In Search Of Business Value: In Search Of Business Value: How to Achieve the Benefits of How to Achieve the Benefits of

ERP TechnologyERP Technology

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Presented by: Aida ZakariaPresented by: Aida Zakaria

OutlineOutline

IntroductionIntroduction

The Need for Benefits RealizationThe Need for Benefits Realization

What is Benefits RealizationWhat is Benefits Realization– Benefits Realization ActivitiesBenefits Realization Activities– Benefits Realization ToolsBenefits Realization Tools

The Value of Benefits RealizationThe Value of Benefits Realization

ConclusionConclusion

IntroductionIntroduction

Significant investments in IT is a source of Significant investments in IT is a source of competitive advantagecompetitive advantage

Companies invest millions of dollars to Companies invest millions of dollars to implement SAP, Siebel, or other ERP or implement SAP, Siebel, or other ERP or CRMCRM

ERP is a ERP is a tool tool used to achieve a business used to achieve a business objectiveobjective

Introduction (Cont’d)Introduction (Cont’d)

Paper Scope: Paper Scope: – Discuss obstacles and drivers of technology Discuss obstacles and drivers of technology

benefits realizationbenefits realization– Discuss how managers can optimize the Discuss how managers can optimize the

potential of ITpotential of IT– Discuss how managers can leverage people Discuss how managers can leverage people

to achieve the maximum benefits of ITto achieve the maximum benefits of IT

The Need for Benefits RealizationThe Need for Benefits Realization

Why companies introduce cutting-edge Why companies introduce cutting-edge tech as part of their IT strategies?tech as part of their IT strategies?– Cost pressureCost pressure– Address inefficienciesAddress inefficiencies– ImageImage

Benefits realization is concerned with Benefits realization is concerned with measuring and evaluating the actual measuring and evaluating the actual benefits of ITbenefits of IT

What is Benefits RealizationWhat is Benefits Realization

““A comprehensive project approach that A comprehensive project approach that focuses on identifying, measuring and focuses on identifying, measuring and ensuring the business benefits achievable ensuring the business benefits achievable through technology”through technology”

Breaks benefits into manageable chunksBreaks benefits into manageable chunks

Utilizes tools to ensure the true benefitsUtilizes tools to ensure the true benefits

Consists of activities from inception Consists of activities from inception through implementationthrough implementation

Benefits Realization ActivitiesBenefits Realization Activities

Development of Business Case, Corporate Development of Business Case, Corporate Metrics, and Benchmark:Metrics, and Benchmark: justifies, identify justifies, identify and quantify the potential benefits and and quantify the potential benefits and compare to costscompare to costs

Organizational Change Management Organizational Change Management Cultural Assessment:Cultural Assessment: identify cultural areas identify cultural areas to be addressed with the changeto be addressed with the change

Benefits Realization Activities Benefits Realization Activities (Cont’d)(Cont’d)

Cultural Change:Cultural Change: focus on large gaps not all focus on large gaps not all aspectsaspects

Communications:Communications: effectively communicate effectively communicate changes to end users though various changes to end users though various channelschannels

Business Process Modeling:Business Process Modeling: ensure IT ensure IT improves the processimproves the process

Benefits Realization Activities Benefits Realization Activities (Cont’d)(Cont’d)

Development of Operational Metrics and Development of Operational Metrics and Benchmarks:Benchmarks: translate metrics into translate metrics into measured operational numbers for middle measured operational numbers for middle managementmanagement

Organizational Job Design and Planning:Organizational Job Design and Planning: change job descriptions, reporting change job descriptions, reporting relationships to support the new technologyrelationships to support the new technology

Benefits Realization Activities Benefits Realization Activities (Cont’d)(Cont’d)

Detailed Process Design: Detailed Process Design: complete design complete design addressing who will do what and how. Helps addressing who will do what and how. Helps direct training coursesdirect training courses

Individual Metrics, Processes, and Individual Metrics, Processes, and Benchmarks:Benchmarks: for individuals to understand for individuals to understand how their performance contributes to the how their performance contributes to the success of the projectsuccess of the project

Benefits Realization Activities Benefits Realization Activities (Cont’d)(Cont’d)

Organizational Job Design Organizational Job Design Implementation: Implementation: translating documentation translating documentation to realityto reality

End-User Training:End-User Training: helps users understand helps users understand and perform tasksand perform tasks

Reward Design and Implementation:Reward Design and Implementation: to to motivate. Introduce KPIs in annual reviewsmotivate. Introduce KPIs in annual reviews

Benefits Realization Activities Benefits Realization Activities (Cont’d)(Cont’d)

Benefits Measurement:Benefits Measurement: compare actual to compare actual to projected resultsprojected results

Root Cause Analysis of Benefits Gaps:Root Cause Analysis of Benefits Gaps: understand why gaps existunderstand why gaps exist

Implementation of Corrective Action: Implementation of Corrective Action: activities to address the root cause analysisactivities to address the root cause analysis

Benefits Realization ToolsBenefits Realization Tools

Tools used to perform the tasks effectively:Tools used to perform the tasks effectively:

Business Case and Metrics:Business Case and Metrics: financial and cost- financial and cost-benefit analysisbenefit analysis

OCI Tools:OCI Tools: Organizational Culture Inventory tools to Organizational Culture Inventory tools to identify gaps between current and ideal culturesidentify gaps between current and ideal cultures

Process Modeling Tools:Process Modeling Tools: modeling the before and modeling the before and after processesafter processes

Benefits Realization Tools (Cont’d)Benefits Realization Tools (Cont’d)

Skills Gap Matrices:Skills Gap Matrices: identify required skills. identify required skills. Helps in arranging for trainingHelps in arranging for training

Benefits Realization Scorecards:Benefits Realization Scorecards: to track to track actual benefits performance after go-live. actual benefits performance after go-live. Useful in disseminating information in the Useful in disseminating information in the companycompany

The Value of Benefits RealizationThe Value of Benefits Realization

Why should a company implement benefits Why should a company implement benefits realization approach?realization approach?Reduce project riskReduce project risk

Achieve close alignment between business and technical Achieve close alignment between business and technical activitiesactivities

Identify and addresses obstacles to realizing benefitsIdentify and addresses obstacles to realizing benefits

Provide more thorough understanding of lesons learnedProvide more thorough understanding of lesons learned

Provide better justification for future IT project approvalsProvide better justification for future IT project approvals

ConclusionConclusion

Investing in IT without compelling justification is Investing in IT without compelling justification is not acceptable.not acceptable.

There is a need to ensure that companies There is a need to ensure that companies realize the potential benefits of technologyrealize the potential benefits of technology

The Benefits Realization approach into IT The Benefits Realization approach into IT ensures reaching wise investment decisions and ensures reaching wise investment decisions and successful IT implementationsuccessful IT implementation