enterprise value chain training (ppt)
TRANSCRIPT
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3-Year IT Management and 3-Year IT Management and Budget PlanBudget Plan
Eisenhower 4Eisenhower 4thth Floor Auditorium Floor Auditorium May 26, 2006May 26, 2006
Enterprise Value Chain and Enterprise Value Chain and Application Map TrainingApplication Map Training
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Value ChainsValue Chains
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ObjectiveObjective
To give agency personnel a better To give agency personnel a better understanding of Enterprise Value Chains.understanding of Enterprise Value Chains.To give agency personnel multiple To give agency personnel multiple examples in order to increase examples in order to increase understanding and to find a starting point understanding and to find a starting point to create their own value chainto create their own value chainTo give agency personnel techniques that To give agency personnel techniques that could make creation of the value chain could make creation of the value chain easiereasier
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What is a Value Chain?What is a Value Chain?
Value Chain theory comes from Michael Porter’s Value Chain theory comes from Michael Porter’s book book Competitive AdvantageCompetitive Advantage (1985) (1985)A model that breaks down an organization into a A model that breaks down an organization into a series of value-generating activitiesseries of value-generating activitiesA Value Chain is aA Value Chain is a– Business ModelBusiness Model– High Level ModelHigh Level Model– Performance Feedback ModelPerformance Feedback Model– Beginning stages of an Application MapBeginning stages of an Application Map– Beginning stages to look at the State’s business goals Beginning stages to look at the State’s business goals
as one enterpriseas one enterprise
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Parts of the Value ChainParts of the Value Chain
Support ActivitiesSupport Activities
Primary ActivitiesPrimary Activities
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Porter’s ModelPorter’s Model
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Support ActivitiesSupport Activities
Do not directly add value, but are still Do not directly add value, but are still necessary in providing the services or necessary in providing the services or productsproducts
Close to universal for every agencyClose to universal for every agency
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Support Activities (continued)Support Activities (continued)
Porter’s Breakdown of Support ActivitiesPorter’s Breakdown of Support Activities– Firm Infrastructure: organizational structure, Firm Infrastructure: organizational structure,
control systems, company culture, ect.control systems, company culture, ect.– Human Resource Management: employee Human Resource Management: employee
recruiting, hiring, training, development, and recruiting, hiring, training, development, and compensation.compensation.
– Technology Development: technologies to Technology Development: technologies to support value-creating activities.support value-creating activities.
– Procurement: purchasing inputs such as Procurement: purchasing inputs such as materials, supplies, and equipment.materials, supplies, and equipment.
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Support Activities (continued)Support Activities (continued)
State of Kansas agencies have modified State of Kansas agencies have modified support activities to include:support activities to include:– Administration ManagementAdministration Management– IT ManagementIT Management– HR ManagementHR Management– Financial ManagementFinancial Management– ProcurementProcurement– Supporting AssetsSupporting Assets
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Primary ActivitiesPrimary Activities
The links in the value chain are the The links in the value chain are the “strategic relevant activities” that add value “strategic relevant activities” that add value to the services or products you are to the services or products you are providing.providing.
Every agency is going to have unique Every agency is going to have unique “strategic relevant activities”“strategic relevant activities”– Some may be similarSome may be similar
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Primary Activities (continued)Primary Activities (continued)
Porter’s Breakdown of Primary Activities Porter’s Breakdown of Primary Activities – Inbound logistics: the receiving and warehousing of Inbound logistics: the receiving and warehousing of
raw materials, and their distribution to manufacturing raw materials, and their distribution to manufacturing as they are required.as they are required.
– Operations: the process of transforming inputs in Operations: the process of transforming inputs in finished products and servicesfinished products and services
– Outbound logistics: the warehousing and distribution Outbound logistics: the warehousing and distribution of finished goodsof finished goods
– Marketing and Sales: the identification of customer Marketing and Sales: the identification of customer needs and the generation of sales.needs and the generation of sales.
– Service: the support of the customers after the Service: the support of the customers after the products and services are sold to them.products and services are sold to them.
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Primary Activities (continued)Primary Activities (continued)
Porter’s list does not have a direct one-to-one correlation Porter’s list does not have a direct one-to-one correlation to State government in many cases.to State government in many cases.– His focus is mostly directed to manufacturing companies that His focus is mostly directed to manufacturing companies that
have a certain product they are producinghave a certain product they are producing– His primary goal is the get the company to get more value out of His primary goal is the get the company to get more value out of
the sale of those goods.the sale of those goods.
