information strategy: updating the it strategy for information, insights and governance
TRANSCRIPT
October 26th 2010
Information Strategy: Updating
the IT Strategy for Information,
Insights and Governance
BroadView
Consultants
BroadView
Consultants Copyright © 2010 BroadView Consultants Inc.
Who We Are
• BroadView Consultants Inc.
– Mission: Creating and Harvesting Business Value
of Information & Technology
– CIO Agenda: Business Enablement through IT;
CIO Issues
– Strategic enterprise IT plans Governance
Business cases IT cost optimization
Application portfolio rationalization
2
BroadView
Consultants
Jamal S. Shah
Managing Director
Tel: +1.647.293.9904
Email: [email protected]
www.broadviewconsultants.com
Presenter
Presenter
BroadView
Consultants Copyright © 2010 BroadView Consultants Inc.
Selected past clients have included....
4
Selected Past Clients
BroadView
Consultants Copyright © 2010 BroadView Consultants Inc.
Today’s Topics
– Information & Technology Strategy
• Why update/build your IT strategy?
• What to consider
• Where to start
• Pitfalls and Challenges
– Case Study
Agenda
5
BroadView
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The world is generating more data, in more forms,
from more sources than ever before
6
More
Variety
• 988 exabytes of digital information will exist in 2010
• 15 petabytes of new data is being generated every day
• 80% of new data growth is unstructured content:
email, documents, images, video and audio
• Unstructured data doubles every three months
• Automated transfer of instrumented data
• Smart meters, utilities, parking, traffic transponders
• Medical devices, operational instruments, telemetry,
sensors, mobile devices
An Explosion of Data
More
Sources
More
Data
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This growth is exponential
7
Source: IDC, 2009
An Explosion of Data
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Business is demanding better access, quality and
insights from that data
• 77% of executives say they do not have real-time
information to make key business decisions
• 79% rely on personal intuition more than facts and
analysis
8
Blind
Spots
Accuracy
Reliability
• Only 14% of all organizations estimate that they have
completely accurate data
• 73% of organizations recognize that bad data quality
significantly affects their bottom line
Business leaders want to use information to
make proactive decisions before an event occurs
– rather than have to react to it
An Explosion of Data
BroadView
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Executives are looking for top line growth and deeper
insights as a competitive differentiator
9
Source: Breakaway Survey , August 2009. Question 2 –“What are the main business objectives of your enterprise over the next
two years? Please select up to two.” Chart shows percent of organizations selecting the objective
10%
12%
33%
41%
71%
Operating enablement
Improved risk management andregulatory compliance
Cost takeout and efficiency
Competitive differentiation suchas innovation and deeper insight
Revenue protection and growth
Main Objectives Over Next Two years
An Explosion of Data
BroadView
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High performing organizations have demonstrated the
value of insights from the large quantities of data
10
Organization Distinctive
Capability
Value Delivered
Best Buy Customer
Centricity
Increased customer retention, revenue and
profitability. 45% increase in revenue 2004 –
2007. (85% profit increase in 1Q05)
Harrah’s Casinos Customer and
Loyalty Service
Increased market share from 36% to 43%
between 1998 to 2004
Netflix Customer
Preferences
Analytics
Revenue increase from $5million in 1999 to
$1.7billion in 2009
Marriott Hotels Revenue
Management
Actual revenue as percent of optimal rates
increased from 83% to 91%
Blue Mountain
Resort
Supply Chain and
Yield
Management
1,822% ROI by eliminating excess inventory,
improved reporting, more strategic pricing
decisions
An Explosion of Data
BroadView
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Have you come across this situation?
11
An Explosion of Data
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Challenges in managing data and information are
increasing
• Information silos detracting from ability to build insights
and full picture of customer situation
• Business historically reluctant to address data
management issues
• Need to improve management of multi-channel customer
communications
• Increasing competitive need to obtain knowledge and
insights from the vast amounts of data – in “real time”
12
Business Data Issues
BroadView
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Emerging technology capabilities are enabling a
rethink of how to evaluate, provision, support ,
manage, and govern data, information and content
13
Emerging Technology Capabilities
Cloud
Computing
Web 2.0
Technology-
Native
Workforce
Information-
as-a-Service
Ubiquitous
Broadband
Service
Oriented
Architecture
Social
Computing
Software-as-a-
Service
ETL
Acceleration
Approaches
Agile Methods
Business
Intelligence
BI-as-a
Service
Crowd-
Sourcing
XBRL
BroadView
Consultants Copyright © 2010 BroadView Consultants Inc.
