

X

X


(Sell New Products)








ImproveSpeed/

Responsiveness



ProvidePleasant

InteractionsAcross

Channels


Service Levels


Relationships




Churn


Relationships

ProactivelyExtend

ContractsBefore End


Segments




BroadenChannels

ExpandGeographical

Reach ofAdvertising

ExpandGeographical

Reach ofRetail/



Services


OEMOpportunities


Categories

RefocusMarketing on

SpecificSegments

Identify andProvide


Highest-Risk/Value/Potential

Customers

ProvideUpgrade

Incentives





TargetedSegments &





Efficiency





Tools






Development


ManagementProcesses


Contracts



Servers

AutomateOrdering /



Processes



Costs


ImproveInventory


ImproveSales






AutomateReporting



Information



ImproveTargeting /

Narrow Focus



Offers


Information


ChangeCommission /

IncentiveStructures

ChangeOrdering







AutomateCampaign

Structuring /Design


ImproveDemand

Forecasting




Requests



Tools



FocusResources on

KeyOpportunities


Areas

ImproveAccount

ManagementProcesses

ImproveOrder


ImproveOrdering

Processes andTools



Customers





Processes

Simplify andShorten


Improve andExpand



RetentionProcesses


Feedback

FocusResources on



for KeyCustomers


LeverageProduct/


Customers







Broaden StaffSkills

LeverageKnowledge-



Information





ProvideEffective


Support


Opportunities



Channels


Tools





Leads



AvoidCompetitive

BiddingSituations





IncentivePrograms



IncentivePrograms


CompensationSystems



Tools


Staff






ImproveQuality of

Leads / Lists



ProductBundles


Assignments


ModifySubsidies





Analysis

Pursue Joint/Shared

Advertising








Efficiency



Reduce SALESCosts

Reduce SERVICECosts

ImproveWeb

Efficiency

ImproveWeb

Efficiency

EvolveProducts and

Services



ProductBundles




BundleProducts and

Services


(Convenience,etc.)



Programs

ReduceDefections

ImproveService

Effectiveness

ImproveAccount

Management

ImproveAccount

ManagementSkills

Improve SalesSkills

ImproveSpeed/

Responsiveness

ImproveKnowledge of



Customers

ProvideVolume

Incentives



etc.)

ImproveSales

Effectiveness


VolumeExpansion

Opportunities




Programs

ProvideBreadth

Incentives



ImplementAffinity

Programs


Cross-Sell /Up-Sell

ImproveIdentification ofCross/Up-SellOpportunities




Up-SellCampaigns



NewSegments



ForceIncentives



New Segments





for NewSegments


ImproveSales

Effectiveness


Leads





Sales Channels



Analytical Tools



Tools



Tools










RestructureService

Channels

RestructureRetail/




ImproveData

Collection/Analysis

Efficiency



Information





Channels

ImproveCompensation

Practices


QuotaManagement

FacilitateProduct

Configuration

FacilitateProduct

Configuration


for AccountAdmin. &

Billing Services


Move LowValue


ServiceChannels


ResolutionServices





IncreaseUtilization




Management



Tools


intoPerformance/

IncentiveSystems


intoPerformance/

IncentiveSystems

IncreaseUtilization

(Time on Task)

IncreaseUtilization

(Time on Task)


