Unlocking the Value from Implementation & Delivery R Ramki, SAP India

Agenda Are we investing in the right IT initiatives that are aligned with our organization’s goals? Are we realizing the full value potential of these investments? What governance, empowerment, business involvement and change management competencies are required to ensure value is achieved? How do we enforce benefit commitments with the same passion that we drive budget commitments?

Value Realization Plan Value Creation and IT When it comes to Value Creation, only 20% of the organizations get all the value 17% Only 17% of organizations have a formal business case for their IT Projects Business Case 0% 100% 20% Only 20% of organizations get measurable value from their IT initiatives Value Realization 0% 100% 5% Only 5% of organizations had any plans to realize the value in their business case Value Realization Plan 0% 100% Source: SAP Value Engineering analysis of 1,609 completed business case engagements

Joint Business and IT initiatives drive 2.5x more value How do Companies Realize Value? Joint Business and IT initiatives drive 2.5x more value Joint IT and Business Driven Initiatives 20% 2.5X More Value IT and Business Units Disconnected Improved Productivity % Increased Value 8% 2% Investing in IT Improving Management Practices* Investing in IT while Improving Management Practices * Key performance improvements i.e. Lean Manufacturing, Performance Mgmt., Six Sigma. Source: “When It Lifts Productivity”, The McKinsey Quarterly, 2004 Number 4

Alignment of Operational Drivers is Key to Achieving Value Linking Vision to Value Alignment of Operational Drivers is Key to Achieving Value Value Technology Metrics Business Processes Strategy Vision

Value Management Lifecycle On-Time, On-Budget, On-Value Value Lifecycle Business Need “Capture Value” Investment Approval “Investment Justification” “Implement the Solution” Go Live

1 Value Discovery Finalize scope and project objectives Baseline current performance Build the business case Identify key value drivers and KPIs Why should we do this? How should I execute? What proof of success is available? What issues do I face today? 4 key elements of a great business case

Measuring Drives Time-to-Value Measurement Is Essential to Improve Time-to-Value On-time or Better 11% On-time or Better 73% No Measurement of Value Measurement of Value Programs that measure quantitative benefit attained Measurement drives benefit attainment Source: 230 participants in ASUG/SAP Value Realization Survey Findings, 2006

Highest Value Achieved From IT Investments 2 Highest Value Achieved From IT Investments Value Realization Organization-wide mission clarity Implement and Design for value Design governance model Define KPIs to track Communication and change management Training

Design to Value Discipline requires a solid methodology; otherwise adoption drops as project continues Mission Alignment & Readiness 1 Project Preparation 2 Business Blueprint 3 Realization 4 Final Prep 5 Go-Live 75% 63% 61% 45% 47% 38% 30% 28% 25% 23% 4% 7% Scope driven by ROI Project goals documented for guiding principles Business case translated to design strategy Consistent KPI development for operational improvement Design checked against business case Ownership for benefits assigned before go-live Maturity Level 3 – 4 Maturity Level 1 – 2 Adoption of Value Realization Source: ASUG/SAP Value Realization Survey Findings

Governance Model Executive Sponsor provides overall direction while PMO and CCC support unit-level roll-outs/ users Executive Sponsor/ Project Sponsor Executive Sponsor CMD/ Chairman of Board Central Project Sponsor Director/ Board Member Respective Project Sponsor for Unit Unit Heads Steering Committee Data Lead Central Process Managers Infrastructure Manager Project Manager Change Manager Data Manager Data Lead UNIT - 1 Central Core Team (PMO) Customer Competence Center (CCC) Process Owners Production Material Sales Project Manager Support Roll-out Manager User Key User Business Application Support Infrastructure Support Service Desk & 3rd Level Support Functional Tech. Change Team Lead + Member Data Training Manager Functional Leads Technical Leads UNIT - 2 AS ABOVE Functional Team Members Technical Team Members UNIT - N Template Management AS ABOVE Roll-out Management

Identify Process-specific KPIs and Owners Tracking KPIs KPIs are measured continuously: During Business Blue-print Phase Before Go-Live 6 Months Post Go-Live Every 6 Months Thereafter Identify Process-specific KPIs and Owners 1 2 Track Performance KPI Owners Adopt Control Measures Show-case Value Realized Baseline KPI During Blue-print Benchmark with Leaders 3

Change Management is the bridge from the ‘old’ to the ‘new’ Communication and Change Management Change Management is the bridge from the ‘old’ to the ‘new’ Fewer and Lower Resistances Every transformational project brings changes for the employees involved, which frequently leads to different kinds of resistances Higher Readiness for Change Change Acceptance Adoption of best practices Lower customization Stakeholder Management Top Management Commitment Strong Project Management Continuous Monitoring Robust Governance A+ People Engaged Communication Communication from Executive Sponsors to Show Commitment Communication Plans Communication Material Training Training Needs Analysis Training Material Skilled Trainers Change Management Roadmap Structure, plan and control all roll-out related change management activities

3 Value Optimization Suppliers Customers Continuously measure performance Identify further improvement opportunities Define action Leverage best practices Continuous training

Value Management is the next generation of Change Management Value Management is a Journey Value Management is the next generation of Change Management Value Management Value Portfolio Planning CEO / Board CIO and IT are seen as a critical business partner delivering real tangible value. CIO reports directly to CEO All project are measured based on: On TIME, On BUDGET and On VALUE Fewer projects and more effective IT spend - few business applications and clear master data standard with high BI adoption Mandatory Business Case CxO Great alignment between CIO and other CxOs Regular review of all IT requests - a transparent value based prioritization process A balanced view of all IT investment and a clear alignment with the overall strategy Reactive IT CFO Collaborative approach to business case justification Projects are analyzed one at a time A disciplined approach to IT investment Business Partner Business / IT Relationship Governance Results Budget Owner IT services the business based on budget allocation and first-come first-serve basis Users provide budget and have a big say in solution selection On-time and on-budget is the only focus

Value Management is the next generation of Change Management Success = Real Change Value Management is the next generation of Change Management Vision Communi- cation Skills Tools Incentives Action Plan + + + + + = Real Change Communi- cation Skills Tools Incentives Action Plan + + + + + = Confusion Vision Skills Tools Incentives Action Plan + + + + + = Rejection Vision Communi- cation Tools Incentives Action Plan + + + + + = Fear Vision Communi- cation Skills Incentives Action Plan + + + + + = Frustration Vision Communi- cation Skills Tools Action Plan + + + + + = Slow Change Vision Communi- cation Skills Tools Incentives + + + + + = Chaos

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