David Caruso Keynote Address
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David Caruso Keynote Address

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Keynote Address given by David Caruso, founder and Principal of David Caruso & Associates, at Transformation and Innovation 2007.

Keynote Address given by David Caruso, founder and Principal of David Caruso & Associates, at Transformation and Innovation 2007.

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David Caruso Keynote Address David Caruso Keynote Address Presentation Transcript

    • David Caruso
    • Principal
    • David Caruso & Associates, Inc.
    • Targeting Business Process Performance: Unlocking Your Company’s Profit Potential
    Welcome to Transformation and Innovation 2007 The Business Transformation Conference Welcome
  • The art of winning an unfair game
  • The Impact of Supply Chain Applications 2000
  • There Are Financial Correlations…
    • Demand Driven leaders have:
    • 15% less inventory
    • 17% stronger order fulfillment
    • 35% shorter cash-to-cash cycle times
    • Which translates to:
    • 60% better profit margins
    • 65% better EPS
    • 2-3X the ROA
    Source: AMR Benchmark Analytix
    • Right Process
    • Right Technology
    • Right Metrics
  • IT Forensics: Typical Findings
    • IT budget is skewed toward business as usual
      • IT budget is within industry norms but…
      • The risk: limited future productivity investments
    • IT projects don't deliver the bang they should
      • Project management is not focused on business value creation
      • Corporate-wide initiatives aren’t uniformly adopted
    • Strategic planning processes must be revisited and improved
  • ERP Benefits Realization Study - 2005
    • Key Success Factors:
      • Common corporate vision
      • Process Improvement Group
      • Programmatic Financial Analysis
    Size, Scale, complexity, 9% Other, 11% Resources/ People, 7% Agreeing on common processes 11% Executive Buy-in/ Adoption/ Change Management, 12% Technical Issues, 13% Cost-Business Case- ROI not understood, 38%
  • The CIO’s Conundrum Stage 1 Data Visibility & Control Stage 2 Operating Effectiveness Stage 3 Market Position Stage 4 Strategic Moves IT Value Creation Strategic Value of IT Value of Cost Savings Metrics
  • Perfect Order SCM Cost Demand Forecast Key to Profitability Assess Diagnose Correct Supplier Quality Supplier On-Time Purch Costs Dir Mtl Costs RM Inv Cost Detail Production Sched Variance Plant Utilization WIP + FG Inventory Order Cycle Time Perfect Order Detail AP AR Inventory Total Cash-to-Cash Operational Applications & Performance Visibility
  • Perpetuating Business as Usual… Typical Today’s world:
  • The Difference Between Leaders and Laggards is Significant
  • The Money is in the Business Process… “… just implementing I.T. Systems without the supporting business processes is a waste of money” Supply Chain Management Review May/June 2005. David Simchi-Levi (MIT) Claus Heinrich (Univ of Mannheim)
  • IT Operating Expense Reduction: Tops out A Little Perspective: The Sources of Business Value
    • One company’s Business Improvement Benefits:
    • 2.3 % SG&A reduction: $23M = 5.6% vs 5.4% Net
    • COGS: a 2% reduction = $150M in ongoing cost reductions at current revenue levels
    • Inventory =Increasing turns from 6.9 to 8 would free up $138M
    • Using these rates for 2007 with a 5% revenue increase yields a $450M improvement over 2005
  • Who’s Driving the Bus? …Influence and Control in IT Projects IT’s Ability to Control Business’s Ability to Control High Low High Low 1) Schedule & Budget 2) System Adoption 3) Improved Process KPIs 4) Actual Financial Returns Measure for Accountability Measure for Credibility “ Definition of Victory”
  • Understanding Capability and Maturity is Essential Creating Business Value Process Maturity Information Maturity KPI & KPD Measurement
    • Best Practices:
    • Global operations
    • Demand visibility
    • Innovation management
    • Customer insight
    • New product introduction
    • Service delivery
    Quality & Availability of Data
  • From the Leaders: Milestones to Performance Orchestrate Collaborate Anticipate React Understand demand: Sources, quality, variability Global visibility Reduce complexity Value chain level Performance metrics Call to action Organize for success: Strategic planning PMO
  • Closing thoughts…
    • Every business decision results in an IT decision…
    • How central to your success is your Information Technology?
  • Thank Y
    • David Caruso
    • Principal
    • David Caruso & Associates, Inc.
    • Contact Information:
    • 781-545-6660
    • [email_address]
    ou Thank Y ou