These convergent trends are driving urgency to update
IT strategies at organizations to take account of
information and insights
• Urgent need for eDiscovery and retention
management policies
• Approaching a “tipping point” with our ability to
collect, store and analyze the vast amounts of data in
traditional ways
• Executive leadership is beginning to see the value
and potential in exploiting the (currently siloed) data
• Organizations have an opportunity to update their IT
strategies to take advantage of convergence to build
business insights14
Summary
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A sound strategy is critical for prioritizing and
communicating information and technology investments
• Facilitate a “value” dialogue between Business and IT
• Visualize how business can be done differently
• Line of sight from business objectives to investment
projects
• Framework for making business and IT trade-off
decisions to meet the business needs
• “Town Plan” (Architecture)
• Investment roadmap
• Believable business case with accountability
15
What is the Purpose of a Strategy?
BroadView
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Traditionally, an IT strategy is built around the three
key areas of process, people and technology
Technology
Strategy Components - Traditional
Process
• Typically:
• Focus was on optimizing processes
• Data and information are assets to
be transferred or shared by
applications
• Technologies often not well
integrated
• Governance addressed separately
in IT
• Business Process:
“Activities or tasks that produce a
specific service or product for
customers” - Wikipedia
Traditional IT Strategy
People
IT Strategy
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However, a business capability based approach
encompassing information, insights, and governance in
a single model enables a more useful view
Strategy Components
Governance
Information AND Technology Strategy
Information
& Insights
Technology &
Architecture
PeopleBusiness
Capabilities
• Business Capability:
• “The ability to execute a
specified course of action” -
Wikipedia
• “Resources an enterprise
uses to create outcomes and
bring products and services
to the market”
• Includes business processes
• Organizationally generic
capabilities that cross functions
• Can be decomposed
BroadView
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Organizations need to adopt new ways to improve
speed to insight and speed to delivery in managing
and analysing the vast amounts of data
18
Source: Adapted from Business Analytics and Optimization for the Intelligent Enterprise, April 2009.
Traditional Approach
Instinct and Intuition
Corrective
Years, months, weeks
Human intuition
Decision support
Efficient
Emerging Approach
Fact-driven
Directive
Hours, minutes, seconds
Applied semantics
Action support
Optimized
Business Capability
BroadView
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Business capabilities should focus on cross-
functional, organization-wide use of knowledge for
decision making
• Business capabilities supported by data and analysis to enable fast,
value-based, near-real time decisions
– Information at point of need and in a form to enable decision
• Identification of few distinctive capabilities where analytics and
insights will provide competitive advantage
• Embed the process of Analytics (insight generation, validation and
value realization) as a capability across the organization
• Emphasize end-to-end process and insight thinking
19
Best Practices: Business Capability
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Information, Insight and decision capabilities need
to be foremost in building the business capabilities• Information to move from “what happened?” to “what is happening?”
and “what will happen?”
– Enable decisions on “what should we do?”
• Identify new opportunities for combining data across functions and
building insights
– All data are not created equal . . . look beyond traditional sources of
data
– Leverage external data and embed in business processes
• Drive data integration across the organization
– Focus on data quality
• Information overload impedes decision making – organize data to make
it consumable by role and context
20
Best Practices: Information & Insights
BroadView
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Architecture and technologies need to drive
organization-wide capabilities and standards
• Business Analytics as a core competency of all
organizations
• Emphasis on “information reporting” and Business
intelligence
• Analytic tools to the right people to enable speed,
consistency and quality of insights
• Data and Technology Architecture
– Data and technology standards
– Master Data Management
• Manage data lineage
21
Best Practices: Technology &
Architecture
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All levels within the organization need to be
supported for decision enablement
• Technology native workforce
• Decision making at point of action
– Ability, data and tools at lowest levels to make
appropriate decisions
• More analytical, skill-based orientation at all levels
• Organizational centre of gravity to help drive uptake of analytics and insights for decisions
• Encourage cross-functional thinking on sharing of information
• Mindset: some information is a business asset – and needs to be treated as such
22
Best Practices: People
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Governance enables and supports organization-wide
insight capabilities, compliance and risk management
• Information governance is NOT optional
• Business led (cross functional) and IT enabled
• Prioritize the information and governance across levels /
departments
– Start by targeting only most important data & information
– Business ownership of most important data
• Key Roles: Executive Sponsor, Program Driver, Business
Stewards, IT Stewards
• Business drivers (risk, compliance, etc) to help build a business
case for information governance
23
Best Practices: Governance
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So, now we know what to do ...
