How to Manage Relationship

Ecosystems in the New Digital Enterprise

Governance Transformation:

Avasant

Carlos HernandezPartner

sig.org/eval

© 2016 Avasant LLC. All Rights Reserved.

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Tuesday, October 11, 2016

How to Manage Ecosystems of

Relationships in the New Digital

Enterprise

Governance

Transformation

Presenter

Carlos Hernandez

About Avasant

About Avasant Closing ThoughtsGovernance

Needs & Case

Study

Market

Perspective

4

98%

Customer

Satisfaction

Deals

Negotiated

Countries

$100B+ 40+

1,000+successful engagements

What we doDigital StrategyDefine and execute digital business strategies by

structuring and managing the strategic partnerships of the

digital ecosystem to create competitive differentiators

Strategic SourcingOptimize IT and Business Process operations

through strategic partnerships to achieve core

business objectives beyond predictable and low

cost services.

Managed Governance ServicesManage vendor portfolios through best practice

processes, automation, and state-of-the-art

technology to create a simplified, structured, and

cost effective way to maximize sourcing value.

Global StrategyFull range of management consulting services

for private sector, governments and donor

agencies to assist in the development of new

market strategies, support sustainability and

catalyze business acceleration.

Avasant LawExpansive suite of custom tailored legal services, delivered

with experienced legal team with focus, across Technology

Transactions, Corporate Law, Intellectual Property, Market

Expansion, Information Privacy & Startup Advisory areas.

Avasant FoundationOur mission is to enable emerging regions to realize their potential. In

partnership with leading foundations and institutional donor agencies, we

provide deserving youth access to skills training and education with the

goal of job creation in the digital economy.

TransformationDevelop and execute a strategic transformation plan creating new

operating model and technology footprint designed to drive business

performance improvement and customer satisfaction.

O V E R V I E W

Market Perspective

About Avasant Closing ThoughtsGovernance

Needs & Case

Study

Market

Perspective

6

The Big Question

“We have mature vendor

management capabilities

with fully functional traditional

governance competencies.

“As we embark on business

transformation initiatives such

as digital and pay-as-you-go

IT, how must we change the

way we govern to realize the

value of our future digital

ecosystem?”

Director VMO, largest Non-Profit in NA

7

Pick the statement that best represents the

current state of business and digital

transformation within your organization:

a) We are presently developing a digital

transformation strategy

b) We are in the midst of executing our

digital transformation strategy

c) We are just beginning execution of our

digital transformation strategy

d) We presently have no strategy but

plan to begin developing one in the

next six to twelve months

Polling Question #1:

8

Today’s most common Governance challenges…

Antiquated contracting

models

Irrelevant metrics

Misalignment with desired

business outcomes

Organization immaturity

Delivery focused, missing

technology & architecture

Complex and diverse vendor

ecosystem

9

What is driving Governance Transformation?

Evolving Buying

Behavior

Analytics &

Decisions

A new

breed of

Suppliers

01

02

03

Demand for

Digital

Transformation

Focus on

Business

Outcomes

Increased Risk &

Regulatory

Compliance

06

07

08

Value

Optimization

05

04

New Delivery

Models

10

How is Governance Transforming?

Outsourcing Maturity

Nu

mb

er

of

Ve

nd

ors

SLA Based Contracts Outcome based Contracts

Fe

w S

tra

teg

icM

ulti-So

urc

ed

Extr

em

ely

Fra

gm

en

ted

Governance Focus

Governance Focus

Traditional Outsourcing Model

Multi-sourced Outsourcing Model

Digital based outsourcing

model

Risk Management & Relationship Management take higher priority with more of outcome

based contracts in a heavily fragmented outsourcing model

Governance Focus

11

What is Changing?