Value chains give a good starting point to think about Value chains give a good starting point to think about what your agency does to meet their goalswhat your agency does to meet their goals– The services that our state agencies provide might in some The services that our state agencies provide might in some
cases do not have goods that are sold, but the services provided cases do not have goods that are sold, but the services provided are still importantare still important
– The benefits of the value chain can still be realized in the The benefits of the value chain can still be realized in the governmental arena. We care about getting the most out of our governmental arena. We care about getting the most out of our limited money. Value chains can help in that goal.limited money. Value chains can help in that goal.
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Primary Activities (continued)Primary Activities (continued)
The value chain links are not independent The value chain links are not independent activitiesactivitiesLinks exist inside of value chainsLinks exist inside of value chains– Horizontal LinksHorizontal Links– Vertical LinksVertical Links
These links can help lead to optimization These links can help lead to optimization and coordination of activitiesand coordination of activitiesAlso provide a basis for quality assurance Also provide a basis for quality assurance and monitoring performanceand monitoring performance
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KBOR Value Chain
SupportingActivities
PrimaryActivities
CoreBusinessProcess
ProcessManagement
QualityManagement
ProductInformation
Support AssetInfo
SupportingProcesses
Supporting (Financial, HR, IT, …) Assets
User Feedback and Program Management
Process Management
New or Existing
Program orPolicy
BudgetSubmission
To Board
BoardReview
BudgetReview
Board Approval
FundingRequest
Policy &ProcedureDevelop. /Revision
FundingApproval
Review
Fundsdispersed
Program and Policy Review
Students, Citizens
“Through its diverse postsecondary education system, the KBOR seeks to provide educational opportunities for all of Kansas’ citizens to achieve their greatest potential.”
Policy and Quality Programs
HR Management
Financial Management
IT Management
Administration Management Goal
Customers
Governance and Coordination of Public Higher Education
Funding of Public Higher EducationAdequate Funding for Programs and Services
2020
Fort Hays StateFort Hays State
Financial Management
HR Management
IT Management
Administration Management
Supporting ( Financial, HR, IT, Admin ) Assets
Individual Instructor Research
Process Management
Product / Service Assets
AQIP / Accreditation
Instructor Level Assessment
Supporting Processes
Support AssetInformation
Product Information
Quality Management
Core Business Process
Process Mangement
PrimaryActivities
SupportingActivities
Public Service
Goal“Instructing students within a computerized environment in order to provide a foundation for entry into graduate school, for employment requiring well-developed analytical and communication skills, and understanding an American society of increasing diversity and global complexities of the 21st century.”
Community Outreach
Alumni RelationsRegional & State
OutreachSternberg Museum
Academic Advising
UndergradCourses / Seminars
Graduate Courses / Seminars
Virtual College
Recruiting / Retaining
Research
Instruction
Department Level Assessment
University Level Assessment
College Level Assessment
Job Placement
/ Career Services
FHSU-SponsoredResearch
Docking Research
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Value Chain TemplateValue Chain Template
http://www.netmba.com/strategy/value-chttp://www.netmba.com/strategy/value-chain/hain/
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Why a Value Chain?Why a Value Chain?