SpecialHandling


OrderQuantities

ImproveService



Territories



ImproveDistribution


Opportunities


ImproveTracking of

ServiceRequests



Routes


ImproveDistribution


Requests


Metrics

ImproveMarketing


Monitor andModify





Segments





Bases


ManagementFunctions


SoftwareLicenses



Improve RealEstate

Efficiency




Leases



Ease of Use


Responsiveness




Improve/Expand

Functionality

StrengthenBrand




Good Will


Brand /Perception

LeverageBrand


Brand /Perception

ImproveAwareness

WithinTarget

Segments


Brand /Perception



StrengthenBrand /

Perception

Escalate /Improve

Advertising


ImproveAwareness

WithinGeography



ImproveAwareness



Communicate /Position NewProducts &Services




Portfolio

Develop /Deliver



Channels


Channels



AcrossChannels


Channels


Launch NewChannel

MarketingPrograms

Change MediaMix




Feedback



PublicizeCommunity



Segments

Redefine /Clarify

Positioning




Strengthen Brand



Integrate withWork Orderand ServiceRequestSystems




Systems



Systems




Systems


Quote Systems



Offer Systems



Integrate withOrder

ManagementSystems


KnowledgeBases


ManagementFunctions



Analytics


Analytical Tools

Asset Turns










AssetTurns



RefineSegmenta-

tionApproach

RefineSegmentation



etc.)



Approaches

DifferentiateSALES

Approaches


AlignProduct

Strategies




Develop /Evolve





Information


of ChannelEconomics




X XX X

X XX X

X

X

HealthPlan Value Map HealthPlan Value Map

INNOVATION GROWTH

MAINTENANCE PRODUCTIVITY

Statement ofValue and Benefits

Analysis of Value(e.g. strategic vs.

financial, mandated vs. discretionary

Are We Tied to the Business Priorities?

Where is the Value Delivered?


Appendix – Value MapAppendix – Value Map

.



At the lowest level, the Value Map illustrates the business levers, or discrete activities, that can help clients meet their ROI objectives

The Value Map breaks down into high and low level business objectives

The foundation of the Value Map is “Shareholder Value”, the primary components of which include Revenue, Operating Margin and Asset efficiency


(Sell New Products)








ImproveSpeed/

Responsiveness



ProvidePleasant

InteractionsAcross

Channels


Service Levels


Relationships




Churn


Relationships

ProactivelyExtend

ContractsBefore End


Segments




BroadenChannels

ExpandGeographical

Reach ofAdvertising

ExpandGeographical

Reach ofRetail/



Services


OEMOpportunities


Categories

RefocusMarketing on

SpecificSegments

Identify andProvide


Highest-Risk/Value/ Potential

Customers

ProvideUpgrade

Incentives





TargetedSegments &





Efficiency





Tools






Development


ManagementProcesses


Contracts



Servers

AutomateOrdering /



Processes



Costs


ImproveInventory


ImproveSales






AutomateReporting



Information



ImproveTargeting /

Narrow Focus



Offers


Information


ChangeCommission /

IncentiveStructures

ChangeOrdering







AutomateCampaign

Structuring /Design


ImproveDemand

Forecasting




Requests



Tools



FocusResources on

KeyOpportunities


Areas

ImproveAccount

ManagementProcesses

ImproveOrder


ImproveOrdering

Processes andTools



Customers





Processes

Simplify andShorten


Improve andExpand



RetentionProcesses


Feedback

FocusResources on



for KeyCustomers


LeverageProduct/


Customers







Broaden StaffSkills

LeverageKnowledge-



Information





ProvideEffective


Support


Opportunities



Channels


Tools





Leads



AvoidCompetitive

BiddingSituations





IncentivePrograms



IncentivePrograms


CompensationSystems



Tools


Staff






ImproveQuality of

Leads / Lists



ProductBundles


Assignments


ModifySubsidies





Analysis

Pursue Joint/Shared

Advertising








Efficiency



Reduce SALESCosts

Reduce SERVICECosts

ImproveWeb

Efficiency

ImproveWeb

Efficiency

EvolveProducts and

Services



ProductBundles




BundleProducts and

Services


(Convenience,etc.)



Programs

ReduceDefections

ImproveService

Effectiveness

ImproveAccount

Management

ImproveAccount

ManagementSkills

Improve SalesSkills

ImproveSpeed/

Responsiveness

ImproveKnowledge of



Customers

ProvideVolume

Incentives



etc.)