24
Where do we start?
Where to Start
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Start by first assessing the status of current capabilities
and gaps - particularly information and insights - and
build a strong business case
• Assess current ability and gaps to support required
Business capabilities:
– Information / knowledge, governance, resources,
processes, technologies
25
Where to Start
Baseline
Capabilities &
Opportunities
Build
Quantified
Business
Case
Establish
Flexible
Information
Platform
• Quantified business case; accountabilities; line of sight
• Focus on highest impact business capabilities
– Risk, revenue / profit
• Think “big”, start “small”, grow “fast” approach
• Prioritize investments, demonstrate value quickly
• Approach with consolidation in mind – “many to one”
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Several key risks and challenges should be addressed
early in an Information Strategy initiative
26
Pitfalls & Challenges Recommendations
Lack of Business
involvement / sponsorship
• Business buy-in and involvement is critical
• Define Executive Sponsors and Information
Stewards early - use as evangelists
Lack of business case /
ambiguity of RoI
• Quantitative and qualitative
• Risk / compliance and profit opportunities
• Line of sight from business objectives to
investment projects
Unrealistic scoping • Remember: not all data is created equal
• Focus on distinctive business capability
• Start information initiatives small and then grow
• Possibly fund as part of other major initiatives
Cross enterprise
complexity
• Prioritize information, insights and governance
across levels and departments
Pitfalls and Challenges
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Case Study 1
• Engineering and manufacturing
• Business Unit of a multi-billion dollar Group
• Created IT Strategy before, but lacked Business buy-in
• Needed to update IT Strategy to:
– Provide line of sight from Business objectives to
investment programs
– Respond to competitive pressures
– Leverage data, information, and knowledge across
Group
28
BroadView
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Client’s Vision and Mission are driven down to
specific Corporate Strategies and Success Factors
Being the #1 growth partner of choice
in engineering solutions for leading
companies worldwide
Revenue > 6%
Vision
Mission
Strategic
Objectives
Success
Factors
Hold baseline
and reposition
for growth
Increase size /
quality of
[Client]
development
pool
Pursue KI
solutions &
cross-SBU
developments
M & A
Stay customer
focused & simplify
processes to focus
30% more time on
growth /
customers
Customer
Insight and
Segmentation
Opportunity
Identification
& Channel
Optimization
Grow Top Line
Increase size /
quality of new
products &
applications
portfolio and
markets
Leverage
new
business
models
Reduce
working
capital and
inventories
Monitor
and
leverage
market
intelligence
Increase
customer
face time
Increase staff
productivity /
administrative
efficiency
30
Case Study
BroadView
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Business capabilities are described to be
organization-wide and not based on functional groups
Develop New Products and
Services
Fulfill Demand
Plan and Manage the Enterprise
Generate Demand
Plan and
Manage
Marketing &
Sales
Sell Products
and Services
Develop
Applications
Support
Marketing and
Sales Activities
Market
Products and
Services
Produce
Products
Plan &
Control
Material
Movement
Manage
Transport-
ation
Control
Production
Quality
Develop
Manufacturing
Strategies and
Plan
Manage
Distribution
Network
Receive
Inbound
Shipments
Manage
Warehousing
Store
Material
Prepare
Material for
Shipment
Plan
Procurement
Acquire and
Purchase
Material
Budget
Process
Transactions
Manage
Accounting
Transactions
Reporting
Plan HR
StrategyHire
Train &
DevelopRetain
Financ
e
Human Resources
Manufac’g Supply Chain & Sourcing
Define/
Develop
Research
Concept
Produce Lab
Scale
Customer
Samples
Develop
Manufacturing
Process and
Prototype
Provide R&D
Evaluation
Scale-up and
Qualify
Manufacturing
Process
Assess R&D
Opportunities
Research
Business
Opportunities
Set,
Communicate
& Control
Business
Targets
Set
Communications
& Control
Policies
Manage
Organization
Structure
Direct the Business
