54 sapsa sap value mgmt overview

Value Management OverviewChristian Thisgaard, Head of Value Engineering - NordicsSeptember 15th, 2011

2©SAP CONFIDENTIAL 2011

Lack of Business

& IT Alignment Business Case

Project Team Involvement

Decreases after the Investment

Decision

Current Practices

Automation vs. SAP Best Practices

Long, Risky and Expensive

ProjectsUnrealized

Value

Low Business Satisfaction

Software Project Rather than Business Transformation

Too Often Companies Do Not Achieve Expected Value from IT-driven Transformations

SAP Customers Want Secured Business Outcomes


The Value Leakage is caused by 3 main factors

Expected Value

Poor Selection and Prioritization

Implementation Changes Affecting

Potential Value

Poor Absorption and Value Tracking

Realized Value

10% – 15%

20% – 25%

Building Things RightBuilding the Right Things

Exploiting What We Built

Source: Corporate Executive Board -Applications Executive Council Research

50-65%

100%

5% – 10%


StrategyEnablement

Measurable Benefit

Risk & Compliance Innovation

Business Value

Defining Value

A balanced view between strategic and tangible benefits is crucial. This is the only way to keep all stakeholders engaged.

The Four Value “Buckets”


Heavy Value Management Adopters Over-Achieve on All Value Drivers

Quantitative1

Increased program sponsorship & engagementIncreased alignment between business & ITCloser strategy-to-execution loopImproved change management & end-user adoptionBetter IT Demand Management

Value Management: Establishing the Common Language of Business and IT

2.0XMORE

Projects delivering value on or ahead of time

On Time

1.9XMORE

Projects delivered on or below budget

On Budget

1.6XHIGHER

Business Benefits Achieved

On Value

Strategic

Source: SAP/AMR Value Management Survey Results 2010; 400+ Companies Surveyed

(1) Performance of companies with high level of best practices adoption compared to those with low levels of adoptionSource: : SAP/AMR Value Management Survey Results 2010; 400+ Companies Surveyed


SAP Value Management

Value Management

Lifecycle

Plan

How well are we performing today?What will make us better?Are we willing to do something about it?

Execute

How do we enact the recommended changes?How do we measure progress?How do we get the right visibility & accountability?

Institutionalize

How do we scale the value-based approach across our portfolio?Where should VM live in our organization?How do I make VM part of our organization’s DNA?

Sustainable Approach to Drive On-Time, On-Budget, On-Value Performance


Nordic Engagement Case:Nordic 5 yrs Results: +400 Benchmarks, +300 Value Discoveries, +30 Value Realisations and 3 Value Optimizations

Global company 10Bill revenueAlready have SAP Order Mgmt and Finance

Transformation of global Supply Chain & Production (50 countries)

Procurement Supply chainManufacturing

Build common “change urgency” from all stakeholders

Benchmark program (+30 submissions)Consolidation of strategic drivers and pain-pointsTarget setting & PlanningEstablishment of Value management on two levels

Value realization of SCP TransformationAdoption of Value Discovery for other IT-projects

Context

Challenge

ApproachValidation

Alignment

Benchmarking

Analysis

Secure executive alignmentConfirm timeline, deliverables and interviewees

Benchmark performanceFacilitation

Quantify valueBuild solution roadmapEstimate costsPrepare business case

Validate findings and recommendationsPresent to Executive sponsor(s)Agree on next steps

Adoption

Review Governance ModelReview IT Portfolio ModelRoles and Skills


SAP’s Value Mgmt Services, Tools, Data and Training

Performance Benchmarking

Business Case Development

Value Academy

Value Realization

Value Optimization

Available to SAP and non-SAP customers

One of the largest and most global benchmarking programs10,000* submissions from 3,000 companies30+ Business Processes, 700 KPIs, 1,000 Best PracticesEstablish performance baseline & set goals for transformation

Performance BenchmarkingCentral portal to manage end-to-end benchmarking processFlexible peer group definitionsOn-demand benchmark results

Value Management Center

VMC LinkNote: Data as of December 2010


Which Benchmarks are relevant for you?