ImproveSales

Effectiveness


VolumeExpansion

Opportunities




Programs

ProvideBreadth

Incentives



ImplementAffinity

Programs


Cross-Sell /Up-Sell

ImproveIdentification ofCross/ Up-SellOpportunities




Up-SellCampaigns



NewSegments



ForceIncentives



New Segments





for NewSegments


ImproveSales

Effectiveness


Leads





Sales Channels



Analytical Tools



Tools



Tools










RestructureService

Channels

RestructureRetail/




ImproveData

Collection/Analysis

Efficiency



Information





Channels

ImproveCompensation

Practices


QuotaManagement

FacilitateProduct

Configuration

FacilitateProduct

Configuration


for AccountAdmin. &

Billing Services


Move LowValue


ServiceChannels


ResolutionServices





IncreaseUtilization




Management



Tools


intoPerformance/

IncentiveSystems


intoPerformance/

IncentiveSystems

IncreaseUtilization

(Time on Task)

IncreaseUtilization

(Time on Task)


SpecialHandling


OrderQuantities

ImproveService



Territories



ImproveDistribution


Opportunities


ImproveTracking of

ServiceRequests



Routes


ImproveDistribution


Requests


Metrics

ImproveMarketing


Monitor andModify





Segments





Bases


ManagementFunctions


SoftwareLicenses



Improve RealEstate

Efficiency




Leases



Ease of Use


Responsiveness




Improve/Expand

Functionality

StrengthenBrand




Good Will


Brand /Perception

LeverageBrand


Brand /Perception

ImproveAwareness

WithinTarget

Segments


Brand /Perception



StrengthenBrand /

Perception

Escalate /Improve

Advertising


ImproveAwareness

WithinGeography



ImproveAwareness



Communicate /Position NewProducts &

Services




Portfolio

Develop /Deliver



Channels


Channels



AcrossChannels


Channels


Launch NewChannel

MarketingPrograms

Change MediaMix




Feedback



PublicizeCommunity



Segments

Redefine /Clarify

Positioning




Strengthen Brand



Integrate withWork Orderand Service

RequestSystems




Systems



Systems




Systems


Quote Systems



Offer Systems



Integrate withOrder

ManagementSystems


KnowledgeBases


ManagementFunctions



Analytics


Analytical Tools

Asset Turns










AssetTurns



RefineSegmenta-

tionApproach

RefineSegmentation



etc.)



Approaches

DifferentiateSALES

Approaches


AlignProduct

Strategies




Develop /Evolve





Information


of ChannelEconomics




X XX X

X XX X

X

X


(Sell New Products)








ImproveSpeed/

Responsiveness



ProvidePleasant

InteractionsAcross

Channels


Service Levels


Relationships




Churn


Relationships

ProactivelyExtend

ContractsBefore End


Segments




BroadenChannels

ExpandGeographical

Reach ofAdvertising

ExpandGeographical

Reach ofRetail/



Services


OEMOpportunities


Categories

RefocusMarketing on

SpecificSegments

Identify andProvide


Highest-Risk/Value/ Potential

Customers

ProvideUpgrade

Incentives





TargetedSegments &





Efficiency





Tools






Development


ManagementProcesses


Contracts



Servers

AutomateOrdering /



Processes



Costs


ImproveInventory


ImproveSales






AutomateReporting



Information



ImproveTargeting /

Narrow Focus



Offers


Information


ChangeCommission /

IncentiveStructures

ChangeOrdering







AutomateCampaign

Structuring /Design


ImproveDemand

Forecasting




Requests



Tools



FocusResources on

KeyOpportunities


Areas

ImproveAccount

ManagementProcesses

ImproveOrder


ImproveOrdering

Processes andTools



Customers





Processes

Simplify andShorten


Improve andExpand



RetentionProcesses


Feedback

FocusResources on



for KeyCustomers


LeverageProduct/


Customers







Broaden StaffSkills

LeverageKnowledge-



Information





ProvideEffective


Support


Opportunities



Channels


Tools





Leads



AvoidCompetitive

BiddingSituations





IncentivePrograms



IncentivePrograms


CompensationSystems



Tools


Staff






ImproveQuality of

Leads / Lists



ProductBundles


Assignments


ModifySubsidies





Analysis

Pursue Joint/Shared

Advertising








Efficiency



Reduce SALESCosts

Reduce SERVICECosts

ImproveWeb

Efficiency

ImproveWeb

Efficiency

EvolveProducts and

Services



ProductBundles




BundleProducts and

Services


(Convenience,etc.)