Case Study
BroadView
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Capability Gaps – Impact on Achievement of Business Strategies
Business capability gaps that risk achievement of the
business strategies are identified
Develop New Products and
Services
Fulfill Demand
Plan and Manage the Enterprise
Generate Demand
Plan and
Manage
Marketing &
Sales
Sell Products
and Services
Develop
Applications
Support
Marketing and
Sales Activities
Market
Products and
Services
Produce
Products
Plan &
Control
Material
Movement
Manage
Transport-
ation
Control
Production
Quality
Develop
Manufacturing
Strategies and
Plan
Manage
Distribution
Network
Receive
Inbound
Shipments
Manage
Warehousing
Store
Material
Prepare
Material for
Shipment
Plan
Procurement
Acquire and
Purchase
Material
Budget
Process
Transactions
Manage
Accounting
Transactions
Reporting
Plan HR
StrategyHire
Train &
DevelopRetain
Finance Human Resources
Limited or No
Adverse Impact
Strategic Capability
Attainment Somewhat
Impacted
Business Strategy Attainment
Significantly Impacted
Strategic Capability
Attainment at Risk
Unlikely to Attain Strategic
Capability Goal
Manufacturin
gSupply Chain & Sourcing
Define/
Develop
Research
Concept
Produce Lab
Scale
Customer
Samples
Develop
Manufacturing
Process and
Prototype
Provide R&D
Evaluation
Scale-up and
Qualify
Manufacturing
Process
Assess R&D
Opportunities
Research
Business
Opportunities
Set,
Communicate
& Control
Business
Targets
Set
Communications
& Control
Policies
Manage
Organization
Structure
Direct the Business
32
Case Study
BroadView
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Strategic Objectives Business Enablement
• Globally integrated view of customer
• Knowledge of market development targets
• Knowledge of value-added offerings
• Identification of new product opportunities
• Innovative compounding strategies
• Integrated transactional system
• High delivery reliability and reduced transaction costs
• Accessible maintenance, uptime and process metrics
• Integrated account management processes
• Business readiness to support M&A
• Develop new knowledge-based business designs
• Data normalization, integration and availability
• Knowledge management and eLearning
• Support for a CRM capability
• eBusiness-ready infrastructure
• SAP availability and support
• Collaborative product design
• Technology to support experiments
• IT Governance processes and structure
• Application and technology consolidation and standardization
I&T Capabilities
Investment programs have a clear “line of sight” to
the organization’s strategic objectives.Investment Programs
33
Case Study
• Grow Top Line
• Hold baseline and reposition for growth
• Increase size / quality of [Client] development pool
• Pursue KI solutions & cross-SBU developments
• M & A
• Stay customer focused & simplify processes to focus 30% more time on growth / customers
• Stabilize SAP
• Higher Innovation and Speed to Market
• Top-line Growth Through Deeper Insights
• Supply Chain Efficiency Optimization
• Exploiting eBusinessCapabilities
• Extracting Value From SAP
• Creating a Solid Foundation
BroadView
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The capabilities enable faster and broader information
collection, analysis, insights and decisions
Cost-to-
Serve
Analysis and
Channel
maps drive
how each
customer
segment will
be served
Plans and
priorities
driven by
channel
strategy
Customer
interface
infrastructure
Integrated
data about
customer
interactions
Templates
and
automated
tools /
PDAs to
enable ease
in access
and
submission
of customer
interaction
data
Sales &
Marketing
Analytics
Personal
Contact
Web/
emailTelephone Fax / mail
Customer
Systems
B2B
Systems
Customer / Account Information External
Information
Customer
Product /
Service
Technical
Information
Single / Integrated Customer Information Database
Data Mining & Analytics
Planning &
Reporting
Dashboard
Transaction Systems
Segment:
Relationship
Segment: New
& Emerging
Segment:
Innovation
Dial [Client]
First
Self-Serve /
plastics.[Client].com
Transaction Systems
/ Enterprise
Applications
Distirbutior
Account
Information
Sales
Activity
Quotes /
Contracts
Development
HistoryLeads Work Rules
Segmentation, Routing and Lead Management
Sales Force
(Development
Reps., Sales Reps.)