Uniform way of looking at all agenciesUniform way of looking at all agencies
Start to look at how IT helps each one of Start to look at how IT helps each one of the links of the value chainthe links of the value chain– netMBA.com has Information Systems at netMBA.com has Information Systems at
every level of the value chainevery level of the value chain– KDOT’s application maps prove this for their KDOT’s application maps prove this for their
particular agencyparticular agency
Building block for Application MappingBuilding block for Application Mapping
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Technology and the Value ChainTechnology and the Value Chain
Technological change is not important for Technological change is not important for its own sake. It is important to the value its own sake. It is important to the value generating activities of your organizationgenerating activities of your organizationTechnology is imbedded at every link of Technology is imbedded at every link of the value chainthe value chainInformation / Data is becoming more Information / Data is becoming more pervasivepervasiveOverall technology is playing a greater roll Overall technology is playing a greater roll in business strategyin business strategy
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Value Chain LinkagesValue Chain Linkages
Activity to ActivityActivity to Activity
Business Unit to Business UnitBusiness Unit to Business Unit
Agency to AgencyAgency to Agency– Department of Education to Regents Department of Education to Regents
InstitutionsInstitutions– KCJISKCJIS
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Value Chain Linkages (continued)Value Chain Linkages (continued)
Human Resources Management
IT Management
Finance Management
Asset Management
Program/Project Management
Planning ConstructionPre-Construction Maintenance Real-TimeOperations
Safety
Research/Laboratory
Highway Infrastructure Assets
Administration / Services
Procurement
Local Support
HighwayImprovements
Aviation, Rail, Water andPublic TransportationNetworks
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Vertical LinkagesVertical Linkages
Human Resources Management
IT Management
Finance Management
Asset Management
Program/Project Management
Planning ConstructionPre-Construction Maintenance Real-TimeOperations
Safety
Research/Laboratory
Highway Infrastructure Assets
Administration / Services
Procurement
Local Support
HighwayImprovements
Aviation, Rail, Water andPublic TransportationNetworks
There are easy to see vertical linkages between planning and real-time operations. They span the entire three chains
But there are also be linkages between supporting activities and primary Activities that are harder to see with the model alone
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Horizontal LinkagesHorizontal Linkages
Human Resources Management
IT Management
Finance Management
Asset Management
Program/Project Management
Planning ConstructionPre-Construction Maintenance Real-TimeOperations
Safety
Research/Laboratory
Highway Infrastructure Assets
Administration / Services
Procurement
Local Support
HighwayImprovements
Aviation, Rail, Water andPublic TransportationNetworks
Changes made in each activity could change how other activities are performed
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Performance / Quality AssurancePerformance / Quality Assurance
Human Resources Management
IT Management
Finance Management
Asset Management
Program/Project Management
Planning ConstructionPre-Construction Maintenance Real-TimeOperations
Safety
Research/Laboratory
Highway Infrastructure Assets
Administration / Services
Procurement
Local Support
HighwayImprovements
Aviation, Rail, Water andPublic TransportationNetworks
At the Activity Level:
When you start looking at advanced usage of the Value Chains one canbegin to look how each activity is performing.
At the lowest level you can look at each specific activity
This metric will let you know if each activity is performing optimally.
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Performance / Quality AssurancePerformance / Quality Assurance
Human Resources Management
IT Management
Finance Management
Asset Management
Program/Project Management
Planning ConstructionPre-Construction Maintenance Real-TimeOperations
Safety
Research/Laboratory
Highway Infrastructure Assets
Administration / Services
Procurement
Local Support
HighwayImprovements
Aviation, Rail, Water andPublic TransportationNetworks
The same type of performance metric can be applied to an entireValue chain.
Value chain level:
At this level you can begin to start measuring the success of your process in meeting your high level business goal
This could done via the results gained from each activity level evaluation, or done via a macro level approach
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Performance / Quality AssurancePerformance / Quality Assurance
Other ways to think about thisOther ways to think about this– ““White Space Gaps”White Space Gaps”– Prioritized Processes / FocusPrioritized Processes / Focus– Agency to Agency PerformanceAgency to Agency Performance– Pier Agency PerformancePier Agency Performance
Other Kansas AgenciesOther Kansas Agencies
Federal PartnersFederal Partners
Local partnersLocal partners
Other state partnersOther state partners
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Where to begin?Where to begin?
Goals FirstGoals First– Define the goals of the agencyDefine the goals of the agency
Budget Documents, Strategic Plans, Responsibility Budget Documents, Strategic Plans, Responsibility and Authority documents, Organizational Charts, and Authority documents, Organizational Charts, surveyssurveys
– Determine what steps occur to carry out each Determine what steps occur to carry out each goalgoal
Use Porter’s model along with other agency Use Porter’s model along with other agency examples as a reference pointexamples as a reference point
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Where to Begin (continued)Where to Begin (continued)
Application catalogApplication catalog– Group applications according to services they Group applications according to services they
provideprovideThis should be a good alternative to finding goals This should be a good alternative to finding goals of the agencyof the agency
– (If possible) Break down the group of (If possible) Break down the group of applications into smaller linksapplications into smaller links
Again use Porter’s model and other agencies Again use Porter’s model and other agencies examples as a reference pointexamples as a reference point
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Where to Begin?Where to Begin?
Combination ApproachCombination Approach– Define the goals of the agencyDefine the goals of the agency– Find group applications based on the goals Find group applications based on the goals
defineddefined– Break down the groups into smaller linksBreak down the groups into smaller links– Fill any holes in the value chain using other Fill any holes in the value chain using other
methodsmethodsDocument review, survey, organizational charts, Document review, survey, organizational charts, ectect
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Level of DetailLevel of Detail
Collect at the level of Detail that works for Collect at the level of Detail that works for you.you.