Programs

ReduceDefections

ImproveService

Effectiveness

ImproveAccount

Management

ImproveAccount

ManagementSkills

Improve SalesSkills

ImproveSpeed/

Responsiveness

ImproveKnowledge of



Customers

ProvideVolume

Incentives



etc.)

ImproveSales

Effectiveness


VolumeExpansion

Opportunities




Programs

ProvideBreadth

Incentives



ImplementAffinity

Programs


Cross-Sell /Up-Sell

ImproveIdentification ofCross/ Up-SellOpportunities




Up-SellCampaigns



NewSegments



ForceIncentives



New Segments





for NewSegments


ImproveSales

Effectiveness


Leads





Sales Channels



Analytical Tools



Tools



Tools










RestructureService

Channels

RestructureRetail/




ImproveData

Collection/Analysis

Efficiency



Information





Channels

ImproveCompensation

Practices


QuotaManagement

FacilitateProduct

Configuration

FacilitateProduct

Configuration


for AccountAdmin. &

Billing Services


Move LowValue


ServiceChannels


ResolutionServices





IncreaseUtilization




Management



Tools


intoPerformance/

IncentiveSystems


intoPerformance/

IncentiveSystems

IncreaseUtilization

(Time on Task)

IncreaseUtilization

(Time on Task)


SpecialHandling


OrderQuantities

ImproveService



Territories



ImproveDistribution


Opportunities


ImproveTracking of

ServiceRequests



Routes


ImproveDistribution


Requests


Metrics

ImproveMarketing


Monitor andModify





Segments





Bases


ManagementFunctions


SoftwareLicenses



Improve RealEstate

Efficiency




Leases



Ease of Use


Responsiveness




Improve/Expand

Functionality

StrengthenBrand




Good Will


Brand /Perception

LeverageBrand


Brand /Perception

ImproveAwareness

WithinTarget

Segments


Brand /Perception



StrengthenBrand /

Perception

Escalate /Improve

Advertising


ImproveAwareness

WithinGeography



ImproveAwareness



Communicate /Position NewProducts &

Services




Portfolio

Develop /Deliver



Channels


Channels



AcrossChannels


Channels


Launch NewChannel

MarketingPrograms

Change MediaMix




Feedback



PublicizeCommunity



Segments

Redefine /Clarify

Positioning




Strengthen Brand



Integrate withWork Orderand Service

RequestSystems




Systems



Systems




Systems


Quote Systems



Offer Systems



Integrate withOrder

ManagementSystems


KnowledgeBases


ManagementFunctions



Analytics


Analytical Tools

Asset Turns










AssetTurns



RefineSegmenta-

tionApproach

RefineSegmentation



etc.)



Approaches

DifferentiateSALES

Approaches


AlignProduct

Strategies




Develop /Evolve





Information


of ChannelEconomics




X XX X

X XX X

X

X

Asset TurnsOperating MarginRevenue Growth


for AccountAdmin. and

Billing Services


Move LowValue


ServiceChannels

Provide Self-Service Optionsfor Diagnostic /

ResolutionServices







AssetTurns



X XX X

X XX X

X

X

The Value Map includes a matrix to explore how business activities can potentially impact operating drivers, both positively and negatively


Questions

Presenter: Irwin Goverman Partner, Business IT Strategy and CIO Services

Documents

Transcript of Presenter: Irwin Goverman Partner, Business IT Strategy and CIO Services