Segment:
Price
Lead Channelling System
Service
Activity
34
Case Study
Personal
Contact
(CSRs)
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The “Town Plan” helps to easily communicate how
various components will fit to support the Business
System
Category
Knowledge Management
Transaction
Reporting
Planning
Decision
Support
Mfg S&M R&DFinanceBus Plan
Manage
Business
SAP
APO
Bolt-on
Financial
Systems
S A P
SAP BW
STC FacilitiesHRLogistics
& RTP Info Mgmt
Approved Point
Solutions
Approved
Point
Solutions
Corporate reference systems
eC
om
me
rce
CR
M A
pp
lic
ati
on
Su
ite
Emerging Knowledge Management applicationsSharePoint,
Domino.docP
lan
t M
an
ufa
ctu
rin
g &
La
b
Sys
tem
s
35
Case Study
BroadView
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System
Category
Knowledge
management
Decision
support
Planning
Reporting
Transaction
Business
planning
•SAP APO
•SAP BW
•SAP APO
•Collaborative
planning
•Knowledge Bases
•SAP
•IXOS
•UpBase
•ACSIS
•IP21
•LabStation
•SAP
•ACSIS
•IP21
•LabStation
•SAP BW
•SAP
•MIMI
Manufacturing
•e-Learning
•TRAQS/Prism
•Domino.doc
•Collaboration
Logistics
•SAP
•Transoval
•IXOS
•SAP
•DURAMS
•Transoval
•Contract
warehouse systems
•SAP BW
•Transoval
•SAP BW
•Transoval
•Collaborative
scheduling
•SAP
•Ariba
•IXOS
•SAP
•Ariba
•SAP BW
•SAP
Requisiti
on to Pay
•Collaborative
planning
Sales to Cash
Sales &
Marketing
•eLearning
•Collaboration
•Community
•SAP
•SAP BW
•SAP
•IXOS
•SAP
•DuPont Direct
•Omnexus
•Vendor Managed
Inventory (VMI)
•ERP Linking
•MSDS-Internet
•E-Certs
•eLearning
•Cybrant
•Knowledge Bases
•Collaboration
•CRM Application
suite
•SAP BW
•CRM Application
suite
•CRM Application
suite
•IXOS
•Product Catalogue
•Product Catalogue
•CRM Application
suite
•SAP APO
•SAP APO
36
This is supported by the Application Portfolio details
Case Study
BroadView
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• Data and knowledge items will have one master source to ensure global
consistency, reporting accuracy, and to minimize cost (“single source of
data”).
• Appropriate data will be centralized to support decision making across
teams, sites, businesses, SBUs and functions.
• When necessary to replicate data geographically for system and user
performance the data will come from the one master source and be
managed to ensure its integrity.
• Corporate data elements and Corporate data management standards and
rules will be used where they are available. This will ensure the maximum
consistency of data within the business and across SBUs.
• Every data item will have an identified owner with responsibility to enforce
data management standards, principles and processes.
Data Principles
37
Case Study
Sample
BroadView
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IT-enabled programs, each consisting of multiple
projects to build the capability
A. Stabilize SAP
C. Top-Line Growth Through
Deeper Insights
B. Higher Innovation and Speed to
Market
D. Supply Chain Optimization
(Logistics & Manufacturing)
F. Extracting Value from SAP
E. Exploiting eBusiness Capabilities• Employee Portal / Self-serve
capabilities
• Roadmap for leveraging eChannel-
enabled collaboration capabilities
G. Creating a Solid Foundation IT Organization
• IT Leadership Time on Growth
• Reduce Costs of IT (incl. explore offshore)
• IT & Data Architecture and Standards
• Evaluation of New Technology Trends
• eSourcing
Human Resources
• Timekeeping at sites
Sourcing
• eSourcing
• Plant Maint.