Human Capital Management

Talent Management

Financial Excellence

Customer Contact Centers

Sales Effectiveness

Finance

Financial Compliance

Order to Cash

Enterprise Health Checks

Best People and Talent

NPDI

Product and Service Leadership

Total Cost of Ownership (TCO)

Business Intelligence/ Analytics

Enterprise Information Management

Strategic IT

Supply Chain Planning

Transportation Management

Warehouse Management

SRM/ Procurement

Manufacturing

Enterprise Asset Management

EH&S Compliance

Operational Excellence

Responsive Supply Networks

High Performing Assets

Superior Customer Value

End-To-End Processes

= Best Practice Surveys* In Ramp Up

Financial Performance and Risk Management

Cash to Cash

Best Run IT

Healthcare ACO*

HR Shared Services

Finance Shared Services

Value Management

Lean Enterprise

Enterprise Architecture

Implementation ServicesRetail Merchandising*

Trade Promotion Management

Industry Specific

Mobility*


What do you Receive?VMC Link

Cost Time

EffortProcess Maturity

Company Best Practice Importance Compared to Coverage Contrasted Against Peer Responses (Peer Group 1)

-

1,0

2,0

3,0

4,0

5,0

6,0

IT Governance Value Management

Solution Portfolio Management

IT Service Organization And

Delivery

Business Process

Improvement And Test

Management

Business Continuity And

TCO

Average Coverage Top 25% Coverage

1 = No Coverage5 = Full Coverage



Executive Alignment

DiscoveryWorkshops and Data

Collection

Business Case Analysis and

validation

Validation & Final Presentation

Note: Data as of December 2010

PerformanceBenchmarking


Value Academy

Value Realization

Value OptimizationOnline, collaborative business case development toolRepository of industry based content:

business process level pain points, enablers, best practices and value drivers / KPIs

Linked to SAP Process Benchmark dataProject economics calculator (e.g. NPV, IRR, etc.)

VLM Link




2000 Companies4000 Attendees

Value Management education sessionHands-on exercises - benchmarking, VLM tool Insights on Value Management Adoption

Delivered as Public or Company-specific sessionsGeneralIndustry Line-of Business Topic (Mobility, BI, TCO etc.)



Value Academy

Value Realization

Value Optimization

350 Academies140 Cities





Value Academy

Value Realization

Value Optimization

Mobilization

Value K

PI’s

Audit

Value Readiness ScanAction Plan

Value MapsKPI and Analytics DetailValue Scorecard Model

Periodic Value AuditValue Risk Assessment (Summary of Business Case Implication)





Value Academy

Value Realization

Value Optimization

Scope1. Value Discovery2. Value Realisation3. Value Optimisation

All Programs

IT

Pilot

One Process area

All Process areas Business

Institutionalize VM competencies across the organisationOrganizational DesignVM “upgrade” of existing functionsEstablish VM KPIs & Organisation


CONTENT TRAINING SERVICESPerformance Benchmarking

10,000 submissions

25 Industries; 30 process areas


1 Million content items

Pain points, solutions, value drivers

Value Academy (Customers)350 academies

4,000 attendees

2,000 companies

Value Management for Partners ProgramProgram to expose and align SAP’s VM Methodology with Partners

Value EngineeringCollaborative benchmarking and business case development for your business transformation

Business Transformation ServicesConsultative alignment of business strategy and IT

SAP Programs for Value Management


PLATFORM & TOOLS

Value Lifecycle Manager (VLM)End-to-end benchmarking platform

On-demand performance insights

Collaborative, on-line business case development & monitoring

15,000 users

1,500 active business cases

Value Management Center (VMC)


Press and Analyst Validate SAP’s Value Based Approach

Press“SAP’s value management program is the most advanced effort of its kind…offer[ing] advanced business solutions along with deep-domain expertise and insights.

InformationWeek Bob Evans, “Global CIO: SAP Shares

Corporate Treasures With Customers”

Analysts“SAP has invested significant effort to develop services and intellectual property to help its clients get more value from their investments. Companies should evaluate these services to help identify opportunities, develop business cases and track results”

Gartner

“The Bottom Line: Companies that implement more value management best practices achieve more business value faster from their IT-enabled business transformation projects.”

AMR Research


What can SAP Value Engineering do for you?

1. Ensure that SAP has a solid understanding of your business environment

2. Ensure that you have a good understanding of SAP’s technology solutions

3. Ensure that potential business value becomes real business value

4. Strengthen the linkage between Business Owners, IT and SAP

5. Strengthen the relationships between you and SAP

54 sapsa sap value mgmt overview

Documents

value realisations

value leakage

value discoveries

value buckets5sap confidential

valuebased approach

value trackingrealized

business transformationtoo

lack of business