Include Summary level on the ITMBInclude Summary level on the ITMB
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Enterprise Application MapsEnterprise Application Maps
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ObjectiveObjective
To give a quick review of Value ChainsTo give a quick review of Value Chains
To understand what an application map isTo understand what an application map is
To understand the scope of the application To understand the scope of the application mapmap
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What is an Application MapWhat is an Application Map
An Enterprise Application Map is an An Enterprise Application Map is an extension of the value chain extension of the value chain
It seeks to categorize the applications and It seeks to categorize the applications and systems in your agency with links on the systems in your agency with links on the value chain.value chain.
It an application map is aIt an application map is a– Business and technology hybrid modelBusiness and technology hybrid model– High LevelHigh Level
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Application Map ExampleApplication Map Example
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Map Example #2Map Example #2
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Application Map Example #3Application Map Example #3
Full Version (JPG)Full Version (JPG)
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Why an Application Map?Why an Application Map?
It will allow agencies to see where each specific It will allow agencies to see where each specific application fits in relation to the high level business application fits in relation to the high level business areas in the organizationareas in the organization
To find gaps where IT does not have any To find gaps where IT does not have any applications in a particular business areaapplications in a particular business area
To find how pervasive technology is in your To find how pervasive technology is in your organizationorganization
Can be used to illustrate justification for IT spendingCan be used to illustrate justification for IT spending
Starts the process to visually see IT / Business Starts the process to visually see IT / Business alignment. alignment.
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What Applications to include?What Applications to include?
Applications that show up in Section 3 of the 3-Applications that show up in Section 3 of the 3-Year PlanYear PlanOther things that do not show up in section 3.Other things that do not show up in section 3.– Access databasesAccess databases– Big excel spreadsheetsBig excel spreadsheets– Ad hoc software running in someone’s officeAd hoc software running in someone’s office– Applications that are shared by agenciesApplications that are shared by agencies
KDOT also added different goals and business KDOT also added different goals and business areas to their map.areas to their map.– This model can be tailored to help your agency in a This model can be tailored to help your agency in a
wide variety of rangeswide variety of ranges
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Creating the Application MapCreating the Application Map
Place each application / system / ect on Place each application / system / ect on the appropriate area of the value chain.the appropriate area of the value chain.– If it is used in multiple different functions then If it is used in multiple different functions then
put it in all of them that applyput it in all of them that apply
There is really not much more to it than There is really not much more to it than that. Creating the value chain is the that. Creating the value chain is the biggest hurdle.biggest hurdle.
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Level of DetailLevel of Detail
Provide what ever level of detail you can Provide what ever level of detail you can realistically complete in the given time.realistically complete in the given time.
We would rather see a partial application We would rather see a partial application map than no application mapmap than no application map– Submit it to us as a “draft” and we will not Submit it to us as a “draft” and we will not
publish itpublish it
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ReminderReminder
Deadline for the IT Management and Budget Deadline for the IT Management and Budget Plan is September 1Plan is September 1stst..
Submit the optional models later than Submit the optional models later than September 1September 1stst if you need the extra time. if you need the extra time.
Contact us if you are having any problems, or Contact us if you are having any problems, or have any concerns. The sooner the better, as have any concerns. The sooner the better, as we are getting busier by the day.we are getting busier by the day.
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Training Provided Training Provided (9:00-11:00)(9:00-11:00)
June 23 June 23 Business Partners ModelBusiness Partners Model Eisenhower 4Eisenhower 4thth Floor AuditoriumFloor Auditorium
July 21July 21 Data MapsData Maps Eisenhower 4Eisenhower 4thth Floor AuditoriumFloor Auditorium
TBDTBD Other needed training / one-on-Other needed training / one-on-one support / Out of Topeka one support / Out of Topeka TrainingTraining
September 1September 1 Three Year Plans DueThree Year Plans Due
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Questions?Questions?
Bill Roth, CITA, 785-296-2108Bill Roth, CITA, 785-296-2108– [email protected]@da.state.ks.us
Bryan Dreiling, 785-296-2809Bryan Dreiling, 785-296-2809– [email protected]@da.state.ks.us
http://da.state.ks.us/kito/ITMBP.htmhttp://da.state.ks.us/kito/ITMBP.htm