Contract Structure & Management• Standard, shorter and simpler contracts

• Zero Cost and Gain Share Models

• Linked to business capabilities

• Focused on partnership, not services

• Limited operational T&Cs and D&Os

Performance Management• Business metrics measurements

• Simpler reporting/meeting driven

approach

• Shared metrics for a single service chain

• Simpler validating and verifying of SLAs

Financial Management• TCO pricing models

• Increased complexity in pay as you use model

• Automated pricing and reporting

• Pricing traceable to specific, tangible deliverables

• Fixed price model for post-design work

Relationship Management• Business driven connected with outcomes

• Control over deliverables, intellectual

property, and future direction of the

software and solutions

• Mature project management & delivery

Risk Management• Policy Development to manage technology

• Increased Data & operations risks

• One sided supplier contracts

• Easy entry and exit of suppliers

• Volatile supplier ecosystem

12

Manage Performance through Business Outcomes

Manage Scope, Price and Value

Support bimodal structure

Factors to enable Governance Transformation

Technology• Automated workflows and

Analytics

• Dashboards & Reporting

• Process Management

Manage partner integration linked to BUs

Collaboration / Engagement & virtual teams

• Technology & architecture skills

• Business domain knowledge

• Data analytic skills

• Vendor risk management

• From cost to performance and

innovation optimization

• Less approvals, more decision

making

• High Volume & diversity handling

• Automated workflows and

Analytics

• Service integration

• Dashboards & Reporting

• Process Management

People Process Technology

13

Managed Governance Services is a very viable option to

accelerate your journey

• Optimizing and simplifying governance

• Driving performance and ROI

• Connecting business outcomes

• Enabling vendor collaboration

• Reducing operational risk

14

The journey…

Update Policy & Prepare for Change Train the team

Redefine Processes &

update capability

Enable Governance Structure for the new

Ecosystem

Leverage managed governance services to rapidly

evolve in the maturity curve of vendor management

Implement technologies

15

The Result: Business value driven Governance

• Increased

Revenue

• Optimal ROI

• Better

• customer

experience

Innovation Efficiency Performance

• Applied

Innovation

• Competitive

Advantage

• Allow for fast

transitions

• Improved cycle

times

• Cost optimization

• Business centric

• Predictive,

proactive,

• leverage trends

16

Pick the statement that best represents how well you believe your organization is prepared to manage your ecosystems of relationships in the new digital enterprise:

a) We are in the midst of business transformation and are implementing a holistic, comprehensive and strategic approach to managing our ecosystems of relationships

b) We are in the midst of business transformation and have begun planning how we are going to manage our ecosystems of relationships in the future

c) We are just beginning business transformation and have not yet considered the impact upon our ecosystems of relationships in the new digital enterprise

d) We have no coordinated enterprise-wide approach to managing our global portfolio of suppliers and service providers

Polling Question #2:

17

Realize Value through Governance Tools & Technologies

1

2

3

4

5

Standardization, Complexity and Volumes are driving tool adoption

Value leakage is a reality – 40-60% of lost value

Innovation and Quality through Automation

Competitive Advantage through a 360˚ view

Enables Governance through efficient Management

Increased Value

Enhanced Compliance

Maximized Opportunities

Governance Needs & Case Study

About Avasant Closing ThoughtsGovernance

Needs & Case

Study

Market

Perspective

19

THE GOAL: With current membership well over 40

million and continued growth on the horizon, AARP

sought to design a new IT organizational structure

with a focus on service level excellence and cost

savings.

Case Study: AARP

Approach:

Generated efficiencies resulting in a 30%

operational savings and improved vendor

governance

Led the overall outsourcing transition and end-

to-end implementation efforts for the enterprise

enabling transformation to successfully adopt

change in order to drive organizational success

and outcomes

Design the Vendor Management function and

associated processes and capabilities to

effectively manage a multisource environment.

Closing Thoughts

About Avasant Closing ThoughtsGovernance

Needs & Case

Study

Market

Perspective

21

• The increasing focus on business

outcomes and new business

transformation initiatives such as

digital are presenting significant

challenges to realizing the value of

sourcing

• Traditional governance practices

are inadequate to Manage

Ecosystems of Relationships in the

New Digital Enterprise

• Vendor management staff are

going to need strategic

perspective, new skills, and greater

understanding of end-to-end, multi-

provider service processes

Closing Thoughts

22

• The increasing focus on business

outcomes and new business

transformation initiatives such as

digital are presenting significant

challenges to realizing the value of

sourcing

• Traditional governance practices

are inadequate to Manage

Ecosystems of Relationships in the

New Digital Enterprise

• Vendor management staff are

going to need strategic

perspective, new skills, and greater

understanding of end-to-end, multi-

provider service processes

Closing Thoughts

Thank you for

participating in today’s

webinar!

Empowering Beyond

GET CONNECTED

www.Avasant.com

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Partner

Carlos Hernandez

carlos.hernandez@avasant.com

Main: (310) 643-3030 Mobile: (469) 524-9564

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Governance Transformation:

How to Manage Relationship

Ecosystems in the New Digital Enterprise

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