System
Finance
• Standardize
Outlook and PO
Data collection
and reporting
Manufacturing
• Manufacturing Applications
and Infrastructure
Rationalization
• Plant Maintenance
Top-line Growth Operating Margin improvement G&A Rationalization
• Opportunity Assessment
Leveraging Technology for Speed
to Market
• Integrate LIMS
• Customer Requirements / Gaps
Information Database
• Customer Segmentation and
Channel Management
• Customer Information Mgmt
• Lead Management
• Sales Force Effectiveness /
Automation
• Demand Forecasting and Statistical
Analysis
• Reporting and Drill-down Dashboard
• Rationalization of Logistics Network
• Achieve Original Business Case Benefits
• Address Additional Untapped Functionality /
Value
• Extend Integration Benefit of SAP
Across Value Chain
• Asia-Pacific Implementation
38
Case Study
BroadView
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IT-Enabled Programs
C. Top-line Growth Through Deeper Insights
A. Stabilize SAP
Grow
Topline
The IT-enabled programs support achievement of
the business strategiesStay
Customer
Focused /
30% More
Time
D. Supply Chain Efficiency Optimization
E. Exploiting eBusiness Capabilities
G. Creating a Solid Foundation
F. Extracting Value From SAP
B. Higher Innovation and Speed to Market
Increase
Development
Pool
Hold
Baseline
Pursue KI
Solutions
Pursue &
Complete
M&A
c
c
c
Direct Impact In-direct Impact
39
Case Study
BroadView
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An assessment of Business Impact and Urgency
helps to prioritize the projects
Relative Prioritization Assessment
Degree of
Business
Impact
(Value)
Fully supports
Achievement of
Business Strategies
Limited Support for
Achievement of
Business Strategies
HighLimited
AD
F G
B
C
E
I
L
J
H
K
Q
N
R
M
O
S P
TU
V
W
X
Y
Urgency
ZPlan and Implement
Re-evaluate Urgency or
Reconfigure Project
Address Quickly
Question Need
Case Study
BroadView
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Ten capability building projects have been
identified for pursuit during the next 18 months.
A
D
F
Discovery Effort: Leveraging Technology for Speed to Market
G
R
V
M
C
Lead Management
Leveraging eChannels for Collaboration
SAP – Asia-Pacific Implementation
IT Leadership Time on Growth
Customer Requirements/Gaps Information DB
Customer Segmentation & Channel
Management
Sales Force Effectiveness/Automation
E Customer Information Management
Z Stabilize SAP
41
Case Study
BroadView
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Summary of Workstream Benefits
Project
Indicative
BenefitsIndicative
Investment* Duration*
High-level benefits from each project have been estimated along
with investments and high level project plans
A
D
F
Discovery Effort: Leveraging
Technology for Speed to Market
G
R
V
M
C
Lead Management
Leveraging eChannels for
Collaboration
SAP – Asia-Pacific Implementation
IT Leadership Time on Growth
Customer Requirements/Gaps
Information DB
Customer Segmentation &
Channel Management
Sales Force Effectiveness /
Automation
E Customer Information
Management
42
Case Study
BroadView
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Sequencing of projects is crucial to drive maximum
value and success
43
Value
Delivered
Sequencing and Timeframe
• Precision Pricing
• Customer Profitability
• Customer Mix
• Customer Segmentation
• Channel Strategy
• Customer Contact Transformation
• Order Fulfillment/ Differentiated Services
• Performance Measurement
• Data Mining
• Sales Force Effectiveness
• Prospect to Order
Illustrative
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ProgramsQ2 Q3 Q4 Q6 Q7Q1 Q5 Q8
The programs are estimated to cover ….Program Dependency and Gantt Chart
A
D
F
Discovery Effort: Leveraging
Technology for Speed to Market
G
R
V
M
C
Lead Management
Leveraging eChannels for
Collaboration
SAP – Asia-Pacific Implementation
IT Leadership Time on Growth
Customer Requirements/Gaps
Information DB
Customer Segmentation &
Channel Management
Sales Force Effectiveness /
Automation
E Customer Information
Management
Z Stabilize SAP
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Case Study
BroadView
Consultants Copyright © 2010 BroadView Consultants Inc.
Final Thoughts
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“It is not the strongest of the species that survives,
nor the most intelligent, but rather the one most
responsive to change”Charles Darwin
“An organisation's ability to learn, and translate that
learning into action rapidly, is the ultimate
competitive advantage”Jack Welch
BroadView
Consultants Copyright © 2010 BroadView Consultants Inc.
Thank you for your participation
Questions?
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BroadView
Consultants Copyright © 2010 BroadView Consultants Inc.
Contact Information
Jamal S. Shah
Managing Director
BroadView Consultants Inc.
Tel: +1.647.293.9904
www.broadviewconsultants.com
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